SaaS Interviews with CEOs, Startups, Founders
How Tettra hit $1m ARR for its internal knowledge base tool
26 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
Uh, so if sidekick was like the free tool for sales, uh, lead in, which is now called HubSpot marketing hub starter or something, uh, that was the free tool for marketers. Yeah. You know, you become public and all the names become more complicated. Yeah, totally. They made us change the name at one point, but it was, it was the right call. That's funny.
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check it out right now at get latke.com hello everyone my guest today is andy cook he is building and is co-founder and ceo of a company called tetra knowledge sharing for growing teams prior to that he was product manager at hubspot where he helped start their free marketing product line he was the co-founder of rentabilities which was acquired by hubspot back in october of 2013 andy you ready to take us to the top i'm ready to go all right so you get rich from that acquisition why aren't you on a beach somewhere doing nothing
I have too much ADD not to work. All right. So how long did you stay with HubSpot after that acquisition in 2013? I was there for two years. Okay. So then would you go right into Tetra in 2015? Yeah, we came up with the idea for Tetra while we were growing our team. The product at the time at HubSpot was called Lead-In. So we were growing this product called Lead-In.
It kind of was like a startup inside of HubSpot. And as we were growing our team, myself and my now co-founder of Tetra Nelson were in Cambridge, and our entire engineering team was in Dublin, Ireland. And so we communicated a lot over chat. And there were a lot of times where we needed asynchronous, more long-form communication. uh, communication and we just didn't have a good tool for it.
That was hooked up to chats. We came up with the idea for Tetra. Is, so would you compare this to Slack today or no? We're not like we integrate with Slack. So we're a supplemental tool that works with the Slack platform. So like Slack's more chat synchronous communication and Tetra is more documentation asynchronous communication. I see.
I guess what I was getting at was did Brian miss it on this little science fair nest egg, which could have been Slack, but it ended up leaving HubSpot and being spun out. Yeah. Uh, no. So, uh, technically Brian didn't miss out on it because he invested in Tetra. So we do become next Slack. He's, uh, he's got a small piece of that.
Um, and then the product we were working on inside of HubSpot is actually doing really well too. It's their low end, uh, free marketing automation, uh, sidekick tool. Uh, so if sidekick was like the free tool for sales, uh, lead in, which is now called HubSpot marketing hub starter or something, uh, that was the free tool for marketers. Yeah.
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Chapter 2: What inspired the creation of Tetra and its unique focus?
Uh, so it's a HubSpot labs project. So basically the way it worked is my first company with rentability was acquired. We'll be up front as a talent acquisition. So it did not get rich, but did okay for myself, especially for like, you know, a 25 year old who, uh, invested all of his time and money into his first startup. It was nice to have a job too. That was a huge benefit.
And I learned a ton on HubSpot. But so lead-in started in HubSpot Labs. And on my first day, they took me, put me with another person who had been working there for three years, who I also happened to be friends from middle school with, Nelson, and the then chief product officer at the time, David Cancel, who's the CEO of, sorry, as the CEO of Drift.
He was the chief product officer at the time, and he just told us like, hey, we want to build marketing software for very small businesses that we don't normally sell to. Don't know what it should cost, don't know what it should do, just make sure to use orange in the logo, go.
So we worked on it, just the two of us, Nelson and I, for about a year, grew it to about 7,000 small businesses using it, and eventually got more funding, which is like budget headcount inside HubSpot. from Brian and Dharmesh and JD and all those people to grow the team and build it out more. And then, I mean, so how do you leave HubSpot? Oh yeah, good question. So we left HubSpot on good terms.
So we came up with the idea for Tetra probably the beginning of 2015 or so. Well, did this other thing fail? Like, I mean, what got you off of the small business tool? Oh, right. Yeah. So it didn't fail at all. We hit our milestone, which was to rebuild the entire product, which was only built for WordPress at the time on the HubSpot infrastructure.
So there's like a cloud version and a WordPress plugin. So we built that out with the team in Dublin. And then we actually got it announced on stage at Inbound as like a big product launch as well. So when we left, it was in good hands. They knew what they were doing. There was another product manager who was working on it, too.
So we kind of like transferred all that knowledge that was in our heads into the heads of the team moving forward. Uh, and then we left to go start Tetra. So all is well. So asynchronous asynchronous communication really got going 2015, 2016. Help me understand pricing model. Is it pure play SAS? And if so, on average, what our customer is paying per month for it, would you say?
Uh, it's pure, pure play SAS, uh, our, our pub. So like average revenue per account is about $110. So it's like $1,300 per year. Yep. And what does that typically look like? Is that a team size of two people, 10 people? Um, so it's all over the map and like, we've had many different pricing models and we just constantly change them.
I think we've changed pricing like eight times since we started to, uh, four years ago. Um, but the average team that works really well with Tetra is between 50 and 500 people and they're growing and hiring frequently. And walk me through how'd you got, how you got your first five or maybe first a hundred customers. Uh, so it's really interesting.
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Chapter 3: How did the transition from HubSpot to Tetra unfold?
All right. We're running out of time here. Last couple of questions here. What's the team look like today? How many people are seven people strong seven. I love that all local there in Boston or you spread out. We're all local, co-located. Very cool. And then a burning cash today or breakeven or profitable? We're burning cash, but we're default to live pretty handedly. Okay, good.
So, you know, translating that essentially a variable expenses you could turn off and be breakeven or profitable. Yeah, exactly. And like we'll be profitable, I think by like March 2020, maybe sooner depending on growth rate. And what are you, I mean, right now, are you talking like 10 grand net burn even with variable included or more? It's like 20, 20 net burn. Okay. That's interesting.
It always gives me a sense of the founder's risk profile, right? What that burn looks like relative to revenues. Yeah. We're trying to invest in growth. We're an ambitious company. Like even though we haven't raised like proper institutional capital, like we want to grow and we think we can, we just don't need a ton of cash to do it. Yeah. Yeah. I love that mindset. I think it's totally doable.
You don't have to subscribe to the VC only model. All right. Let's good stuff here. Andy, let's wrap up with the famous five. Number one, what's your favorite business book? Hard Thing About Hard Things by Ben Horowitz. Number two, is there a CEO you're following or studying? Not a CEO, but I'm following Jay Simons, the president of Atlassian, pretty closely. Their model's pretty similar to ours.
Yeah, and if you guys wanna hear Jay on the show, he came on and described a lot of their model about, oh, two months ago. You can look that up on Google. Number three, what's your favorite online tool, Andy, for building your company? ProfitWell. Yeah, number four, how many hours of sleep do you get every night? Eight. And what's your situation, married, single, kids? Single. Okay. No kiddos?
No kiddos, but want them someday. Very cool. And how old are you? 31. 31. Last question. What do you wish your 20-year-old self knew? Ah, that it's a marathon, not a sprint. Don't burn out and remember to exercise and sleep. Guys, tetra.co, an internal wiki, really got a lot of traction built on top of Slack.
Now today doing about $700,000 in terms of ARR run rate from 535 customers paying on average $110 per month. They're burning call at $20,000 a month right now.
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Chapter 4: What pricing strategies has Tetra experimented with over time?
But again, really trying to drive growth. They've grown about 68% year over year in terms of revenue. They've raised about $1.6 million, team of seven with about 38% revenue churn annually, 42% expansion for 104% net revenue retention annually as Andy looks to continue to scale. Andy, thanks for taking us to the top. Thanks so much. Appreciate you having me on.