SaaS Interviews with CEOs, Startups, Founders
How to get your first 3 customers paying $72k, from Incident Response SaaS Founder
18 Feb 2023
Chapter 1: What is Uptime Labs and how did it start?
The easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Guys, Uptime Labs was launched last year. It's a SaaS platform today with three customers paying six grand a month or $18,000 a month in revenue.
They did a million dollar pre-seed round last year at a $4 million cap. Today, seven folks on the team, two co-founders are still around. They're looking to scale again. They help you get better at incident response. For example, if two servers go down or something like that, they help you get your teams up to date so they can respond quicker in a real life situation.
Chapter 2: What challenges do customers face during outages?
We'll see what they do next in terms of growth. Hey, folks. My guest today is Hamed Silatani. He's a father and husband, and he uses his remaining time to build Uptime Labs, which helps train teams to fix outages quicker at uptimelabs.io. Hamed, are you ready to take us to the top? Yes, of course. All right. Give me a customer story here.
Tell me about a customer that's using you and how they use you today. Yeah, sure.
Chapter 3: How does Uptime Labs train teams for incident response?
So the... The big challenge when it comes to IoT outages and recovering from outages is the chaos that it breaks out as soon as system goes down. And it takes a lot more than technical skill set to be able to recover from an outage. So a customer we signed up, our first customer last October, they were preparing for the peak period during Christmas time and where they thought would be very busy.
And they had to, they wanted to skill up enough engineers
so they can cover that busy period but there was no other product or no other solution to let them to prepare their and skill up the engineers in the short span of time so we happen to see a kind of the customer in the meetup and when we explain what uptime lab does and how we deliver this skill training and let engineers to go through experience of troubleshooting like
10 years of experience within three to four months, then they really got interested and they engaged us and we ran those incident drills for them. So Hamed, just to paint a real story here, a team can sign up, an engineering team can sign up for Uptime Labs and what you'll do is you'll act like they have been hacked. And all their user passwords are now out on searchable on Google or something.
And you will let the team practice how to respond to these incidents so that when a real one does happen, they're more prepared.
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Chapter 4: What is the revenue model for Uptime Labs?
Is that accurate? It is correct, but we are not working in a cyber sick environment. Okay. We are training people to recover from genuine IT incident. The ones that happen, not because of malicious. We'll give real examples. It'll be helpful. Okay, the network goes down between two servers without any particular reason. So there's no malicious intent there.
And people start noticing that on the front and various different applications start failing and user reporting problems.
Chapter 5: How many customers does Uptime Labs currently serve?
How do you find what is a problem and recover from those network outages? That's the sort of experience that we get people through. That's great. And help me understand your guys' revenue model, right? What's the customer pay you guys on average per month to use the technology? We are still very early stage, less than just about a year old.
We have three tiers, which is we call it two nines, three nines and four nines. And the nines coming from availability chart, 99% available, 99.9% available. And then they pay us per tier. And each tier gets a number of incident drills and trials per month available to them.
Chapter 6: What is the growth plan for Uptime Labs this year?
And they also get a number of seats available to them. So they pay us based on number of drills that they run. And so again, what does the average customer actually pay you per month? A hundred bucks a month, 500 bucks a month, a thousand a month? Oh, 5,000 pounds a month. 5,000. Okay. So 6,000 USD per month, something like that. Yep. That's very cool.
Chapter 7: How did the founders decide on equity distribution?
And someone paying you six grand a month, how many seats are they probably paying for? They pay for five seats. Okay. And that five seats can help them train up to 20 engineers in the course of a year. So they train a set of engineers for a quarter and then bring another set of engineers to use those five seats.
And you'd walked us through the story of your first customer last year, which was great. How about how many customers are you serving now today? Are we talking three, four, five, something like that? We're currently serving three customers. Three customers.
Chapter 8: What advice does the guest have for aspiring entrepreneurs?
Okay. So three customers paying $6,000 a month is about $18,000 a month in revenue right now. Is that accurate? Yep. Almost. And what's the growth plan this year? How do you get up to $50,000 a month? So our... Our focus this year is to... We are not optimizing for increased revenue this year. We are optimizing to learn from customers what exactly they need.
So we are very careful what customers we're signing up. What we'll be looking for customers, we call visionary customers. So the vision of the leader at the helm and the technical team is much more important than the revenue they give us this year because that will help us to build an awesome product that then we can sell a lot faster next year.
With that context, we'll be looking to sign up another five customers this year by end of the year. The only kinds of founders saying right now they don't care about increasing revenue are ones that have raised a crap ton of VC to get through a recession. Everyone else wants to make a lot of money right now and they want to be very profitable. So I'm assuming you've raised capital. Yeah.
Yeah, we have raised our pre-seed round. Okay. I'm not saying I don't care about money. I do care about money. I need it. But what I care most about is building this awesome product that people need because then money and success will follow. That makes a lot of sense. How much was the pre-seed round for? About just under a million dollars. Just under a million. And did you close that last year?
Yes. Interesting. So looking back now, most SaaS companies doing rounds last year, their pre-seed were selling between 15% and 20% of the company in that round. Were you in the same range? Yeah. Okay. So something like a $4 million cap, $5 million cap, something like that? $4 million. $4 million. That's great. Now looking back now... I think we need to convert this in pounds and dollars.
Yeah, no problem. No problem. Looking back now, was that the right decision? Yeah, absolutely. I think without that money, we wouldn't be able to build the base product to start going to market. And yeah, I think it was the right decision. And then the amount worked out well as well. It's given us enough runway, especially through this economic situation at the moment.
And what's the team size today? How many folks are full-time? We have seven of us full-time, five in product engineering, and then two co-founders. That's great. And you're one of the founders, right? Yes. Okay. Now, what did you guys do at the beginning? You just split equity 50-50 or what? That's... That's a very interesting question. So initially it was more than 12 of us.
So it was four of us were getting together, but then it started 50-50, but it didn't end up 50-50. And so that's a tough conversation, but it happens a lot. So to the extent that you can walk us through how you had the conversation about, hey, I'm working harder. I deserve more. I'm working less. I don't need as much equity.
I mean, the good thing was all of us, we knew each other for a very long time. So there was absolute trust in the conversation and fairness. And how we ended up to kind of changing the percentages was really how much risk each of us are happy to take. Okay.
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