SaaS Interviews with CEOs, Startups, Founders
I smell a $10m ARR SaaS Company. Why this 22 year old is smart to start with an Agency!
18 Sep 2023
Chapter 1: How did a 22-year-old secure four customers paying $5k/month?
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Revolution.design is trying to help you get design done faster and more affordably in a more reliable way. They've got four customers today paying five grand a month launch just eight months ago, already doing 20,000 a month in revenue. Again, this is sort of that blend between a design agency plus recurring SaaS fee, hoping to keep these customers sticky. We usually see a lot of churn.
They haven't lost any customers so far, only four. They haven't lost any of them, which is good. We'll see what happens next. Hey, folks. My guest today is Kareem Al-Alami.
Chapter 2: What strategies are used to reduce churn in a design agency model?
He helps tech startups avoid complicated in-house hiring, overpriced design agencies, and unreliable freelancers. With his company, it's called Revolution Design. They can hire a top 1% senior design talent in one day for $49.90 per month. That's almost $5,000 a month. And pause or cancel at any time. Kareem, are you ready to take us to the top? Yes, let's go. All right. This is cool.
So, so I've interviewed a bunch of folks that do this sort of thing. And the issue is always churn. It's keeping someone paying five grand a month for more than a couple months. How do you address this? Yeah, basically, I think the main thing to address here is to hire the best designers, really, like, you know, prove your point.
Because when the client is happy with you and all of the designs, they get them quickly, they are happy with them, I think they will stay. You know, we've been in the business for quite a, not very long time. We've been in the business for eight months. And, you know, some of our clients are still with us after eight months. So, yeah, I think that's like the main point to address always.
That's great. Okay. So you launched eight months. So you launched basically January of 2020 this year. Yep. Yes, yes, yes. Very cool. Okay. And can you give me an example of a customer paying you today? Yeah, so usually there are tech startups who just raised a series A or seed or anything like that, and they are looking for designers.
Usually the founder is quite technical or the marketing person is quite marketing, and they are not skilled in looking for designers, looking at portfolios and stuff like that. And they have three options, hire agency,
full-time or freelancer and you know they are all like kind of fundamentally flawed in our view so how many designers have have i mean do you hire them full-time or do you is it a marketplace you just sit in between Yeah, basically we sit in between and we are like the creative directors. I have also a co-founder.
We've been freelancing and helping tech startups for almost a combined period of 15 years. So we know how it goes, especially in this industry. And we kind of sit in between as creative directors and direct the designers and communicate with clients and stuff like that. And so how many paying customers then do you have today? Yeah, right now we have four. Okay. Yeah.
And how many freelance designers do you need to support those four paying customers? So actually one designer can take up to three clients. And, you know, like the main thing why we kind of founded Revolution Design is because here in Czech Republic and Slovakia, where we are from,
you know we have like a really great design talent for really affordable prices and you know that's the reason why one of the biggest agency design agencies called strv is basically located in prague because you know you have a really great talent here that you know can take two three thousand euros a month and they are you know happy as you know I don't know what.
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Chapter 3: What is Revolution Design and how does it operate?
So you have three or four designers you're working with consistently right now? Yes. Okay. Interesting. Got it. And so I guess walk me through, I mean, are you guys profitable today? Does the business model work? Is it sustainable? Yeah. Yeah, it's totally profitable, actually. So yeah. How much profits in June this year? Yeah, we've done about counting like 15,000 euros.
Okay, that's pretty good. I mean, look, I'm doing the math. Four customers, five grand a month. You're doing 20,000 a month top line. After you pay designers, you pay your salaries, you pay your software expenses, you're profiting 10,000, 15,000 a month. Yes, yes. Like we don't really pay ourselves salaries, you know, and stuff like that.
But, you know, that's... So you guys split the profits of 15K between the both of you. yeah like we reinvest them to the company and you know hiring and stuff like that so yeah That's awesome. Are you guys thinking about launching your own internal software product? Yeah, we were really thinking about it.
But I think and I believe that our clients really value the simplicity because right now we work on Trello. But in the future, I don't think it's quite sustainable with 20, 30, 40 clients. So this is something that we are really thinking about and even planning. So yeah. That makes sense. How did you get the first four customers? Talk to me about the sales process. Yeah, absolutely.
Basically, they were all inbound clients or leads. We didn't do any cold outreach or anything like that. They usually are our past clients we have worked with before or... no new clients that just saw what we are doing. And we haven't really done any marketing sales outreach or anything like that so far since we are in such early stage. But yeah, all of them are inbound.
People say all of them are inbound, but inbound doesn't just happen, right? If you launch a site in the middle of a forest and make no noise, no one's ever going to find it. So you must have done something to get people to find you. Oh, no, absolutely. We just put out one LinkedIn post that we are launching this new business. Me and my co-founder have worked with hundreds of clients before.
We have all of them in our connections. We emailed some of them.
um and yeah basically you know some of them converted some of them you know are still hesitating and we have like calls and stuff like that but yeah uh i think it's about you know proving that that you know what you are doing and having a great portfolio and you know doing what kinds of work are you are they paying you five grand a month for is it mainly sort of website design or what are you paying for
So basically pride ourselves on having these full-stack designers, which means that it's someone who knows how to do brand, website, and product. So whether you need a new brand, a new website, new product, or anything in between, we can provide that Right now, the most work we have is for website, web design, and web flow.
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Chapter 4: How does the guest manage client relationships and expectations?
You get paid the least. And when you are slow, you get paid more. So I think that's the core fundamental problem with all of them. However, these three solutions, the agency, freelancer, and the full-time designer, they all... So for example, hiring a full-time designer
Usually it takes up to 41 days and usually costs between $120,000, $160,000 a year in New York, San Francisco, basically where my clients are from. And you get the benefit of working with them on a day-to-day basis.
Chapter 5: What is the significance of hiring top design talent?
They get to know your brand and stuff like that. Agency usually costs between $50,000 to $100,000 a project, and usually that's not very feasible at the start. And finding a great one is quite hard also, but not as hard as hiring or finding a really great freelancer because hiring a great freelancer, which is like the golden middle between agency and full-time,
designer is like you know searching for a needle in a haystack because you never know what the way we found the way we found our design agency is we started off on dribble and behance and we hired for one project and then we realized the person that we were using as part of an agency and then before you know it we grew to the agency program are you you guys using dribble and behance for your top of funnel will you do one-off projects on those sites to land a larger customer
Actually, my co-founder, he has been designing for almost 11 years or 10 years, and he had all of his projects from Dribbble. I never got on Dribbble or Behance or anything like that. So have you gotten a customer from Dribbble or no? No, no, no, actually. It's not working for you. Actually, yeah, we had one. Actually, it was this Web3 wallet called Koala Wallet. I'll clip those lips.
They saw my co-founders, you know, portfolio. I'm trying to pull lessons for the audience. If you're trying to get on dribble of hands, the second thing you do on your website is you offer a website audit for four 95 at your top of funnel. I imagine it's at least, you know, a tripwire product here. How many of these have you done? Yeah, we've done about two or three of them so far.
Yeah, one of them converted, so it was like 33%. But yeah, we are not scaling right now. So what's your goal for the end of the year? How much revenue are you hoping for this year? Oh, we definitely want to hit the 20 clients, $100,000 a month. That would be very low in the first. That's a lot of growth. That's like 5x growth from where you're at today. Yeah.
I mean, we are not at the end of the first year and we haven't even done any outreach and stuff like that. So yeah, quite exciting. All right. We'll see what happens. We'll see what happens. In the meantime, let's wrap up with the famous five. Number one, your favorite book. Yeah, that has to be the great CEO within my network. Number two, is there a CEO you're following or studying?
Elon Musk, probably. Number three, what's your favorite online tool for building revolution design? um figma and webflow yeah number four how many hours of sleep do you get every night oh like six five and what's your what's your situation married single kid yeah i have a girlfriend long-term girlfriend yeah so no kids yeah fortunately and how old are you kareem i'm 22 22. Last question.
Something you wish you knew two years ago when you were 20. I mean, you know, be more ambitious, probably. Take on more risks, I would say. Yeah. Yeah, as I have it, revolution.design is trying to help you get design done faster and more affordably in a more reliable way.
They've got four customers today paying five grand a month launch just eight months ago, already doing 20,000 a month in revenue. Again, this is sort of that blend between a design agency plus recurring SaaS fee, hoping to keep these customers sticky. We usually see a lot of churn. They haven't lost any customers so far, only four. They haven't lost any of them, which is good.
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