SaaS Interviews with CEOs, Startups, Founders
Img.ly is Image Editing SDK, $2m in Revenues, Bootstrapped, GitHub Growth Channel
13 Nov 2020
Chapter 1: What is the main topic discussed in this episode?
So you can approximately say it depends a bit about the support, et cetera, they get, but it can be around 2025 per year.
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We've got to grow faster. Minimum is 100% over the past several years.
Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker CEO Frank Bean before Google acquired his company for $2.6 billion.
We want to see a real pervasive data culture, and then the rest flows behind that.
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My guest today is Daniel Hauschut. He's building a company called Imagely, which is where he strives to build platforms to make design more accessible for everyone. After graduating with a PhD in electrical engineering in 2015, he had a few interim CTO positions in the local startup community. In 2017, he co-founded Imagely with his partner, his co-founder.
All right, Daniel, ready to take us to the top? Sorry? Are you ready to take us to the top? I'm ready. Thank you for having me. You bet. So tell us about the company. This is specifically for designers. Is it a B2B SaaS tool?
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Chapter 2: What inspired Daniel to co-found img.ly?
Well, what changed? So for sure, somebody called us and said, okay, it's a really nice tool, but how about a commercial license? So how about support, et cetera? And that was the first where we realized, okay, somebody likes it very much and really wants to pay for it and needs the support for it. And so we started really licensing this SDK. In the beginning, it was like really one-time payment.
So it was like our first start with it. And this is what changed in the beginning, yes.
Okay. So you put it up on GitHub. Was the agency your agency or were you an employee at the agency?
I myself was an employee, but my co-founder was also founder of the agency. So this is how it started.
How did you guys spin the technology, the code out of the agency?
Well, this was far later, to be honest, like two years ago. At first, we left it inside the agency and kind of split the pot and said, OK, this is this team and this is this team. And later we are just like you normally do. You found a new company and you have to pay some taxes, et cetera. And then you have that one.
OK, but you and the agency co-founder split equity and imagely. Yeah, I see. And how many total people are on the team today? Oh, today we are 30 people. 30 people. Okay, wow. So you've grown to 30 people. Have you bootstrapped or did you raise?
We didn't raise at all. The only money we took was, let's say, the initial investment of the agency, which meant like at the very, very beginning, for sure, one employee was like building it on the site, let's say 10 hours per week, etc. But even after that, we just took the money we got from new licenses and hired new people and invested it over the years into the product.
And that's where we are today.
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Chapter 3: How does img.ly's SDK cater to non-designers?
So it's really a rough number because it's hard to differentiate, but maybe $100,000. It could be $100,000. Because, like I said, it's hard to tell because the people are going to work full-time in the beginning, etc.
And how many customers do you have using the technology today? Today, around 400 worldwide. Okay, 400 worldwide. That's great. And obviously, churn is critical with any sort of SDK or SaaS company. What's your churn today?
We are pretty lucky. I guess we have an average. We just looked it up. It was like under 2% this year over the year average.
Wow. Why is it? I mean, that is extremely low. Why is it so low? That's for the whole year, not monthly. That's 2% per year.
The average over the year. Yes. Yeah. So, okay. You can say it's also per month then, but still.
Well, no, no. Hold on. Is it 2% per month or is it 2% for the whole year?
It's an average 2%, so it's per month.
Okay, got it. So 24% churn annually.
Okay, then I made a mistake. No, then 2% per year because it's really not even one person per month sometimes. So just to be clear.
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Chapter 4: What is the pricing model for img.ly's services?
Okay, so if a year ago you were doing $100,000 a month in revenue, right, and you have 2% annual churn, that means today you're doing $98,000 a month in revenue from that same customer base, ignoring new customers. Exactly.
So not each customer has the same amount of what they pay. Of course. Well, you're right. And now we are forgetting the new customers, right? Yes. But churn-based, you're right.
That's great. Okay, so 2% churn. And then break down the team a bit for me. There's 30 folks total. How many are engineers?
Half of it. I would say half of it and four or five of it are designers. And then it goes to marketing, sales. Our product people, yeah, we have actually everything in our company. So we don't outsource anything. Basically, the whole foot setup that you need for a company is yours.
Daniel, is there a price point high enough where you can have salespeople with quota selling it?
Actually, good question. We don't have quota currently. It's not our concept. But I think we could. But it's not how people work in our companies these days. So it might happen in the future. Yeah.
Now, 400 customers at that $500 a month sort of average, that would put you guys at what, around $200,000 a month right now in revenue?
Yeah, a bit less, but yes, you could say so.
Okay. And where were you about 12 months ago, just so we can understand growth?
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Chapter 5: How did img.ly acquire its first customers?
The bigger plan for sure is extending the SDK business. I already told you that we have video editing integrated now. I started integrating it. And these days we extend more to complete layouting technologies that can do more than just photo editing, but also compose complete things like multi-pages and all that stuff.
That's what we're currently doing and what we actually ship soon, let's say it this way.
Very cool. And if you were to back into a CAC to get a new $500 a month customer, what would you say you spend to get these customers?
It's really not easy. It's something we think about a lot. So as you can see, we are not spending much on, let's say, paid ads. But I would definitely go there and put more effort there.
That's what we're currently trying to do with more A-B testing and how maybe also look for, let's say, other channels where you can put banners or ads, not maybe Google itself, but maybe on forums and all that stuff or newsletters and all that stuff.
Yeah.
What about the other components of CAC? CAC isn't just paid spend. You have a marketing team, you have a sales team. When you look at what your fully weighted CAC is, what would you put it at?
It's actually... Actually, I don't know. I have to look it up. So I don't want to say something which is not true in the end.
No, no, no. That's fine. I mean, again, this is always sort of a guess by companies. But if you are taking basically 10 new customers per month, 10 to 20, and you just basically take your total expenses in sales and marketing and pay. So sales and marketing salaries, all your paid spend, and then just divide by 20, you can kind of back into a rough, fully weighted CAG. Yeah.
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