SaaS Interviews with CEOs, Startups, Founders
Obie Growing on Slack marketplace, $25k MRR, Helps Teams Store Information Efficiently
17 Sep 2020
Chapter 1: What actions did Obie take at the beginning of the pandemic?
We made some quick, decisive actions at the beginning of the pandemic, just in case. We cut founder salaries and we lowered burn. But interest has only increased, product usage has only increased, and sales have only increased since the pandemic with the shift to remote work.
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Chapter 2: How did the shift to remote work impact Obie's product usage and sales?
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He is building a company called Obi, a company changing the way organizations access and manage their collective knowledge. He got into the startup space kind of magically. No, really, I mean, he performed magic professionally at a young age and gravitated towards digital marketing to promote himself.
By the age of 15, he registered his first business, a digital agency that provided marketing and design services for other entertainers and small businesses. He's a self-proclaimed serial entrepreneur, host of two podcasts, The Art of the Fail and Accelerating Support, and was the youngest founder accepted into batch 20 of the prestigious 500 Startups Accelerator Program in California.
Chris, you ready to take us to the top? I'm ready. All right, man. So what is OBIEE? And if people want to follow along, it's OBIEE.ai. What's the company do?
Yeah, so we built a faster way for companies to capture and access their collective internal knowledge.
And how does that work? So right now, my team, it's all systematized via Google Drive. We upload documents, we label them correctly, we search, we find what we need. How do you do it better?
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Chapter 3: What is Obie and how does it help organizations manage knowledge?
How much have you raised to date?
We've only raised about $750K in US. So for the first... three or four years of the company, we bootstrapped. So we're not your typical Silicon Valley, uh, company. We've been very scrappy. Um, we're still very lean and we're not, um, dependent on the sort of VC, uh, treadmill if, if you will.
Yep. So $750,000 raised today. And what's your team size? We're only five today. Five. How many engineers? Uh, one, one.
Okay. Got it. And what's your background? Uh, nothing specific. I'm an entrepreneur. That's, that's how I like to explain.
You're not, you're not writing code for the platform.
No, I am not. I'm, I'm a self self-taught product designer. So I do, uh, all of the design work here at OB. Uh, and then of course all the other tasks that go along with starting a company.
Yep. And, and again, launch 2015, many pivots. How many customers are you working with today?
We have about 40 mid-market customers, and then we just launched our browser extension, and that's super green, but that has more of a B2B2C focus, so that's going to be sort of a volume play.
Can I take those 40 customers times that $450-ish a month average? You're doing, what, $15,000 to $20,000 a month right now in revenue, something like that?
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Chapter 4: What unique features does Obie offer for knowledge accessibility?
Is that accurate? And if so, about how much are you burning per month, even during COVID when people are trying to extend runways?
Yep. Yep. So we're still, we're burning about 30 K a month.
Okay. I mean, does that make you nervous?
No, actually, um, you know, we've been knock on wood sort of fortunate with this whole, this whole, uh, pandemic. Um, it's going to turn out net positive for us, at least so far. We made some quick, decisive actions at the beginning of the pandemic, just in case. We cut founder salaries and we lowered burn.
But interest has only increased, product usage has only increased, and sales have only increased since the pandemic with the shift to remote work.
So just to be clear, you're doing about $25,000 a month in revenue right now. Your total expenses are about $55,000, so your net burn is $30,000 a month.
Correct. Now, you know, it's not exactly binary because you've got annual subscriptions and monthly billing and stuff like that. But yeah, yeah, you're accurate there.
And I mean, a lot of founders did what you did, right? They cut their salary. I mean, how do you have the tough conversations about how much you cut your salary and then the decisions about, well, crap, I have real living expenses. I live in Menlo Park. It's not cheap, right? I mean, how do you think through all that?
Yeah, I mean, I think that's what makes our team unique, is that we've constantly had to make those tough decisions. Before we got into 500 Startups, the company was almost dead. And we hung on, we bootstrapped, we got really creative with the expenses. So this isn't something that's foreign to us. So me and my co-founder made the decision to not cut our employees' salaries, just our own.
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Chapter 5: What pricing model does Obie use for its services?
Churn's critical in a SaaS company.
Yeah. So, I mean, that took us a while to figure out. So we say that we launched OB in 2017, which is, uh, when we were coming out of 500 startups, that's sort of when we pivoted in into OB away from the onboarding solution. And it took us until last year to figure out churn. We really, that's sort of when we discovered that, uh, you know, we've hit this elusive thing called product market fit.
Um, defined by just surveying a lot of users and using some of the existing frameworks out there. But now we have churn really stable. It's below 3% a month. So it took us a long time to figure that out, though. And it's become the core product when I talk about the mid-market product that's based on top of Slack, that's very niche for us.
And that's why we recently developed the browser extension to sort of broaden our horizon a little bit. But in order to get to product market fit, in order to get that churn down and really understand who a qualified customer was, we had to narrow that scope a lot.
Yep. And what is your, you know, you can survive with a lot of churn if you're not bleeding cash to acquire customers, right? So to get a new $400 or $500 a month customer, what's your fully weighted cat?
Yeah, so that's where it's a blessing and a curse for us. So we do not yet know how to take $1 and turn it into two, which is unfortunate. What is fortunate about our model is that 95% of our sales come inbound organic. So we're relying heavily on existing channels of distribution like the Slack app directory, the Atlassian marketplace, Google marketplace, so on and so forth.
We're investing in content marketing and SEO, which seems to be starting to work. But we do not do almost any paid acquisition. We do some experiments from time to time. We do a little bit of retargeting. So I can't actually tell you what our our CAC is.
Walk me through sort of these early paid experiments. Have you tested any sort of Google or Facebook ads? And if so, how'd the test go?
Oh, yeah. Yeah, we've tested all of the channels in many different ways. I think what we've discovered, this is sort of anecdotal, but OB is very much an impulse buy. And it's a sort of specific time in the buyer journey type thing where you can't really hit them with the ad if they really haven't felt this pain to a certain degree.
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