SaaS Interviews with CEOs, Startups, Founders
SaaS Bootstrapper Hits $3m Revenue with genius niche product
04 Jul 2022
Chapter 1: How did the SaaS company achieve $3 million in annual revenue?
So we are currently on $3 million annual revenue.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, 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. Hey folks, my guest today is Alex Fischkenhoff.
He's the CEO of Splinks, a SaaS platform for internet and voice service providers that helps companies get their operations under control from a single place. That means billing and payment collections, ticketing, job scheduling, and network management. Alex, you ready to take us to the top?
Thank you. Thank you for inviting me.
You bet. So give me an example of a customer that's paying you and help us understand what they're paying you for. What do they get?
We work with small and medium-sized internet providers that usually operate on emerging markets. At the moment, we have around 700 companies working with us. So it's a business-to-business.
Those are paying customers?
Yeah, paying customers. And so we are currently on $3 million annual revenue. And we started six years ago and bootstrapped completely. So we started with my friend and my business partner. And so... Yeah. As I said, the companies that we work with, they are quite small, so they're not that big. So monthly they pay us around 350 US dollars. So it means like 4,000 dollars annually.
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Chapter 2: What services does Splinks provide to its customers?
We were on $2 million.
Nice growth.
Yes, the growth per year in the last two years is around 70%. Of course, during the first years... I was going to say, take us back one more year.
Do you remember what was revenue in 2020?
Yes, it was... It was 1 million. Then we went to 2 million. So we doubled. And always in the previous years, we also doubled the revenue. So we started with like $80,000. Then we went to 250. Then we went to 500. Then we went to 1 million, 2 million. And at the moment, 3 million. This is what we are having now so far.
That's amazing. Well, look, a lot of my audience might not be familiar with sort of internet companies and emerging markets, right? So why do they need you? What are they paying you for?
because they try to compete with the large players.
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Chapter 3: Who are the primary customers of Splinks and what do they pay for?
So, because we work with internet and voice providers. So the companies that provide internet connection to end users, and you know, you can compare, So for example, AT&T is a large operator, Vodacom, all these big players. But we work with the small guys. They try to beat these big operators.
And these small players, they need software that will work efficiently and that will help them to manage their business and grow and compete and beat these large competitors. So what we bring them is that kind of software that does everything for them. So we manage everything in one single place. There's billing, payments, scheduling, network management.
Plenty of things that all the areas actually of internet provider that we just bring it in one place. And that really increases a lot efficiency of the company. So this small company then is able to work well and to compete and get the market, sell their services.
From your website, Splinks makes it easy to sell internet, connect, build customers, and support your customers, right? Yes. Now, what got you into this space? Are you an ex-internet guy?
Yes. I started as a network architect or a network engineer, but also I was working as a project manager, product manager for some online companies in Czech Republic. And then in 2014, I was invited to South Africa to work as a network architect there to help to one local company to build quite a large network. So I was helping them.
And meanwhile, I found out that the market is emerging and there are many new players coming there in South Africa and in all other African countries as well. And when I came back, when my contract ended, so I came back in 2016 and we decided to write a software that will start helping these companies to operate efficiently. So that's how it started all.
That's amazing. And how many folks are on your team today full-time?
We have 50 members at the moment. Five, zero.
Yeah. How many are engineers?
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Chapter 4: What has been the revenue growth of Splinks over the years?
That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. Moving forward, you're reinvesting everything. You're driving growth. Help me understand what the growth, how are you adding so many customers? You have 700 today. You're adding 15 per month. Where are you finding these customers?
we put a lot of efforts in the marketing. So, I mean, we try to, to build a brand from the day one. So we, we, we try to convince people that this software is exactly what they need and not competitors. So we do spend a lot to, to online. I mean, a lot of efforts, maybe not investments to online tools, but a lot of efforts. Uh, I think I have quite good marketing team to people.
They're working very professional. So, and, uh, Sales is also performing very well.
Do you spend any money on paid ads?
Yes, we do. We do, but not that much because the niche is quite small.
How much last month did you spend on paid ads? I think around $4,000. Okay, so not a lot at all. Yeah. And then tell me how your sales team is structured. Do the salespeople have quota?
No.
Yes, of course. They do have some fixed salary. And then based on the sales that they bring or they process, we pay them some percentage on annual revenue, first year of the annual revenue. What percent? 3% and up to 5%. It depends on their involvement.
3% to 5%. Okay, interesting. And how many deals do you expect reps to close? What is their annual quota?
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Chapter 5: Why do small internet providers need specialized software?
So about $150,000 of ARR. Are you able to pay them way less than $150,000 so that you actually make money on that sales rep?
Yes, because they are employees of our company, so they have very strict rules on how they work. So they are a bit limited in what options they have. So we have this strict policy. They need to reach this 1,000. And if they reach it so that we pay them, that's 3% to 5% of the revenue. I understand that.
Yeah. What's the base, though, you would pay? Like if I join you today and I used to do $1,000 a month of new deals, what would you pay me as a base?
That would be not that simple because you are from the United States. So it depends on the country where my accounts, they work from the countries with a lower income, let's say.
So that's why I'm asking. Yeah. How low can you get this talent?
No. With all the bonuses, what they have, they have around $3,000. $3,000 monthly salary.
Okay, got it. So you could have a sales rep that's making $36,000 per year if they hit $150,000 of new ARR closed, $1,000 a month for 12 months.
Usually they make more. They make like $2,500 monthly. Okay. I'm saying that 1,000 is a minimum when we say that they work and they perform. So in general, they make around 2.5 monthly each of them. I see.
And how many are there? How many quota-carrying reps?
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