SaaS Interviews with CEOs, Startups, Founders
Secretive Austin SaaS Breaks $6m Bootstrapped Helping with ElasticSearch
16 Feb 2021
Chapter 1: How many customers is Bonsai currently serving?
So how many customers are you serving now today? We're serving, so we have about 1,600 paid and 4,000. Oh, wow. You are listening to Conversations with Nathan Latka. Now, if you're hearing this, it means you're not currently on our subscriber feed. To subscribe, go to getlatka.com. When you subscribe, you won't hear ads like this one. You'll get the full interviews.
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Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello everyone, my guest today is Drew Sellers. He is building a company called Bonsai.io, a managed search engine for SaaS. Drew, you ready to take us to the top? Absolutely, let's go.
So what exactly does this mean? I mean, is this like Algolia competitor? In a sense, but so the bigger way to think about this is we've all worked with developers. Inevitably, there's a piece of technology that they're new or that's novel to them. They get stuck on it and they spend days spinning the wheels trying to solve this problem.
Our company comes in and just eradicates that as a problem for search engines specifically. And that's where the managed piece comes in. What does that mean? I don't understand for search engines specifically, people building search engines? So people are building an application.
So let's say that you're building some new hot application that's going to show me all the best barbecue in Austin, Texas or in the world. And I'm going to type in, you know, Rudy's barbecue. Well, if I do a lowercase R and uppercase R, a database can't naturally figure out that those are the same thing.
And so you need a separate piece of technology and tool set to find that search engines are idealized for this particular model. Oh, I see. So you're selling to companies that use search for discovery, could be a restaurant or anybody else, and help them make sure that their metadata is formatted in a way to increase discoverability in the search engine. Yeah.
So real quick, a lot of developers have spent a lot of time working with databases. When you get to a search engine, it's a very different paradigm. And so you don't have a ton of experience. So we come in, we don't all... I've heard this term like SaaS plus where we're not just hosting the tools, like giving you that SaaS, like, you know, pay a couple of dollars, get a thing.
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Chapter 2: What is Bonsai.io and how does it function as a managed search engine?
I want to say the story is they were in San Diego. They were at like a Ruby user group and they got into the cab with... like a Heroku person and like hit it off. And it was totally one of those serendipitous moments where they were like, Hey, you know, we need an add on. Will you come and join in this thing? And they were like, well, this sounds awesome. Yeah.
Like this is the cool thing to be in. That's too funny. Okay. And what does growth look like? I mean, you're 55, $550,000 a month today. Where were you like in December of 2019? December, 2019. I want to say we were, um, A year ago. Our annual would have been like 4.9. Okay, got it. 4.9 million. Healthy growth. Where are most of these new customers today coming from?
The Heroku exchange or somewhere else? They're actually referrals is our current big winner from lead generation perspective. And it's at our enterprise tier offering is really what's taking off for us. And so one of the things that's very unique about us is the level of support that we provide. So we've been around for 11 years. We've run solar, we've run elastic search.
We know Lucene back and forth, which is the underlying thing providing the horsepower. Because we've been doing that for so long, when people show up, we're here to help you understand your problems. We oftentimes hear, you know, I got more benefit out of this sales call that I just did with you than I did in this paid engagement with this other company. We love that. I love hearing that.
And so you guys have bootstrapped this. Walk me through the team dynamic. How many people total? We have 14 people. It's 11 developers. One, two, three, four, 13. 13 right now. We just hired our second salesperson and they'll be starting this month, but we are otherwise 13 people and 10 of them are engineers and we have three non-engineering talent. That's great.
Now the two sales folks that you have, do they both carry a quota? Neither of them carry a quota today. We are very much this like... We're a little new agey. We're a little woo woo. And we like thinking about like what keeps people happy, what keeps people engaged. We have a four day work week. We have mental benefits. We have health benefits. We really invest back into our employees.
And so my CEO is really good about always asking the question, like what's the intent or the goal of this practice in the larger business? And is there a way that we can achieve it at a scale of 13? versus trying to cargo cult in an idea that's meant to be for a company of thousands. Yeah. I mean, 13 people and 6 million in revenue. I mean, what is that? 450,000 revenue per employee.
The, you know, the average is 190. So, I mean, you guys are, you're doing something right. I mean, how do you get so much productivity out of these folks? We're only working four hours a week. Yeah, so we are focused on our customers. So we have our help channel where people come in and we don't just solve problems at the surface level. We get in, we engage with you.
And because we're running your search engine, we can actually go and see everything. And we can go in and say like, oh, this is a problem where the user had a configuration issue. And so we might need to work on our documentation, but we'll sit down and square them away. Oftentimes it's a technology thing, right?
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Chapter 3: What growth strategies have contributed to Bonsai's success?
And that's one of the goals for this year. Interesting. Any plans to raise or do you like the bootstrap life? We love the bootstrap life. It lets us stay 100% focused on the customer. Yeah, we love that. Okay, let's wrap up here, Drew, with the famous five. Number one, favorite business book. Creating the Corporate Future by Russell Ackoff. Number two, is there a CEO you're following or studying?
No, I try to just learn from everybody, but I will say that I quote from What is Strategy by, not Paul Krugman. Anyways, I love Southwest's model. There's a bunch of stories that I quote from Southwest. Yeah. Number three, what's your favorite online tool for building? You're talking about Herb Teller, I think, right? Yeah. Southwest? No. I like the Southwest story. So it'd be the early stuff.
So it's probably her, but I study the business versus the person. I see. Okay. Number three, what's your favorite online tool for building a bonsai? Rome research right now. Interesting. Not a notion guy, huh? All right. Any Rome, any Rome research tattoos anywhere on you yet? No, not at all. It's a crazy culture. I love it though. Love it. And you're, and you're in Austin. Are you in Austin?
I am, sir. Yeah. So not Elias. And obviously he's down there and talks a lot, does a lot of Rome tutorials. He's creating a course. We're actually having a meetup on Thursday at my house. So you should come if you're free. I'll send you an invite. Oh, I'd love that. I just got done going through his course. Oh, very cool. Perfect. Small world. How many hours of sleep are you getting every night?
Eight to nine. And what's your situation? Married, single kids? Single. That's how I get eight to nine. No kids. And how are you? 42. 42. Last question, Drew. What's something you wish you knew when you were 20? Man, learning how to take more risks. That's a good one.
Guys found that 11 years ago, the company is now doing $6 million in terms of run rate, bootstrapped up from 4 million about 12, 13 months ago. They're a tool that helps businesses understand how they show up in search, optimize how they show up so they can get more leads, more traffic, and ultimately more sales.
Over 4,000 free users and about 1,600 customers, mostly developers using the platform as they look to scale and continue to scale in app exchanges, referral programs, and otherwise. Drew, thanks for taking us to the top. Thank you. Have a great day.
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