SaaS Interviews with CEOs, Startups, Founders
She sold 20% for $4.5m for one SaaS. She's bootstrapping the other one. Key differences
13 Jul 2022
Chapter 1: What milestone did the guest recently achieve in their SaaS business?
Maybe we should be toasting champagne right now because if my math is correct, you just broke a million dollar run rate.
I would rather not comment, but thanks.
As she says with a big smile. 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 Hannah Mohan.
She's the co-founder of Magic Bell, a notifications inbox geared towards app creators. Before that, she founded two other software companies, Support Bee and Muziboo, an online music community where she can upload and discuss songs. She's a programmer, maker, transgender woman who speaks openly about her transition and was the first openly transgender woman to participate in Y Combinator.
All right, Hannah, you ready to take us to the top? I am. Yes. Thank you. Close out the support B story. Cause I remember you coming on being so impressed with how big you grew that bootstrap. Did you sell it?
No, we are still running it and I have a team that runs it and I'm like not involved in the day-to-day operations, but yeah, we did in the business as of now.
Okay. Tell me about magic though. What's it doing? What are people paying you for?
So MagicBell was an idea that came out of SupportBee in fact, because SupportBee relied heavily on notifications, email notifications and mobile notifications. And I just spent so much time building notifications in SupportBee that at some point I figured this actually seems like a more interesting problem for me personally.
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Chapter 2: What is Magic Bell and how does it serve app creators?
What's the story?
So we don't think of ourselves as like a delivery provider. So we price based more on the number of active users because we think that's how we deliver value to you by improving your retention and engagement within the product. And so it's based on the number of monthly active users, which is people who are notified or log in.
So the listed prices are very much kind of, you know, every subsequent plan is more monthly active users. But I think our average revenue is more so because we also sell upmarket enterprise deals. And there are things like infrastructure that's SOC 2 compliant or a data warehouse integration or a support SLA, things like that as well.
If I'm paying you 10 grand a year, how many MAUs do I probably have?
If you're paying us 10 grand a year, then you're probably on our, I would say, the pro plan. And you would have about... 30,000 monthly active users. So let's say a reasonably sized B2B app, B2B SaaS app.
Yeah. Yep. And put all this on a roadmap for me. When did you officially like spin the company out of, of support B when was like the launch date for magic bell?
Yeah. So I actually tried a couple of times really to, you know, uh, separate from support B, but I think like, you know, I got used to a paycheck from support B it was hard, but finally we did it in October of 2020 and we launched pretty quickly. in November 2020 on Product Hunt, got a few paying customers, and we got into YC in the winter of 21.
And then it's been kind of like that path from there on.
That's amazing. And the YC model is 125K for 7%, right?
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Chapter 3: What challenges did the guest face when bootstrapping their previous companies?
I mean, no complaints that we didn't get 500. It's totally okay.
Yeah.
Yeah. Oh no, I didn't even know that was an option. I was just curious what that was.
That's nice.
So your first couple of customers in November, 2020 via product hunt, which is obviously fantastic. Um, how many customers are you scaled up to now today?
Um, I would say like, um, it's about a hundred paying customers. Yeah.
Okay. Okay. And so do you see this longer term, you know, is this going to be MailChimp? It's going to be for millions of people, or it's going to be for a thousand people paying a hundred grand a year.
I think it's going to be somewhere in between a braise and a Twilio.
That's a really good analogy. Do you guys care about valuation right now, specifically your valuation? Do you think you might raise soon or sell a portion of the company? There is no other tool on the internet that you can use to get a better and higher valuation than FounderPath's new valuation tool.
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Chapter 4: How does Magic Bell's pricing structure work?
Okay, fair enough. So six engineers. What are the other four or five people working on?
We have a marketer. We actually do have an operations person because it really helps. I mean, one thing I think I realized was like, I was so used to half of my time was actually going into operations really in my bootstrap startup. And so I figured this time I should create more time for actually building the business.
We have somebody to help us with customer support because we want to provide a different level of kind of service upfront. And we have a product designer and we also actually have in the very early days, we had a more generalist, but brand-leaning designer. And it's actually been one of the decisions that's worked out quite well for us.
Oh my God. The website's beautiful. It's paying off. Clearly, it's paying off.
Yeah.
Yeah. So tell me a little bit about how you went from three customers from Product Hunt to 100 customers today. What's the go-to-market strategy here?
I mean, unfortunately or fortunately, it's really mostly content and posting on LinkedIn, things like that. We've had some referrals, but our product launch and Hacker News launch helped. But it's actually largely been content. I mean, the funny thing is those things really don't change that much. We are figuring out outbound, but it's definitely not trivial.
we're certainly rooting for you this is a heck of a story which is fun uh in the meantime though here hannah let's wrap up with the famous five number one last business book you read i can't recall actually but um actually built by tony fidelik yeah yeah let's go to number two is there a ceo you're following or studying
i actually think uh jeff lawson is a great ceo and then you know launch darkly edit uh she's pretty amazing yeah yeah uh a a great great story there too number three how many hours of sleep to get every sorry uh what's your favorite online tool for building magic well besides your own
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