SaaS Interviews with CEOs, Startups, Founders
They Used ProductHunt to Make $60,000 for their New SaaS, 6,000 signups
07 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
So you have 20 customers today paying $250 per month. So you're doing about $5,000 a month today in revenue, right? Exactly. Yeah. 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 Pierre Touzeau.
He co-founded CLAP, that's C-L-A-A-P, alongside his partner Robin and Tom to create a new decision-making system for the distributed era. Before CLAP, Pierre was VP of Marketing at 360 Learning, a softbank-backed company famous for its async and distributed culture. All right, Pierre, are you ready to take us to the top? Yes, perfect. All right. So how would you describe CLAP? What's the tool do?
Yes, so Clap, it's an async video collaboration platform. So basically, the key is to say that you have this big shift to a distributed world. One big problem that we have is that back-to-back meetings have become the norm. But we like the core of the problem is that any time today we want to align and make decisions, basically, we are kind of stuck between two options.
We have option one, async written communication, like Slack, Notion, and so on. It's flexible. But at some point, we like context, we like interactivity. So anytime we're stuck, we need to revert back to meetings. We're like, okay, let's talk about it. Let's align. And we end up in a Zoom call.
And the idea behind what you call async video collaboration is really to create this new way to align and make decisions that combines both the flexibility of async communication with the context and interactivity of a meeting. And basically the way it works is like, let's say I'm a product manager or business guy. Oh, Pierre, hold on real quick, just to pause for a second.
So it's effectively like Loom in the sense that it's asynchronous, but Zoom, Z-O-O-M, and the fact that you can still do live meetings. Exactly. To sum up, it's Loom, but for feedback and decision-making because we add on top of Loom a layer of collaboration together to annotate the video, to make decisions and so on.
But it's also a way to centralize all the videos you have in your company in just one place. There's some light project management tools built on top of the video so you can get stuff done. Exactly. The way the workspace is built is really inspired by collaboration tools like ClickUp, Notion, Asana, and so on. I don't want to bury the lead here. You just recently launched on Product Hunt.
How many uploads did you get? So I think we got 1,400. Actually, it's a funny story because at first we got 1,800, but we had 400 votes deleted the week after. So I think it's one of the learning I can share. If you ask too many people that don't have any account on the product to vote, you might get some votes deleted. But right now, I think it's 1,400 votes.
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Chapter 2: How does CLAP facilitate async video collaboration?
So actually like the second one is a proper use case. And then we also realized that the retention rate was actually like pretty high actually like once you are like activated. So that's really like one metric that we optimize for.
So just to be clear, when someone signs up for clap, you want them to create two claps as fast as possible, two videos, and then ongoing for retention, you want to see them engage with 15 to 20% of the total videos that they create to some degree. No, no, no, no. So to be clear, so we have like one stuff that we measure, which is activation rate.
The way we define activity user is to clap recorded.
uh today the activation rate we have is in between 15 to 20 which is really definitely something we need to improve but then the retention rate we have uh it's around like a 70 to 75 after 12 weeks and i think it's also part of reason why we launched on product hunt is that because we knew that the existing users that kept using the platform they were like really engaged with the product
So we're actually pretty confident that we have a product to sell and to have people use it. And that's the moment we decided to launch on product. And to Pierre, how many people are active today? They've created at least two videos. So we have around 1,400 activated users on the platform. Okay. And so we understand the product hunt. We understand top of funnel.
We understand conversion into active users, 20% or about 1400 today. So you almost have five, 6,000 total signups then, right? So maybe 7,000. Yeah. So you've got 1400 active. You guys then start going, you know what? We need to make money from this. We can build a real business. So how did you think about what to charge and who to show the paywall to?
Okay, so it's actually a good question because we tried to build a PLG model. And when you build PLG, you always have a debate about what is the right moment to launch monetization. And we actually decided to launch it pretty early, not to have a payroll, but at least to monetize the existing user.
because for us it's really a way to assess if you have product market fit because like meaning if people are ready to pay for it it means that you have like something that you want to scale so we've done two things for that um the first one is that we actually like contacted uh the accounts that we knew uh and that were actually like using a clap a lot with basically like more than 20 30 users and so on and the second stuff we did was
Purely like to show a pop-in in the product saying, you've reached your account limit. Now it's time to pay. Head direct to the pricing page and then book a call with me. How many people? What was the limit? Who saw the banner? So the banner, we actually like show the banner for the workspaces with more than 50 claps recorded. With more than five zero videos created, claps created? Exactly. Yeah.
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Chapter 3: What did the Product Hunt launch achieve for CLAP?
We have over 253 deals that went down over the past 30 days, all the revenue numbers, all the valuations, and the multiplier. That way you can go filter the data, find companies that are your same size, what they sold or raised for or at, and then use those as comparables in your decks to argue and debate and get.
a higher valuation and less dilution, which is the name of the game, less dilution. Check it out today at founderpath.com forward slash products. That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. Okay, so there's 2,000 companies on your platform with 7,000 employees or users. Is that the right way to think about it? Okay.
And then how many of... Okay, so of those 2,000 companies, 60 of them are power companies. They have at least 50 videos created. Exactly. We decided to trigger this for those companies. Yeah, exactly. That makes sense. Okay. So of those 60 accounts or workplaces that saw the paywall, 20 of them have converted to paid. Exactly. Now we're on the same page. Okay.
So today you have 20 paying customers. Exactly. Amazing. Okay. So now that we understand the funnel, tell me about the price. How do you decide what to charge? I think the price was... There are like two stuff. First one is like a market benchmark. And you compare to like existing solutions, et cetera. So we decided to go with like $10 per month per user.
And the second stuff is also based on the, we say like the willingness to pay and how indispensable your tool is. And for example, in some teams like product design and so on, we know that they have like essential workflows built with Clap and we can really monetize this easily.
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Chapter 4: How many signups did CLAP receive from the Product Hunt launch?
So we have like one entry point, which is like the one team plan, which is like $10 per month per user. But then we can also upsell to like $20, $30 per month per user by adding like other features such as like meeting, recording and so on. So you have 20 paying customers or workplaces today, right? 20 companies paying for your tool. What does a company today pay on average per month?
On average, they pay 10 euros per month per user. Well, I don't know how many users. That's what I'm asking. As a company, what does the company pay on average per month? Per month, I would say they pay an average between 200 to 300 monthly recurring revenue. Okay, so they're signing up for 25 paid accounts on average right away. Exactly.
And I think it's a good validation because something that we really wanted to validate is that we are not purely a user tool. And I think it also ends the confusion on this, but we are really a team tool, a team platform. And once people pay for it, they don't pay just for one or two users, but they really build for one entire team or maybe two teams on clap.
And it's also mostly, I would say, hyper-growth tech startup. So actually, the number of users per workspace can actually become quite big on those accounts or companies. Understood. So you have 20 customers today paying $250 per month. So you're doing about $5,000 a month today in revenue, right? Exactly, yeah. And where were you exactly a year ago? Zero, right?
Yeah, a year ago, we actually launched the product a year ago. Okay, so no revenue. Okay, got it. So when did you start coding? You started coding, I think, back in 2020, right? No, we actually started coding end of 2020, beginning of 2021. For six months, we really built the product. We launched in private beta in July 2021.
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Chapter 5: What is the conversion rate of signups to paid users for CLAP?
So actually for 10 months, we remained in private beta. We had actually a huge wait list of 3,000 users. So we had a lot of people to onboard. But I think the goal was really to understand the use cases where we have a quick activation and virality. Also validate that the retention is good. And once we had a good user retention, that's the moment we decided to open the product.
rebuild the website, the branding, the content, and so on, refine the onboarding to say, okay, now we are going to test to open the product on the product end. Understood. And you raised a 3 million seed in 2021, right? Exactly. In 2021, yeah. Most companies are selling 20% of their business in their seed. Did you sell about 15% to 20%? No, it was less, actually. Oh, it was less than 10%?
No, it was less than 20%. Oh, less than 20%. Okay, got it. So between 10% and 20% though? Exactly, yeah. I see. Okay, so that's like a $20 million valuation, something like that, pre-money? Pre-money, it was a bit less. In dollars, I think it was around $17. And have you been able to use that $3 million to get to where you are today or did you have to go raise more capital?
Chapter 6: How does CLAP define and measure activation rate?
No, we still have a lot of, like, we have, like, two years of runway left. I think we have, like, the type of product we build is not, like, super cash intensive because we are, like, still pretty small. We are just 14 in the company. One Ford total? How many engineers? Yeah. Eight engineers. Okay. Any sales people yet or no?
Just one sales, but actually he left and I think it was maybe a bit too soon to do it. So right now it's more me doing sales and we have one head of customer success, actually like the former head of customer success from Typeform. And I think this is something you should prioritize when you do like a PLG. But sales, I feel like it's something that the founder...
must do at the beginning especially like when you test like use cases pricing and all this kind of stuff because it's a lot of product marketing work that you need to do now when you talk about you know obviously runway you got to talk about what is your you know burn per month so you have 14 people your revenue is still growing i mean are you burning what 100 grand a month 150 000 a month yeah 100 100 net burn net burn yeah and you're comfortable with that that doesn't keep you up at night
No, I think we're comfortable because like two things, we have like two years of runway left by adding actually like one software engineer. So that's, we are comfortable with that. And also second stuff, I think we have a pretty good signals on our side of PMF. And so we are like, yeah, we are pretty confident on this.
Pierre, how do you have three years of runway if you're burning a hundred grand a month? That's 1.2 years times three is... Two years of runway. No, and I think like something I forgot to mention, but so we are based in France and in France, when you raise the like 3 million, you can add on top of that some debt.
And actually like we add 1.5 million of debt thanks to like a BPI, which is like the public investment bank. So actually like in total, we got like a 4.5 million. I see. I see. I see. Do you have to pay that debt back or is it basically free money from the government?
it's basically you need to pay back if you succeed and for any fundraising you can actually get more debt but if you fail you don't need to pay back Yep. Yep. Makes sense. Very cool. Well, listen, this is a ton of fun. It's interesting for me to compare your story with Looms. I had them on right before they were launching their paywall, but they had 1.2 million active users.
And so you're choosing to launch paywall way before they did in terms of your just pure usage numbers. I'm sure you are aware of that comp. And I'm imagining that that was an intentional decision you made. Why? I think it's because the play we have is a bit different. And I think also the angle we approach, I think Clap is really a collaboration platform.
Loom was more of a pure PLG product, basically enabling individual users to share quick videos in Slack, email, and so on. But in the end, what we realized is that Clap, we are a platform that teams used. We wanted to validate that teams are willing to pay for that.
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