SaaS Interviews with CEOs, Startups, Founders
Windsor Breaks $55k MRR, Turns Down VC, Loves Bootstrapped
23 Jun 2021
Chapter 1: What is the main topic discussed in this episode?
We are bootstrapped and we have been profitable from the start and are still quite profitable. 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. Hello, everyone. My guest today is Nicholas Kolster.
He's a serial entrepreneur and founder of Finland's first VoIP company. He worked with data science and algorithms for 10 years in e-commerce and large enterprises and a startup that was acquired by Facebook. He realized that algorithms were rarely the problem, but data silos were the real problem and started to solve that problem with Windsor.ai. Nicholas, you ready to take us to the top? Yes.
Okay. So tell us what year you launched Windsor. We launched in 2017. We started working with enterprise customers, started to solve this data silo problem for them. And yeah. I've been going since then. When you say enterprise customers, I mean, what was the size of your first deal that you closed? Do you remember? The size of the first deal, it was maybe 20,000 or so. How did you do that?
I mean, that's rare to launch and go from zero to your first customer as a $20,000 deal. Yeah, we started very enterprise type sales so that we started contacting companies quite a lot. We did a lot of sales back then. We met so many different companies, decision makers. And then we found some very happy companies. Some very happy customers that trusted in us.
Of course, there was quite a lot of work to do there. Now, fast forward to today. Are you still selling, on average, your plan size is $20,000 per year? No, that has been a big change that we have been doing. We have been really automating the product, making it much more self-service.
And I think it was maybe 18 months ago that we started to really, really focus on making the product more self-service, much more low touch, because that seemed to us to be the way to grow, to really separate the custom work from the growth and so on.
And I think there's some interview with Justin Lemkin where he says that it's much easier to move upmarket more towards enterprise than to move downmarket. And yeah, we noticed that. It's always greener on the other side. Everyone listening right now with a $40 average ARPU wants to have a $40,000 average ARPU. Everyone that's enterprise wants a bigger top of funnel, wants to move downstream.
That's how it works. Yeah, true. So what's the average customer paying you now per day? Probably per month. Per month, it's around 1,000. Okay, 1,000. So you've come downstream a little bit. Now, have you done all this bootstrapped or did you raise capital? We are bootstrapped. And yeah, we have been profitable from the start and are still quite profitable. Who's we? Do you have co-founders?
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Chapter 2: What is Windsor.ai and when was it launched?
We have really tried so that everyone who has been with the company for a while is also an owner. Tell us how you set that up. Sometimes people don't understand how to set that up. We have a stock option pool that everyone who has been with the company can join. And when they have been with us for six months or so, then they automatically become part of it.
And how many people are on the team today? We are 10 people today. 10 people. How many engineers? Nine. Oh, wow. It's almost all engineers. Yeah. Almost everyone in the company can write SQL and so on. We believe that's quite important. But of course, now it becomes much more important to also focus on marketing and so on. Of course. Now, how many customers are you serving today?
Chapter 3: How did Windsor.ai secure its first enterprise customer?
Today, it's 50, 60, around that range. 50 or 60. Okay. So, I mean, can I take 55 times $1,000 ARPU? You're doing about $50,000 per month? Yeah, it's in that ballpark. Okay. And when you go back a year from today, what was monthly recurring revenue? It was, um, I think it was, it was around 40. Okay. Yeah. How did you get, how did you get that growth?
Is it coming from adding new customers or expanding old customers? It's both. It's both. Okay. Okay. So it's coming from both, but again, a lot of this is happening in the product because you don't have a sales team. So it's all, it's all inside the product, right? Yeah. True. True. I'm very picky with sponsors I have on the show.
Usually I use the show and you guys, the audience as leverage to ask for a great deal. And I simply won't take on the sponsor unless number one, I love the product. And number two, they're giving us a special unique deal for our audience. Well, Zendesk reached out recently. And you know, me personally, I've watched other tools in Zendesk, the customer support space, increase price.
They try and upsell you 20 different products and It's expensive because they want to move to the enterprise to make their investors happy. Well, Zendesk is publicly traded, and that means they have a lot of cash to throw around, which means they can afford to give startups a great discount. In fact, all these enterprise tools, I convinced them to say, you know what?
We'll give it to your audience, Nathan, for free for six months. So here's the caveat. If you're pre-series B... or you have fewer than 50 employees, you're eligible today. Go to nathanlaca.com forward slash Zendesk to get their best customer support tools totally free for six months. Again, that's today, nathanlaca.com forward slash Zendesk.
Now, you've done a great job setting up your pricing page at windsor.ai forward slash pricing. There's a lot of things. There's a lot of paywalls users can hit, right, based off the usage, the utility value. So number of reports, number of users, data source connectors, destinations, number of rows. Which one of these sort of number-based upsells has been the most effective for you?
Which one do people use the most? Yeah, it's still many times a little bit a discussion when companies upgrade. But the number of data sources, the data volume, and so on. And also a little bit how much support is needed. These are the drivers. Are you doing any upsells for setup fees? No, no, we're not doing that. Yeah, yeah. Any plans to raise capital?
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Chapter 4: What changes has Windsor.ai made to its pricing model?
Not right now. I mean, we have been receiving quite a lot of inbound VC contacts, but we have not yet seen the case, but maybe it comes someday. What inbound for you from a VC was the most exciting? Did they name evaluation? No, we didn't go that far in the discussion. What did they say? Yeah, quite many have been interested in the space and so on.
Maybe there is some correlation between some of our competitors raising capital and the activities increasing there. I'm not sure. Who are some of your competitors that have raised? It would probably be, of course, funnel.io and maybe also rockerbox, because we also do the attribution modeling. What box? Rockerbox could be one from the US. Rockerbox.
Yeah, because we also do the multi-touch attribution modeling. We don't only do the data integration. So the attribution modeling has been quite an important part for our customers also. So you're doing about $700,000, $600,000 per year right now in terms of your annual run rate. If someone came and offered you $10 million all cash upfront today to sell the business, would you sell?
Not sure, not sure. Would have to discuss, of course, also in the theme and so on. But yeah, definitely would think about it, yeah. What sorts of things would you need to think about? Like, yeah, would have to discuss a little bit, like, what's the vision and these kind of things. Very cool. All right, what's the next product roadmap? What are you guys releasing next?
We have been focusing so much on the UX, improving the UX, the onboarding. And now next we're going to improve all the features around predicting revenue, predicting success for the campaigns and these kind of things. So these are quite important. And at the same time, making integrating different data sources easier. so that it becomes easier to also add CRM data into the whole data stream.
Are you tracking churn at all, Niklas? Not so much. Of course, we get very sad when we lose a customer, but it has not been happening so much. Maybe like one or two customers per month or so. Okay. And how much revenue do they usually represent? It varies. It varies. Many times they are small. Okay. Got it. All right. And do you have real expansion revenue upselling? Yeah. Yeah. Yeah.
A little bit, a little bit. Some customers have been upgrading a lot and also expanding to different teams in the company and so on. So that has been, that has been quite, quite good. Maybe 10, 10, 20% or so. Okay. Very cool. Nicholas, good stuff, man. Let's wrap up here with the famous five. Number one, what's your favorite business book? I would probably mention this Creative Selection.
It's a little bit of an unknown book, but it describes how Apple developed the iPhone and all the challenges, all the different engineering problems they had to solve. It's really fascinating. Creative Selection, inside Apple's design process during the golden age of Steve Jobs. Yeah. All right. Number two, is there a CEO you're following or studying? I'm not following any particular CEO.
I'm trying to pick up things from here and there as much as possible. Number three, what's your favorite online tool for building Windsor? I would actually have to say that it's a Discord. We rely quite a lot on Discord, the chat tool. Number four, how many hours of sleep do you get every night? Eight. And what's your situation? Married, single, kids? I'm married with two kids. Two kids?
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