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Jun 28, 2018 · 15m · top-founders

1069 Elastic CEO: We're A More Professional Zapier

Renat Zubairov · 8m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs, host Nathan Latka interviews Elastic.io CEO Renat Zubairov about pivoting from self-serve SaaS to enterprise iPaaS, scaling toward $200,000 MRR, and completing a majority acquisition with mVISE AG.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38.7% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 4.3 Guest disagreement 2.0 Nathan pushing back 4.0
05100:0010:000:49–2:59 · Nathan as informed peer 5/10 Elastic.io Overview and Professional Integration Comparison Nathan probes Elastic.io's differentiation by bringing up competitors like Zapier and Segment. Renat clearly educates on the distinction between integration SaaS for end users and integration platform as a service (iPaaS) for professional integration teams, while Nathan calculates their contract values.3:00–5:05 · Nathan as informed peer 6/10 Founding Journey and the Cloud Architecture Opportunity Nathan demonstrates domain knowledge by referencing his recent interview with Talend leadership. Renat shares his perspective on the shift to the cloud being akin to the transition from mainframes to PCs.5:05–9:23 · Nathan as informed peer 6/10 Bootstrapping, Angel Backing, and Majority Acquisition Nathan persistently drills down on funding, the 75% acquisition by MBIS AG, and exact revenue figures. When Renat mixes up year-over-year growth periods (mentioning 2017 to 2018), Nathan immediately pushes back and forces him to clarify the timeline.9:27–14:02 · Nathan as informed peer 6/10 Mid-Roll Sponsor Break: SignEasy Platform Following an ad read, Nathan challenges Renat on unit economics including logo vs revenue churn and agency partner CAC. When Renat admits he cannot immediately state the payback period, Nathan insists that as a SaaS CEO it is a metric he must track.0:49–2:59 · Guest teaching 5/10 Elastic.io Overview and Professional Integration Comparison Nathan probes Elastic.io's differentiation by bringing up competitors like Zapier and Segment. Renat clearly educates on the distinction between integration SaaS for end users and integration platform as a service (iPaaS) for professional integration teams, while Nathan calculates their contract values.3:00–5:05 · Guest teaching 4/10 Founding Journey and the Cloud Architecture Opportunity Nathan demonstrates domain knowledge by referencing his recent interview with Talend leadership. Renat shares his perspective on the shift to the cloud being akin to the transition from mainframes to PCs.5:05–9:23 · Guest teaching 4/10 Bootstrapping, Angel Backing, and Majority Acquisition Nathan persistently drills down on funding, the 75% acquisition by MBIS AG, and exact revenue figures. When Renat mixes up year-over-year growth periods (mentioning 2017 to 2018), Nathan immediately pushes back and forces him to clarify the timeline.9:27–14:02 · Guest teaching 4/10 Mid-Roll Sponsor Break: SignEasy Platform Following an ad read, Nathan challenges Renat on unit economics including logo vs revenue churn and agency partner CAC. When Renat admits he cannot immediately state the payback period, Nathan insists that as a SaaS CEO it is a metric he must track.0:49–2:59 · Guest disagreement 2/10 Elastic.io Overview and Professional Integration Comparison Nathan probes Elastic.io's differentiation by bringing up competitors like Zapier and Segment. Renat clearly educates on the distinction between integration SaaS for end users and integration platform as a service (iPaaS) for professional integration teams, while Nathan calculates their contract values.3:00–5:05 · Guest disagreement 1/10 Founding Journey and the Cloud Architecture Opportunity Nathan demonstrates domain knowledge by referencing his recent interview with Talend leadership. Renat shares his perspective on the shift to the cloud being akin to the transition from mainframes to PCs.5:05–9:23 · Guest disagreement 3/10 Bootstrapping, Angel Backing, and Majority Acquisition Nathan persistently drills down on funding, the 75% acquisition by MBIS AG, and exact revenue figures. When Renat mixes up year-over-year growth periods (mentioning 2017 to 2018), Nathan immediately pushes back and forces him to clarify the timeline.9:27–14:02 · Guest disagreement 2/10 Mid-Roll Sponsor Break: SignEasy Platform Following an ad read, Nathan challenges Renat on unit economics including logo vs revenue churn and agency partner CAC. When Renat admits he cannot immediately state the payback period, Nathan insists that as a SaaS CEO it is a metric he must track.0:49–2:59 · Nathan pushing back 3/10 Elastic.io Overview and Professional Integration Comparison Nathan probes Elastic.io's differentiation by bringing up competitors like Zapier and Segment. Renat clearly educates on the distinction between integration SaaS for end users and integration platform as a service (iPaaS) for professional integration teams, while Nathan calculates their contract values.3:00–5:05 · Nathan pushing back 2/10 Founding Journey and the Cloud Architecture Opportunity Nathan demonstrates domain knowledge by referencing his recent interview with Talend leadership. Renat shares his perspective on the shift to the cloud being akin to the transition from mainframes to PCs.5:05–9:23 · Nathan pushing back 6/10 Bootstrapping, Angel Backing, and Majority Acquisition Nathan persistently drills down on funding, the 75% acquisition by MBIS AG, and exact revenue figures. When Renat mixes up year-over-year growth periods (mentioning 2017 to 2018), Nathan immediately pushes back and forces him to clarify the timeline.9:27–14:02 · Nathan pushing back 5/10 Mid-Roll Sponsor Break: SignEasy Platform Following an ad read, Nathan challenges Renat on unit economics including logo vs revenue churn and agency partner CAC. When Renat admits he cannot immediately state the payback period, Nathan insists that as a SaaS CEO it is a metric he must track.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 41.1% · guest 58.9%0:00 · Nathan 41.1% · guest 58.9%3:00 · Nathan 15.7% · guest 84.3%3:00 · Nathan 15.7% · guest 84.3%6:00 · Nathan 38% · guest 62%6:00 · Nathan 38% · guest 62%9:00 · Nathan 38.7% · guest 61.3%9:00 · Nathan 38.7% · guest 61.3%12:00 · Nathan 45% · guest 55%12:00 · Nathan 45% · guest 55%15:00 · Nathan 97.9% · guest 2.1%15:00 · Nathan 97.9% · guest 2.1%
Sharpest disagreement ▶ 12:31 Correcting customer definition on CAC

Renat counters Nathan's simplified CAC assumption by explaining that partner acquisition is complex and cannot be treated as instant return software sales.

 Hardest push from Nathan ▶ 8:39 Interrogating growth timeline inconsistency

Nathan halts Renat's narrative to point out that 2018 is still underway, forcing Renat to restate his 700% and 100% growth intervals correctly.

 Biggest teaching moment ▶ 1:36 Explaining iPaaS vs SaaS integration architecture

Renat reframes Nathan's simple comparison to Zapier by articulating the architectural differences and the enterprise professional user base Elastic targets.

 Nathan holds their own ▶ 7:29 Estimating MRR from unit pricing and client volume

Nathan demonstrates SaaS expertise by multiplying the $10k ACV floor with the 200 customer base to accurately back into Elastic's ~$200k monthly run rate.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Elastic.io Overview and Professional Integration Comparison 5523 Nathan probes Elastic.io's differentiation by bringing up competitors like Zapier and Segment. Renat clearly educates on the distinction between integration SaaS for end users and integration platform as a service (iPaaS) for professional integration teams, while Nathan calculates their contract values.
Founding Journey and the Cloud Architecture Opportunity 6412 Nathan demonstrates domain knowledge by referencing his recent interview with Talend leadership. Renat shares his perspective on the shift to the cloud being akin to the transition from mainframes to PCs.
Bootstrapping, Angel Backing, and Majority Acquisition 6436 Nathan persistently drills down on funding, the 75% acquisition by MBIS AG, and exact revenue figures. When Renat mixes up year-over-year growth periods (mentioning 2017 to 2018), Nathan immediately pushes back and forces him to clarify the timeline.
Mid-Roll Sponsor Break: SignEasy Platform 6425 Following an ad read, Nathan challenges Renat on unit economics including logo vs revenue churn and agency partner CAC. When Renat admits he cannot immediately state the payback period, Nathan insists that as a SaaS CEO it is a metric he must track.

Statements from this episode (10)

Opinion
Elastic.io Targets Professional Integrations Compared to Zapier's Simpler Use Cases
“The Zapier is what's called integration software as a service. So they are more focused on predefined ready to use simple scenarios where integration platform as a service, we are working with a more comprehensive use cases, high value use cases, which is in t…”
Renat Zubairov Jun 28, 2018 ▶ 1:41
Assertion Not checkable as stated
Zubairov: Elastic.io Average Contract Exceeds $10K ARR
“So we are on like 10 K plus ARR for an average contract.”
Renat Zubairov Jun 28, 2018 ▶ 2:31
Disclosure
Elastic.io Bootstrapped For Its First Year Using German Social Support
“We bootstrapped actually you know, in Germany, we have a very good social system and we basically survived from our savings and this social support for a year.”
Renat Zubairov Jun 28, 2018 ▶ 5:08
Disclosure
Publicly Traded mVISE AG Acquired a 75.1% Stake in Elastic.io
“So we, as of March as of March this year, we are part of a larger organization, which is MBIS AG. This is a publicly traded company here in Germany. Although it's a really publicly traded company, which like also grows on the similar pace as we grow, like over…”
Renat Zubairov Jun 28, 2018 ▶ 6:36
Assertion Not checkable as stated
Elastic.io has approximately 200 business customers
“So right now we're having around about like 200 customers, which is a company's business customers.”
Renat Zubairov Jun 28, 2018 ▶ 7:13
Assertion Not checkable as stated
Majority of Elastic.io Customers Come From White-Label and OEM Partnerships
“We're still a lot of direct and indirect customers, you know, so it's not, majority of our customers, it's to be honest, indirect customers. As we are pretty much focused now on white-labeled and OEM partnerships.”
Renat Zubairov Jun 28, 2018 ▶ 7:54
Assertion Not checkable as stated
Elastic.io grew 700% in 2016 and 100% in 2017
“I mean the groove and we grew from January, 17 to January to December, 17, around about a hundred percent and January. 16 to December, 16, around about 700%.”
Renat Zubairov Jun 28, 2018 ▶ 8:47
Assertion Not checkable as stated
Elastic.io experiences roughly 5% annual churn driven by org changes
“Well, it's maybe five percent a year. And actually the churn is, we see the churn due to the changes in the organizational structure, but very, very little ones. There's no churn due to the product replacements.”
Renat Zubairov Jun 28, 2018 ▶ 11:00
Assertion Not checkable as stated
Elastic.io estimates agency partner acquisition cost at roughly $10,000
“My gut feeling would tell me it's like something like maybe 10 K per partner.”
Renat Zubairov Jun 28, 2018 ▶ 13:13
Assertion Not checkable as stated
Elastic.io estimates CAC payback period between 6 and 12 months
“I believe it's somewhere, somewhere between six and 12 months.”
Renat Zubairov Jun 28, 2018 ▶ 13:43
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