The Exchanges

Q when we last spoke, uh, this would have been back, um, in early 20, 21, actually. You told me, you know, your largest customer was 240,000 bucks a year. You know, you had 1200 customers paying a hundred bucks a month on average. You're doing about 1.5 million in total ARR. Um, and you, I believe you were basically bootstrapped outside of a small seed round. How have things changed?

A Oh my God. There's been a lot of change. So, so at the time we had, you know, a base has always had the intention of being full stack, low code, but we had essentially half the products stood up. So we started with the backend. We had a backend as a service product, and we had a professional services offering that would help people use that backend. And so part of our bootstrapping and dog fooding strategy was to bring services to the table. Uh, do large engagements that implement a base while we were building out the rest of the product. So that rest of the product, which is all the front end tools is now in the market. Uh, in the process of all this, we raise venture capital. Uh, so we closed the 10.6 million dollar round, uh, earlier this year. And, you know, we're in the process of shifting the business model. So taking the services side of what we do, and instead of us doing it ourselves, creating an ecosystem of external providers that do it on behalf of our customers, we've already got, you know, a seed, you know, a bunch of those in place and we're, we're building out more. And then really focusing our efforts on product led growth. So really implementing a product led growth flywheel, and then a B to B sales, uh, effort that goes on top of that.

AI assessment note: “we closed the 10.6 million dollar round, uh, earlier this year”

Q Now is this a no code, low code sort of play, or are you an agency that's building stuff for folks?

A It's, it's sort of a combination of the two. So it's, it's a low code approach and I want to focus on the low code, meaning that it, it is a product used by developers. Um, the idea is that you can build comprehensive products. It's not something you have to throw away. And the focus is on the backend. So the low code platform primarily is on the backend side, all delivered through a very powerful API. And then most of the time our customers are building front ends that consume the backend. But we also, as a services company, we also do that work for customers as well. So sometimes, sometimes we do full stack development on top of our low code platform for customers.

AI assessment note: “It's, it's sort of a combination of the two.”

Q And Albert, I mean, I'm hoping you're gonna blow me out of the fricking water here. They don't churn because if they churn, they essentially lose 200 grand worth of investment they made initially, right?

A No, they look, they, first of all, we haven't had churn, but, but they can churn. And, and, and I'm proud of the fact that they can, because one of the things you'll see, you'll see is that we built everything in a base is built with standards. So it's not like they can just export and go to the next thing, but, but their code is written in JavaScript or TypeScript. They're using React or Vue.js or whatever framework on the front end. Their data's in MySQL. One of the big innovations inside of A-Base is the GraphQL API. GraphQL is a standard. Most, you know, the GraphQL APIs that exist out there, the engines that exist are not as powerful as ours, but nonetheless, with a little bit of retrofitting, it could work. And then there's other things that are inherent in the platform, like role-based security and things like that. But the idea is that we're not, you know, we're not like Salesforce, right? We're like trying to lock somebody in with proprietary languages and all sorts of exotic things. We're basically saying, look, if you want to leave, you can leave. But the idea is why would you ever want to?

AI assessment note: “No, they look, they, first of all, we haven't had churn, but, but they can churn.”

Q when we last spoke, uh, this would have been back, um, in early 20, 21, actually. You told me, you know, your largest customer was 240,000 bucks a year. You know, you had 1200 customers paying a hundred bucks a month on average. You're doing about 1.5 million in total ARR. Um, and you, I believe you were basically bootstrapped outside of a small seed round. How have things changed?

A Oh my God. There's been a lot of change. So, so at the time we had, you know, a base has always had the intention of being full stack, low code, but we had essentially half the products stood up. So we started with the backend. We had a backend as a service product, and we had a professional services offering that would help people use that backend. And so part of our bootstrapping and dog fooding strategy was to bring services to the table. Uh, do large engagements that implement a base while we were building out the rest of the product. So that rest of the product, which is all the front end tools is now in the market. Uh, in the process of all this, we raise venture capital. Uh, so we closed the 10.6 million dollar round, uh, earlier this year. And, you know, we're in the process of shifting the business model. So taking the services side of what we do, and instead of us doing it ourselves, creating an ecosystem of external providers that do it on behalf of our customers, we've already got, you know, a seed, you know, a bunch of those in place and we're, we're building out more. And then really focusing our efforts on product led growth. So really implementing a product led growth flywheel, and then a B to B sales, uh, effort that goes on top of that.

AI assessment note: “Oh my God. There's been a lot of change. So, so at the time”

Q You and me both, and I want a piece, I get two percent. All right. That makes sense. So just to understand to the nature of like SaaS versus your service business, it sounds like they're both material potentially. If you just add up all your revenue over the past 12 months, how much would you say is service sort of revenue versus low touch software revenue?

A Yeah, so those percentages are changing, but call it 20% platform, 80%, uh, services. But the idea is that the, the service revenue feeds the beast in lieu of venture capital while we build up the recurring platform revenue, you know, the margins on the service side are pretty good, but obviously not as good as recurring revenue platform revenue. Right. So, but, you know, if I'm having a conversation with a VC about this, you know, it's like, look, we get it. The service side, not as scalable. But we are innovating in our services group so that we can do things in a more scalable way. There are technologies that we're using there and that are evolving. To make things go really fast, really consistent, and be able to handle a lot of projects at the same time.

AI assessment note: “call it 20% platform, 80%, uh, services.”

Q Mm-hmm. You're using some interesting positioning words on your website. You know, things like the best, not just the best way to build like applications, the best way to build JavaScript applications. Um, and there's, you know, I, you know, niching down in a hyper-competitive space can really work. So why JavaScript applications and what are other examples of how you're trying to focus on a specific niche?

A That's it's interesting that you call it a niche. And I love that. Cause it's actually the biggest niche there is. If you think about low code tools, In general, they've all made people learn a new language, visual language, combination of visual and scripting languages, whatever. What we're trying to say is when you get into a base, you should already know what to do if you're a JavaScript developer, of which there are about fourteen million in the world. So it's the largest pool of developers, you know, around a language in the world. So If you're a customer, think about the benefits of using a low code tool that also brings with it, uh, fungibility from the developer side rather than train up developers on our stack at a high price.

AI assessment note: “What we're trying to say is when you get into a base, you should”

Q Well, no, the two million you just raised, like you're raising it to go hit, to go hit some metrics. What metrics do you want to go hit?

A Yeah. So we, we didn't really call that a series A. We call that more of a series seed, but if we pursue a larger round, it would be a series A. Um, You know, the metrics, I think the metrics we would need for that are pretty much there, which is, you know, growth rate of, you know, recurring revenue of a stable set of clients that have exceeded, you know, recurring revenue, at least of a million dollars in, in ARR, which, you know, that's not an issue. Um, obviously an, an enormous addressable market with a huge unmet need. And I can explain a little bit more about that because you might say, well, low code, there's a bunch of stuff, but I can explain the difference. And then our, you know, the other really good headline is our net retention rate. So if you look at where we start to where we end up with a client and revenue, you see a very significant increase in usage and upsell that happens.

AI assessment note: “recurring revenue, at least of a million dollars in, in ARR”

Q It's not easy to get to, I mean, to a thousand customers, especially when it's a DevOps sort of sale, right? Uh, I mean, walk me through how you got your first 10 customers back in 2017.

A So in 20, we, and we, we've done a little bit of, uh, call it experimentation. So when we first launched the platform, we launched it for free and we launched it for developers. So we tried to go sort of bottoms up developers. And then along the way said, you know, look, this is great, but it's not really a business, you know, even after we launched the paywall. Um, so which was when the paywall was last summer, uh, late, you know, probably about a little over a year ago or about a year ago. And, um, We just, we just realized like developers is, we want developers to love the platform. We want them to support it. We want them to bless it. But B to B is really where the money is. And I'm not, I'm not the type of CEO founder that founds an open source company. Uh, you know, for me, nothing wrong with it. It's just not me. Right. And so for me, I got to have a commercial business. And, uh, when we're talking to developers, it's one sort of conversation when we're talking to business owners, especially, like I said, non-technical founders, they just absolutely love what we bring. Cause we bring a platform built for them that can hyperscale as if they're successful, they never have to rebuild the product. They're talking to people that have built digital products used by millions of people funded by, you know, hundreds of millions of dollars, Silicon Valley money. Uh, and we come in…

AI assessment note: “when we first launched the platform, we launched it for free and we launched it”