Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I talked to Jacob eyting, founder and CEO of RevenueCat, a SaaS platform that helps mobile apps to power in app subscriptions.
Jacob was working as a CTO for a mobile app company and it was a real pain for him and his team to enable in app purchases and subscriptions.
He thought it would be a great idea if someone could make it easier, but he did nothing with the idea for two years.
Eventually he left his job to build a solution himself.
He started with a simple SDK and posted about it on Reddit and he was torn apart by people who thought that he was trying to become an unnecessary middleman.
But there were a few people who understood the pains and were interested in his solution, so he focused on them.
He improved his product and did a beta launch, but he only had 5 people sign up and create an account.
It seemed like his idea was going nowhere.
He wasn't generating any revenue and he was relying on his wife's income.
He had a few months of Runway left, but he didn't want to spend a lot of time improving the product if he didn't have customers guiding him.
So he started writing content.
He spent six to 12 hours a week writing and publishing a blog post every week and he did this for a couple of months.
He kept doubting himself.
He didn't think he had what it took to turn this idea into a real business.
Slowly, he started to see some SEO traffic trickle in.
He finally got customers and was making $400 in monthly recurring revenue.
But that gave him the encouragement to get more serious.
By the end of that year, he'd grown his business to 7k mrr.
He started to think that maybe he could even grow it to a six figure a year business.
But the last couple of years have been huge.
Jacob has grown his business to over 160k monthly recurring revenue.
That's over $2 million annual run rate.
In this interview, you'll learn how he's gone from struggling to finding customers to building a multimillion dollar SaaS that's still growing very fast every month.
Hope you enjoy the interview.
Jacob, welcome to the show.
Jacob Eiting (02:58.950)
Hi.
Glad to be here.
Omer (03:01.830)
So do you have a favorite quote?
Something you can share with us that inspires or motivates you or will get us excited or inspired about our Days.
Jacob Eiting (03:10.370)
Yeah, no, I do.
And I'll probably miss the tribute, but I think I heard it through one of the Stripe founders, but I think it's Lance Armstrong quote, but don't hold me to that.
It says it doesn't get any easier, you just go faster.
And as I think of the last couple of years as we've been scaling revenuecat, you're always ready to Every hill is a false hill.
Every hill you cross, it's just there's another bigger hill on the other side.
And once you settle into that, things kind of get easier.
You just realize it's just always going to be this hard.
It's just going to be different.
There's a corollary along with that too.
I think it came from another Stripe employee actually, that I heard, which is the only reward for hard work, is more hard work.
Seems to certainly have held up for at least these first few years.
Omer (03:52.550)
Okay, so for people who aren't familiar with revenuecat, tell us about what does the product do, who's it for, and what's the big problem you're helping to solve?
Jacob Eiting (04:00.470)
Yeah, so we make an SDK and an API for mobile developers to add subscriptions to their apps much easier.
And it allows them to build and scale their businesses by providing dashboards and integration tools and really just all of the missing infrastructure that the platforms like Google and Apple App Store don't necessarily provide out of the box.
By using our system, you kind of get most of what you would maybe take a year building if you were building one of these businesses from scratch.
Omer (04:29.730)
So you guys launched in around 2017.
And when I was doing research for this interview, I found a revenue number around November 2018, which was 6.9K MRR.
And now we're talking July 2020.
So two years on, less than two years on.
And that 6.9K MRR number has gone
Jacob Eiting (05:02.070)
to something like 161.161K.
Omer (05:09.130)
That is awesome.
Okay, great.
So we're going to dig into the story of how you started the business and all the things you needed to do to get that initial traction and, you know, get to around 7k mrr.
And then we're going to talk about growth and what's happened in the last two years just to drive that sort of growth with revenue.
Cat.
So why don't we start with how did you come up with the idea for this product?
Jacob Eiting (05:35.940)
So my co founder and I, prior to starting this company were worked together.
We were on an engineering team at a company called Elevate, which was a Brain training app on the App Store.
So it was games on your phone that kind of helped you with language skills and kind of keeping sharp.
And we were very early to the App Store as far as like building a subscription based consumer product on the App Store.
We provide these games and this content and you pay us a. I don't remember what the price was, a 4.99amonth subscription or 8.99, whatever it was.
And we kind of had this interesting experience.
We launched the product, we didn't have subscriptions in it.
The product was not monetizing very well at all.
The company was kind of in a, in a tight spot.
Then we were like, okay, let's, let's just see if we can monetize with subscriptions.
So we shoved in subscriptions really quickly.
And then that next week Apple calls and tells us that we're going to be App of the Year, which was great.
It saved our company.
It was amazing.
Launched us on this crazy trajectory.
But what ended up happening is we had this really rushed subscriptions infrastructure that suddenly was loaded with all this usage and okay, so dust settles from App of the Year and we're trying to figure out, okay, how do we build this business?
It was like, well, how many people are churning?
We don't know that.
How many people are converting from free trial to paid?
We don't know that.
Who's converting from free trial to pay, et cetera, et cetera.
All these things that Google and Apple subscription platforms don't really make easy for you to extract.
We were spending a ton of our engineering resources internally building backend systems to just extract this data, give it to marketers and other stakeholders who were, you know, working to scale the company.
My co founder and I, I remember having a conversation in probably 2015 being like, this is really dumb.
Why are we, it sucks at every sprint.
We have to spend more time on this system.
We should build something or somebody should build something.
Then of course, we just waited two years before we actually did anything.
But that was, that was sort of the beginning of revenuecat as a product.
But it wasn't for a couple years on that.
We actually started working on it after that.
Omer (07:33.020)
So, I mean, I don't know that much about app development, but it doesn't seem like the easiest problem to solve.
So it's not like, you know, yeah, I'm going to kind of go away and build this MVP over a weekend and people are going to start using it.
And then as you and I were talking earlier, there's a whole Bunch of overhead that comes with this in terms of when you're having this infrastructure play and apps are so dependent on you, there's got to be such a high level of trust before they start using you.
So how did you get started?
Jacob Eiting (08:10.420)
So, I mean, we started just with a small.
I mean, we still started with an mvp.
So my first, our first anything was I was like, okay, if I were building this for me at Elevate, like, what would I want it to look like?
And we coded it.
I coded up a little SDK and Miguel, my co founder, wrote up a little API to service that SDK.
And I went on Reddit and was like, hey, does anybody want to use this?
And of course, like, I got torn apart.
But we did get a few people to sign up.
And it.
And it took a few months.
I think it was maybe like 60 days until, like, the very first app was like, it had enough utility that some app was going to use it.
And the real reason for those very first customers was just that they opened up the Google Docs or the Apple Docs and we're like, whoa, this is a lot of work.
Hey, this guy on Reddit had posted this thing that said, it makes it much easier.
Let's just give them it a try.
And it took just a few months until somebody was crazy enough to do it.
Right?
And I think that's kind of because of this infrastructure and trust problem, right?
Like, if we were launching from a trusted brand, it might have been different, but in the very early days, like, you're just going to trust some random Internet person.
Okay, okay, sure, he worked at Elevate or whatever, but there's still like.
Like, how, how long is this project going to be around?
Like, can I rely on this?
Et cetera, et cetera.
Especially a problem early on for dev tools.
Omer (09:25.880)
So when you, when you got torn apart on Reddit, did that make you at any point kind of think twice whether this was a good idea or not, or it was just the kinds of questions or kind of criticisms that you expected to get?
Jacob Eiting (09:38.440)
There's like a couple categories, right?
There's people that are indifferent, which, those are pretty useless to you as a product builder.
There's people who get really excited.
Those are the ones you should focus on.
If nobody gets excited.
Well, your product, you get a lot of problems.
But if there's a group, a small group of people who do get really excited, then focus on what they want, talk to them, because there's probably more people like them and there might be enough that you can just build for them.
The middle different people, they will come along eventually if the product gets good enough.
The people who are just the haters, don't worry about them too much.
Most likely they were never going to use your product anyway and they just like being mad on the Internet.
I remember we, what do we say?
Enough Subscriptions made easy was like the tagline in the early days and somebody on Reddit posts rip off middleman made easy.
And that was just like the meanest thing.
I was like, God, that's so mean.
And like you can't help it does affect you.
Like it shouldn't, right?
But here I am three years later still thinking about that one mean Reddit post.
And like once in a while it's funny when things are like when somebody posts something really nice about us and we share it in our slack.
I always, I sometimes I'll dig up that post or if we hit a new revenue go, I'll post it there just to be like, just remember, it doesn't matter what people say, as long as you just keep working hard, right.
You'll eventually succeed.
Omer (10:50.750)
So what did the first version of that SDK actually do?
Jacob Eiting (10:55.150)
I mean it was super simple.
It allowed developers to basically add subscriptions to their app without writing a backend server because that's kind of one of the required steps.
If you read the Google and Apple docs for this, it'll say like, oh, you have to have a backend.
And actually a lot of mobile apps don't or their backend is limited or it's just not something they want to do.
So that was kind of the very first basic functionality.
It was literally like make a purchase through our API, we'll talk to Apple for you and then we'll post it to our backend for you and then we'll track all the updates and everything so that you can keep that user status.
Correct.
That was basically it.
I don't even think we tracked prices or we didn't really have Our analytics dashboard was really rudimentary.
You did very, very, very little.
And that was actually kind of important in the early when you're launching a product and it's sort of the MVP hypothesis like make the crappiest product you can that will somebody will have a quantum of utility.
Right.
I think it's a Paul Graham thing.
Well, I don't know, minimum thing that will be useful and if that's sticky and you have a little bit of traction there, keep going, right?
Like, then worry about like, okay, like how do I work on Making this something I can convince people to use, but you can tell when there's that quantum of utility and people will use it despite all the problems.
That's when you know you've kind of got something.
Omer (12:10.820)
So was your first customer or user a friend of yours?
Jacob Eiting (12:14.580)
So it depends on how you date it.
But, like, the first app that integrated our SDK was definitely a friend.
Like, I went to all my friends.
The first thing I did, I went to my friends, said, hey, is anybody working on a subscription app?
I will do all of the work for you if you let me put this SDK in your app.
Because I needed to test it.
Like, I had written it, I had like, been like, I had a test app that was fine, but until you actually integrate it with somebody's, like, in production system, there's a lot of edge cases and things.
So that was really useful for me in the very early days to kind of like.
And I learned a lot, like, see how it would actually plug in and made a lot of changes.
And it was great.
We had no customers.
It was me and my friend's app and I was just acting as a customer building.
And then I could make adjustments to the SDK and the API and make it better.
And I did that a few times.
So a few people's apps that were friends or friends of friends, I would be like, listen, you can get a week of free dev time out of me and I will totally implement this entire thing in your app.
You don't have to worry about it.
Right.
So I was basically giving away, you know, talk about like a cost of acquisition, right?
It was like whatever a week of a developer's time is, which isn't.
Isn't super cheap.
That was kind of our strategy initially, but actually that first app that actually hit the store ended up being somebody I didn't know, which was.
Which was cool.
So, but.
But at that point, the product had
Omer (13:23.070)
been through some iterations, so Miguel was working still.
He was still full time at Elevate.
So this was like a evenings, weekends thing for him.
You were working full time on this, but the product wasn't really generating revenue.
So, like, were you kind of living on savings?
Like, how were you sort of a
Jacob Eiting (13:45.740)
little bit of savings?
A lot of bit.
My wife who had a job, right.
And this is where like, you know, honestly, like privilege and just having a.
Saved up some money and having some safety net around you kind of does make starting a business a lot easier.
So for like six months or, I mean, until we raised money, revenuecat really couldn't pay me anything.
It was over a year that I was.
I was just basically working on this for free.
And I was able to do that because, yeah, my wife had a.
Had a nice computer job that paid well.
Omer (14:15.280)
So what was it about this idea that kind of got you to take that leap of faith and say, you know, I'm going to do this.
I'm going to, you know, basically not generate an income.
And over this sort of the year, what kept you going?
Like, was it just based on how painful this experience had been in terms of building this type of solution at Elevate?
Was it kind of market research you did?
What was it that sort of told you there's something here and I should keep pushing forward?
Jacob Eiting (14:51.810)
Yeah.
So this is going to be like not the fairy tale startup founder story that the people like to hear.
Like, oh, this problem was just inside me and I had to make it real.
Right.
It's not that story.
So it was literally like, I left Elevate because.
Not because I wanted to start revenuecat, because I wanted to start a company.
I had kind of worked my way up and seen a lot of Elevate, and I knew, like, okay, the next phase in my career, in life, I want to start something that's my own and that I can sort of something that has an unbounded upside, that I can continue to just, you know, see how far I can take it.
And I think a business is a really good vehicle for that.
But I didn't know what I wanted to do, so I did, you know, took a little time off, like, messed around, like, played with my hobbies, learned to design, you know, rounded out my skill set a little bit.
And then I got really bored after, like, six months or so and started to, like, write down ideas.
And I started.
I started with the big Elon Musk ideas.
Right, like rockets and airplanes and things like that.
Omer (15:40.210)
Of course, yeah.
Jacob Eiting (15:41.530)
And I started to do some research and like, look who.
What other companies were in the space and who.
What have.
And firstly, I was like, okay, I am way out of my league on this stuff.
Like, there are people who know this stuff better and they're not doing.
Nobody's crushing it.
So I'm like, am I really going to be able to do well here?
I was like, okay, if I'm going to start a company, it's really hard.
Everybody says that.
Everybody tells me it's really hard.
So I should just stack the deck in my favor as much as I can.
Right.
So let's pick an idea I know how to do in a market that I know exists and a need I know is there and with tools that I know how to build with, which were, you know, these APIs and iOS SDKs were something I had, you know, as an engineer, I had worked with extensively.
So I was like, all right, Revenue Cat, this idea for this API, it's not the.
It's not the coolest idea in the world.
I mean, it's subscription management APIs.
It's like, not wasn't my passion, but, like, I, like, I know this is something that if this market is here, like, I can build this, like, and I've learned later that that's called product founder fit or company founder fit.
You want to find something that you are uniquely positioned, like, to work on.
Right.
You don't want to go into something you don't want to build something for.
Not you.
You know, in some ways, it gives you a lot of.
Lets you skip over maybe a lot of customer interviews you might have to do otherwise.
Right.
If you are the customer initially.
But yeah, I hesitate to tell that story because, yeah, sometimes it's like you want to hear the passion project, the lifelong dream or whatever like that.
But for me, really, it's just the lifelong dream is to.
Is to build something really big.
You know, since then, we've kind of coalesced the story and the mission of revenuecat around helping developers be successful, which is kind of the story of why we started in the place which Miguel and I were developers and we wanted to, you know, make more money, start a company.
And so now revenuecat, we're building tools to help developers do that on a very large scale.
And that's a mission I'm now, I kind of came into it in the reverse way.
I started without, like, a real clear vision and mission for the company, and now I have, like, a super clear vision for where we want to take it in the next decade.
Omer (17:35.390)
So you had a handful of apps sort of initially that sort of came on board to start using revenuecat.
Were you charging anything at the time?
Jacob Eiting (17:46.980)
So for my friends, no.
But the first app that signed up, so initially, and this is like, I think probably one of our big.
There's been a couple moments where, like, we just.
We missed on something and we fixed it and it changed things, like, very rapidly.
Initially, the way we priced the product was like, hey, give us three and a half percent of your revenue, which I had arrived at because I did like a market sizing.
I was like, well, if I get, you know, how many Apps, do I need to get to pay my salary or whatever, whatever.
And did a really poor bottoms up market analysis on it.
And, and I was like, okay, I'm gonna need 3% or whatever.
And turns out that that's way too much for take rate that people want to like give up to a tool.
And then secondly, it's just not.
There's other ways to like say that without saying three and a half percent, which is kind of what we do on our website now.
We, we talk about like bundled amounts of revenue volume, which it equates to a take rate.
I don't think anybody's super surprised, but it kind of pitches the value better.
So like in the early days we did charge a little bit.
I had like two invoices go out that, that really aggressive pricing.
I think we made total maybe like $300.
And then this was before we got into YC and then I was like, okay, like once we got into YC and talked to some people that we realized our pricing was probably way off this one.
We decided to pivot to the pricing kind of we have now.
And then I just, I just stopped charging those people.
I didn't tell them why.
I just, I just was like, I'm just going to stop sending.
Because in the early days we didn't have a billing system either, right?
So to charge them to go into our invoicing software and write an invoice and send it to their email.
So I just stopped doing that once we decided to change our pricing.
Omer (19:21.570)
What, so they were just using it for free?
Jacob Eiting (19:23.650)
Yeah, yeah, essentially.
I mean, we created a really generous free tier.
So like, anybody making less than 10k a month can use our basic API for free.
And that was a big change.
It was a big pivot moment for us as far as like people being more willing to try it if they don't have to like commit to paying, especially like upfront.
If they can just like get it going, they're going to think less about it.
And to be honest, like, if you think about how products are sold into companies, if the developer doesn't need to get like budget approval for something, then there's a more likelihood they're going to use it.
Right.
As opposed to they have to go to their boss and say like, oh, this is going to be $100 a month.
Right.
It just kind of like reduces that friction early on.
Omer (20:01.600)
How else did you find customers?
Like, so you were sort of reaching out to friends.
What other sort of outreach were you doing to try and find potential customers?
Jacob Eiting (20:13.440)
Yeah, so you just kind of exhaust your easiest channels first.
Right.
So it started with friends and then I was like, well, I'll go on Reddit and I posted there and like maybe on Hacker News or maybe on my Twitter or something like that for the beta launch in December of 2017.
And then quickly I like got 30 signups and then like that, and then that was it.
Omer (20:31.570)
30 sign ups altogether from all those places?
Jacob Eiting (20:33.890)
Yeah, exactly.
Which is not crazy good, right?
And most of those people were just requesting a beta and then I would send them the invite and then they would never sign up.
Right.
So maybe I had like five people who even like created an account.
And so like, okay, well, I guess we have a lot of work to do.
And so after I kind of exhausted those obvious channels, I was like, what am I going to do?
I don't have any customers.
So I wasn't like ready to iterate on the product too much because I just didn't have any feedback.
So I just chunked out two days a week to writing content related to the problem.
And the theory was like, okay, developers are experiencing problems in this space.
If I can write content that answers their questions better than the docs can, and then it just happens to say revenuecat at the top, I feel like that's going to, that's going to like be good for us.
And I didn't push Revenue Cat very hard.
I had like a few places on the page where it's like, hey, Revenue Cat does a lot of this for you if you want to check it out.
But then I would actually just dive in.
Like, we're subject matter experts on this stuff.
So like we just.
I just dove into all the engineering implic, why it's difficult, the things you need to look out for, the gotchas.
And you know, I would post them on Hacker News and Reddit or whatever, and none of them like blew up.
But what started to happen is I did, I did that every week for like two months.
And by the end of that there were just enough trickle of se, it started to SEO well.
And like that trickle started to become a stream, right?
And we started to just get like, kind of like a daily little flow of traffic off of those blog posts, which still persists today.
And I still think that was probably one of the highest leverage activities I did in the early days was just taking those 10 weeks to write a bunch of content because it established my brand as an expert on this and established the company's brand as being somebody who really understands this problem.
Probably Better than you.
Right.
So you should trust us.
It goes back to that building trust thing.
Right.
Omer (22:19.370)
So how much time are you spending on writing the content?
Every week.
And was this something that you had been doing before or was sort of writing a new thing for you?
Jacob Eiting (22:30.400)
No, it was kind of.
I did not do very well in English in high school.
It may surprise you to learn I was more of a calculus kind of kid.
But, no, it was a challenge.
My wife helped me a ton with copyright editing and just making sure it was like the English was proper and stuff.
And I paid for Grammarly and all that stuff just to get over the, like, technical aspects of it, because I wasn't at the point.
Now, now we just have a copywriter, right?
So we just write stuff and send it to a copywriter.
$200 a post or whatever, and we can afford that.
But back then, I was, you know, trying to be cheap as I could.
And so, yeah, I would take.
How long would it take me to write a post?
Like, eight hours was fast.
If I could get a post done in eight hours of work, because it takes you a while to research it, then you write a draft, then you have to walk away because you can't do too much writing at once.
So you write, you walk away.
You come back later that day or the next day and rewrite.
And then you do that three or four times and then send it to somebody else to look at.
So it was a lot of work.
I mean, two days is probably fast if I could get one done in two days.
But, you know, you make a process out of it.
You list all the different things you can write about.
You rank them on which is going to be you think is going to be the best and fast and, like, most effective.
And then you just got to do it.
It's a grind.
I still have a hard time writing content now because, like, it just, like, sucks up so much time.
I can do podcasts all day long, so these are easy.
You just talk.
Sorry.
Omer (23:50.510)
Yeah, yeah, no, I find that, too.
It's like, I write stuff and people will look at what I've written, and they say, oh, that's really good.
Right.
Generally, it's kind of positive feedback, but to me, it's like writing is like pulling teeth.
Jacob Eiting (24:05.530)
Oh, I hate it.
Yeah.
Omer (24:07.690)
I don't know if that's supposed to
Jacob Eiting (24:08.930)
be like that or not, you know, but.
But.
But it's effective, right?
And it's like, a lot of times if something's hard, you know, there's value in it.
So if you can.
If you can push through that pain and learn to like, make a process out of it, I think that's a real advantage, especially if you're a decent writer or you can find people who are decent writers who can give a voice to your.
To, you know, whatever you're doing, I think really does pay off.
Omer (24:29.600)
So did you do like any keyword research or, you know, kind of come up with sort of like a content plan, or was it really just here's a list of stuff that, you know, brainstorm.
A list of stuff that I could write about that I think is interesting that I know something about.
What was the criteria?
Jacob Eiting (24:44.320)
Yeah, mostly that it was just like, okay, I mean, now having worked with content marketers and stuff, like, now I go, oh, okay, that's content plan, right?
This is like keyword research, right?
There's like names for this stuff.
But back then I was just like, I don't know, I'm just gonna write about stuff.
I think people will Google, right, And it turn out to work really well.
Especially like looked for nice thing about writing about technical topics.
If you write about like a particular call or a particular API, if you put that in there, Google will pick those up really easily.
And so that worked out really well.
We would throw in error messages and things like that, and when people would have an error message, they'd jump to Google to search it.
Apple might be the first hit, but then like our blog might be three or four and people are just going to click on it.
You know, if nothing else.
Out of curiosity.
Omer (25:25.980)
Okay, so I was looking at a graph of MRR back in 2018, and it was kind of like almost nothing happening in May and June, then sort of July and August sort of look like, yeah, maybe there's like three, $400 in MRR.
And then suddenly from August to November, like three months, it goes from $400 MRR to almost $7,000.
What happened?
Jacob Eiting (25:59.990)
I guess it was the early indications of product market fit.
Well, okay, so we did launch one concrete thing, which was integrations.
Prior to that, we were just kind of collecting your data, showing you in a graph.
It was all in our product.
We realized a lot of people were asking us like, hey, we want to send this to this marketing platform or this attribution platform or this analytics thing.
So we're like, okay, let's build integration so we can just do those connections for developers.
And we built that, and that's how we found our first, like, big customer that I didn't know or didn't come through YC, there's like, first, like, 300, $400 in December.
That was during YC.
And we were just kind of, like, begging other YC companies to, like, trust us.
And that's a little bit.
You know, you talk about bootstrapping, trust.
YC is a good way to do that.
Right.
Like, you get into yc and they're like, all right.
At least I know these guys went through the same program that I did.
But then after that, like, in September.
Yeah, that's when the first customer came to us that we didn't know that was like, hey, we have this problem, and we'll pay you handsomely for it.
And we were like, sure.
Like, the funny thing was, when we launched integrations, they actually.
We didn't actually do them.
We didn't actually write them.
We just made the landing page.
So we picked like, 15 tools or whatever it was that we thought would be make good integrations, and we just, like, wrote, like, an indexable landing pages for all that stuff.
And then there was, like, a contact button.
And then as soon as somebody asked for it, like, Miguel would turn around and write the integration in two days.
And it's funny, like, it ended up being really smart because we did get a couple customers without having it written initially.
And then, honestly, we just finally finished up the last one a month ago, finally.
That's advice you hear.
Try to not do as much work as possible.
Be as lazy as possible as far as putting things off, because a lot of times you won't even need to do them.
We were able to take out a loan, essentially, and sell, like, we had all those things because we knew we could quickly build them if they were needed.
Right.
And that's kind of just like a general hack when your team is small.
Omer (27:55.350)
So when you finished YC, which was what, sometime in 2018.
Jacob Eiting (28:00.710)
Yeah.
Omer (28:01.430)
You were making about $400 a month.
You raised some money there as well, right?
Jacob Eiting (28:09.430)
Yeah, yeah.
So we raised a small, like, a million and a half seed right after yc.
When you do yc, it's kind of one of those things that maybe I wish I had.
I don't regret anything.
But that's one of the things when you.
You know, I applied to yc, probably a bit naively thinking, like, oh, it's yc, it's like a credential or whatever.
It's like a.
You know, I was enamored with the brand, which it lives up to it, to be honest.
Like, it's.
It's a great program, but it really.
The Real thing is, it's a lot of ways starts you down this, like, fundraising path, and really, to get the most usefulness out of it, you want to leverage the end of your demo day into a fundraise.
And so that's what we did at the.
At demo day.
We raised a small seed round million and a half dol to kind of let us hire a basic team and start to scale things up a little bit.
Omer (28:53.060)
And one of the things that we were talking about this before we started recording was that you had said that, you know, I kind of didn't really take this business seriously until after I joined yc.
Like, there were still doubts in your mind that, is this the real thing?
Jacob Eiting (29:14.560)
Right.
Omer (29:15.520)
So what was going on in your mind up to the point that you went into yc, and what was it that changed your mindset going through the YC program?
Jacob Eiting (29:25.520)
Yeah.
So this was.
This probably gets into an individual founder psychology, and I'm sure not all people are like this, but I think I had done my homework and I had done the business plan.
I had thought about it.
But still, in the back of my mind, I had never had something do really well before, right?
I had worked at companies.
I'd always had jobs.
I could pass an interview fine, But I never built something that truly was, like, going to kind of grab the ring or whatever.
And so even revenue cat, I was surfing a lot.
I was like, maybe not taking it as seriously as I should, right?
Because I just didn't know.
I think, subconsciously, I was kind of waiting on somebody's permission.
And when I got into yc, my mindset totally changed, maybe subconsciously, and I was like, okay, here we go.
Let's buckle in.
Let's really try to leverage this month in these few months, and let's.
Let's see how far we can take this thing.
It's real now, right?
And looking back, I'm like, you know, I didn't need their permission to take it seriously, right?
Like, I could have just done that on day one.
And so I tell founders that now.
I was like, especially, I help a lot of people who are interviewing for YC and stuff.
And I always say, like, hey, like, if you want to get into yc, take it seriously now, right?
Pretend you're in YC now.
Pretend demo days in three months, right?
Just, like, treat your company like seriously and good things will happen.
And I don't know, I think also I just maybe had a chip on my shoulder.
You know, I didn't go to Stanford.
I didn't Go to Columbia, right?
So, like, when I got into YC and there were all these, like, really smart people and like, all these, like, titans, for lack of a better word of Silicon Valley running around, you're like, oh, okay, there's no further level, right?
Like, I don't need any more credential or permission from anybody.
Like, I can now it's all up to me.
And that was really useful.
But I do think it was just, like, totally psychological and there's.
There's not as much magic there, you know.
So take it seriously is my advice.
Omer (31:12.980)
Yeah, I guess the hard thing is when you're starting out, you don't really know if the idea has any legs, if it's going to get anywhere, whether you're going to get traction or you'll find product market fit.
And I think it's almost like.
And especially, I guess that was different for you because you were doing this full time.
But if you're sort of doing it like, you know, I still have a job and I'm sort of dipping my toes in the water, and if it feels really nice and I get that reassurance and like you said, the permission, then I'm gonna kind of go in.
But I'm just waiting.
I'm just waiting.
Man.
Jacob Eiting (31:49.850)
I see that all the time with, like, especially people who are trying to, like, bootstrap out and kind of like have that safety net.
And I think there are definitely cases where that works out, but no matter where you decide to take the leap, it's always going to feel scary.
And I'll tell you, still after yc, like, we weren't sure I was gonna say when we raised our seed round, I was like, we had $400 a month in MRR and I was going out raising a million dollars because I had this, like, I was like, markets this big, if we can get this percent, we're going to make a lot of money.
But, like, did I believe it?
I mean, did I believe it could happen?
Yes.
Did I believe it would happen?
Different question, right?
So, like, there was still a lot of suspension of disbelief even, even after yc.
And I'll say now that's kind of probably the biggest shift in mindset in the two years since then is that now I've watched it compound for two years.
Every month I'm waiting for the other shoe to drop.
Every month I'm waiting for the down month, for the terrible thing to happen that just like, you know, exposes me as the fraud I am, but it just keeps not happening.
And Now I'm.
Now I'm starting to, like, really honestly believe, hopefully that that hubris doesn't get me in the end.
But it took a.
It took a long time for me to really be like, okay, like, this thing is going now, and, like, we just need to go faster.
I mean, that's kind of the stage we're in now.
Omer (33:02.070)
You know, I heard something from a very successful entrepreneur who's completely outside of, you know, tech in terms of, like, about mindset.
And he said, like, if you're into the idea, you think there's something there.
You see there's the opportunity.
A lot of the times it's not that you're doubting that there's an opportunity and something can happen.
You're sort of doubting whether you're the person who can make that happen.
Right.
And, you know, it's not.
Doesn't apply to everybody, but I think just.
I think I've seen a number of people go through this.
And he said one thing that really sort of stuck with me, which was, look, you sort of think about this and you say to yourself, look, somebody is going to do this.
Why can't it be me?
Right?
Jacob Eiting (33:48.850)
Yeah.
Omer (33:49.130)
And I think if you just kind of keep asking yourself that question, sometimes it can be kind of helpful just to, you know, keep going, pushing forward.
Jacob Eiting (33:56.460)
Yeah.
I mean, it goes ties back to that, that founder product fit.
Right.
It's much easier to say emphatically yes to that question if you pick something that's really, you're really strong at.
Right.
If I was trying to work on my electric airplane startup right now, I probably wouldn't be here.
Right.
Like, I would have scrapped it and I would have gone back and gotten a job and, you know, just done that thing.
Right.
But I think because we chose something that was really in our wheelhouse, it gave us the confidence to be like, yeah, I'm sure other people could build it, but I think we're the best ones for the job.
And if you believe that, then look out.
You're powerful at that stage.
Omer (34:32.930)
Okay, so you raised the seed round.
So you got about million and a half and some change.
What was that like for you in going out and fundraising?
Jacob Eiting (34:49.370)
It.
Omer (34:49.490)
Was it a process that was easy to pick up, doing it as first
Jacob Eiting (34:54.850)
time, it kind of depends on your personality and just kind of what you're good at.
If you're good at sales, which I found I discovered I was always an engineer, but during starting revenue Cat, I realized I kind of fell into some sales situations right.
Where I'M trying to sell stuff.
And I was having a lot of success and kind of realized I liked it.
I was like, oh, I'm actually pretty good at sales.
And so fundraising is just another.
It's another sales thing.
You're going out there, you're pitching this vision, you're trying to tell this investor how their life is going to be improved after they make this investment.
You're trying to paint the picture of this post close world where things are better.
I know that now, but intuitively that's how I just kind of how you go about it.
But we were also.
I hesitate to give too much a picture of what our fundraising experience was like because I think we just had a lot of trends in our favorite going back to stacking your deck.
Like, I had done the market research.
There was nobody else doing this.
It was a little bit of a weird idea and like something new which maybe hurt us or might have helped us.
So like I ended up being able just to kind of talk to a few people who had come to us directly and.
And it was able to close around really fast, especially once you get like a. Jason Lincoln came into our round.
He was like the first one to jump on board of Saster fame.
Once that happens, like the dominoes just kind of fall into place once you get one like good investor on board because people, people tend to feel better about the decision.
Omer (36:14.660)
I guess it was the same with revenuecat and getting on customers.
Like, I guess once they're seeing, oh, this app and that app are using it, there's a lot of social proof and it kind of builds.
Jacob Eiting (36:26.980)
Yeah, it's huge.
Investing as well.
Yeah.
Social proof is.
Omer (36:30.900)
So what's happened in the last couple of years?
Like, how did you go from 7K mrr to what was it we said?
160.
Yeah.
And you're still growing month over month.
So what's been driving that growth in the last couple of years?
Jacob Eiting (36:51.480)
To answer the question, how have we done that?
One month at a time, essentially.
But I mean, we have some useful dynamics and this is why pricing is really important.
And founders should think about pricing, at least structurally.
In the early days, you're not going to get the numbers right, the dollar values right, but you can at least get the price structure correct.
And one big change in the early days, we shifted from charging people by number of users to number of basically revenue.
And that has kind of been why our growth has been so good, is that these subscription apps tend to grow.
We're basically aligning ourselves with all these Little businesses, some are bigger than others.
Some are big businesses that are trying to grow themselves and we stand to benefit from their growth.
We're at the point now where we have enough apps in our portfolio, growing, customers growing, that even if we have a slow month on new business, the revenue just grows.
And that wasn't a mistake.
We knew that would happen.
That was a dynamic that we knew would happen once we had enough customers.
It was very theoretical in the early days.
I was like, I think this will happen once we get enough customers.
We will just expand over time.
But once it starts happening, 4 or 5% monthly revenue growth based just from expansion really starts to add up, especially as you get bigger and bigger.
It's like exponential stuff.
Everybody in the era of COVID now knows about exponential growth.
But it's really slow for a long time and then it's really fast.
And so that's been kind of the tipping point and then it's just been kind of a slow increase in every month.
Just trying to talk about our brand a little bit better, make the product a little bit better, talk to our customers, you know, customers, if you have a good product, especially something in this kind of space, developers talk to each other.
So if you do a good job and make people happy, the word of mouth is non trivial.
And that's also a compounding process.
Right.
So the bigger your customer base gets that growth from word of mouth grows with your growth.
Right.
So it's also an exponential kind of process.
So those two things kind of combined.
That's my theory for why things have gone a lot faster.
It's interesting on the site we had a goal to hit a million in revenue last year.
Year.
And by the middle of the year, if you just like drew the straight line, we were like not going to make it.
And I was like, well, we tried, right?
We're not going to make it.
And then you forget in startups you have to draw a curved line.
Right.
We did end up making it.
Right.
And so yeah, that was probably one of the biggest lessons I learned is like, is like compounding effect.
Like try to build as many compounding effects into your business as possible because like those are the things that you can rely on year over year.
Omer (39:26.800)
So what was that for you?
I mean, content was obviously a big part of that.
And you continue.
Jacob Eiting (39:30.880)
Yeah, I mean that's something that you.
It takes a linear amount of work to create, but then that piece can potentially, if it's evergreen, produce every month forever.
Right.
So that, that just like increases your rate.
I Think hiring is another compounding advantage, like making sure you're hiring the right people, making sure that they're happy.
Right.
Culture building, making sure that people at a place where they can work efficiently.
Because you're going to keep scaling by adding headcount.
But if organization doesn't get less effective as you add more people.
Right.
If you don't have as every company has some diminishing returns, but if you can limit that.
I always think creators or engineers or whoever, people who build stuff, doing little improvements every day for a very long time, that's a big compounding effect because you're going to look back and suddenly your product is way better than it was a year ago.
So building a culture around shipping and around moving things very quickly, I think is a compounding effect.
All of those things feed back into the revenue too.
That's ultimately what you're trying to build, is your reach.
And revenue is kind of a measure of how well you're fulfilling your mission.
So, yeah, that's sort of a learning I've kind of stumbled into.
Not so much on purpose, but I've kind of now seen all these effects coming in a year or two since our fundraise.
And eventually the ball just starts rolling without you pushing it.
Right.
And now you're just trying to keep up.
Omer (40:49.930)
So we sort of look at the story.
It sounds great.
You had this idea, you started working on it for a while.
It got into yc, raised money, did the hockey stick growth curve got to 2 million ARR.
We talked a little bit about sort of the regrets or things you'd done differently, you do differently.
Like taking the whole thing more seriously without not seeking permission, getting into YC and just doing that on your own and having that mindset.
What else do you look back and sort of either wish you had done differently or feel was a particular challenge that you learned something from.
Jacob Eiting (41:38.480)
Yeah, I mean, I think everything we do, at best I get something 80% right.
So there's always a little bit I can learn in every step.
I mean, we had.
I will say, like, we've been fortunate that we.
And this is like the last thing you say before something terrible happens.
Right.
But like, so far we haven't.
I haven't.
I don't have like a huge mistake.
I mean, there's certainly been like interactions with customers that I've screwed up just through lack of focus or there's definitely been projects I've let go long and things like that.
But that's kind of.
Those are fixable problems.
Right?
Those are things you can iterate on.
And so I think some problems we had early on, and I won't call them problems because we did resolve it, but when you hire people early and you feel like the bar shifts or that you didn't interview them properly or there's just not the right place for them at the right time, you have to act really quickly in the early days.
So we ended up having to.
We ended up in our first year of scaling, hiring five people and letting two of them go.
And it doesn't sound like a ton, but for a company of our size, that's kind of a lot of disruption.
And those were mistakes on our part.
We learned a lot about, like, what we're actually looking for.
Right.
We learned.
We kind of improved our interview process.
And I won't.
So I won't call them huge mistakes.
I think it could have been huge mistakes, like, if we had just muddled on.
Right.
If we had just been like, well, this is the new normal, and we're just not going to be as effective as we were before.
Right.
Or we're not going to get everything we want.
And so those were kind of learnings.
And there's always, like, little mistakes about fundraising, like, learning.
There's so many, like, little unspoken courtesies and things that I don't know, because I'm just, like, an engineer trying to build a business.
I'll be like, oh, wait, I was supposed to ask you if you wanted to put in more money.
Oh, I didn't know that.
Or like, oh, I was like, round composition.
What's round composition?
Like, those people just invest and then they get stock.
Omer (43:33.630)
Right.
Jacob Eiting (43:33.830)
What's the problem?
Right.
So there's.
There's a lot of, like, little stuff like that.
But, like, to be honest, you know, you'll make mistakes.
You just don't want to make the mistakes that'll kill your company.
Right.
Like, most mistakes you can.
You can correct.
So, like, the biggest regrets I have, and I apologize for not having, like, so many, like, concrete examples, are the ones when I know there's a problem and I don't do anything about it for too long.
Those are the.
Those are the things I really try to minimize.
Omer (43:56.810)
Yeah.
Jacob Eiting (43:57.170)
And I'm trying to get better about it as time goes on.
Omer (44:00.050)
So also looking back at, like, the process you went through to pick this idea, because it wasn't like you said, oh, you know, the clouds opened and I had this inspiration, and it was like, this is the thing.
It was like, no, I wanted to
Jacob Eiting (44:13.170)
go out the Monty Python Holy grail moment, right?
Omer (44:16.670)
Yeah.
But it was more like a process you went through.
I want to build this business.
I want to do my own thing.
I got a whole bunch of ideas.
And eventually picking one that you thought had some legs, what's your advice to somebody who's maybe in that position right now?
Jacob Eiting (44:30.670)
Stack your deck.
Put as many cards as you can in your favor.
So if that's like finding the best co founder you, you know, or the person that's like, Miguel was like.
When I made my list of people I could work with on this, like.
Like, it wasn't very long, and Miguel was at the top.
Right.
So he was like, all right, I got to get Miguel to build this with me, and I got to pick this thing that I know really well.
Right.
Like, technically.
And I can build.
Right.
Do something that you can build.
I think sometimes founders, Sometimes I see especially solo founders struggle with, like, oh, and actually, on your podcast, Paul Joyce was talking about this, how he relied on contractors a lot early on, and that just, like, slows down the feedback cycle.
It makes it very expensive.
So, like.
Like, if there's something you can build, if it's with zapier or airtable or whatever, like, pick a product that you can iterate on to kind of get that first initial product market fit before you have to hire or have a co founder you really trust that knows how to build it.
Because having somebody on that team, I think is really important.
So just like, stacking as many advantages as you can before you even kind of get into the market, right?
Before you even kind of, like, build a company, and you're out there battling with all the stuff that companies have to deal with, scaling, customer support, funding, like, all that stuff.
Just, like, try to build.
Try to set up as many advantages for yourself as you can when you're kind of thinking about what to do.
Omer (45:47.350)
All right, let's wrap up here.
We're going to go into the lightning round.
Can I ask you seven quick fire questions?
So are you ready?
Jacob Eiting (45:54.870)
I am ready.
I got my answers written down.
Let me look at them real fast so I can sound super smart.
All right, let's do it.
Omer (46:03.820)
All right.
What's the best piece of business advice you've ever received?
Jacob Eiting (46:06.780)
Talk to customers every day.
Omer (46:08.780)
What book would you recommend to our audience, and why?
Jacob Eiting (46:11.980)
American Prometheus.
It's the biography of Oppenheimer and the Manhattan Project.
Omer (46:16.700)
What's one attribute or characteristic in your mind of a successful founder?
Jacob Eiting (46:20.860)
And I recognize the irony of this, but humility.
Omer (46:24.700)
What's Your favorite personal productivity tool or habit?
Jacob Eiting (46:28.430)
Gmail keyboard shortcuts.
Omer (46:31.230)
What new or crazy business idea would you love to pursue if you had the extra time?
Jacob Eiting (46:36.030)
I would love.
I think there's so many problems in remote work right now.
I'm building a remote company, legal infrastructure, real estate.
There's so many problems there to solve.
I would love to work on something in that space.
Omer (46:46.110)
What's an interesting or fun fact about you that most people don't know?
Jacob Eiting (46:50.350)
That I got most of my leadership experience starting rock bands in high school and trying to get four teenagers to do something together.
Omer (46:57.950)
Nice.
And finally, what's one of your most important passions outside of your work?
Jacob Eiting (47:02.830)
I've become a real, real.
This is such a.
Such a cliche CEO thing, but I've become a real sucker for cars and airplanes, shiny machines.
They're beautiful products to think about how they were made, and they're just fun to play with.
Omer (47:15.510)
So that's awesome.
Cool.
Jacob, thanks for joining me, man.
It's been a pleasure.
It's been really interesting to kind of unravel this story and kind of go through this sort of process with you to sort of understand how you went from basically, you know, an inkling of an idea that you had no idea whether it was going to go anywhere to where you are right now.
And at the rate that you guys are growing at, if you keep that up.
So
Jacob Eiting (47:46.990)
let's hope.
Yeah, I was going to say I'm super glad.
I'll be real happy to come back on the show in two years after we go public so I can give you that story.
Omer (47:57.170)
Yeah.
And then remember, you have to shave your beard as well.
Jacob Eiting (47:59.810)
Yeah.
There we go.
My Go Public beard.
I like it.
Omer (48:03.650)
All right.
If people want to find out more about Revenuecat or try it out, just go to Revenuecat.com and if folks want to get in touch with you, what's the best way for them to do that?
Jacob Eiting (48:14.210)
Twitter.
I tweet a lot and they're not all good tweets, so I apologize in advance, but it's J E I T I N G on Twitter.
Omer (48:22.510)
Awesome.
We'll include a link to that in the show notes as well.
Thanks, man.
I wish you all the best and thanks for joining me today.
Jacob Eiting (48:30.270)
This was a pleasure.
Look forward to coming back in 2025.
Omer (48:33.710)
There we go.
Cheers.
