The SaaS Podcast
Elastic.io: Getting Traction by Charging More for Your SaaS – with Renat Zubairov 
Elastic.io: Getting Traction by Charging More for Your SaaS
Renat Zubairov is the CEO and co-founder of Elastic.io, a hybrid integration platform that helps businesses connect APIs, and on-premise and cloud applications quickly and securely.
In 2012, Renat and his co-founders were working for a company where they were doing a lot of integration work. They realized that they weren't the only ones feeling the pain.
Eventually, they came up with an idea to build a SaaS integration platform.
They used their savings to start their company and spent the first six months building a product. But they didn't talk to any customers. So when they eventually launched, it was hard for them to find customers. Even giving away the product for free didn't help much.
But when they started charging for their product, something interesting happened. They started attracting better quality customers. And the feedback they got from those customers allowed them to build a better product and serve those customers better.
They realized that they could charge even more for their product by targeting larger companies.
Today, a typical customer pays them around $10K a year and they're currently doing around $2.5 million in annual revenue. And they've been growing over 100% year over year (YOY) for the last 3 years.
Renat shares the story of how they've built Elastic.io, what they've been doing to grow so fast, how he wishes that they'd charged much earlier for their product and the impact of not thinking big enough when they started.
I hope you enjoy it.
“Predictable Revenue: Turn Your Business Into a Sales Machine with the $100 Million Best Practices of Salesforce.com” by Aaron Ross and Marylou Tyler
- “Thinking, Fast and Slow” by Daniel Kahneman
Omer Khan [0:10]
Welcome to another episode of the SaaS podcast. I'm your host, Omar 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 Renato Zubairov the CEO and Co-founder of Elastic.io, a hybrid integration platform that helps businesses Connect API's, and on-premise and cloud applications quickly and securely. In 2012, Renat and his co-founders were working for a company where they were doing a lot of integration work, they realized that they weren't the only ones feeling the pain. And eventually they came up with an idea to build a SaaS integration platform. They use their savings to start the company and spent the first six months building a product. But they didn't talk to any customers. So when they eventually launched, it was hard for them to find customers. Even giving away the product for free didn't help much. But when they started charging for their product, something interesting happened. They started attracting better quality customers. And the feedback they got from those customers allowed them to build a better product and serve those customers better. They realized that they could charge even more for their products by targeting larger companies. Today, a typical customer pays them around $10,000 a year. And they're currently doing around two and a half million dollars in annual revenue. And they've been growing at over 100% year over year. For the last three years. Renato shares the story of how they've built Elastic.io, what they've been doing to grow so fast, how he wishes that they charged much as For their product, and the impact of not thinking big enough when they started, so hope you enjoy it. Real quick before we get started First, don't forget to grab a free copy of the SaaS toolkit, which will tell you about the 21 essential tools that every SaaS business needs. You can download your copy by going to theSaaSpodcast.com. Secondly, enrollment for SaaS Club Plus is now open. Plus is our online membership and community for new and early-stage SaaS founders. One of the benefits of joining is group coaching. We have live group coaching calls on zoom every two weeks, and you can join live and ask questions or just sit back and listen in. And if you're not able to attend live, you can watch the recording later. So on the last call, we covered questions like I'm about to launch my SaaS business, what types of insurance do I need? And are there insurance companies that specialize in SaaS? Also, I've just hired two contractors to do lead generation work for me, what's the best way to track all the work that they do the list building, email outreach, etc. And thirdly, we're just getting started. And I want to know how much equity to split with my two co-founders, and how we should handle vesting. So those are just examples of the types of things we cover on the group coaching calls. When you join, you get instant access to the recording of this group coaching call. Plus you get access to the full archive of all previous coaching calls as well. So just go to saasclubplus.com to learn more, and request an invitation if you're interested in joining. Okay, let's get on with the interview. Renat welcome to the show.
Renat Zubairov [3:39]
Hi, I'm really exciting to be here. Thanks for this.
Omer Khan [3:43]
Do you have a favorite quote? You can share with us something that inspires and motivates you or gets you out of bed every day?
Omer Khan [3:49]
Yeah, sure. I think I will not be the only person with this quote, but especially in the startup area, but it's the quote of founders and co-founders of [inaudible], it's “Timing, perseverance 10 years of trying will eventually make you look like an overnight success”. I could I could really, really feel it. I could really understand this growth every time I see some success stories, but also some failure stories because I think everything goes hand in hand success and failures, especially in the startups or in any innovative area.
Omer Khan [4:20]
Oh, that's, that's so true. You know, it's just like, you look at what's happening out there, and you hear some story and you think, Wow, those guys have launched and they just had amazing success, but you don't see what they did for the 5-10 years before they got to that point.
Omer Khan [4:33]
Yeah, absolutely. I'm actually the best example I have there, which I constantly mentioned, to my friends and colleagues is like, you know, the company called Rovio. Maybe Rovio make sense or something?
Omer Khan [4:44]
Renat Zubairov [4:45]
Yeah. You might guess like the Angry Birds. The game Angry Birds was which game it was sequentially was it did the first game second game solid game and then they did the Angry Birds. You can guess how many games they did before.
Omer Khan [4:59]
Yeah haha, I've have no idea.
Renat Zubairov [5:01]
It's actually 36 games. Wow. And then Angry Birds?
Omer Khan [5:08]
Yeah, and you heard the story, you know, in so many places like, you know, the other day I was watching an interview with James Patterson, the author. He's written like so many books and his I think his net worth is like close to a billion dollars. And he was saying that, you know, the first book he wrote was rejected by over 40 publishers. So, you know, if there's this pattern, you see this over and over again that it's not just about SaaS, right. It's just about every time we want to do something, we want to create something. There's a process that you go through.
Omer Khan [5:41]
Yeah, absolutely agree. That's true.
Omer Khan [5:44]
Okay, so let's talk about elastic.io. You just refer to it as elastic.
Omer Khan [5:50]
Basically, no, we're actually that IO, essentially a part of domain an important, important part of domain because we, coming from a developer background an immersion of developer and io for developers is something they have to do in any project, right? Doesn't matter what it is. And for us, elastic.io is pretty much a very good description of what we do. This elasticity in input and output is actually the very core of Elatic.io.
Omer Khan [6:18]
Yeah, that makes sense. I mean, like, you know, my domain is SaaSclub.io. But the only reason is because I couldn't get SaaSclub.com. Right? But for you guys, elastic.io actually makes sense right corner from in terms of, you know, what the product does, you know, input, output is a big part of exactly that, that integration.
Omer Khan [6:36]
Absolutely. Yeah and elastic.io we are just looking mentioned integration platform, right. So we connect different systems being at systems in the cloud, systems on premises for traditional kind of older legacy customers legacy systems, as well as a mixture of these. And for us when we founded the last elasticity was their property of the cloud which separates the say the bit existing but like the men from the boys, you know?
Omer Khan [7:09]
Omer Khan [7:10]
So the elasticity is their unique property of the cloud. And without the elasticity, it's, it's more like lipstick on a bacon. It's really a cloud washing.
Omer Khan [7:19]
So in a nutshell, if you how would you explain what the product does? Who's the target customer, and what's the big problem you're helping to solve?
Omer Khan [7:27]
Now, actually was the last day that I are, we are helping to solve a problem which existed like since the beginning of IT, it's an application and data integration. So we let different systems speak to each other, and let our customers build processes, which orchestrate data and applications through cloud and on premise. So for example, the eCommerce orders from Shopify shop would appear in the earpiece system and also the visitor or say customer data will be automatically synchronized between I know, CRM system and maybe a marketing campaign systems like Marketo. And this problem is actually very much existed since like, last 34 years already. There are numbers of other ways to solve it. And with Elastic, we're just bringing this solution to the cloud. So we are from Gardner naming and integration platform as a service. And we try to solve this problem for two groups of customers. One of them is a middle-sized businesses so I'm not into SME lessons middle sized businesses. So let's say 50 plus employees are regulated 50 to 500, 5000. employees, companies with large number of systems they're using. And the second group of our customers are Software as a Service vendor, are software the service founders and IT teams or software service companies. Who is challenged by every customer? How can I integrate your SaaS tool with my CRM, whatever?
Omer Khan [9:10]
Correct when I looked at the Elastic.io website initially, like my first takeaway was like, oh, this looks very similar to Zapier. But when I sort of started digging into it, I realized it was quite different in terms of the problem that you're solving. So just for people who might be thinking the same thing, can you just help kind of explain the how you're different?
Omer Khan [9:36]
Oh, yeah. Basically, we are more like an enterprise version of Zapier. I'd say as I said, this integration problem is not something new. So there are whole market size or market segments existed before like IPOS existed, like an extract, transform load application, CTL applications, message-oriented middleware and so on, so on. And what we do is something similar to Zapier, but we are targeting a bit bigger companies or a more professional user of it, which demand a more comprehensive, but also, at the same time, maybe more complex or more flexible solution compared to traditional existence at AWS up your kind of use case.
Omer Khan [10:26]
Can you give me one example of that maybe just so we can kind of help people understand the type of integration or the type of complexity that a customer might be asking for?
Renat Zubairov [10:34]
Yeah, absolutely. And this is actually also in the world who can talk about later in our founding story. When we started with, there was some very basic use cases, right? Where Zapier starts it way its system started like, if something happened here, something should happen there. If I have my invoice in my invoicing application, I want to start in my Dropbox right? And this is a pretty basic similar use go simple use cases, the complexity of these use cases because they have, I know 50 different invoicing applications and maybe like five or 10 different storages just like Dropbox or reference. All right. And when we started running to our customers was that obviously there are some people who said, Okay, great, I also Mike, I'm ready to pay for it. But my biggest pain and biggest headache is how do I synchronize complex data, like orders in my eCommerce system with my earpieces, right? And this, unfortunately, from the complexity inflexibility goes far beyond, like basic file here file their use case, which pushed us more towards the more high well, you may be, in a sense, more expensive area. However, the price is just a differentiator for the customers. So we're just moved up the market more or less from my basic use cases where we just do a simple event-based integration into the more business is critical integrations where we synchronize business-critical data between applications which are not that they fancy or shiny. Yeah, and more traditional applications like for example, SAP or P.
Omer Khan [12:14]
Got it. And then in terms of pricing, you mentioned that so I'm looking at the plan started around 200 euros a month, and then for enterprise customers, you can go up to 5000 euros a month, then higher. Correct?
Renat Zubairov [12:30]
Absolutely. And you can see also we don't have a free freemium plan or free plan, premium business model like Zapier, for example have and pricing can be seen as a reflection of a value, right? But at the same time is also it is also a filter. I mean, the pricing is as amazing, is a task of amazing complexity. I think we can talk about pricing maybe to two hours, but pricing and generally for us, it's also a differentiation for whom we actually targeted and how much attention and investment is required to solve the different level of problems for the customers.
Omer Khan [13:11]
Okay, got it. And in terms of revenue, you're now part of a publicly-traded company. So these sort of numbers of public Anyway, what are you doing in terms of revenue at the moment?
Renat Zubairov [13:24]
Last year 2018. We did, if I'm not wrong, 2.3 million Euro revenue, which is I think $2.5 million. And year before we did, again, if I'm not thrown around about like 1.2, and the year before was 500. So we actually consistently growing hundred plus percent year to year for the last three, four years in a row. And this gives us actually a very good foundation for the girls and also for the future. And one other part of I think important KPI for us, as we're part of a publicly-traded organization is actually all visible and the company called mVISE, which is a German company in Germany. We also profitable and cashflow positive since last two years, if I'm actually three years already.
Omer Khan [14:18]
Okay, great. So let's kind of talk about, like, how did you start like where did the idea for this product and business come from?
Renat Zubairov [14:30]
As it said, this solution or the problem we're trying to solve with Elastic is not something you and me and two of my co-founders, we were working in this area for, like, six years before finding Elastic.io or eight years, I was working for a company called Talend, which is one of our competitors now, and one of my co-founders who worked for a large international bank, which is also very much deep into the integration. They Integration application integration. And working there was so much challenge to traditional software vendors, with the traditional software vendor business model, which was based on a perpetual license, which was based on maintenance fees, were not really compatible with the way how modern cloud-based software service companies were working and think. And part of the challenge was definitely technology. So the software, the service and cloud in general, represented a significant technological shift, right? This lift and shift can have ways of transforming it on premise software into a cloud software just does not work. And again, this way, Elastic, right, so this is the unique property of a cloud software for us. But the biggest challenge is not technological. It's also a business challenge because selling a subscription software, shift the risks in the equation between the vendor and the customer significantly, if we are thinking about perpetual model, I will exaggerate a bit right but customer buys a software, a vendor takes a DVD and throw it over the fence and then saying the customer knows your problem. Right. And when we're using a cloud software or software as a service, the software vendor is responsible and most of the time taking over the responsibility for providing a service. And hosting actually is a software as a creator. And this gives absolutely new power to the user, as it's called software, right, because they are no longer it's no longer a problem, how the software run, how to run the software, how to upgrade the software, how to maintain it and how to monitor it, but also Now it's all now a vendor problem and represent a significant value add for the customers. And many of our customers nowadays, especially when I'm talking about direct customers, not the software as a service or EM customers, they have a legacy integration platform, which they could not effectively cost monitor, maintain. And they see a lot of benefits by moving into the cloud-based solution like Elastic.io, where the maintenance, upgrades, updates, as well as operations of the integrations is actually shared between us and them, not only on their shoulders.
Omer Khan [17:39]
Okay, so how did you guys get started when you you know, you've you've seen this pain you're experiencing it? How did you get started with with the product or the business or even deciding that this was a business that you were going to invest your time and money and
Renat Zubairov [17:53]
We realized that this kind of transformation and in the account information is very significant is actually a once in a lifetime chance for us to really start something new to really make the difference and ride this wave of transformation. And we actually quit our kind of day jobs. We actually started in before a little bit. But then we learn, we realized that as an entrepreneurs, you have to jump off the cliff, because otherwise people will take you serious, right? And like, I don't believe in entrepreneurship Spartan right, you're either in or out, there is no nothing in between, unfortunately. So we jumped and founded the Elastic.io and the first year, we're leaving from our own savings from friends and family, and fools, and also some support from the government because in Germany, there's definitely very good social security and this kind of stuff which are supporting us on new businesses initially. And then after a year, we found the first seed investor and grew the company, so.
Omer Khan [18:59]
and now How long did it take you to build the first version of the product? Or your did you build an MVP? How did you get something to market both in terms of time and did you spend any time talking to potential customers or you guys felt like you knew this well enough this problem that you are confident to sort of go ahead and just start building the product,
Renat Zubairov [19:20]
To be honest, looking back, we spent far too much time doing technology, or programming. And we should have spent this time speaking to the customers honestly, and this is that's the fun part, isn't it? Yeah. And and it brings a lot of satisfaction right every time or every day you set your targets by the end of the day you achieve your targets most of the time and then you go home happy your unit tests are green and everything is for this is good. And we started we are like outside of our comfort zone right by Oh wait, we are, we have no employer, we're self-employed now we founded a new company. But looking back, we just spent too much time doing coding and too few times speaking to people, however, it somehow worked out. After a year with the technology that we built, actually, we launched the first version of Elastic.io, maybe six months after and it started to attract other people's attention. Many people got excited. I think it was about the time Zapier guys also started and IFTTT was already there, so many people said, Oh, it's like IFTTT and some people say oh, okay, if it's like Zapier and the as its comparison was actually pretty much Well, it however, is an integration platform as a service was a completely new market. And we were actually very lucky with this market as the market just exploded in the following years.
Omer Khan [20:50]
So you guys spent about six months building the product and then how did you get the word out? Like how did you find those initial customers.
Renat Zubairov [21:01]
Yeah, one of our co-founders was very good at spreading the word of mouth, you know, talking to people and, and spreading the word about us. So we managed to participate in a number of events. You know, I think we were on all startup events around our area, and maybe most in the Germany. I should also say it was 2013. And unlike now, to start, the ecosystem in Germany, was maybe I don't know, 15%, maybe 20% from the size of today. So that was not too many events, which is I think good because otherwise we just spend too much time on events. Right? But we were participating in many events, we're also doing exhibitions to kind of startup programs and also online marketing.
Omer Khan [21:48]
Okay, wait, let's just talk about the events before you go on about content marketing and Quora, what was your participate? You said participating but what were you actually doing at the event? Were you guys turning up and finding people to talk to. Were you trying to sponsor an event? Were you getting a booth and trying to get to talk to attendees? How are you making this work for you?
Renat Zubairov [22:09]
I mean, initially, when we were self-funded, our marketing budget was nearly non-existent. So most of the time, there's a few events were made in the first year were kind of startup event where we had don't have to pay for both. But we got like, presented to both and one of the largest event we were at an event called Xibit. It's used to be a biggest IT exhibition in Germany and Europe actually. And then we like as a startup, we've got some free booze, free places to expose ourselves. We also went to Dublin and basically a couple of events like this without any let's say financial exposure, except maybe travel and tickets and maybe youth hostel, places to sleep.
Omer Khan [22:55]
Yeah, actually, I was watching some guy on YouTube and I was pretty impressed with some of the youth hostel Across Europe how good they are.
Renat Zubairov [23:03]
Yes, that's, that's true. This is sometimes also Dublin one was not great, to be honest. I would not go there again.
Omer Khan [23:13]
Okay, so let's talk about we'll get into content marketing. But you mentioned Quora. So what were you doing there? And how well was that working for you to find customers?
Renat Zubairov [23:23]
I think in the first year, maybe like a significant digit number of our our referrals, came from Quora. And if I'm not wrong, maybe just maybe from two-three questions in Quora, which I answered, and I think one of them was the difference between like, what is the difference between IFTTT systems and Zapier? So that was traffic generators for us and another, especially in the first days. There were some significant number of visitors we've got through Hacker News. I think we made it to the first page of the Hacker News in on the weekend. I don't remember which was exactly this, but it was pretty significant. I think we got first few hundreds of signups altos, this event, we tried later to boost it, and then boost it that never never made it again. No, maybe Hacker News is become so so massive and efforts are so little. But at the time we just got in the first page. And then we wrote one of blog posts about a particular feature of very, very new technology called Amazon Web Services, especially the cloud front. And that was very, very technical blog post about some items, remember HTTP header behavior or something like this. After that, when, when when would Google like Amazon CloudFront we will like the link number two after the CloudFront because of this blogpost
Omer Khan [24:58]
That's pretty nice.
Renat Zubairov [24:59]
Yeah. And it's I think generated over multiple years, I think maybe like 10s of thousands of visitors to our website, also, potentially not related but it's kind of technical audience which is also was beneficial.
Omer Khan [25:15]
I forgot to ask you, were you charging for the product right away the six months you built it you launched? Was there a beta period where people were just able to try the product for free before you charged? Or did you say from no, no, from day one, we're going to start charging.
Renat Zubairov [25:29]
Yeah, we actually would started like a beta or like a private beta initially, we were not charging for it. And we try to learn from from the behavior of the people and retention, and other kind of online KPIs, how people use it, and later on, we introduced a freemium plan with freemium model, just to realize later again, a filtering power of pricing, right? Because eventually we realize people don't take you serious if you price tag is zero.
Omer Khan [26:06]
but especially the kind of companies, if you're going after larger companies, I think that's completely valid. When you launch did you have a specific customer in mind? Did you had you already decided we're going to go after this size kind of company? Or were you kind of still fairly open to kind of figuring out who that customer was?
Renat Zubairov [26:28]
Initially we were when we were kind of bootstrapping. We say, initially, we were like, talk to developers, right? liver, maybe romantic, I'm sure. Right. And we were very much into like the freemium and conversion and like selling something for $20 a month to large number of people. And this is, I think, a very valid business model, which work on some potential scale and also, the bootstrapped model could potentially work. However, later We realize that it's a support and hand holding efforts for smaller customers are the customers or in a smaller pricing plans is more or less the same or equal to the support and maintenance efforts for larger customer accounts. However, the feature set is definitely different. But then we basically pivoted to more expensive or more expensive pricing plans, which especially which was bigger kind of customers and bigger kind of companies. Because obviously, I think the sweet spot for SATA service products, especially the ones which are bigger in the total volume is definitely not something which is sending content for 5 euros a month or $5 a month, but more in the thousands of dollars.
Omer Khan [27:53]
How do customers find you today's there's still a lot of inbound marketing that's helping you generate
Omer Khan [28:00]
Yes, the inbound channel is, I think over the last two years is the most reliable channel for us, partially because of the market. As I said, we were very lucky to be in this market. We were lucky to be in the early phase of this market. So the interest to Software as a Service integration platform or integration platform as a service grew significantly, like when we're speaking to analysts, right, they say, a previous generation of our software of our like, class of software, which is enterprise service bus is a saturated market. So every customer has at least one or more enterprise service bus already. So the new girls have potentially got potential companies in this market is through replacement of a competitor, while for the night is especially in the last few years, it was like explosive growth. So for 80% Year of a market expansion, the market size, which led to the fact that we have a lot of competitors just by the number and the market consolidation isn't progress but not there. But that was a lot of interest from potential customers switching from the old let's say legacy way to do it two more called
Omer Khan [29:20]
way to do you also do some cold emailing and cold calling to to drive sales. Can you tell me a little bit about that? Like, how much do you do and and how does that work? To be honest,
Renat Zubairov [29:35]
It didn't work that well. Although initially, I think like two years ago, it worked better than later. So in the last year, we, I think many people in the industry there's a very nice book called Predictable Revenue. Unfortunately, the the name of authors I forgot already. But it gives a very interesting framework of working and The one thing I didn't realize when they was writing this book is that when this book is published, then basically this is a message which everyone else will also use. Right? So the especially in the area of marketing once once people start speaking about the marketing way to generate leads, this way of generating leads will not work anymore because it's already too late. And initially, the email cold email was working pretty okay, I would say and cold calling, but the what we witness it, that cost of lead acquisition or generation of leads went significantly up over the last couple of years there. So we, starting from next year, we will not focus or significantly decrease the number of cold calls and cold email campaign we will do.
Omer Khan [29:59]
And then Did you do any paid ads, AdWords, LinkedIn ads, anything like that?
Renat Zubairov [30:57]
Yes. That was a waste of time and money. Maybe we were doing them wrong, I could not exclude this we are not bigger company. And we have fund that as much of resources. But at the same time, the bidding structure of AdWords, which is excellent decision for Google, right, but maybe not as great for everyone else, in combination with a higher number of bigger competitors in the market drove cost per click to area where it's very hard to justify compared to other channels. So we're not doing AdWords anymore. We did AdWords, we did LinkedIn campaigns. with Facebook, we did, we did Twitter campaigns. And unfortunately, we were not able to generate a compelling lead acquisition cost there.
Omer Khan [31:53]
So there's a distinction in terms of your customers and I want to just talk a little bit about that because You have basically you have like direct customers and then you sort of have a reseller model, right? Is that the right way to think about it?
Omer Khan 32:10
Correct. It's more like an OEM model. Yes.
Omer Khan [32:14]
Okay. Okay. So the direct one is straightforward. somebody finds a blog post arrives at your website, tries, the product gets in touch, etc, right? And they start using it to solve their needs. Talk about this OEM model, like
Renat Zubairov [32:29]
how does that work, or the OEM model is actually something we we initially never didn't start about. But after speaking to our customers, and also the ecosystem, when you realize it's a it's a very good teach potential, and it's actually working very well for us now, we have very big customer names as OEM customers like one of the biggest telecommunication companies in Europe, German telecom or Dutch Telecom, as well as number of other cells in the US and the Middle East. But the typical young customer for us is actually a softer service application. You could imagine their big number of softer applicant softer service applications on the market. And obviously the cloud leaves from low customer acquisition costs and software which customer perception does not suck, right? I mean, it's in software which is easy to use, compelling, understandable and easy to learn right, which leads to the fact that many software service applications are focused on particular vertical, right, there is a CRM for link building, there is accounting applications for hair salons. And they are very specific kinds of applications, which, at the same time, help a lot with learning curve of particular areas. So it's very easy to understand what's going on in particular niche if their software service application is niche-specific. But at the same time, it means that there are many, many, many software service applications people use. I will give you an example. I mean, we're not a big company, I think in total with Elastic.io, we're right run by like 50-60 people, and was together with our parent company, we're like maybe 200 around about. But even in our like 50-60 people company, we counted recently and we use around about 50 different software, the service applications, which means like every employee have one his own software service application. And this leads to the fact that every Software as a Service application now is challenged with a way to provide consistent business value, as a part of a bigger process as a part of a business process which spanned across multiple software service applications. And typical answer to this is when the customers are coming. And they asked like, can you work with these guys? Can you integrate with that application? Can you integrate with this application? The typical answer is, yes, of course we can. Here's an API do it yourself, right? Which is not particularly easy for the customers, because obviously, it's just pushing the problem to the customers of integration. As well as it's not particularly useful in the sale process. Because the sale of software service application becomes slower. And customer will ask more questions about the API. And they need to do proof of concept as they need to do to find the people who will integrate and so on, so on. So with OEM offering of Elastic.io, we actually offer an embedded integration platform which has all applications Elastic.io has available for the customers of software service products. So, the answer can you integrate with this by was that is very simple. Yes, we can here, here's a ready-made solution just activate it and then it will start working for you and for your customers immediately and by this we first of all shortening the sales process, right. So, the answer is very simple. And second, we make application much stickier. Like, the stickiness of application which is integrated into the customer processes is is by factor, maybe like five I would say, in our experience, more sticky means the churn will be used significantly compared to application which is just and alone can be replaced anytime.
Omer Khan [36:53]
Okay, got it. So before we started recording, one of the things that you said to me was You know, when I look back, I feel like we didn't think big enough. When we started out. Tell me more about that.
Renat Zubairov [37:10]
When we were starting, it was our first company, it was our first startup. And we, when people asking us like investors or your potential partners, like what is the target size of your market? We didn't pay too much attention. We need to know what the market is. But we, as many people, you know, like, like we as humans, right? We have a very, it's very complicated to realize, or to imagine the big number, right? Like, it's very hard to imagine or feel how much a billion bigger than a million. And for us, we weren't, didn't have this experience to say Big. And we weren't really realizing what our potential markets are and what this growth opportunity we had before us, which had potentially some negative effects in our conversations with many people. Right. And this is something maybe to do with our cultural background. You know, I'm not original German, I'm originally coming from Russia, but living in Germany since like early 18 years. And especially in Germany, the people are very risk averse, right? At the time when we found that the last decade or it was very complicated to get an access to the capital and also the growth models or examples of the significant growth. We're not there in Germany at the time, because most of the German companies are middle-sized companies built over generations and generations. Right. And by not thinking big enough to be I think it was one of the mistakes that we missed some very big opportunities.
Omer Khan [39:02]
Okay, that's a good lesson good sort of some reflection to look back. And I think all of us can sometimes do that, right? Yes. We've got to challenge ourselves to, to think, a little bigger. And I've always been kind of blown away by so many founders that I've spoken to. When on the face of it, you look at the product and you think, okay, that, oh, they're very focused on a very specific, hyper-targeted market niche, and you're like, that doesn't look like a huge opportunity. And then, as you sort of start talking to them, you figure out like, how well they're doing, how much they've grown the business and how much opportunity there still is. It's always a constant reminder to me about there's no sort of finite cake that gets smaller with everybody going in. There's there's constantly opportunities out there and, you know, it's a it's a much healthier way to sort of think about running a business as well.
Renat Zubairov [39:56]
Absolutely, absolutely. It's not a zero-sum game right to We're entrepreneurship and entrepreneurs. They generating the value is they're not pulling away from somewhere else, right?
Omer Khan [40:09]
Yeah, yeah, absolutely. All right, we should, we should wrap up and getting on to the lightning round. So you're going to get seven fast. Quickfire questions here. Hey, ready? Yep. Okay, what's the best piece of business advice you've ever received?
Renat Zubairov [40:27]
As entrepreneur you have to jump off the cliff. Right? Do you have to be committed? And you're either in or out? There's no, no in between?
Omer Khan [40:36]
What book would you recommend to our audience and why?
Renat Zubairov [40:39]
The one recent book I read was very nice, called thinking slow Thinking Fast. It was written by a psychologist who got a one a Nobel Prize in Economics, which is unusual for little Prize winners. It's about a two kinds of thinking. We have in our head, which are constantly competing. And it's about instincts and how actually we think and feel as humans.
Omer Khan [41:10]
What's one attribute or characteristic in your mind of a successful founder?
Omer Khan [41:15]
I think it's a good extension of the initial cold, which I mentioned, I believe the preserve its persistence and patience to solve the important characteristics of a good founder as well as optimism. So this combination keeps me up every morning and getting onto the bed.
Omer Khan [41:35]
What's your favorite personal productivity tool or habit?
Renat Zubairov [41:39]
Initially, for me, it was a calendar like Google Calendar, and like, the rule of Sundays, everything which is not the Mayan calendar doesn't exist. But now I have the time to the calendar. I have a new kind of super tool for me, which I use like everyday multiple times. It's actually a Dropbox paper. I'm not getting any any referrals here, but I just I just really like the way how they created a tool, which is so intuitive and easy for doing the meeting notes, meeting minutes to really fix what we discussed. And I do it for every meeting for every conversation I have, which sometimes people believe I'm just mad, no, but I really really find it useful.
Omer Khan [42:27]
What's a new a crazy business idea you'd love to pursue if you had the extra time?
Omer Khan [42:31]
Actually I am in the process of rebuilding parts of my house are now and the kind of idea of a smart house or smarter house is very compelling to me right now. And what I'm really I thought would be very interesting for me to dig about more about it until we'll have more time is really like how this home automation and smart home ecosystem works and why actually there's no clear winners there. So I couldn't really understand why there's no like, Google does it Amazon does it. But still, they're like 55 different standards. Like, no, no clear winner. I really curious why that doesn't work, but I just don't have time to dig into it.
Omer Khan [43:14]
And really into a lot of that stuff. And every time I buy something, I wonder to myself, how much more complicated I'm making life because, you know, every kind of piece of it's got its own app. It's got its own kind of setup. It's, you know, just bringing the whole thing together in a way. At some point, you're going to be like, okay, I'll probably have to throw this away and somebody will come up with this end to end solution, which might make sense. But right now, it's not there. What's an interesting or fun fact about you that most people don't know?
Renat Zubairov [43:45]
One of the interesting facts that some people know and some people don't know about me, is actually the area where I was born and grown-up. It's actually very very far away in ours in Siberia in Russian Siberia. The particularly interesting fact about this place is definitely the temperatures, which are there, still have lots of friends living there, and they really enjoy a bit warmer winters now, but at the time, I was a kid there when it was minus 55 in the winter, so it's fine the 65 Celcius,
Omer Khan [44:23]
Oh my gosh.
Renat Zubairov [44:24]
in the winter, then part of the school people could stay home. When it's minus 60, then all schools are closed, but only when it's 60. So when it's minus 68 is still and yeah, that's basically an interesting, it's an interesting part of my my life and which
Omer Khan [44:44]
It is it is, yeah. Thanks for sharing that. And finally, what is one of the most important passions outside of your work?
Renat Zubairov [44:51]
It's actually my kids and family. I really like to spend time with them and sometimes I'm spending maybe the last time, then I would like to, but I really enjoy spending time with them. I have three kids, when my son is already 16. And my youngest daughter is actually only four. So it's, it's a lot, a lot of fun spending time with them. And they also see them grow. And it's a lot of entertainment to doctors I'm and also to, it's really amazing.
Omer Khan [45:22]
Yeah, yeah. So it was my sister, I think who once said to me, before I had any kids, you know, if sometimes it can feel like 99% of the time being a parent is like really hard. And sometimes you ask yourself why I did this. And then it could be this just 1% moment with your kids that makes up for all of that. And it made no sense to me at the time. But now as a parent, I totally understand that. Yeah.
Renat Zubairov [45:48]
Good. A Good Day, a good day. Actually, I like four years old, 10 years old and 16 years old. So you can already see the pattern here. When the kids go grow up and go to school. Then we were like with my wife. Okay. That's like the fun part is our maybe anything you want?
Omer Khan [46:07]
Yeah. Okay, great. So Renat, thank you for joining me, it's been great talking and kind of learning more about elastic.io. If people want to find out more, or think it might be able to help them, they can go to elastic.io. And if people want to get in touch with you, what's the best way for them to do that?
Renat Zubairov [46:25]
Although you can just ping me on Twitter with my surname, or just drop me a line on Renat[at]elastico[dot]io
Omer Khan [46:32]
Awesome. Thanks again. It's been a pleasure. And I wish you all the best.
Renat Zubairov [46:37]
Yeah, thanks Omer I really enjoyed it. Thank you very much for the opportunity to speak to you and looking forward for also your future results. It's really exciting.
Omer Khan [46:46]
Thank you. Yeah, we didn't mention that that you're actually a listener as well of the show
Renat Zubairov [46:52]
Yeah, it's I'm really, really pleased to be able to be here and I will be very profitable show to all my family and kids.
Omer Khan [46:58]
That's awesome. Love it. Alright, thanks for listening. I really hope you enjoyed the interview, you can get to the show notes as usual by going to thesaaspodcast.com, where you'll find a summary of this episode, and a link to all the resources that we discussed. If you enjoyed this episode, then please consider subscribing to the podcast. And if you're in a good mood, consider leaving a rating and review to show your support for the show. Thanks for listening. Until next time, take care!