B2B SaaS Billbee’s MRR soared in 2020, growing by 70% within the year from around $100,000 per month to nearly $200,000.
Created in Germany in 2015, Chief Revenue Officer David Pohlmann told Latka in an interview Billbee considers itself a “toolkit for multi-channel e-commerce.” To support small and medium-sized businesses on marketplaces like Amazon, eBay, Shopify or WooCommerce, it manages all the backend processes: invoicing, shipping, inventory, stock levels syncing and more.
With 9,000+ paying customers and an ARPU of $17, the B2B SaaS prioritizes transaction-based pricing — where users pay $0.07 per order — rather than a percentage of total sales.
“Even if you sell a very high-cost product, it doesn’t mean you’ll have a high margin and vice versa,” explains Pohlmann. “We could sell something for €2 [$2.40 USD] and have a €1.5 [$1.80 USD] margin, and the other way around.”
Because it’s a profitable company that adds between $25,000 and $30,000 to its bottom line every month, this method seems to benefit the blossoming SaaS.
Source: GetLatka
Billbee was born in a niche DIY market during a time where it was the only tool that could generate invoices, so it was easier to grow the business. Despite the competition that’s emerged since, one simple marketing tactic largely powers its customer acquisition: referrals.
Besides word-of-mouth, Pohlmann says the company gets most of its referrals from its e-commerce partners. “All these players have their own app stores, plugin stores or partner sites we integrate with, and that’s by far the biggest source of new leads and new sign-ups.”
At the time of this interview, Billbee earned around 1,000 free sign-ups per month, where between 200 and 300 users converted to paying customers. Even with a 13% churn rate, the SaaS expands by 14% to 15% annually and has net revenue retention of 102%.
Since its start, Billbee has remained completely bootstrapped. According to Pohlmann, there are no plans to change that.
Instead, it wants to grow the company in its own way, like transitioning its team of 20 employees to a remote-first environment — one of many creative paths it likely couldn’t pursue with investor funding.
What is Billbee’s annual revenue?
In 2020, Billbee generated $2 million in ARR.
What is Billbee’s monthly revenue?
In 2020, Billbee generated $180,000 in MRR.
Who is the CRO of Billbee?
David Pohlmann, age 29, is the CRO of Billbee.
Transcript Excerpts
To grow, lean into your unique value proposition
“We’ve been in a very niche market. There’s a platform called DaWanda, which is the German clone of Etsy, and we started especially in the DIY area for e-commerce, and there was a big community … There was only one tool to generate invoices, and this was Billbee at the time.”
Employ (cheap!) marketing strategies that run themselves
“[To get customers,] it’s really a lot of word of mouth. We’re focusing on the German-speaking region as of now, so we’re quite known [in the] German-speaking region within the e-commerce area. But also, we get all our referrals that aren’t word-of-mouth from our partners, which are the e-commerce systems like Shopify, WooCommerce, Magento, Amazon and eBay.”
Find your own lane: Which metrics make sense for your business?
“[Our CAC] is difficult to count, because the only costs we really can associate with it are commissions; maybe some apps budget, but we do very little performance marketing. So, [our] CAC is probably a few hundred bucks, maybe $150 to $180 or so.”
Freedom is the key to leading growth aligned with your vision
“At the moment, we really feel the freedom of being bootstrapped and having a profitable company, which really produces some cash and just makes it fun to work with. This year, we introduced remote-first, so we canceled all offices. We also introduced a 30-hour full-time work week while keeping pay.”
Full Transcript Nathan Latka: Hello everyone. My guest today is David Pohlmann. He’s always making money online, all the way back since school. He started his professional career as a cooperative student at former 120,000 person HP, with stops in Europe and California. Later on he started as employee number one and took over the growth part to further bootstrap Billbee to a seven and more figures SaaS company, now working as the MD for revenue and operations. David, you’re ready to take us to the top? David Pohlmann: Yes, I am. Thank you. Nathan Latka: All right. So just to be clear, you’re working full-time at billbee.io as MD. Do you have equity in the company? Are you considered a co-founder? David Pohlmann: We are five years old. Nathan Latka: Sorry? David Pohlmann: So I’ve watched the stock option, so no equity but yeah, it’s only [inaudible 00:00:42], yeah. Nathan Latka: Okay, great. That’s helpful to understand. So tell us about the company. What’s the company do and are you pure play SaaS? How do you guys make money? David Pohlmann: Yeah, we are actually pure SaaS. We’re a typical B2B SaaS application for small and micro businesses who sell their stuff online. So we have a bit of e-commerce, and lots of our users just sell on Amazon, eBay, Shopify and all this kind of stuff. And we do all the backend processes like invoicing, shipping, inventory, stock levels syncing and all this kind of stuff. So we see ourselves as some toolkit for multi-channel e-commerce, let’s say. Nathan Latka: When did the company launch? David Pohlmann: We started in 2015. Nathan Latka: Okay. And now today on average, what are these small businesses paying you to use your technology? David Pohlmann: We have a ARPU of 17 a month and the bandwidth is very high, starting from zero or a few cents until a couple of hundred zeros. Nathan Latka: Okay. So yeah, big bandwidth but average is $17 per month. Take me back to 2015 though. How’d you guys get your first 100 customers? David Pohlmann: We’ve been in a very niche market. There’s a platform called DaWanda which is the German clone of Etsy, and we started especially in the DIY area for e-commerce and there was a big community. And we really started off with the DIY community and there was only one tool to generate invoices, and this was Billbee at this time. Nathan Latka: Interesting. David Pohlmann: So was really easy to get the first 100 customers and, yeah, very, very niche. And then we expanded- Nathan Latka: And how many customers now today? David Pohlmann: We have a little more than 9,000 paying customers. Nathan Latka: Okay. And what’s enabling? I mean, when you say that they’re processing things like payments through you as well, is there a percent of GMV model as well or it’s just pure SaaS? David Pohlmann: Yeah. Actually there’s not a percentage of GMV volume, but we have a transaction-based pricing. So they pay us seven cents per order which goes through the system, in basic terms let’s say. And there are a few more rules around it which leads to some upselling. Yeah. But basically it’s seven cent per order. Nathan Latka: Why’d you choose to go that route instead of just charging a percent of total sales that they put through the platform? David Pohlmann: Yeah. That’s a good question. I think it’s some kind of historical, how we decided to go with the orders. And yeah, also even if you sell very high cost product, it doesn’t mean you have a high margin and vice versa. So we could sell something for €2 and have €1.5 margin and the other way around. So yeah, that’s why I think we’ve decided to go with the per order pricing instead of a percentage pricing. Nathan Latka: Interesting. So 9,000 customers, $17 per month. How much are you doing per month in revenue? David Pohlmann: We do 180K [inaudible 00:03:45] around pure SaaS. So 2.2 [inaudible 00:03:49] really, and there’s a little- Nathan Latka: And if that’s what you’re doing today, what were you doing exactly one year ago? David Pohlmann: This was this September exactly, and September before it was… Let me just check it out. I have the numbers here, I think. Yeah, probably we’ve grown by 70%. So, yeah. Nathan Latka: So you’re doing about a $100,000- David Pohlmann: Should be around- Nathan Latka: … a month, a year ago? David Pohlmann: Exactly around 100,000. A bit less than 100,000K. Yeah. Nathan Latka: Yeah, yeah. Very good, great growth. And talk to me, have you guys bootstrapped this or do you guys raise capital? David Pohlmann: Oh no, it’s completely bootstrapped. Yeah. Nathan Latka: I love that. David Pohlmann: No funding, no [crosstalk 00:04:30]- Nathan Latka: I love that. That’s great. Are you guys profitable today or are you breakeven? David Pohlmann: We’re profitable. We are 25 to 30K per month. So, yeah. Nathan Latka: That’s great. So you sort of got that- David Pohlmann: We always try to stick to the Rule of 40 but also have both KPIs above 10%. So we do not want to fall below 10% profit. Nathan Latka: Yeah. And Rule of 40 takes basically your profit plus your growth, and what you were saying is you want to be above 10% both on year-on-year overall growth, and you’re well north of that, you’re at 70%, and you want your profitability to also be above 10%. David Pohlmann: Exactly, yeah. Nathan Latka: That’s great. Tell me more about the team. How many folks on the team today? David Pohlmann: We’re 20. Yeah. Nathan Latka: How many engineers? David Pohlmann: Eight. Around eight. Yeah. Nathan Latka: Eight. And any quota carrying sales reps or no? David Pohlmann: No, we do not do any sales at all. Yeah. Nathan Latka: Yeah, yeah. And walk me, churn is critical in a SaaS company, especially selling to SMBs. What’s your churn look like? David Pohlmann: Annual churn is 13%, so gross churn, but we have a lot of expansion. So net revenue retention is actually above 100%. It’s around 101, 102% or so. Nathan Latka: Got it. So you churn 13%, you expand by 14 to 15%, so net revenue retention 102%. David Pohlmann: Exactly, yeah. Nathan Latka: And you started off in these niche sort of Etsy, the German competitor Etsy, sort of sites, the DIY space. How are you getting customers today? David Pohlmann: Yeah, it’s really a lot of word of mouth. We’re focusing in the German-speaking region as of now, so we are quite known within German-speaking region within the e-commerce area, I would say. But also we get all our referrals which are not word-of-mouth referrals from our partners which are the e-commerce systems like Shopify, WooCommerce, Magento, Amazon, eBay. All these players have their own app stores or plugin stores or partner sites where we integrate with, and that’s by far the biggest source of new leads and new signups. Nathan Latka: You’re integrated- David Pohlmann: I think we’re at around- Nathan Latka: Go ahead. David Pohlmann: We are at around 1,000 signups a month and more than a half of it as really referred by our partners. Nathan Latka: 1,000 free signups or new paid customers? David Pohlmann: Free signups. Nathan Latka: How many convert to pay each month? David Pohlmann: 25 to 35. So one third, around about. Nathan Latka: Okay, yeah. So you’re getting between 200 and 300 new customers per month? David Pohlmann: Yes, exactly. Nathan Latka: Interesting. Of all the app stores you’re integrated with, which one drives you the most new referrals per month? David Pohlmann: What do you guess? Nathan Latka: I would guess Shopify. David Pohlmann: Yeah. By far, yeah. Nathan Latka: Okay. Interesting. Any talks for Shopify to acquire you guys? David Pohlmann: Not yet, but we actually don’t want to, so. Nathan Latka: Why is that? David Pohlmann: At the moment we are fine, I think. Nathan Latka: Why is that? David Pohlmann: Yeah. At the moment we really feel the freedom of being bootstrapped and having a profitable company which really produces some cash and just makes fun to work with. And yeah, this year we introduced remote-first, so we canceled all offices. We also introduced 30-hour full-time work week while keeping pay. So yeah, few things you probably could do with some capital behind you. Nathan Latka: So what are you spending? I get a lot of your stuff is from referral partners, but when you do spend money, what is your fully weighted CAC to get a new $17 a month customer? David Pohlmann: Yeah. It’s difficult to count because the only costs we really can associate with it is commissions. And yeah maybe some apps budget, but we do very few performance marketing. And so CAC is probably a few hundred bucks, maybe 150 to 180 bucks or so. Nathan Latka: Interesting. When you say commission, you mean the commission you pay to Shopify to their app exchange? David Pohlmann: For example, yeah. Exactly. Yeah. Nathan Latka: Which is how much? David Pohlmann: With Shopify it’s 25%. Nathan Latka: Got it. Got it. Very good. All right, this is good stuff. Let’s wrap up here with the famous five. Number one, favorite business book? David Pohlmann: Scaling up by Verne Harnish. Nathan Latka: Number two David, is there a CEO you’re following or studying right now? David Pohlmann: Maybe the guy from lemlist, Guillaume. Can’t spell his name to be honest. Nathan Latka: From where? David Pohlmann: From lemlist. Guillaume- Nathan Latka: From lemlist. Guillaume. David Pohlmann: Yeah, yeah. Yeah, him. Yeah. Nathan Latka: Number two. What’s your favorite online tool for building your company? David Pohlmann: Leapsome. Nathan Latka: Say it again? David Pohlmann: Leapsome. Nathan Latka: Leapsome. David Pohlmann: L-E-A-P-some. Nathan Latka: Number four- David Pohlmann: It’s some kind of employee engagement or so. Yeah. Nathan Latka: How many hours of sleep do you get every night? David Pohlmann: Seven to eight. Nathan Latka: And what’s your situation married, single, kids? David Pohlmann: Married, one kid. Nathan Latka: Okay. And how old are you? David Pohlmann: I’m 29 still. Nathan Latka: David Pohlmann: Quit the job earlier. Nathan Latka: Guys, there you have it. billbee.io started selling early on to DIYers in the German competitor Shopify sort of app exchange. This was back in… A couple of years ago, 2015 they launched. They were doing about 1.2 million in terms of run rate a year ago and now doing 2.2 million in terms of run rate. They’ve got over 9,000 customers paying on average $17 per month. They are profitable, every month they take about 20 to $25,000 to the bottom line, also growing nicely. And they’re doing all of this completely bootstrapped, which we love. Team of 20 people, eight engineers. Churn is 13%, expansion 15% for 102% net revenue retention. CAC payback period is super healthy as they look to continue to scale. David, thanks for taking us to the top. David Pohlmann: Thank you. Have a good one, Nathan. Bye. Nathan Latka: One more thing before you go, we have a brand new show every Thursday at 1:00 PM Central. It’s called Shark Tank for SaaS, we call it Deal or Bust. One founder comes on, three hungry buyers, they try and do a deal live, and the founder shares backend dashboards, their expenses, their revenue, ARPU, CAC, LTV you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1:00 PM Central. Nathan Latka: Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2:00 PM Central. To make sure you don’t miss any of that make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn’t want you to miss breaking news in the SaaS world, whether it’s an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don’t want you to miss it. Nathan Latka: Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We’ve probably talked about your tool if you’re running a company or your firm if you’re investing. You can go in there and quickly search and see what people are saying. Sign up for that at nathanlatka.com/slack. Nathan Latka: In the meantime, I’m hanging out with you here on YouTube. I’ll be in the comments for the next 30 minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We’ve got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys’s support. All right, I’ll be in the comments. See you.