762: 4000 Developers Pay Them To Catch Bugs, $9.5m Raised

James Smith. He's the co-founder and CEO of Bugsnag, the leading crash monitoring platform for web and mobile applications. The company helps companies like Airbnb, Lyft, Cisco, Pandora and Yelp catch and fix errors on their applications. Originally from London, James moved to the Bay area in 2009, leading the product team as the CTO of Heyzap. In his spare time, he likes hacking open source software, eating junk food and practicing his American accent.

Famous Five: Favorite Book? – Radical Focus What CEO do you follow? – Jeff Bezos Favorite online tool? — eShares How many hours of sleep do you get?— 8 If you could let your 20-year old self, know one thing, what would it be? – "If you don't ask, you don't get, apply it to your life"

Time Stamped Show Notes: 01:11 – Nathan introduces James to the show 02:00 – If a company has a software, Bugsnag detects when the software is broken 02:22 – Bugsnag charges monthly 02:28 – The price varies depending on the company's needs 02:36 – Price starts at $29 a month to tens of thousands a month depending on the scale of the business 03:17 – Customer cohorts 03:57 – Team size is 35 and will be 45 at the end of the year 04:30 – James and his co-founder quit their job in 2012 and started Bugsnag in 2013 04:40 – James was the CTO for Heyzap which was a Y combinator company in the gaming space 04:59 – Heyzap wasn't able to solve the problem James had with Bloomberg 05:59 – James invested in Heyzap and learned a lot from his time with them 06:40 – Heyzap was acquired by the German company Fyber 07:06 – James' experience entering the startup world 08:30 – With Heyzap, James had to decide whether or not he'd buy his shares before the acquisition 09:43 – James' price was low because he was an early employee of Heyzap 10:41 – James was 29 when he left Heyzap 10:50 – Bugsnag was initially bootstrapped, then raised in 2013 11:08 – Bugsnag went with Matrix Partners 11:32 – Bugsnag raised a total of $9.5M 11:49 – Customer number is around 4000 companies 12:04 – Bugsnag has a free and premium model 12:14 – There are 60K software engineers who are using Bugsnag 12:21 – One third are organizations and the rest are using it for free 13:00 – First year revenue was $4.5K in ARR 13:27 – Bugsnag has broken $2M ARR already 13:47 – "The expansion revenue is really, really strong" 13:50 – Bugsnag is constantly in a net negative churn 14:06 – Logo churn is around 1% 14:40 – Bugsnag started with low deal sizes and grew them slowly 15:05 – People try Bugsnag for free and see its value 15:45 – Healthy net negative churn in the industry is around mid-single digit to low double digit negative churn 16:41 – The best driver of growth for Bugsnag is word of mouth 17:01 – Bugsnag also does conferences and had 18 conferences last year 17:10 – Sponsorship price per conference can go up to $10K 17:28 – Large companies go to conferences as well 17:35 – Payback period is the 12-month which is the rule of thumb 18:17 – Bugsnag is in a typical SaaS gross margin 20:25 – The Famous Five

3 Key Points: If you don't ask, you won't receive; therefore, just get out there and ask for what you want. Small deal sizes can grow and expand to large ones once people see your value. Consider owning a part of a company—especially if it's a company that you truly believe in.

Resources Mentioned: The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more Klipfolio – Track your business performance across all departments for FREE Hotjar – Nathan uses Hotjar to track what you're doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books Show Notes provided by Mallard Creatives