$9M ARR, Zero Investors: Yasser Elsaid on Bootstrapping Chatbase as a Solo Founder

0:00Having a slightly below average co-founder is much, much worse than being solo. I wasn't following the footsteps of like, oh, first you need a pitch deck and then you talk to investors and then try to find a co-founder and then hopefully you raise money and then you start building. I just saw the opportunity and I started building. Dictatorships make your chances of success much higher. If you have trust in the founder and you think they're smart enough and they have input on how to build the product and how to get customers, then it should be a dictatorship. You don't want them to be slowed down.

0:24If you bootstrap to 100 million ARR AI business, anyone would call that a success. And like it's a success for the founder and for the team. But I don't think it would be considered a success if you raised 100 million.

0:36Yasser Elsaid:What's the case for solo founding? The case for solo founding is that it's very hard to lose. The biggest reason is co-founder breakup. Because if you don't have breakup, you can just like pivot or you can just try to raise more money or there's a lot of other options. I like the fact that everything is my fault and like being solo gives me that satisfaction. chatbase has had this incredible journey nine million dollars in arr in about three years there was this opportunity that you saw and i'm really curious what that opportunity was like how you saw it because that ultimately pursuing it was the thing that kind of got you to building this great business so let's just start there when you saw the opportunity what did that look like yeah this was very early on this was even before chadgpt was launched i was using the da vinci models so way back in the day back then it was there was no like api where you can send a chat and like get back a response it was just you're talking to the base model just completion not chat completion and then i saw the idea of this is a very powerful model but it doesn't have custom data it doesn't have your data and that in the very first version of chat base it was just uploading a pdf and then talking to it so like my idea was uploading maybe a textbook or just like a book or a website or anything and then having a chat with it and of course now it seems obvious that this like makes sense and it's a good idea and people would want that but I talked to a lot of people back then and I don't know if it was very obvious I I think some people didn't see the value or maybe they saw the value, but they didn't see the models improving.

2:29They just saw like what existed now. And maybe that was not super, super helpful because the models were not there yet. But yeah, I had like, I thought there is a very good chance the models were improved because now there's all of these big companies that are working towards the same thing. So I think I started chatbase with one, a very good idea which is adding custom data to the base model and then I bet on the models improving which was not very popular back then. And I think that's how we just kept growing as the AI wave has been like, we've been riding it from since three years ago.

3:15Yasser Elsaid:So that's really interesting but in order for you to even get there to to realize hey we should make it so that you can chat with a pdf for instance you needed to be exploring and playing around with these things so what was it causing you to even play around with DaVinci in the first place like where were you is I think that oftentimes when people are trying to come up with ideas and things to work on sometimes they're trying to artificially do it and it feels like in many ways you kind of came across this through the process of exploring things and tinkering with things so maybe you can give a little bit of a frame of reference for people when they're trying to understand how you approached it and maybe that would be something that they could apply to their lives as well yeah I think um like honestly the only there's no shortcut like the only thing you can do is just to like try things and then because you're trying things and because you're talking to other people and because you're in the you know like in the group chats in the community you're seeing the new things that people are releasing you're getting inspired then you come up with a good idea or like at least you see potential in some ideas so the way this happened for me was so I was in my last semester uh in in university in Canada and I was always so I was doing internships but I was also doing side projects with the goal of just like having something that can make money so this was I was like inspired by you know people like Peter Levels for example and I was doing other projects I had the project called rate my courses I had another project called essay pal but because I I was, you know, like tinkering with things and, you know, like trying the APIs, trying to do stuff that the APIs can't do yet, just like trying things.

5:09I saw RAG, which was, like, I saw it very early on, and I think that was, you know, the spark, the sorted chat base. And it wasn't even called RAG back then. It was just like, I don't think there was a name. It's just like you add data, you add data to a base model so that it can know more things. So I saw some people writing papers about that. Some people were creating CLI tools about that, but there was no product that you can open a website, add a document, and then chat with it. So yeah, I think for me, it was obvious that this is something people would need. and I just stopped everything I'm doing in university I just like stopped going to class and I had the conviction that yeah like this is an opportunity that doesn't come often and like to be able to see that very early and of course like I didn't know how big it's gonna be but I had some conviction on like, oh, this might actually be an opportunity.

6:20And yeah, I just stopped doing anything else. And I started executing. And then, yeah, I think like a month and a half after, I was coding by hand back then. So it was still slow. Yeah, a month and a half after like getting the idea, I released the first version of chat base.

6:40Yasser Elsaid:You know, there's two things that I would love for us to talk about, you know, regarding that sort of early days of figuring this out. I think that one is that people often think that they need to have the right idea and they kind of just try and go straight to figure out the right idea. It seems like there were a bunch of things that you were trying and then ultimately you found chat base sort of through that, through that process of building those other things. And that ultimately caused you to, you know, put those other things to the side. So I'd be really curious just your philosophy and sort of what you learned around building those other things that kind of got you to the position where you'd actually discover the chat base opportunity and then maybe the other thing would be really cool to talk about and i think would be really useful for people to hear is how you how you actually got that sense that it was time to put the other things away and including school but but particularly the other projects and go all in on this because i think that one thing that sometimes people have is they do that kind of try out a bunch of things but they have a hard time kind of abandoning them all and putting all of the wood behind one arrow so so maybe talk about sort of that first part though we can talk about sort of the focusing and doubling down how do you think about sort of the process of like tinkering with other ideas and how it ultimately potentially drove you towards discovering the opportunity for chat base yeah so i think like the normal way to go about things is that you you know like you look at the market you look at competitors you like research what they're good at you see their reviews you see what their customers are saying and then you from all of that research you come up with a business idea but I think in practice I don't think any business started out like on day one with the idea that it ended up being as it grew much bigger and I think it's the same even for chat base even after I saw that idea so I think for me what happened was i i was working on multiple things i saw one thing that it seemed to me like just from first principle thinking like it just seemed to me that this is very powerful and by just thinking about the effects of something like this just like sitting down and thinking it's just not no market research no talking to users nothing like that and i think that's the only way in a fast moving industry like AI because you don't have time to talk to users because there is no users to talk to like this is like you are it's like a very it's a new paradigm like there's no one to um to like you know interrogate about something like this because they they've never used something like this um so I think a lot of things in AI will be about like seeing what is possible now and like what just became possible and just like build something around it and then while you're building you'll find you know the universe pushing you towards like a certain direction because of many things because of like maybe there is a limitation in one idea but you find out another idea that works or maybe you talk to some people and like it seems like, hey, this is an approach that you can do things.

10:00And I think if I think about all the successful tools that came up from like after the LLM era, I think a lot of them started out that way. It was as soon as the technology is ready for something, you see someone build that something very quickly, like for example, OpenClaw or even CloudCode and stuff like that. Because the models are now capable enough to do long-running tasks, to run multiple tools, to have access to the CLI and not hallucinate. Because it's a new paradigm, it comes from just first principles thinking and not heavily doing a lot of market research or talking to a bunch of users because it's a new paradigm.

10:52Yasser Elsaid:One thing I think you've talked to me about in the past over dinner or something is urgency and sort of the sense that once you discovered this opportunity, at least the first version of what chat base would be, you felt like there was a real urgency to get it out there and sort of be the first. And maybe that also ties into that thing I was talking about earlier that I thought would be interesting to hear, which is sort of that decision to put everything else aside. You had other apps that you were working on, maybe varying degrees of success and promise with those you had school so how does urgency tie into that decision and the decision that you ultimately made to put all the other things aside yeah so i think for me the reason i was urgent or like i had a lot of urgency was not actually right it was the belief that like you can do ideas that other people are doing like you have to do i don't know I think a lot of people when you talk to them about like a startup idea they say oh but that exists and I had like the same like misconception that oh I need to do this now because if I wait I know like this idea is good and someone else will do it so I just need to to do it now but I think like the reasoning was maybe not right but the result was I needed urgency and that of course was the right thing to do and um a big reason i would say for the success of chat base was the timing and like i think that helped us um stay bootstrapped because as soon as we launched we we had revenue uh maybe like like i think i had the first payment through stripe 30 minutes after i put out a pricing page so i think yeah i think if you're building an ai especially now like now it's extremely competitive like now it's very obvious that um like this is the future and you want to be part of it so everyone is building so i think now it's even more uh important to have urgency but at the same time to still make sure that you you are opinionated and not just you know like following the trends of um like what's popular now and then like jumping to the next thing because I think it's very hard to run like a scalable business that way.

13:16Yasser Elsaid:You know you've bootstrapped as a solo founder to 9 million ARR over three years. You have quite a following on X because people are fascinated and they want to follow in your footsteps. At the same time when you started you didn't have a lot of a following. You didn't really have much of an audience at all you had no revenue to start you were I guess still in school so what was it actually like back then how did you decide to be solo like what was the what was the backstory there I think what helped is that I wasn't an SF so I think I I think I didn't like think about like what people do when they want to start a company or like what the the steps are I was just you know like I just saw the idea and I started building it I wasn't thinking too much oh do I need to raise do I need a co-founder and maybe like maybe like not everyone should do that and that doesn't work with every business of course but like to me just the truth was I saw the idea and like I started building I wasn't um I wasn't like following the footsteps of like oh first you need a pitch deck and then you talk to investors and then you try to find a co-founder and then hopefully you raise money and then you and then you start building i just saw the opportunity and i started building and what helped was as i said like we have we had revenue very quickly so and also we had like a lot of customers quickly and i was alone so i didn't have time to like go like find a co-founder and raise money like it was just all of my time was spent on just building the product and then talking to customers and maybe if I had more time to like think about things I would have um tried to find a co-founder or or more or raise but yeah I think I just didn't have the time to do so and you know I had like some angry customers calling me you know at 2 a.m so like that was my my like my whole day um just building and improving the product and talking to customers until it got to a point where like I can run this profitably and hire people and it's been that way since then it feels like in many ways solo founding especially solo founding with the bootstrapping component which I guess over dinner last night we described this as free solo is a bootstrapping solo and then people like Ben it's like true solo if they're been if they're building without any teammates and we'll talk about team in a few minutes here um when you're building this sort of you know this this sort of free solo uh approach um it does feel like it it has a lot of uh that it owes to sort of like the indie hacker kind of movement um and i'm really curious do you think that we're just moving in a world where the indie hacker was always thought of as a little bit like this is bootstrapping kind of puts a ceiling on things pretty significantly and indie hacking is is quaint and it's about making revenue but it's not about building big businesses you have more revenue than a lot of companies that are venture-backed three years in um so you're you're doing phenomenally well you're better than a lot of venture-backed companies so you're kind of changing the narrative around like what a solo solo bootstrapped company looks like.

16:44Yasser Elsaid:In the past, people thought it was kind of like this, you know, small business type thing. How do you think about that? How do you think about like, what's actually possible with a solo bootstrap business? And maybe, you know, we've talked a little bit about it, but I'd love to hear kind of what that journey has been like. And did you realize in the early days that it could actually be something like this? I know you started it out with just the premise of making a business that makes some money. So just walk me through a little bit of that yeah i i agree i think um when i was like the indie hacking movement was mainly around building like a lifestyle business you know like some people call it like a a micro sass or or something like that it's just the idea like you want to make profit and then go live in bali um which i think like this is i think it's extremely valid and i think it's I think it's more possible now with all the AI tools.

17:42I think if someone has enough agency and enough urgency and drive, I think that's a very viable path and sounds fun. For me, I was considering building Chatbase as a lifestyle business and some people were doing also multiple projects and running all of them at the same time. but I think I just saw this as like once in a lifetime opportunity for many reasons I like the timing the how big the market is how competitive it is and I think maybe like it's it's also human like by nature like I'm more competitive like I couldn't get myself to okay say okay this is enough let's just go you know to the beach and uh enjoy the the profit um so i think a part of it is like the person that is that is running things and like what their goals are but for me the goal was always like i want to see this through i want to like i i think it's hard to find an opportunity like this and i think people get something like this maybe like maybe like three times in their whole life maybe less and most people don't take advantage I feel like I did a good job early on by taking advantage and you know somehow I feel like I owe it to myself to like at least see it through like see see its potential and also it's fun like I enjoy doing it I enjoy seeing you know the graphs go up I enjoy talking to customers and like seeing how this helped them i i enjoy the competitive aspect of it um so it's also fun and yeah that's that's mainly the reasoning on like why i decided to like go all in and maybe raise the ceiling of what maybe like uh people thought what is possible bootstrapping a company especially solo it really feels like you have raised the ceiling

19:51Yasser Elsaid:in terms of what people think is possible. And we have no idea just how high that ceiling can go. I'd be super curious to hear about the competitive aspect of this. Not competitors, but like you being a competitive person. Is that something that you identified in yourself really early on? What were some of the aspects of being competitive that kind of resonated with you or made you sort of who you were when you were growing up? Yeah. so I was doing a lot of sports growing up I think maybe that's one aspect that affected my personality so I did swimming I did archery for a long time and you know like going to competitions and all of that I think especially when you're young and when you with your friends I think it shapes your uh yeah it shapes your personality and i wouldn't say i'm competitive because of i just want to like you know prove other people wrong or you know like i think a lot of founders a lot of people say founders have you know like a chip on their shoulder and um the reason they do what they do is because it comes from a place of like i want to prove everyone wrong i don't think i have that but i think i just i think it's it's it's fun to as i said like to see things through and like see the the biggest impact you can make and um to me i'm more like competing with myself or like yeah yeah honestly competing with myself i want to like see how much i can build this and like like just be proud of what i built um and yeah i think that's yeah that's the reasoning behind deciding to just go all in and like um try to grow this as much as possible try to get as many customers as possible try to compete with companies that raise a lot more money than us so infinitely more money than us so yeah the um swimming and archery that's interesting those are those are sports that are both individualistic but also teams right archery is also a team swim team um but and you're competing against other people but you're also competing with yourself yeah can you share a little bit more about how you think about those sports and kind of the relationship between the individual their teammates and the people they're playing against because they feel like very different than say you know soccer or football or whatever yeah i think the beautiful thing about uh individual sports is that you can only blame yourself and i think especially when you're young i think that teaches you a lot about just life and like how you you know go through life and conduct yourself through life and i think having that mindset of everything is my fault i think that's very helpful in sports but especially in individual sports and that's what it teaches that's what it teaches you but it's extreme extremely helpful in business also like it's the same um it has the same importance if you're working with more people i think especially if you're the ceo yeah everything is your fault because yeah like you're the person responsible for anything that's happening in the company so i think that mindset even if you're working with other people i think even if you have co-founders i think everyone should um take responsibility and i think um you know like i i got that lesson from sports and i think it helps with businesses and especially it helps with um solo founding a business um but now like now i have a relatively big team and like a lot of the um value that chat base is providing to customers is coming from from the team and i'm very proud to be able to have them um like working with them especially given that this started out you know like in my like last semester in school like you know like building uh in like a class for example so it is very special but i want to make sure that i give them you know the appreciation and recognize their what they helped built i think this is such an important aspect of it right which is you're not it is actually kind of an interesting thing because oftentimes people like well you know they're not solo they have team of course like most companies do have teams and probably will have teams maybe they'll be smaller teams in the future because more leverage for each individual with the tools that they have.

24:29Yasser Elsaid:But there's this really interesting dynamic, of course, where you're solo, but you build a team. And I think that there's a very interesting dynamic of going from one person to multiple people. If you have co-founders, you already have done that, right? Because if you have two other co-founders, there's three of you. When you add the first sort of non-founder to the team, you're going from three to four, perhaps, right? but if you're solo and you're adding the first teammate you're going from you know one to two so it's it's this big shift i'm curious what that was like how you evaluated thinking about when to add the first person um what kind of role that that person had um obviously this is also at a different time so you know technology was different the tools were different so maybe if you were to actually sort of think about the way that you you did hiring if a company were doing hiring today they would do different hiring they would have maybe you know three years ago but i'm really curious sort of what that was like in the early days of considering bringing on a person to kind of go from being truly solo to having a team i didn't have a choice like i think it was extremely obvious that i need i need to hire someone it was just this exponential growth you know in the first two i think i hired the first person like two and a half for three months in after the first launch.

25:52And it was just impossible to keep up with talking to customers, with building their features, with everything. I think for me, I was lucky because the first person I hired is a friend from school. So we already had that relationship. And I think it's the same for most startups. I think that would be a good idea to just hire someone you know and already trust. Because as everyone says, the first few hires determine the culture of the company um so i think it for me like at some point there was no way i can continue doing this solo and i knew that i wanted to grow this as much as i can and i hired that first person he was an engineer my friend from school and maybe like a month after i hired the second person and also a friend and then it just um like i think maybe the mistake i made is i hired too slowly even not not because people say like you only hire when it's painful yeah which i did that but like not on purpose um but i think i continue to do that and i think maybe that's one aspect of bootstrapping that you're kind of forced to be a little bit more careful than if you would have raised and I think I fell into that I wouldn't call it a mistake I think like I did what made sense at the time but I think if maybe I knew a bit more I would have been more aggressive and like maybe hire faster spend more money faster but I think that's what I'm saying about bootstrapping it's the when when people think of a bootstrapped company now it's more like they associate it with like the indie hacking you know lifestyle business which i think it is a big part of it but but now i think you will see hopefully companies like chatbase but i think other companies too will be solo founded and maybe bootstrapped and they will become huge because i think now the technology allows it and i think now also more and more people want to start companies and i think like the number of founders is just going up so i think the number of solo founders will just go up.

28:07And bootstrapping is now a viable option to build a generational company. And maybe the mistake that I made of like maybe being too careful very early on and making sure that we're always like very profitable above a certain amount, maybe some people will be more aggressive. And yeah, I see that as like a good strategy if the goal is to build something generational.

28:34Yasser Elsaid:So I want to talk a little bit more about sort of the team and sort of how you think about culture and building in real life versus remotely. But before we get into that, I think there's a really interesting point that you made, which is it's more possible than ever before to build Bootstrapped and to build to something of really meaningful scale. I don't mean this in a derogatory way, but some people sometimes do when they say a lifestyle business. There is something really interesting about this idea that you can make a lot of progress with very little. And you could essentially be profitable.

29:12Yasser Elsaid:And then there's the question of, what do you do with that? Do you continue to be profitable? And do you raise venture capital? There was somebody in the solo founders program who got$2 million in ARR completely solo, no teammates. And now he hired his first teammate. He had raised a little bit of money, but he didn't touch any of it. you know it just it was just that it was there and it didn't end up getting used so in theory he could have bootstrapped it right um now will he raise more money he's debating it and i think that's a really interesting question that a lot of people have is they have the successes you have or as as he has and you know now it's a question of well should they continue to grow sort of with profits uh especially if they're really profitable if it's a sort of more software oriented business or at some point does it make sense to consider taking money and you're doing it from a place of leverage that maybe you didn't have before.

30:07Yasser Elsaid:So I'm curious sort of what your philosophy has been at least to date because I'm sure there have been quite a few times when people have asked about potentially investing, that sort of thing. Like everything else it depends on, I think the main thing it depends on is the founder's goal. um i think there is a ton of advantages to raising and i think the biggest one is you get to be more aggressive because you have this money and like you're supposed to use it you're supposed to spend it and um maybe you do that some mistakes along the way with with hiring and stuff but i think overall it um just get to move faster which means you capture more of the market and in some markets that's you know the name of the game it's like who's gonna get more customers faster and then also the other advantage maybe for especially if someone like young or maybe it's like their first company or they don't have like a following or something I think the other advantage is some social proof you know when you have like the logo that this customer this firm invested then it helps a little bit with getting customers and hiring but i would say the biggest advantage is just being more aggressive because i i know i was like this and i think other maybe bootstrap founders also had the same problem it's just it it's not the same when you're spending your own money like customer revenue you want to make sure that it's roi positive all the time you want to make sure that you see the results very quickly which also like is a good mindset to have but in some cases you want to like be more aggressive and experiment and and um maybe do some things that are maybe sound stupid but they have like some chance of success but yeah i think that's the main reason to raise if you already have profit um but i would say on the other side like why people would not raise um if they have a growing business is one they think maybe it's like they're delusional but they think they can build a brand that is strong enough that they don't need to associate it or like to borrow brand equity from a big firm um which i feel like that's that's the goal for me like i want to be able to um like maybe maybe it's stupid honestly but I'm just saying I have like the confidence, the self-confidence that I can make this a strong brand that people recognize, that people want to use, that it's not like the alternative to something.

32:47It is just the best tool to use. And I think I can do that without raising. So that's one thing. And then the other thing is about

33:01just maybe optionality and control. So when you, of course, you have like maximum optionality and control when you're on your own. Some people value that. I value it to some extent. And then I would say that the third reason is the definition of success changes as soon as you raise. So it depends also on the person. But if you bootstrap to 100 million ARR, AI business, I mean, I think anyone would call that a success. and like it's a success for the founder and for the team but I don't think it would be like consider the success if you raised 100 million

33:47and I think for me and like I think for other businesses too it might be easier to get to what you consider success if you don't raise because just the ceiling is just changes so much and I think even if you have the self-confidence, even if you know you built an amazing product that customers love, I don't think anyone knows what's happening in AI now. It's very unpredictable. So there is an argument to be made that it's just higher chances of success if you bootstrap.

34:23Yasser Elsaid:There's something really remarkable about chatbases growth and clearly there was the timing as you said and there were a bunch of sort of external factors but there's also you and the team and it's not like you just built one product and that was what the product is today. It's very different than what you started with and I think that that's perhaps something that's really worth talking about because I think people would really benefit from hearing kind of you start with one thing and you end up at a really different place maybe a place that you hadn't necessarily predicted so maybe you could talk a little bit about that like chat base what was it the very early days and then maybe take us quickly through to where we are today yeah no i think you should like the product should change over time like that's the whole point of you know building the product is it evolves as the market evolves as your customers needs evolve as your goals evolve like this is i don't think it makes sense to you know like plan the next year in advance and just like ignore everything that's happening around you that doesn't make sense especially in ai when when everything is moving fast um like you need to be flexible enough and you need to also communicate that with the team that we have like an idea of that we have a strong plan we we know what we want to build but you also have like the flexibility and the like the team is is small enough and fast moving enough that you can like change things as you know like the technology changes or as the market needs changes or like as a new like competitor enters the market so you have to have that quick moving ability and i think also that's easier when you're bootstrapping when you're on a smaller team because you have control and you're just a dictator like you can just decide what you want to do and i think like dictatorships are good when you're trying to build a company um because yeah that's a tangent but i i think say more about that though i mean like i've heard it described as like benevolent dictatorship yeah say say more because i think that's something that's relevant to solo founding right which is that sometimes when you have co-founders it can be somewhat you know uh somewhat difficult to necessarily get to the really pointed decision that needs to be made yeah i'm curious like talk more about the benevolent dictatorship yeah i think i think it's very important and i think like of course i don't know the inner workings of like the biggest companies but i think you associate every big company with one person and they're the face of the company and they're the decision maker and I think like dictatorships make your chances of success much higher because like there is two scenarios.

37:22One, the founder is smart and the team trusts them and they have the agency and they have the skill to build an amazing company and in that case, you want them to be a dictator. You don't want them to be slowed down, but like by convincing everyone about their thought process and making sure a consultant comes from outside to validate their thinking and all of that. So if you have trust in the founder and you think they're smart enough and they have input on how to build the product and how to get customers, then it should be a dictatorship. And then on the other side, if the founder is not smart enough and if their team doesn't have full trust in them, then this company is not going to work anyway, whether or not it's a dictatorship.

38:10So the only way you have a very big success is being a right dictator. Your decisions are right, and you don't waste time convincing everyone about what you want to do. So I think it just makes you move faster. It makes product decisions very fast, and even pivoting if it comes to that. So I think that's one of the biggest advantages of being a solo founder. And I think also, if you do have a co-founder, I think it needs to be very clear who's going to be a dictator and what. And I think then it can work. But if it's not very obvious who's doing what, like the responsibilities are like there is a gray area, then I think it becomes a very big problem.

39:05Yasser Elsaid:maybe let's shift it back to what before we went on this little rabbit hole which was a really good one um sort of how maybe that benevolent dictatorship or whatever um caused you to go you know from place to place to actually get from first version of chat base to where you are today because that i'm guessing it's not exactly a straight line yeah um but what was that what was the evolution there and what were you learning along the way yeah i think um what's interesting in startups in general, but especially in AI startups, is that the inputs change every day and then you make a decision based on what you know today, but then you shouldn't have ego to say like, let's say like a week after or a month after and then some inputs changed and then the decision you made was a mistake.

39:57Then you need to like just go in a different direction very easily and like very quickly. and 100 % it's not going to be a straight line. It wasn't a straight line for us. I don't think it's a straight line for anyone because especially in AI, everything is changing so quickly. So your job as a founder, I think, for decision-making is two things. One, you need to make sure you take in all the inputs that you have today and make sure you think from first principles on what the best decision is that I can make with everything that I know now, with all the context that I know but also not having the ego to say no we're going to continue doing this after like things change and making sure that you and everyone on the team are you know low ego enough to be able to change your mind very quickly to respond to like everything that's happening around you that makes you know like long very long-term planning hard but it is hard and i think it's hard for all the startups and it's even hard for the ai labs and you know the people that are creating this technology because like the truth is no one knows what's gonna happen you know like two months from now like what the products are gonna look like what the market is gonna look like what the customers will want it's just very unpredictable you can have assumptions and like you can have some accuracy but yeah you need to be low ego enough to be able to change your mind very quickly and i think jeff bezos um had a quote i forget exactly what it said but something like you need to be able to make the decisions that it's very easy to come back from and i think that's the case for like especially ai startups if you have a decision that you can like walk back on you know a week from now if things change you should do that instead of doing something that it's very hard to walk back on so yeah for chatbase it was a lot of like thinking you know today like what should we do and then changing it you know a week after and then like thinking about something new a week after and then oh actually it works so we don't change it we're going to continue doing it and over time over like yeah the years it uh chatbase became what it is today and we're still like going

42:23Yasser Elsaid:through that it feels like there's um this idea of like one-way door decisions two-way door decisions um everybody like i think the main the main challenge is that everybody treats all decisions as a one-way door decision and what you're saying is there are so many decisions that are actually two-way door decisions that are totally reversible but because we we kind of have this human nature of kind of clumping everything together uh we we treat the the two-way door decisions as one-way door and it makes it really hard yeah um that's probably the biggest impediment on velocity right so i'm curious how do you kind of encourage the team and create a culture for the team to not feel like they're always going through one-way doors so therefore they have to be extremely careful um maybe not have to always get your permission for things right because you know you're you're not steering but you're directing right you're telling you're saying here's the direction we want to go in and then ultimately you know you you need to give them the ability and encourage them to do their great work and make their great decisions because you can't be the person who makes all the decisions so how do you do that like what's the culture like how did you think about building the culture i'm sure that there are things you've learned along the way that were maybe missteps.

43:41Yasser Elsaid:Every company has those. I'm just curious what that's been like for you. Is this the first time that you've ever really built a company, right? It's kind of like you were in college and now you're running, I think it's a 30-person company, $9 million bootstrapped solo founder. So walk me through, walk us, the listeners through what that actually was like, what you've learned about building a culture that supports these things that are important. Yeah, I think the biggest thing for me to learn or like that I learned and that I made sure everyone on the team knows is that changing your mind is actually good like you should change your mind if if things change because I think if you don't like make sure that this is explicit if you just like let things happen there is this you know like social pressure a little bit to like not want to look like you change your mind or like to say oh actually like this was a bad decision we should do something else changing your mind like you should change like actually not changing your mind is a problem because like inputs are changing very quickly and sticking to something just because you don't want to look bad is like such a bad idea for for the smaller decisions and then especially for the bigger decisions so i think in the culture for us and i think for like a lot of um what ai companies should do i think honestly like any company is encouraging like making sure that if someone decides to change their mind um there is like zero pressure on like oh but you said this or oh but like we put in all this work to do this or you know like the sunk cost fallacy because things things have changed so yeah and i think like the way you build that culture is by just like one doing that yourself and then making sure you communicate that with with the team like very regularly so like it's still in you and everyone on the team that this is how how we do things now i think there's um i think there's something really interesting maybe we could we could sort of transition over to just like what it's actually like to build a strapped company that scales um i think a lot of people have a general sense of maybe what it's like to build you know these smaller like solopreneur indie hacker businesses that don't scale because it's just you're one person but there are some really interesting questions around how to think about profitability versus investing in different things internally, how to think about hiring, how to think about compensating people.

46:12Yasser Elsaid:I'm sure to some extent the people that you attract to the company, you attract different types of people because you're a different type of company. Maybe you could share a little bit more about the practical things that you've learned when it comes to like finances and sort of attracting and retaining talent at sort of a scaled bootstrapped company? Yeah, yeah, that's a good question. I think, so like rule number one, if you're not rich, like you're not financing this yourself is you have to be profitable. Like there is, it's not optional, like you have to be profitable from day one. How profitable is the question and that that's what i was mentioning in like risk tolerance or being aggressive i think like of course when this is like your first company and you're just starting out your you that it's very unclear like what this will grow into um you tend to be more you know conservative and like just want to make sure that this is like the unit economics make a lot of sense like that's the number one metric you're tracking but then as like you gain some moat around the company and like you you have some confidence and like the steps that you need to take are clear in order to grow then once you have that conviction then you can be more aggressive I would say you can even start to lose some money from like all the money that all the profit that you have been building and that's what we're like we're like that's where we are now basically we are investing i would say like we we may be even like spending more money than a lot of like vc-backed companies because we have been profitable for a long time and now there is we have a lot of conviction on what we're building and to to me it's a matter of execution so it's i know it's not going to be easy but it the steps are clear like we need to do this and this and this and it's going to grow um and i think that's a very good position to be in and once you have that then you should like just go all in like oh because if you do believe it then like there is no it doesn't make sense to not do that like it's not logical i think that the it's like a spectrum on like how aggressive you want to be and that uh it just depends on like how much conviction you have on if i do this then we'll grow um if i put like this amount of money in this one thing it will grow then you just put it because it makes sense and this this also depends on like the the person building like how much risk they want to take but um but to me like in the market we're in and like for the goals that we have there is no other way around like spending money so this is what we're doing and when it comes to the people that you attract to work at this company you know there are some companies that are obviously out there that are trying to raise a lot of money they're doing it and they're getting these really large paper valuations that continue to go up, up, up, right?

49:27Yasser Elsaid:And those valuations are usually not tied extremely directly to revenue, right? They might be directionally tied to revenue or success metrics or progress. But, you know, it's a different game than like joining a company that's profitable, that's growing really well, that has like, you know, already at your stage venture scale metrics for a non-VC-backed business. What is it like when it comes to recruiting people? What are people looking for when they join your company versus maybe joining one of these companies that's maybe more splashy, but maybe doesn't have the actual business foundation that you do?

50:12Yasser Elsaid:I'm curious what kind of people are excited about that? What gets them excited? and then also how you think about actually incentivizing people is it just the same thing as like venture skills like venture backed not venture scale because you're both venture scale venture backed startups or is there something else that you do around dividends or how do you think about these things i i don't know anything about this world so i'm really curious about it yeah that's that's very interesting i think 100 you you attract maybe different types of people I think it's more difficult a little bit because it's hard to communicate the value but I think like this is the truth I think it makes a lot more sense to join a company that is bootstrapped and has a lot of like business like value in the real world like revenue and customers it makes a ton more sense because if you are joining a company that like has just raised and you know they have like the um you know like the news article about like the raising and stuff like that then it's like splashy um i don't know if this is the best move to be honest because that means like you're either late like you might be late there's a chance that you're late if the company doesn't live up to the very high valuation that that they have which like of course some companies do and some companies don't but it's a risk you're taking um and you need the company to not only grow into that valuation but grow past it because like you're taking risk by taking options you're not taking like just straight out equity you're taking options and then the options are going to be based on the the valuation uh that they just raised that so i feel like it's extremely more risky than to join a company that is bootstrapped and then like your options mean something because the valuation is not based on you know like revenue like five years from now as as a lot of like companies that are VC backed their valuation is but I think like I'm trying to put myself you know in like the the shoes of a candidate I think the good thing about joining like the splashy like the company that just raised i think it looks better on your resume social signal social signal just looks better on your resume but i think from i think it's just more risky because like you you're betting that this company is going to grow not to that valuation but even more um and it's like you can make that bet but it's it's still a risk you're taking but I think for for some there's huge companies that are bootstrapped and they I think Ahrefs is bootstrapped and they do dividends and like they're growing super like I think they're over a hundred million in ARR and they I think every year they give out like like 50 % of their I'm making this up but I just remembered reading this but a lot of their profit just goes straight to the to the employees so I think that's like you can do stuff like that when you're bootstrapped and like you can't do stuff like that when when you do raise um but yeah for us like i think what's attractive when when i'm like talking to a candidate is one like this is like we don't have like the paper valuation so you don't have like the problem with the options and then two you get to take on like much more responsibility just because like this is a smaller team and you just like tend to move up extremely quickly because by the fact like but this is being a small team and also like bigger companies are more like hiring executives from like outside like other companies not from like people growing from the inside but like a bootstrap company wouldn't be able to do that because they can't afford that and then the third thing is that when you own like all of the equity then you can be a lot more generous with with equity that you give out to employees because like you own all of it so you can just decide to give your best employees a lot more equity and that equity also has value today so and I think a lot of people like when when they think more about it from first principles they come to the same conclusion which oh like this might actually be a better approach and like this is like maybe unintuitively like a lot less risk um and yeah by doing that i think i was able to attract like extremely good candidates who had offers from like those like venture-backed companies that would seem from the outside um as like a like a vc-backed brand but i think yeah once you think about things from first principles, maybe you can like sway your opinion towards this direction.

55:09Yasser Elsaid:You know, there's, there's also something interesting is like, once you scale to a certain amount of revenue, it's possible that you could actually just sell like employee shares, you know, founder shares to investors as well. If you ever wanted to do it instead of just raising sort of straight up, like raising preferred shares or something like that. But I think I thought was, you know, I've never done this before, but I thought it might be interesting, even though, we've covered a lot of ground. Maybe we should actually just really quickly, if it's cool with you, talk through a few of the things you've written about in the past.

55:41Yasser Elsaid:You had this playbook that you published on X that we could link to about bootstrapping and AI agent business. And I thought there was some really interesting things here that maybe we could do a lightning round on. You said, if you're in B2B, just do the B2B stuff. What does that actually mean? yeah i think especially for bootstrap founders you tend to try to like force your b2b business to run like a b2c you know app and that's because customer acquisition is just cheaper in b2c so like because you're you're bootstrap maybe you don't want to spend a lot of money in acquiring customers and you're trying to build like this extremely product led like no one is going to talk to me self-serve self-serve uh app and it just doesn't like it can work but you still have like if you actually want to build something big quickly um i think the approach can be like product like self-serve and then um attach like a sales lead on top of it because at some point you're gonna have like bigger customers and you're gonna be talking to like a middle manager at like a public company and that person like especially if your product is good and like it's there's like a lot of features and like it's it can do many things that person will not spend like a week you know like on your dashboard trying to make it work even like even if your product is extremely intuitive and very easy to use it's just very hard to convince people to spend time in like setting things up and a lot of people like value like talking to humans and like getting on sales calls and like understanding the product and making sure that this is like there is humans behind this this is very valuable um and yeah i think that's that's the only way you can you can continue to grow past past a certain point and just really quickly like when you when you added sort of the the more sales oriented approach where you were actually talking to prospective customers versus it being self-serve at what stage was the company like how much money do you have how many customers did you have because you were originally fully self-serve i believe so when did you when did you add that layer maybe like a few maybe like six seven months ago when we were oh wow so very recently in the scheme of things yeah because like before like we grew a lot quickly like in the last also a year so before then like we didn't have like it's just hard to hire sales people because they're expensive and getting on calls with customers and like going through like long sales process is expensive.

58:19And you can't just do that when you're bootstrapped and you don't have revenue. But after a certain point, we had the revenue, like we had the conviction that this would work. So we started invested more into building a sales team, building like the sales led approach, doing like the B2B stuff, doing the outbound, talking to customers and all of that.

58:37Yasser Elsaid:So there were two points here. The first one, or this is number two, is content is non-negotiable. And then number three, which I think is very connected, is warm outbound is the lowest hanging fruit. Maybe talk about both of those at the same time, because warm outbound is probably a concept that most people haven't even thought of. They think of cold outbound, typically. So maybe say how content being non-negotiable fits into this warm outbound being the biggest opportunity for a lot of people. Yeah, so I think you can do two things. As I said, there's two approaches. One is like the self-serve product led.

59:14You're just like, you're just basically doing marketing and like you're just hoping people go through the onboarding flow. You're treating it as like a B2C company. And then on the other end of the spectrum, it's sales led. You just have like a landing page with a book, a demo. And then you just have like salespeople try to connect with executives at big companies. But I think what's very interesting, and I think actually a lot of companies that are huge that I look up to are doing that, is out of both. They have the marketing, the media arm as just like to get people familiar with the brand, to have more brand awareness.

59:51But they don't just leave it to them to like go on the product and sign up. They pull them, like they actually pull them by sending the emails, going on calls with them and making sure that they go through the whole pipeline. So I think that's the idea of Warm Outbound. the good thing about content and marketing is that it makes everything else you do easier like it makes paid ads easier because people know your brand and like they're more likely to watch your content because they have seen you before they're more likely to click on it because you have that social proof so like organic content just makes everything else easier it makes outbound easier because people have seen you before maybe they someone like told them about you because of the content is just very powerful it makes all the levers uh much stronger and then sales works because it's been working for like you know like the beginning of time it's just talking to people and can like explaining the product and like making sure that this solves their problem and i think combining both you end up with like very strong companies like stripe for example where it has a very strong self-serve and marketing and PLG growth.

1:01:03But at the same time, of course, they can support extremely large businesses and they have the white glove onboarding and all the forward deployed engineers you need because I think those are the best companies. And that's the way I want to build Chatbase is attaching a sales approach on top of a strong content and product-like growth.