The Story
Saba and Tim built VEED.io, an online video editing platform, to $40M+ ARR after being rejected by Y Combinator twice. They started with no money, no validation, got kicked out of their office, had interns quit, and couldn't afford train fare.
As Saba explains: "I grew up in the middle of nowhere and I was one of those people because I lived in the middle of nowhere who just spent a lot of time on the internet. Everything I read about technology was like super exciting."
The Origin Story
"After I graduated from university, I got a job like you're told to. And in my first week at the job, I wanted to quit and actually just do my own thing. I didn't want to be on the treadmill. I didn't want to have a job. I didn't want to have a normal, semi-detached house in the suburbs."
"I wanted to just do what I wanted to do. I wanted to own my own time. And I felt like starting the company was probably the only way to actually do that."
"And then I read in a free newspaper, the app Candy Crush made a million pounds a day. And I was like, I think I could make an app."
Meeting Tim
"I met my co-founder Tim a year after university through this like global hackathon thing. We met online, met up for a coffee, decided to work on some stuff. When you're young, you want to build something."
"The first thing you need to work out how to do is actually are we capable of putting something together. And I know that might sound silly, but like the first thing you've got to do is actually go through the cycle once of, hey, we bought a domain. Cool. We know how to make a back end, great. We know how to make a landing page. Perfect."
The Idea
"The early days were really simple. It was like me and him in a co-working space at his university being like, cool, we know we want to make something in video because we're both really passionate about that space."
"The idea was like super simple, like you know, video editing, I've done it for years. I'm a really technical person, but I find it quite hard. Can we like build basic video editing tools in the browser? Like super basic."
"I was really inspired by Giphy's GIF editor. It was just like upload a video, add text, trim it, done. I was like, can we do something similar like that for video?"
"We just thought that if other people have done it, why are they so special? Why can't we do it? And yeah, we went all in."
The Struggle Phase
"We probably had about enough runway for a year. We literally made like no progress. I'd normally wake up at 6:00 in the morning, get on my bike, head to the office at 6:30, get there for about 7."
"And again, just to let you know how frugal we were. When I say office, I mean co-working space. And when I mean co-working space, I mean me and Tim shared the entry card."
"We'd do that until 7, 8 at night, go to the gym, cycle on the bike furiously for an hour, come back, work again, and then try and pick up some discount food on the way home because it was late and you get half price in different places in London."
Nickel and Diming Everything
"We were using this like Crisp chat and I remember emailing them being like, 'Hey guys, we can't afford 100 bucks a month. Can you do less?' They're like, 'Yeah, $20 a month, fine.' So like everything we would nickel and dime every single purchase to just keep operating expenses as low as possible."
Rock Bottom
"We ended up in this VC's office working and those VCs then kicked us out of their office. So we're now like officeless. The interns that we hired both quit on the same day and we were like stuck."
"We tried to get funding and we got rejected like many many many times and we both had crypto fortunately and we had to sell it to keep the company going."
"Two years of no money, no validation, nothing, no funding, kicked out of your office, your interns quit. It felt like it all unraveled. It was like a really, really tough time."
"Even like going to see friends for their birthdays, not being able to afford the train, all commuting around the city was on a bike. Lunch every day was like pre-made. I couldn't go out and see friends on Friday because they'd want to go for dinner or go for drinks, and I couldn't afford that. Just totally scraping by."
The Pivot
"We both now have jobs at this point. And that was nice because, you know, finally I can do normal things with normal people again and visit my friends and go for dinner."
"But at the same time, we still even at that point took half of our salaries every month religiously, put it back into the company account and then used that money to hire two other engineers who would build for us who really helped us build the company today."
"And over the next like 8-9 months, things started to really take off. We went from like zero users to 30,000 monthly users in like 9 months."
The YC Rejection
"We've got some money saved up now. We've got users. They're not paying, but maybe we're on to something. We apply to Y Combinator and to our amazement, we get into this interview round."
"We go into the interview, we come out. The way that Y Combinator works is really simple. If you get in, they give you a call. If you don't get in, they send you an email rejection letter."
"That evening, we're like refreshing our phone, waiting for the email, and we think to ourselves, I think we got it. I think we got it. And I looked at this email and it was like, sorry. That first line, the rejection just gets you. Unfortunately this batch you haven't been selected."
Implementing the Feedback
"We're looking at this rejection email that we got and there's another line that stood out to me and it says 'we don't understand why you haven't charged your users' or something like that."
"So we thought to ourselves, why don't we try and implement their feedback over the weekend and then email them on Monday. Bang on 9:00 a.m. Monday morning, we sent them an email like, 'Hey guys, thank you so much for your feedback. We implemented it. We got 20 paid users. Would you reconsider?'"
"You know what happened? We got another rejection email. And still to this day I help kill them on Twitter. But at that point there was pre-Y Combinator which is a company that makes no revenue and now there's post - a company that makes some revenue."
Growth Through SEO
"Once we got back to the UK after California I did one thing which was only focus on growth. Like the only thing I had to do was make traffic higher than the day or the week before and make revenue higher than the day or the week before."
"The skill set that really made it fly was SEO. I had to work out how to do marketing. Because I had no money, it was only like SEO."
"People search for things like trim video, crop video. There's actually about 500 of these search terms. So, I built a landing page for every single one of those things. And then I'd record YouTube videos for every single landing page. It was just brute force, like absolutely brute force."
The Growth
"After that journey, things just started growing super fast. At that point, it was just like off to the races. 0 to 1 million in the first year. 4 months later 2 million. 2 months later 3 million and then 6 months after that it was 6 million. So it was 0 to 1, 1 to 6."
"This like proper growth phase of the company going from 10, 20, 30, 40 million in revenue. I don't know, it was like a bit of a middle finger to all the people who didn't want to invest in me or YC turning me down. It was a bit of a hey, we're good."
Business Numbers
- •$40M+ ARR
- •0 to $1M in year 1
- •$1M to $6M in next 6 months
- •Continued growth to $40M+
- •Started with shared co-working card
The Reality of Running a Business
"The founding and the starting of the company is definitely like the most interesting part of the journey. And it becomes this like marathon. This is like an endurance sport, right? You're not on the roller coaster anymore. You're in like day-to-day combat."
"I feel like at the start it's more like jumping through hoops and trying to work out the next trick and how to get around that corner. And then once it starts going and scaling, it's more like how can I just keep drumming the beat of the company and keep things moving and keep growth up."
"It's just really hard to run a business like dealing with people and directing them and trying to do whatever you can that's in the best interest of them, but also the company at the same time. Like it's genuinely really really challenging and the bigger you get, the harder it is and you only feel more and more vulnerable."
Key Lessons
"The company could have failed at so many points. It could have failed when the two interns quit. It could have failed when we ran out of money. It could have failed when we got kicked out of our office. It could have failed when we didn't get into YC, right?"
"Like there are so many points where I could have been or we could have been like, 'Nah, it's over. It obviously doesn't work.' But every single time we kept going. And I'm so grateful for all of those learnings."
Resources
- •VEED.io: https://www.veed.io/
- •Follow Saba on Twitter