Nicolas Dessaigne and Julien Lemoine started Algolia in 2012.
Before co-founding a company together, they had worked as colleagues for a while working on text mining, algorithms and search engines.
Algolia helps companies deliver an intuitive search-as-you-type experience on their websites and mobile apps. They participated to Y Combinator in the Winter 2014 batch and raised $18.3M in May 2015. They’re now based in Paris and San Francisco, and we had the chance to catch up with Nicolas while he was in Paris for a few days.
How did you end up building a SaaS company?
When we started Algolia we didn’t offer a SaaS product, but rather a mobile search engine that could be embedded in apps and used locally on the device. The technology was great but we didn’t find a clear market for it, so we pivoted to a SaaS. We leveraged our experience in this domain at previous companies to build from the ground up a multi-tenant architecture ready to scale.
The SaaS model is very powerful and enables us to deliver value that would be unattainable on-premise. For example, our service is currently available in 36 data centers across 15 regions in the world. This means that we can ensure our response time is under 100ms nearly everywhere in the world while at the same time having a multi-provider setup that makes us tolerant to full datacenter outages.
What surprises did the SaaS model throw at you?
The importance of customer success and word of mouth. It’s critical in the success of good SaaS products. Every new client can bring the next one. If this doesn’t happen, there’s a problem somewhere and you need to sit down for some rethinking.
I recommend reading about what Jason Lemkin calls the “Second-order revenue” — I completely agree.
SaaS is very well-documented, there are thousands of theories about the model but, what’s great is that we keep on discovering and learning.
For you, what makes a successful SaaS entrepreneur?
Same thing as any entrepreneur actually! The right mix of passion and grit. You need to get out of your comfort zone and always be learning. And most of all, spare no effort in hiring the right team. There is no better use of your time!
How did you convert your first customer?
Our first client was Socialcam, a social network that had up to 150M users (acquired by Autodesk in 2013). Algolia was still in beta when we reached out to them. After an initial refusal we hustled our way to a demo. The following day, they were starting to test the API!
That many users in one shot was a big challenge for a product still in beta but we managed to deliver. And, they have never experienced a problem or shutdown. As well as of being our first client, Socialcam VP Engineering became one of our first business angels!
SaaS is often qualified as unsexy. What do you reply to that?
It’s not really B2B SaaS that is considered unsexy, but rather B2B in general. But, as the CEO of a B2B software company, I can’t see why! For me, I work and build in a very exciting domain. I’m creating a solution that solves issues with amazingly talented people and my clients are super happy. What more do I need? ;)
What would be your #1 advice for entrepreneurs launching a SaaS company?
My top advice would be to focus on your customers, to listen to them and learn from them.
Your first 100 customers need to love your product because you solve a problem better than anyone else! There’s no need to run after everybody, focus on your first clients and build a solution that suits them perfectly.
At Algolia, the pivot from mobile to SaaS was a result of feedback from our first beta testers. Obviously, today, we cover more use cases than in the early days but what we do, we do it better than anyone else. It’s the mortar of our company and what keeps bringing new clients.