Interview With CloudForecast’s Founders: Francois Lagier And Kacy Fortner

This was previously featured on Hacker
Noon
and written by Davis Baer. Davis Baer is the
Co-founder of oneupapp.io & Host of the Hacker Noon Founder Interview series
. Thanks for the write up, Davis!

Davis Baer: What’s your background, and what are you working on?

Francois and Kacy: We’re
CloudForecast, and we’re building simple and affordable cloud cost monitoring
tools. Kacy Fortner and Francois Lagier are the co-founders, and we met 5 years ago working on
a previous YC startup that got acquired. We’re offering enterprise quality cloud
monitoring to be used by everyone no matter what the size of the company. We’re
just short of $1k in MRR, and we’ve experienced 187% growth in converted, paying
customers since July.

CloudForecast is a still a side gig for us and we have full-time jobs. Kacy
currently manages a team of engineers after a decade working in Infrastructure
Engineering. Francois is a Senior Software Engineer in a big tech company in SF
and is currently focused on building Machine Learning models.

What motivated you to get started with CloudForecast?

We were end users of existing paid and free products in the market, but we
realized that nothing in the market really fit the needs of small and medium
businesses. Our competitors are expensive, and they are justifying the high
price by offering a large suite of features that often go unused and don’t add
value. They also require contracts that are designed to lock in companies.
Existing open source products were clunky and not actively maintained.

At the company that we worked for, we came up with creative ways to monitor and
alert on our AWS spend. We built a few small in-house services to help out with
this. To validate the idea, we built an MVP in a few weekends and found out that
a few people within our network were interested in paying for the service. We
were pretty excited about that!

What went into building the initial product?

The MVP only required a few weeks worth of work. Francois focused on building
the backend data processing side in Scala on AWS Lambda, and Kacy focused on
building a web front-end (Ruby on Rails) that could simply onboard customers and
set them up. It also helped that Francois’ wife is a UX engineer. She helped us
with the design of the daily email and the front-end website. Since we were
building this on AWS Lambda, running the backend is really cheap. Our Heroku
bill for the Rails app was pretty low too. We were able to support three initial
paying customers with the MVP for under $40 a month.

We really wanted to make the MVP as simple as possible, so we restricted it to
be a bare bones product. The web front-end would collect the AWS credentials, a
credit card, and an email address. The AWS lambda functions would process the report on a daily basis. We met in person a few times to collaborate on the
architecture and overall idea, but most of the work for the MVP was split out
pretty evenly. We used that time to reach out to potential clients in our
network and did more market research.

How have you attracted users and grown CloudForecast?

Marketing for developer tools is not an easy task! We hustled to get our first
five trialing customers from our personal network. Getting the customers from
our personal network was half the battle. We needed to make sure they felt
loved, taken care of and that we listened to their feedback. That meant hustling
to reiterate and improve our product as quickly as possible with every bit of
feedback that came. Every improvement we did for these five customers meant that
they were likely to become a paying customer.

All five eventually became paying customers, which gave us the confidence to do
an official launch via a Show Hacker News post in July 2018.
The Show HN post produced 63 signups, 20 free trials and converted 6 additional
paying customers which we were pretty excited about! Out of the 14 trials that
did not convert, many of them were too small and just wanted to test out the
product. Unfortunately, some of them didn’t see the value in our product, so we
worked with them to improve it.

We ran a few ads on various platforms with a small budget ($50 each) to test the
water with the goal to invest more if we found a good angle. Reddit has
performed well for us. However, LinkedIn did not yield any results, so we shut
it down pretty quickly. We will revisit LinkedIn in the future.

Here is our current focus for user acquisition:

• Content marketing by creating helpful content around Amazon Web Services and cloud cost management.
• Cold outreach targeting our ideal customers, CTO/VP Eng of startups/SMBs
  spending up to $1M annually on AWS.
• Onboarding YC Startup School companies
• Building a strong referral program.

CloudForecast’s term focus:

• Build relationships with AWS influencers and various online AWS communities.
• Attend and sponsor AWS community events, meetup groups, and conferences.
• Build a set of free tools in the AWS space to create qualified leads.

We highly recommend reading Paul Graham’s essay on “Do Things that Don’t
Scale”. We took a lot of advice from the essay
and applied it to our first set of customers. Doing things that don’t scale is
still a very important part of our customer acquisition plan.

What’s your business model, and how have you grown your revenue?

We have two subscription tiers: $49/month and $149/month. For companies spending
more than $100k/month on AWS, we created a custom plan (always <1%).

With our current product offering, converting 1% of our target companies
(400,000 in total) will get us to a minimum of $200k MRR.

The revenue growth will increase as we build out more features to detect waste
on AWS. The total market for cloud computing was $260.2 Billion in 2017. Based
on existing research, it’s estimated that 35% of cloud spend goes to waste. If
we capture a slice of that by saving people money, we will penetrate a market
that can save $91 Billion annually. This number will continue to grow as the
market is expected to reach $411 Billion by 2020.

Our monthly operating costs are pretty much fixed. We have a fixed Heroku bill,
a banking monthly fee, Intercom (customer support), and Google Suite. Our AWS
costs are pretty darn low too; we don’t like wasting money. The best part about
this business is that our margins increase with more revenue!

What are your goals for the future?

We’re planning to grow into a fully-featured cloud management service. However,
our immediate focus is targeting the underserved market of small businesses and
startups in this space. We also plan to implement GCP and Azure cost analysis
within the next year. We have a few unique products on the horizon, and we can’t
wait to share with everyone.

We are also heavily focusing on our marketing strategy to reach $2,500 MRR by
the end of the year.

What are the biggest challenges you’ve faced and obstacles you’ve overcome? If you had to start over, what would you do differently?

Setting the right expectations was definitely a struggle for us at the
beginning. We wanted to move quickly, but we were time-bounded by our full-time
jobs. Clear focus on priorities is key to have decent progress and visible
impact on your product.

We could/should have started building a list of potential leads that we could
easily convert when our MVP was ready. In other words, we started our marketing
strategy a bit late.

Have you found anything particularly helpful or advantageous?

Our original ShowHN post on Hacker News has been instrumental to our success so
far. We’ve found that comments in the post and private messages we’ve received
over email have been very helpful. It’s very validating that folks are finding
our product useful enough to give us candid feedback and are invested in helping
us make the product better.

We recently joined the YC Startup School community. YC is providing us with
great content and an experienced community. It’s great to bounce ideas, learn
from others, and motivate each other. YC is generously offering the content for
free, and you can find all the videos on YouTube.

One of the books that inspired our frugalness was “The $100 Startup”. Many of
the business decisions we’ve made over the last year have been inspired by this
book. Our marketing strategy is following the method described in the Traction
book. The book explains various marketing channels and a system to follow to
prioritize them.

What’s your advice for entrepreneurs who are just starting out?

Don’t be afraid to ask for candid feedback early! If you’re developing an MVP,
try to identify a few ideal customers in your network.

Although some may disagree, we believe that building beautiful products that are
easy to use is just as important as building out a fancy technical
implementation.

Momentum is everything! Early in your project, you will be excited to build
something awesome. However, that honeymoon phase doesn’t last long but talking
to clients and showing them your product will fuel your motivation.

Where can we go to learn more?

If you would like to learn more about us, catch us over at
https://www.cloudforecast.io.

We also have a blog that we updates about once a month at
https://www.cloudforecast.io/blog

We’re also on Twitter at
https://twitter.com/cloudforecast

If you have any other questions, please reach out to us at
[email protected]

Want to try CloudForecast? Sign up today and get started with a risk-free 30 day free trial. No credit card required.