Just a few months ago Yasser Elsaid was in his 4th year of college, interning at FAANG companies like Meta and Tesla. Then he placed his side hustle in front of the tidal wave that is OpenAI's ChatGPT.
The timing worked out. The chatbot company he bootstrapped, Chatbase.co, is already doing a mindblowing $64,000 in monthly recurring revenue. His traffic hasn't dipped since the initial launch. He just hired two employees to help with the overwhelming demand. And no: he didn't pass all of his university classes. Nor does he care.
I reached out to Yasser to get the story behind this whirlwind growth.
Why Yasser started Chatbase
Channing Allen: Hey Yasser! Tell me about your background and what your new company does.
I'm originally from Egypt, and I moved to Canada in 2019 for my undergrad. Back when I started university, I had no idea what I wanted to do. I was surrounded by many students who had the goal of working at a FAANG company. So naturally, I adopted the same goal and started working towards it.
I was able to get internships at Tesla and Meta for my 3rd and 4th years of school. At the start of both internships, everything was super exciting. Free food, massage chairs, smart people, I couldn't find anything to dislike. But as time went on, I saw myself having the exact same day every day. It wasn't a bad day, but it wasn't exciting. I realized that the lifestyle at these big companies is too safe, too manicured for me. Those internships taught me a lot of things, but most importantly, they taught me that I want to become an indie hacker.
CA: What ultimately motivated you to start Chatbase?
YE: I always worked on side projects. None of them made any real money, but listening to the success stories on the Indie Hackers podcast was enough proof that I could make something work. As my time in university went on, I started to focus less on optimizing for FAANG (leetcode) and more on building side projects.
I realized that I would be working hard no matter which path I chose, and the solopreneur path sounded the most exciting and had the most upside.
During my 4th year of university, I got super excited about the applications of AI. I saw solopreneurs like Pieter Levels build cool AI products and I was inspired. I started playing around with the OpenAI API and saw a lot of potential. The idea for Chatbase wasn't super hard to come up with. I didn't do any validation or market research since this space was just being born and it was obvious to me that "ChatGPT for your data" would become a thing and that many people would find it useful.
Product dev and tech stack for Chatbase
CA: How'd you build Chatbase? Is the current version the same as what you started with?
YE: No! Chatbase actually started as a "ChatGPT for your PDFs" tool. It was the easiest and most obvious use case. You just uploaded a PDF, then you could chat with its content. The MVP for this version took me about two months to build. I tweeted it to my 16 twitter followers on Feb 2, 2023:
My tweet went viral. I didn't even have a pricing page yet. Anyone could upload as many documents and send as many messages as they wanted. As soon as I saw the traction, I stopped doing anything university related and focused 100% of my time on Chatbase. I knew I couldn't mess up this opportunity.
I ended up failing two classes, but it was 100% worth it!
CA: Haha! Sounds like a good tradeoff. What does your tech stack look like?
This stack has served me well so far, but I think I might need to change a few things in the future to save on costs. I might experiment with different Vector databases or hosting solutions.
Marketing and user growth
CA: How'd you find your first users? And how have you kept growing since then?
YE: Chatbase was probably the first "ChatGPT for your data" SaaS tool. This was a huge advantage since it wasn't that hard to make it go viral. It had the "wow" factor of being able to upload your own personal documents and chat with them, PLUS it took advantage of the overall AI and ChatGPT hype.
I made a few tweets that went viral, like this one:
From there, AI influencers started posting about it:
This viral marketing was crucial in getting my first batch of customers, but the problem is it's not a good long-term strategy. Since now there are now so many tools that are doing what Chatbase is doing, AI influencers are not likely to post more of the same tools.
Here are other methods I've used to keep getting customers:
- Launching on Product Hunt
- Posting to relevant subreddits (a story works better than "here is a tool I made")
- Being active on Indie Hackers
- Submitting Chatbase to AI directories
My traffic hasn't dipped after the initial launch:
Business model and revenue growth
CA: How does your business model and pricing work?
YE: Chatbase is a subscription service with four different plans. Most subscribers are on the lowest plan (mostly to test the chatbots), but they quickly move to the higher plans or churn. Most of the revenue is generated by the $399 monthly plan.
Chatbase uses Stripe to handle all the subscriptions, and it's working well so far.
CA: Mind sharing what your revenue growth has looked like?
- Feb 7: $0 MRR
- Feb 11: $400 MRR
- Feb 16: $900 MRR
- Feb 28: $3,000 MRR
- Mar 15: $10,000 MRR
- May 13: $64,000 MRR
Today Chatbase is at $64,000 MRR. This crazy MRR growth is due to being really early in the market, plus taking advantage of all the hype around ChatGPT. Not sure how long this will last since now there are a crazy number of tools that are offering similar services and bigger companies are also interested in the space.
One piece of advice for entrepreneurs to find a good product to build is to find a space with SOME competition. If there is no competition, you are either a genius or no one needs what you're building. If there is a lot of competition, it will be a race to the bottom.
The future of Chatbase
CA: So where do you go from here? Both as a founder and, I guess, as a student.
YE: Chatbase will continue to offer "ChatGPT for your data" as a service. I'll continue adding more features based on customer feedback. I see it being the easiest way to create a custom AI chatbot for your data that you can interact with through the website or the API.
I won't be looking for a new grad job any time soon. Instead I'll focus all my energy on Chatbase. I just added two employees to help with coding new features and customer support, and I imagine the team can grow to five or six people.
The main worry I have now is the amount of competition and not knowing what the future will look like in this space. Since all of this is very new, something can happen one day (e.g. a decision from OpenAI) that will change the trajectory of all these AI tools.
Yasser's reflections on his journey
CA: What's been the biggest challenge for you so far? And would you do anything differently?
YE: Honestly, the biggest challenge was convincing myself to work on side projects with no immediate return. Once I started doing that it became very hard to lose. Even if Chatbase doesn't succeed, I'll have learned a lot, had fun, made money, and will always have a cool story!
I don't often think about what I would do differently because every decision I've made has gotten me to where I am, and I'm happy with where I am.
CA: Are there any tactics or resources you've found really helpful along the way?
YE: Listening to stories of other solopreneurs who've made it is very inspiring. It made it very clear that my goal of making $10k a month from a side project is not a crazy goal to have. People achieve it every day.
Keeping up with new technologies and trends will help you find opportunities faster than anyone else. If you can take advantage of these opportunities, one of them will be a success.
In my case I was at the right place at the right time. I was interested in AI applications, I had time to work on a side project, and I found a useful use case fairly quickly. Also, my tweets going viral definitely helped. Those are forces that are outside of my control that contributed to Chatbase's success. But to give myself some credit, I also worked really hard (12-hour days) to capitalize on the opportunity.
CA: Awesome. Is there any advice you'd offer to indie hackers who are just starting out? In other words, to people who are where you were just six months ago?
YE: I've got a few pieces of advice:
- Launch as soon as possible. Skip creating a waitlist and just create a very basic MVP and launch it.
- Launch multiple times if possible. If you make significant changes to your app, you can always present them in a way as if you are launching a new product.
- Build in public. There is no good reason not to build in public. Every new post you make has a chance of going viral and changing your life. Plus, you get to meet cool, like-minded people. You don't have to share revenue numbers. Just what you're working on today. Twitter is still a good place to do this, but no one is doing this on TikTok now so there is a big opportunity there.
- Engage with the community. Follow successful indie hackers, start creating content, share you learnings, meet other indie hackers near you, etc.
CA: Where can people go to stay updated about you?