Tomer Levy. He’s the CEO and co-founder of Logz.io. Before co-founding Logz, he co-founded and was the CTO of Intigua, a company that innovated locker-like containers designed for large enterprises. Prior to Intigua, Tomer spent 6 years at Check Point, where he led its intrusion prevention system product from concept to market. He has an MBA for Tel Avi University, a BA in Computer Science, and is an enthusiastic kite surfer.

Famous Five:

Favorite Book? – The Hard Thing About Hard Things
What CEO do you follow? – Jeff Bezos
Favorite online tool? — Grammarly
How many hours of sleep do you get?— 6-7
If you could let your 20-year old self, know one thing, what would it be? – “Take it easy, you’ll figure it out”

Time Stamped Show Notes:

01:20 – Nathan introduces Tomer to the show
02:06 – Logz is a logins company
- 02:12 – Some of their customers are Kantar Media and British Airways
- 02:30 – Logz solves systematic problems in web servers and databases
02:41 – Logz is a SaaS business
02:52 – Logz caters to IT operations and security team of a company
03:24 – You can subscribe to Logz’ website directly and pay monthly
03:29 – Logz has 2 main cohorts
- 03:32 – SMBs would pay around $10-15K a year
- 03:41 – SMEs would usually pay annually that can grow to hundreds of thousands
03:58 – Average pay is $10K-40K in annual contract value
04:10 – Logz was launched in 2014 and the product end of 2015
04:30 – Logz has an inside sales team
04:38 – Logz offers an open source platform like ELK which is around $500K a month
- 04:58 – Instead of libraries, ELK will be installed in the servers and take all the data
- 05:12 – ELK visualizes the data and Logz offer ELK with more capabilities
05:27 – Logz is based on the open-source community
05:55 – Logz isn’t the developer of the open source
- 06:05 – Logz built a solution on top of the open source for log management
- 06:30 – ELK is like google search for all of your log data
07:02 – There are also other companies who are doing open SaaS
- 07:10 – Pantheon for WordPress and similar with Cloudera are doing open SaaS too
- 07:38 – Github just recently offered Git open source as a service
08:03 – Tomer has been writing content even before the launch of the company
08:14 – Logz is number for ELK search and they contribute the most in the open source community
08:43 – Open source has to be good and easy enough to get started so it will have mass distribution
- 08:51 – But it has to get to a point that it is difficult to scale and make it production grade
09:04 – Logz currently has a thousand companies on board
- 09:17 – Some are paid customers and some are on free
09:35 – Logz has raised money but they could have built a lifestyle business
- 09:52 – Logz raised $24M and the last round was $15.6M in October 2016
10:07 – Team size is 70
10:54 – Logz started in October 2014 and ran their first product by February 2015
11:05 – Logz started with 5 non-paying customers after shifting to paid model
11:38 – As your company grow, people will realizes your company’s value and be willing to pay for it
11:49 – Logz has 0 revenue in 2014 and 2015 revenue was around 6 figures
12:44 – Logz has already broken a million dollar runway
13:02 – Logz competes mostly with engineers setting up their own open source
13:10 – The commercial side, Logz competes with AWS or Amazon Web Services
13:45 – Gross margin
14:12 – Logz pays $1-5M to Amazon for hosting
15:20 – Minimum MRR
15:46 – Team is based in Telavi, Israel
- 15:59 – Logz also has a team in Boston where Tomer currently is
16:11 – Gross monthly customer churn
17:07 – “We’re very much a land and expand business”
17:43 – Marketing team has 8 or 9 people and 7 sales people
18:10 – Fully weighted CAC
18:40 – Payback period
19:22 – Logz also invest in paid marketing with around $5k a month
- 19:50 – Logz invests massively in events this year
- 20:23 – Logz spends a few hundreds of dollars in sponsorships
22:17 – The Famous Five

3 Key Points:

When thinking about a business model, try and create on that is “land and expand”.
Starting as a free service is fine, but you need to make sure you’re built to offer your customers more value behind the paywall.
Great content coupled with great keywords builds great companies.

Resources Mentioned:

The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
Klipfolio – Track your business performance across all departments for FREE
Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books

Show Notes provided by Mallard Creatives

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