Here is a new episode of startup growth analysis, the real one. This month, I decided to tackle Algolia on the advice of the startup community in France. Perhaps like you, I didn't know much about the history of Algolia. So I was able to talk to Nicolas Dessaigne for a good hour, to try to understand how he got there today.

Algolia is a tool that allows developers to install an instant search module into their applications and websites. It's a sort of internal Google to your site. Their clients are therefore web application developers.

Well-made heads

Algolia was born from the meeting between  Nicolas Dessaigne  and  Julien Lemoine . These two co-founders met and knew each other at work. Nicolas is an engineer, and then continued to obtain a Ph.D (doctorate) in computer science. Julien, for his part, graduated from a computer science school (EPITA). Nicolas explains to me that when choosing the roles, Julien, much better technically, took the role of CTO. That is to say !

A professional meeting

Nicolas and Julien met at Arisem, when it was bought by Thalès. They worked together for a few years and the connection seemed to be established. Then Julien leaves the company and goes to Exalead. Nicolas joined him a few years later. They only worked together for a few months. Regardless, they rediscover the sensations of working together. It was in 2012 that they confirmed together that they wanted to create a company together. And they want to get started quickly.

The starting point

So it was at the end of 2012 that Nicolas and Julien got started. Why at this time? Nicolas indicates that he loved his experience at Exalead, but that he wanted to create his own company and that the time had come. Julien had visibly fulfilled all of his professional objectives. His new challenge was this company.

What is quite interesting is that we are dealing with two relatively senior profiles (respectively 36 and 31 years old), both dads, with loans, etc. The scenario is probably the riskiest there is. .

This is the reason why, from the creation of the company, they give themselves at least 1 year to feel whether their work is really worth it or not.  “If we give ourselves less than a year, we don't give ourselves the chance to succeed”  according to Nicolas.

The first product

So these two developers were looking to create a product for developers. Their first idea is to offer mobile application developers an internal search tool, capable of working offline, with the limited capabilities of a smartphone. In just a few months, they developed a first product. It’s a great technical achievement. But it was a commercial flop. The mobile developer market is not ready to pay for this technology. The fact of having moved very quickly in terms of product development allowed them to react very quickly to the market.

The second product

Many developers ask them for an “online” version of their product, that is to say capable of running on a web application connected to the internet.

Pivot.

And it was in March 2013 that Algolia released its beta version. The feedback from the community seems incredible. That’s when they feel it can work.  They validate the problem-market fit . As soon as they sense this, they quickly start looking for funds to accelerate growth. And it is notably through one of their first beta testers that they managed to raise a total amount of $1.5M (a mix of business angels and investment funds). They then recruited their first two employees.

America

Their customers are primarily developers. So from the start, Algolia reached an international audience. In 2013, Algolia is seeking to join Y Combinator (YC), the world's largest accelerator. It's a fail. It was after their first fundraising of $1.5 million in mid-2013, during a trip to the United States to meet clients, that they were advised to try again. They did so, and hit the mark in early 2014.

Following this, they moved the company to the United States (request from the YC). This move to YC allows them to raise new funds ($1.3M) from renowned American investors. But 2014 is above all the year of growth. From 17 paying customers at the end of 2013, they increased to 400 at the end of 2014.

Thoroughly

Algolia's objective is to become the leader in its market in the coming years. The objective is therefore to accelerate this growth. To provide the means, Algolia raised $18M in 2015 and had 35 employees at the end of the year. Which allows it to go from 400 paying users to 1150! Very good growth in such a market. Algolia probably also knew how to balance its resources. The technical team is maintained in Paris. The sales team, resolutely international, is shared between France and California.

Conclusion

Algolia has therefore had relatively rapid growth. This growth is above all due to the profile of the founders. Their studies and career paths are impressive. The choice of their product, in an area that they master perfectly, and their experience, allowed them to build a successful product very quickly, to promote it to the desired target, and to pivot at the right time.

 >>  The Algolia website