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SaaStr 867: $0 to $500M ARR in 13 Months. Inside Higgsfield's Viral AI Growth with Alex Mashrabov, co-founder and CEO

The Official SaaStr Podcast · 2026-07-10 · 37 min

0:00--:--

Key moments - from our scoring

Substance score

65 / 100

Five dimensions, 20 points each

Insight Density12 / 20
Originality10 / 20
Guest Caliber16 / 20
Specificity & Evidence14 / 20
Conversational Craft13 / 20

Higgsfield's explosive growth demonstrates how AI-native video creation tools can disrupt traditional production workflows when positioned correctly. Rather than being a simple interface to existing models, Higgsfield consolidates access to multiple AI video models (Google VO, Sora, Runway, Cling, CDance, Wan, plus proprietary models) and layers on professional features like camera controls, character consistency across scenes, AI directors, and collaboration capabilities that enable remote asynchronous teamwork. The platform charges customers an average of $1,000 annually - five times Canva's $200 rate - because it delivers outcomes rather than just model access. CEO Alex Mashrabov explains that roughly 40% of usage comes from high-value workflows like Cinema Studio and Marketing Studio rather than basic model selection, and the company is increasingly moving toward outcome-based pricing. Creative agencies represent 70% of current $300M ARR, with direct-to-consumer brands emerging as a growing segment. The 150-person engineering and creative team operates with a 5:1 efficiency ratio (engineers to ARR) compared to the industry standard of 2:1, partly because traditional software engineers and machine learning specialists work alongside prompt engineers and 70 creative professionals who translate user feedback into product improvements.

Key takeaways

  • →Higgsfield generates 40% of revenue from workflow-based features like Cinema Studio rather than direct model markup, justifying premium pricing versus competitors like Canva.
  • →Creative agencies represent 70% of Higgsfield's $300M ARR, making them the largest customer segment rather than individual creators or brands.
  • →The platform ships updates 2-3 times weekly and maintains a blended team of 80 engineers plus 70 creative professionals to ensure AI models are actually usable for non-technical users.
  • →Customers can now produce multiple commercially viable short-form videos daily using consistent characters and locations - work that previously required weeks of physical production and hired crews.
  • →Higgsfield achieves 5x higher ACV than Canva by replacing contractor and agency workflows entirely, positioning itself as an outcome-delivery tool rather than a design utility.

Guests

Alex Mashrabov

Topics in this episode

Higgsfield AI video platformCamera controls and cinematic featuresAI Cast character generationCinema Studio workflowMarketing StudioSupercomputer marketing agentAsynchronous video collaborationMCP (Model Control Protocol)Direct-to-consumer brands on social mediaCreative agency workflows

Questions this episode answers

How did Higgsfield grow to $300M ARR in just 15 months?

Higgsfield introduced camera controls (focal length, aperture, lens, lighting controls) that appealed to professional creative directors, reaching $10M ARR in 5-6 weeks, then pivoted to team collaboration features in October that resonated with creative agencies, which now represent 70% of revenue.

What makes Higgsfield more than just a thin wrapper around AI video models?

The platform consolidates multiple AI models into unified workflows like Cinema Studio and Marketing Studio, adds professional creative controls (character sheets, location consistency, camera movements), enables asynchronous team collaboration, and increasingly uses agentic workflows to charge by outcome rather than token usage.

Why does Higgsfield charge 5x more than Canva despite using similar AI models?

Higgsfield delivers higher-value outcomes through professional workflows and automation that replace traditional agency work, enabling single creators to produce multiple commercially viable videos daily rather than static designs - creating $1,000 average annual customer spend versus Canva's $200.

Who are Higgsfield's main customers?

Creative agencies represent approximately 70% of $300M ARR, with direct-to-consumer brands emerging as a secondary but growing segment using AI-generated videos for social media campaigns at scale.

How does Higgsfield handle the complexity of supporting many different AI video models?

The platform employs 70 creative professionals alongside 80 engineers who test models in real workflows, ship updates 2-3 times weekly, and ensure new models are actually usable for non-technical creators rather than requiring prompt engineering expertise.

What our scoring noted

Our reviewer’s read on each dimension, with quotes from the episode.

Insight Density

12 / 20

The episode contains useful operational insights about Higgsfield's journey (agency-first GTM, 70% of revenue from agencies, ACV growth to $1000/year, six weekly releases), but much content is demo-heavy and the conversation frequently circles back to self-congratulation rather than novel principles. Few non-obvious lessons emerge that a B2B operator couldn't infer from the narrative itself.

roughly 70% are agencies
we almost pretty much double our ACV as we move substantially up the markets

Originality

10 / 20

The core thesis - that agentic workflows and ease-of-use unlock higher ACVs than competitors - is sensible but not novel. The positioning of multi-model consolidation as a moat is derivative of existing SaaS logic. The episode lacks contrarian takes or first-principles arguments; it mostly validates conventional wisdom about platform consolidation and agency disruption.

fundamentally there is a question for every business in the world if they are a thin wrapper or not
the network effect and collaboration is very strong. That's what made Figma successful, that's what made Canva successful

Guest Caliber

16 / 20

Alex Mashrabov is a credible operator: co-founder and CEO of a legitimately fast-growing ($300M ARR in 13 months claimed) AI video startup, with prior successful exit to Snap. He has hands-on product sensibility and can speak to real revenue dynamics and unit economics. However, he is a venture-backed SaaS founder speaking about his own company, not a battle-tested operator across multiple contexts, which limits the scope of transferable wisdom.

I sold my previous company to Snap where we build the face filters
we have roughly 80 people engineering

Specificity & Evidence

14 / 20

The episode contains concrete metrics: $300M ARR in ~13 months, $1000 average annual customer spend (5x Canva's $200), 70% agency revenue, 160-person team (80 engineering, 70 creative), six releases/week, and timelines (10M ARR in 5 - 6 weeks with camera controls). However, many claims lack supporting numbers: the $300M ARR definition is debated but not fully clarified, no breakdown of customer segments beyond agencies, no churn or retention data, and the demo lacks specifics on actual customer ROI metrics.

On average customers on Hicksfield spend around thousand dollars a year
roughly 70% are agencies

Conversational Craft

13 / 20

The host (Jason) asks solid tactical follow-ups (engineering efficiency ratio, ARR definition, agency cannibalisation, product prioritisation, team composition), demonstrating familiarity with the product and holding Alex to specificity on revenue. However, questioning is not consistently sharp - the host often accepts answers at face value, pivots to product demo tangents, and rarely pushes back on claims (e.g., the 70% agency mix is surprising but not probed further, the ARR definition debate trails off without resolution).

Alex, how big is the team today and how big is engineering?
So the model, if you just do the seemingly basic stuff like I have, which is leverage the models more efficiently inside of hfo, that's a lower margin product. The upsell is to use it for more cinematography and more value at workflows like you described

Conversation analysis

Computed from the transcript - who did the talking, and the words that came up most.

Share of words spoken

  • Speaker B55%
  • Speaker A39%
  • Speaker D4%
  • Speaker C2%

Most-used words

video23media20million20agencies20important18team18social17first15model15alex14engineering14revenue14models13build12videos12creative12

Episode notes

SaaStr 867: $0 to $500M ARR in 13 Months. Inside Higgsfield's Viral AI Growth with Alex Mashrabov, co-founder and CEO Most companies take years to get to $10M ARR. Higgsfield got there in eight weeks, then kept going. In 11 months they crossed $300M with 120 people and no traditional sales team. Jason Lemkin has been a customer since near the beginning, using Higgsfield to build every video asset for SaaStr, and in this session he sits down with co-founder and CEO Alex Mashrabov to get the real story behind the numbers: what actually drove the growth, what they built that nobody else had, and what they got wrong along the way. The answers are more surprising than the headline. Seventy percent of their revenue comes from the creative agencies they're disrupting. Their biggest product bet was camera controls, something no one asked for. And they've reoriented the entire company three times in under a year, each time based on a signal most founders would have missed.

Full transcript

37 min

Transcribed and scored by The B2B Podcast Index.

Speaker A: Like what would it cost for me to build a video like without skills and people? I mean infinity. I'd have to hire an agency. It would come back two weeks later. It would be terrible. They would charge me thousands of dollars and I would delete it because I would never use it. Instead I can do this in 60 seconds. And so it just. It's an abyssal example that Alex is able to get five times the ACV off Canva even though Canva's mass scale.

Speaker B: Yes.

Speaker A: By having an agentic workflow that. That replaces humans. And honestly for me it replaces contractor and agency that I don't have the patience to hire anyway.

Speaker B: Right.

Speaker A: Rather be helping me create an asset manually. Everybody, special guest moderator me. I think Alex is going to join. We're going to have some fun. So Alex is co founder of one of the most explosive video marketing apps, Higsfield. You guys should use it. So Higsfield AI while you're on site, use it. And it's changed a lot. But if you look at any of the saster videos that I create, if you watch the agents, the intro of me and Amelia, it's all built on Higgs Field and I've been using Higsfield basically I think since it launched or something like that. Right. For all of our stuff. Close. Right?

Speaker B: Yeah. I mean and that means a lot to us. I think it was August, September. It was the first time when we started to evolve just from um, like kind of social, pure social media play to professional creation tooling.

Speaker A: Yeah.

Speaker B: And you are the first to spot us.

Speaker A: So I love it. I use it all the time. If, if we have time we can even log into my account. I can show you all the stuff we building. But it's for all of us just trying to learn. I mean and I'm going to ask a lot of questions. Alex is going to present. I'm going to pamper a few questions. Now they're 300 million in a year. 15 months or how quickly.

Speaker B: Yes. It took us maybe um, 11 months to get to 300. Now it's bigger than that.

Speaker A: Pretty, pretty good, right? So Alex is going to explain to it and where they're going. Like we hear these stories, you know, how did Higsfield and lovable and repl it get to hundreds of millions in months? And now actually someone's going to be honest and tell us the real story behind the story. I'll pepper with some questions. So I'll hand it off to Alex but I'm a super fan and if you guys watch Any of our little short videos. It's all built on Higsville.

Speaker C: You're listening to the official Sastra AI podcast brought to you by. Hey everybody. Starting a business can get expensive fast. Website here, email somewhere else, business phone with another provider. Northwest registered agent gives you a complete business identity in one place with free tools, resources and built in privacy from day one. Get more at, uh, northwestregisteredagent.com that's northwestregisteredagent.com Saster free. S A A S T R F

Speaker B: R E E Absolutely. This is a great honor for me to present here. So let me maybe briefly overview our journey in numbers. We are excited about a new wave of AI native video creation for social media. First and foremost, social media is relatively new. It has been around for 15 years and last five years it has become the largest media in the world. We are seeing numerous direct to consumer companies who actually make hundreds of millions or billions of dollars of sales by by leveraging social media as a distribution channel and using platforms like Hexfield for content production. And this is exactly the reason why we are growing so quickly as we are addressing this massive demand in the markets to make content for social media every day and build a brand and sell products on social media. So we were the first to maybe introduce camera controls. And camera controls are extremely important for professional creative directors. We were really surprised that it took off so quickly and within just in uh, like maybe five, six weeks we got to 10 million ARR. And then in August, September and October we realized that adoption goes beyond just individual creators. And since October, the priority is to make sure that creative teams can work together to make videos very efficiently. So let me give you a few, let me give you a few numbers. So for example, this in a week we are going to present full feature movie in Cannes. And we are doing that to showcase the possibility and opportunities unlocked with video AI. So roughly it took a team of 10 and maybe three weeks to accomplish that. So the efficiency gains are unparalleled and that applies both to long form and the short form content creation.

Speaker A: Alex, how big is the team today and how big is engineering?

Speaker B: So this is a good question. We have roughly half and half split. So 80 people engineering. And engineering is now really broad. I need to acknowledge that software engineering, machine learning, engineering are always kind of traditional professions, but the amounts of people who do automation, prompt engineering also increasingly grows. And the rest of the team are, we have maybe around like 70 people creative team who are not native prompt engineers. And this actually is very important. For us we learn by external signals and internal signals how to make those models actually usable, how to empower um, creatives to actually use them. And what we are seeing is that one creative director can now make ad end to end like let's say within a day. Like before that it would take weeks, it would require to assemble physical production crew, rent a lot of equipments, book a space and so on. And now it's completely different. So for us we believe that like one of the core unlocks for Hicksfield is to having creative team and engineering team working together folks.

Speaker A: So at 300 million AR, you have 60 people in the uh, prd. Org in product and development doing 300 million in revenue.

Speaker B: We have roughly. So just in terms of like traditional engineering and product is probably 60. So it is still a substantial effort. Uh, we were moving very quickly when we were smaller. Now we have to invest a lot in stability, safety, we have to invest a lot in things like anti fraud and so on. So the engineering team grows because I mean vibe coding is not really good for this really deep infrastructure work yet.

Speaker A: But it's by traditional standards it's still a pretty tight engineering team even today as you scale, right?

Speaker B: Yeah, I would agree with you because let's say typically a ratio of engineers to ARR would be maybe around 2. For us this ratio is probably around 5 today.

Speaker A: Yeah, maybe 2, 2 to 3 times more efficient. Something like that.

Speaker C: Yeah.

Speaker B: Cool. And going back to engineering, it's also very important. The very important trend which I see is that the engineering jobs are getting very nuanced. So there are um, for a lot of new product developments that seem now can consist of just of one person and they can maintain fast pace of developments. So for us what's important is

Speaker A: we

Speaker B: deliver time to value faster than any other platform and we have this feedback loop as we see what's trending, we see what users post on social media and using this to uh, improve Higgs Field. And I think that's very important for us to make sure that we have these unique blends of researchers and filmmakers on the team. Most of the team is still is really centered around um, kind of those who made commercials and they and all the materials published by Hicksfield YouTube channels, all of that is generated with AI. It's always generated by our platform. That's how we establish trust. So the reason why we're doing full feature movie in Cannes is another way to show what's actually possible with technology today. And we have over thousands various tutorials on the um, on YouTube to help with this transition from traditional production to AI native production for creative professionals. Jason, this is exactly the points what I wanted to bring up. Like, we are not building in a vacuum. We listen to feedback on social media on Discord channel, Reddit, but also we have a team of 80 creative professionals who help our engineers to build. So we also learned that also we made a very controversial bet early on. We made the bets. That's number of people who need social media video, number of people who want to sell is probably tens of millions of users. But number of people who want to learn prompt engineering is probably hundreds of thousands. And there is this immersive gap which someone has to close. That's why we started with social first user experience. What's also very interesting is we see people buying up more and more credits on top of their subscription. So. And that's very natural for all the marketing technology. Like, I personally, like, like I know, like seven years ago, learned a lot about that from reading Sasters. That's like one of the, uh, positive things about marketing technology. One of the positive trends is that customers come and buy more, more and more of the products if they use it more and if they can convert and drive more sales. And we build the trust that all new video AI models are available on Higgs Field so that it's one AI video studio for Canon production. Let me please show how it works.

Speaker D: Let me show you. Cbc. I'm creating a fashion campaign with three locations and one model. First, I build my character in AI cast. The platform generates a full character sheet I can reference across every scene. Same with locations moved to the dawn, the Minimalist studio and Tokyo at night. Now I can start generating and here's my model in the studio holding the product. But I want to explore other options. So relight gives me the different lighting directions and color angles, generates new camera perspectives from the same image. I pick the best one and I move forward. Now I'm ready for the video. I have full control over the camera, the lens, the aperture, the focal length, the style settings for color, the lighting and how the camera moves, as well as the genre that shapes the pacing. Or I can ask the AI directory. It knows my characters, my locations and the style I'm going for. I tell what I need and it writes the prompts that picks the best settings for this project, I hit generate and the character stays consistent. The location matches and audio is synchronized. Now, when I'm ready, I share this project with my client to review and collaborate.

Speaker B: And this is very important. I wanted to pay attention to the last piece. What's important is that video creation becomes digital and that's asynchronous. Ah. And that's very important. So the reason why software evolves so quickly is that there is a lot of, there are lots of open source projects and people naturally build on top of each other. Historically video was extremely gated, meaning that it was. It's nearly impossible to reproduce, to kind of see how these popular movies, how music lips are built. And we see a major democratization across the space as those prompts become available, projects become available. People can see like behind the scenes they can see the prompts which were used to make a video and they can collaborate, teams can collaborate together digitally to really like let's say make videos together. Like historically what we have seen with incumbents like Adobe is that it used to be like desktop tooling. All the storage was on desktop and it was just very cumbersome process of constantly exchanging files and so on. We bring it all in one platform. What we also learned, it's like these models evolve so quickly. So we work on behalf of our customers to build a trust with them that they will get the best models optimized for specific workflows on Hexel platform. So we ship pretty much every day like last last year on average we were shipping six times a week. This year as we pay more attention to stability, it's probably two, three times a week. And earlier today there was another major launch where we introduced our marketing agent called Supercomputer. So um, with, with all of that we are excited that we are able to emerge as number one platform in multimedia AI. And there are many direct to consumer brands who actually can achieve product and brand consistency. And they are scaling their social media budgets to tens and hundreds of millions of dollars with AI generated videos. It's very important to say that in some categories, especially when it comes to mobile labs, AI, uh, generated ad creatives are absolutely necessary. This is the AI generated creatives is the only way to get people attention because there is a strong novelty effect to that and we pay a lot of attention to that. So those use cases around people building content machines are very important for us when we for high scale, for high scale video production. But also there is a uh, strong adoption by creator economy with people like Madonna, Snoop Dogg, Will Smith using Hicksfield just to create engagement across their audience.

Speaker A: Alex, I want to show my account in a minute. If I give it to, I'm gonna show my account for fun if you don't mind. If it's helpful to you guys. When I started using Hicksfield right after it launched, I did Hicksfield does a lot. If you look at the top image, video, audio, supercomputer, which we just demonstrated all of this. I'm a basic guy. Okay. But here's. In the beginning, it had. It had a couple cool things. But this is a, uh, great use case for B2B. If you see you go into it and it has start frame and end frame. And you can update a photo from this event of like the stage and me. And it will just connect them with different models and create a movie from it. There's other ways today you can do it. I'm going to ask Alex some questions. But it was just magical that I could take a picture of the outside disaster and a spage and get a 6 second or 10 second video. I'd never seen this before. And what I want to show you and I still make these videos. Here's one for if we have this new podcast called the Agents. I just wanted to animate it with me and Amelia here. It seems very simple compared to what Alex saw. But I'll just. This is my whole account of all the assets we've built. Fun promos for this event. This one all different ones. I think it's pretty fun. Right? I'm not yet running an ad campaign. That's pretty slick. Right? And we can go back in time. Uh, see if I can find any other ones. Welcome to the event, everyone. We're so glad you're here. What model is this one? VL3. I. I actually think cling is like my favorite. Uh, here's all the collateral for the event. You might have seen this in our videos. So like I wanted to make an intro. I don't know if I picked it. Right. Make a little techy to introduction to the event. Sometimes there's artifacts. You rerun it. This is like. To promote sponsorships, we built this percent vid that's top of the list and five solid VCs. This could be our round.

Speaker B: Let's line them up. Great to finally meet you both.

Speaker A: Welcome aboard.

Speaker B: Couldn't be more exciting.

Speaker A: Saster AI for the win.

Speaker B: Get funding.

Speaker A: Yeah. We have all these tools. If you haven't used it, we have this. Alex has used it to, uh, a uh, startup valuator that's used over a million times. All the promos. I don't have time. I don't have a team. I built them all here. But when. I think when Higsil launched, maybe you used one Model, Right. Is that possible? You use one model.

Speaker B: So yes, we started with our own model.

Speaker A: Your own model, which was open source. Is that what it was?

Speaker B: Yeah, open source plus plus plus. Exactly. So and then we realized very quickly that the number of models just increases, basically new model coming every week and it's very difficult to just follow everything what's happening in the space. And this is actually an opportunity for one platform to consolidate all the models and let's say pick the best model based on each use case.

Speaker A: Yeah. And so now it's much more powerful. You look at it now, you can pick from all the models. So you can make a video or an asset, a short video. And what's to me, interesting, first of all, you're embracing in a sense your competition, right? In a sense, you have Google VO here, right?

Speaker B: Yes.

Speaker A: You could use Sora before it got deprecated, I think. Right? Yes. You have your own model. I think you've got cling and CDance and Wan, which you know what they are and I don't even know what they are. On the one hand the product is more complicated. On the other hand, I can run all of these things in seconds, in parallel and use different models to see which makes the better video for me. Right?

Speaker B: Yeah.

Speaker A: Uh, super powerful. So talk about complexity and then talk about the business model and why it's not a thin wrapper.

Speaker B: This is a, this is a great question and I think, I think uh, fundamentally there is a question for every business in the world if they are a thin wrapper or not. Because, I mean, most of the software is going to rely on AI anyway. Right. So the way how we think is there are two major unlocks for us. So first is to empower teams to create together. Like I think the network effect and collaboration is very strong. That's what made Figma successful, that's what made Canva successful. And we do believe there are many opportunities in the video space. That's probably first. Second major unlock for Higgs Field is to help brands to sell more products. So we launched our MCP two weeks ago. Today we launch our own agent called Supercomputer and that's really designed to make bulk of creatives to sell more

Speaker A: because we're all dealing with this, right? We all the lms are getting so good, right. We're all a rapper at some level. Thin, thick blue left right on top of it, right. So when I pay for Higsfield and for me, I know there's two different segments in the market. I'm not, uh, I'm not counting every penny. It's cheap to, to me it's cheap. Right, but do you, do you mark up the underlying models? Is that a good deal for your customers? How do you think about it? Because like sometimes I actually don't love VO in Hicksfield, but VO I could get in Gemini or I could pay for directly.

Speaker D: Right.

Speaker A: So how do, how do you think about the economics? And it's just a mystery to me.

Speaker B: Absolutely. So today roughly 40% of usage is not associated with just picking the model but they use workflows like Cinema Studio, Marketing Studio. So that's a way higher level abstraction. That's probably first thing, which is important to say. Second thing is we are still one of the most affordable platforms out there. So for some of the models we are the most affordable. For some other models we could be top two, top three. But I mean we um, are moving with the market there and increasingly trying to implement agentic workflows. That's where we evolve from kind of per token costs to charging by outcome by video.

Speaker A: So the model, if you just do the seemingly basic stuff like I have, which is leverage the models more efficiently inside of hfo, that's a lower margin product. The upsell is to use it for more cinematography and more value at workflows like you described. But you can still make money on the basic workflow of marking up the model, right?

Speaker B: Yeah, yeah. So let me just throw like some numbers so that it makes sense. On average customers on Hicksfield spend around thousand dollars a year. So it is like for example Canva is $200 a year and for us we include every, like every quarter. We almost pretty much double our ACV as we move substantially up the markets as we want to attract more Jason on, on the platform. The reality is that social media like marketing budgets, I mean many companies have like hundreds of thousands, millions, tens of millions of dollars. So uh, when we think about experimentation from experimentation budgets from even $1 million, it's 10,000. Right. And I think eventually everyone would want to try video AI that really yields positive roi, uh, on social media. And we want to make sure that these customers, they will, they will be successful on the platform when they try

Speaker A: and effectively your job is to keep marching them up the value stack. But on average folks are paying you five times more than Canva.

Speaker D: Yes.

Speaker A: Uh, now people are going to start paying more for Canva as Canva gets more gentic with 2.0. But it is a reminder for the theme of this week. If you build, I mean listen, I Made these videos in seconds on Higgs Field. Right. And I probably pay more than for can. I've been a Canva customer since the 1970s or something like that. I mean, I don't know. I pay for 18 bucks a month. I'm sure I pay Higgs field More than 80 bucks a month and I don't care. But if you provide that agentic value. But the value I get out of Higsfield, even though I love Canva, is higher. I can build a whole like what would it cost for me to build a video like without skills and people, I mean infinity. I'd have to hire an agency. It would come back two weeks later. It would be terrible. They would charge me thousands of dollars and I would delete it because I would never use it. Instead, I can do this in 60 seconds. And so it just, it's an visceral example that Alex is able to get five times the ACV up can. But even though canvas mass scale.

Speaker B: Yes.

Speaker A: By having an agent workflow that, that replaces humans. And honestly for me it replaces contractor and agency that I don't have the patience to hire anyway.

Speaker B: Right.

Speaker A: Rather than just by helping me create an asset manually.

Speaker B: This is a good point. So there are several things which I want to say is that we're seeing that increasingly companies bring the capabilities in house. As you write that like back and forth with the agency is just very frustrating and that is both budget wise and timeline. Another huge issue is that it's very difficult to go vice versa. Go back and say, oh, I wanted the actor in this ad to look differently. It's just impossible with physical production. But like very often what we are seeing on the platform, customers create variations of the same ad but just with difference with different actors. So essentially what happens is that, essentially what we are seeing here is that content that's like one social media marketer can make several minutes of commercially viable videos, social media videos a day. And cost wise there is also a massive drop in the cost of production for sure.

Speaker A: Let me ask you one or two questions and then, and then we can break agencies. It's a meta question for a lot of folks. Do you enable them? Do you have a Higsfield offering for agencies because you're disrupting to agencies. But also if, if I, if I have budget for agency and they can give me 10 times more assets that faster it enables agencies too. So how do you. What's your interaction with. With creative agencies?

Speaker B: So this is, this is a good question. So first part, which is creative agency says this is the number one category on the platform. We ah love to bring up examples of brands building.

Speaker A: Number one customer are agencies.

Speaker B: Agencies for sure. Creative agencies is number one. We are excited to see more and more direct to consumer companies kind of using Pixel directly. But this is still an emerging trends. Like if we just talk specifically about 300 million ARR. Most of that's like almost 70% are agencies.

Speaker A: Oh I wouldn't have guessed that. I would have guessed. I mean I would have guessed you were getting there. But your early adopters were webheads and AI nerds and people like that. But it's actually agencies found you early because it made them radically more efficient.

Speaker B: Because I think all agents, a lot of especially creative agencies. Yeah they have been mostly struggling frankly and they use a as a new opportunity to sell M to sell. And I think that's. There is definitely a lot of demands. We have seen super bowl ads generated with. With AI uh we have seen many Olympic ads, Christmas ads like Coca Cola Christmas ad was generated on Hixo. So I think there is, there is just a lot going on and there is clearly. There is clearly a lot of demand for innovation and also all these companies they have experimental budgets like millions of dollars. So it's natural that they are all

Speaker A: trying AI And I'm just a solo user so I don't see it when agencies use you and I think how go to market channels change in AI is interesting when agencies. Because you're also disrupting some agencies. You're enabling agencies that use Higsfield 70, you know 200 million of revenue. But you're disrupting agencies that used to charge $10,000 for something that you can do in minutes. Do they hide it from their clients? Do they white label Higs Field? Are they worried their clients will see it's on Higgs Field and feel like they're being overcharged?

Speaker B: This is a, this is a good point. So this is the second part of the markets which are larger agencies. Larger agencies they make money from um, kind of media consulting. That's kind of first kind of McKinsey but for. For marketing. Right?

Speaker A: Yeah.

Speaker B: Uh and the second part is paid is paid marketing like basically media buying. So. So his video AI and Hicks Field did not change the way how media is bought. This hasn't happened yet. But with our supercomputer products we have direct integration to Meta MCP and some other MCPs as well so that we can play broader role. Not just from ideation to creation collaboration but also we want to add distribution piece basically distribute ads across different ad networks. Got it. And inform clients what works the best.

Speaker D: Cool.

Speaker A: For just because I haven't really chatted with many founders about it for these agencies at 70% of your model, I know your team is only 120 people at 300 million avenues. I said do you have a dedicated partner, team enablement team, people that are making these agencies that maybe aren't at the cutting edge successful with these tools?

Speaker B: Yeah, we are very, very actively building ah for deploy engineering team.

Speaker A: Your own team with that. Yeah.

Speaker B: Yes, absolutely. I think what we're seeing is that the um, demands sort of like there is a lot of interest in customization and higher volume content creation. We have seen, I know like I think out of top 30 media organizations in the world at least 10 build internal tooling because they feel that everything available out there is not good yet. But to me it feels like this is actually a signal to us that we should make our products more customizable and like our enterprise and like we really double down on enterprise adoption.

Speaker A: Okay, uh, and maybe one last high level question. I really believe you guys are doing six releases a week because the product has changed so much since I've used it. Right. Some of the stuff you did in the beginning didn't work out that well. Right. Or you deprecated or stopped investing in it. What sort of. I mean maybe it's just usage and mouths and wows of Dows. But how do you decide quickly what to abandon, what to put to the side, what to hide in the nav, where to go deep because this product's radically evolves. You haven't just. It may be missing part of story. It's not like you went from 0 to 300 million with the exact same product.

Speaker B: This is absolutely true.

Speaker A: I still kind of am in the past using maybe higsfield 2.0 but 95% of folks use a radically different product than when I started. So how did, how do you pick that? Look at the data, decide what to do, decide what to cut.

Speaker B: Absolutely. So we really saw maybe uh, March last year that there is an interest from top creative directors to use AI but camera control does not exist so they just immediately reject it. So that was our first innovation. Then we kind of went to our routes. Uh, so I sold my previous company to Snap where we build the face filters basically and face filters is just kind of one click experience. So we did the same for visual effects and this helped us to get to 10 million ARR within eight weeks or so. Then the interesting part for us was to uh, also, I mean we noticed maybe in July that some people start to make commercial projects end to end with AI. And this is where like kind of AI video AI is no longer a toy. It's not just a tool kind of for some fun effects, kind of face masks or whatever. It actually brings a lot of commercial value. And we reoriented the whole company around that and now we reorient um, the whole company again around agency because as I mentioned like agency workflow is like marketing workflow is extremely repetitive. Every day it's important to understand the trends which are relevant, which are irrelevant, what's worked well yesterday, then decide if, which videos we need to make today, how it's different across different channels, what's the difference, what's the audience like overall sentiments and then make the videos post and rinse and repeat every day. And that's very important to stay relevant on social media. So. And I think kind of agentic actually. I mean like our agentic workflows is our first step to cover the whole marketing workflow ends to ends.

Speaker A: Okay, that's amazing. One last wrap question just at a high level for founders over stuff because this is a, this is uh, I think an over discussed topic. But what is ARR? They said 300 million ARR. Yeah, but this isn't all Salesforce subscriptions at 150amonth receipt. How do you define it? What does it mean? I think you're pretty honest and direct on this. So just, just give us a snapshot of what you think AR today is in an AI and agentic world.

Speaker B: Absolutely. So I think there are um, there are two subcomponents. First I think it's important to take annual subscription and divide by 12 in wherever you, how you measure ARR. It's just very important to do and kind of be intellectually honest and I think a lot of kind of you know, like kind of wishy washy stuff starts with credits. Because if someone uses on demand then there is a question of like where it all gets attributed. Right? Yeah. So like for us we like for us for 300 million we see the on demand usage for specific class for weeks. We see, we take the monthly subscription revenue, annual subscription revenue divided by 12, sum it up altogether multiplied by 12 and that's how we get the result. But I think on demand usage is the most tricky one.

Speaker A: Yeah, but you're using, but you're still using the last 30 days of revenue in essence and multiplying it by 12, right?

Speaker B: Yes. So but it's revenue, it's not just sales. It's revenue. What's important?

Speaker A: Booked Revenue gap revenue or.

Speaker B: Yeah, yeah, revenue, meaning that we take. We take like, annual subscriptions or annual contracts and divide by 12.

Speaker A: Sure.

Speaker B: Which is important because some companies, they take whatever, like, cash they got and multiply it by 12. This is. I think.

Speaker A: Well, that's. That's. But. But. Okay. And. But if 300 million, how much is on annual versus monthly? Versus. I mean, you have a lot on annual.

Speaker B: Look, annual is a very substantial. I mean, like, look, in terms of the number of subscriptions, uh, it's not high, but I mean, it's definitely, uh, like 40% of total revenue. For sure.

Speaker A: I think some folks are stretching the definition of ARR so far. It stretches credibility. But also, I also think sometimes people take this issue too seriously. If you're doing. What's 300 million times 12? I'm getting tired. 26 million or something like that. Right. If this month you're roughly doing 26 million, honestly, then you have a 300 million, uh, revenue rate. Right. It's. It shouldn't. We're making this too comp. Whether it's credits. Yeah. I think if you're giving Mark 80% marketing discounts at zero and claiming it's revenue, it's pretty suspect. Right. If it's cash in the door or cash properly recognized for accounting, I. I think we're. What am I missing, Alex? I think we're over complicating this. Like, that should be your A. R. Yeah. You know, close enough to what your real revenue is, whether it's 1 off, 10 off, 20 off annual, weekly. some level, I don't care what. Use your rent. Just show me their money.

Speaker C: Right?

Speaker B: Yeah, absolutely. So for us, uh, I think what's. And I also spoke a lot about that with Stripe Team. Frankly, a lot of businesses are run on stripe. Stripe also has the orchestration across the various payment systems. And I think. I mean, in the end of the day, I think very soon we will be sharing stripe dashboards because, you know, like, it's just kind of this, uh. Otherwise there is just a lot of this crap. I'm saying definition.

Speaker A: Stripe says 25 million this month. I call it 300 million. We call it the day for me. Right. All right. Incredible success story. Let's give it up for Alex. And thanks.

Speaker B: Thank you.

Speaker A: What we can be proud of.

Speaker B: Thank you. Thank you.

Speaker A: Thanks for doing this.

Speaker B: Thank you. Thank you for having me.

Speaker C: You're listening to the official Saster AI Podcast, brought to you by. Costs can add up quickly when you start a business, so stop paying for five different services. Northwest Registered Agent gives you a complete business identity in one place with free tools and resources to actually launch your business for real. Get more@northwestregisteredagent.com that's northwestregisteredagent.com S A S T R F R E E.

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