How Adapt CEO Gautam B grew to $2.1M revenue and 500 customers in 2024.

hello everybody my guest today is surrender nadarajan he uh he has over 15 years of experience in the industry with over seven years of leadership leadership experience in the data industry adapt.i o is his first entrepreneurial effort he started his career as a developer moved up about our quickly into leadership roles and co-founded adapt two years ago on the family side he's married for six years now and has a couple of lovely daughters surrender you ready to take us to the top absolutely all right adapt.io so what's the company do and how do you guys make money sure so um started up two years ago as you mentioned and we had a lot of experience in the data industry specifically in business information and we had an idea to give it a twist so the current providers focus on quantity in terms of building a data a river of data while we focused on building the delta which focused more on the quality and the change in data itself um in terms of how we make our money we are a typical uh sas product and a premium uh model and that's how we get our paid users so okay first off interesting business i want to talk more about the technology and how you're building this but on average kind of what's the customer paying you per month or per year for the technology uh so we have uh two segments basically so uh becomes difficult to put an average so one is the online the self so model that users come and use the product tested out and purchased by themselves and we have two plans which is uh currently the basic which is 49 and a growth that is 149 a month and we also have our inside sales team and doing uh the sales from their part and uh and that and the deals the the deal sizes of those deals are pretty uh are bigger than the ones that we get on the on the side like how much bigger so um so uh we we do uh deals that are you know that are thousand dollars a month to ten thousand dollars a month so it varies uh very spreading interesting and what are the pricing axes you price against in other words why is someone gonna pay you 10 grand a month versus 49 bucks a month largely it is the number of contacts that they would want to purchase from us so our our database is what drives uh uh the uh uh the pricing interesting okay so it's just number of contacts they want to purchase not like number of seats or like number of data fields per contact or anything like that so beyond a certain number the number of seats doesn't matter because the number of contacts is what drives the price and we we also have integrations with the the popular crm solutions so some of the crm solutions cost higher than a few others so so those are some of the axes that uh determine the price so that's good so understanding those two cohorts are valuable but just for the sake of simplicity if i did force you into an average right would you say maybe it's maybe it's like three four hundred bucks a month across your entire customer base um i'm not sure i can give a number across the entire customer base yeah you know in the online model we would be around 150 to 200 dollars but okay on the inside sales i'm not too sure if you can give a number there yeah that's fine that's fair enough okay so around 200 bucks a month on kind of your online self-serve portal you launched you said two years ago in 2017 that's right yeah and have you chosen to stay bootstrapped or have you chosen to raise capital uh we've chosen to stay bootstrapped from day one so we uh we started generating revenue pretty early from six months into the business and uh we have been we have been pretty much cash flow positive you know a couple of months later we became cash flow positive mike my kind of my kind of founder i love that all right and so now are you operating at like break even or no you're taking 10 20 30 per month to the bottom line no we are very much a profitable company very much cash flow positive and we do we do over 40 uh of profit wow that's amazing so over 40 percent ebate margins that's great yeah and what's your team size today look like how many people um we have 25 members on the team okay and are they all where are they all based we're all based in india coimbatore okay that's very good okay so the team okay so this team's again 25 folks you've stayed bootstrapped you've founded about you founded the company about two and a half call it two years ago what have you scaled to today in terms of total customers on the platform um so i'm not going to give you an exact number but we have you know a few numbers short of 1000 paid customers as of today but we are a premium product so we have over 200 000 users using our tool but we have we have now less than thousand customers who are paying us okay sorry you said uh less than a thousand or a thousand less than a thousand okay less than a thousand cool now i mean can you put a bottom on that so less than a thousand but more than is 500 fair to say yeah 500 2 000. okay that's good all right good and then um and then so so you are you suggest you're you said you're doing a freemium option right so freemium can be very difficult if you don't know where to kind of put that paywall so how do you decide where to put the first paywall what do you get for free and what do you make people pay for yeah that's uh that's an interesting problem that we've been continuing to solve so it's uh so currently we offer five credits for free so anybody who wants to test the product can come and use the product we have we have multiple tools in which you can consume the data and what's a credit by the way one credit equals one contact that's correct yes so one credit is one contact and uh and after five credits is when we show the paywall uh but but it's it's a constant experiment though and we keep experimenting with the number we try to move some of the other axis also and try to put a paywall that makes sense to customers so that we give enough value for them to convert so once i hit five for free then i'll see a pop-up says if you want more it's 49 bucks a month sign up now that's right yes okay interesting what else have you tested um we've tested the features of course so you know some of the exports are not available to users uh to the free users so they'll have to pay to get some of the integrations that we have uh we've tested this number quite a lot we've done five we've done 50 we have done 100 as well so so we are we are varying these numbers uh also so and uh we are also experimenting some features like limiting on a daily basis and limiting on a weekly basis etc so there are a number of experiments that we've been constantly performing and why'd you land now on five you said you tested 550 100 y5 yeah this gave us a a pretty good number for at least a month um in success and so so for a month we were able to get pretty good success from this particular number so that's why we've uh we stuck to this number for a while now uh but we're still experimenting you know we could be changing in the next month to come and then surrender i mean i can take your now these are going to be minimums i think you're probably doing more than this but at a minimum 500 customers doing you know an rpoo of 200 bucks a month i mean that puts you north of a hundred thousand dollars per month in revenue is that accurate yeah that's okay and where help me understand growth i love bootstrap folks that are obviously growing uh 12 months ago about where were you um we've grown four times compared to last year forex is our growth oh wow okay so you're getting about last year so you're doing about 25 000 a month a year ago uh yes that was from the online sales stuff so we were doing uh slightly higher on with the inside sales as well okay okay fair enough yeah yeah but but maybe we'll call it 30. 30 a year ago now you're up north of a hundred so i mean healthy growth there is most that first off is that is that accurate did i get that right uh yeah i cannot give you the exact numbers around there okay and as most the grow i guess what i'm interested in is most the growth going from 30 to north of 100 today coming from your inside sales model or your kind of freemium kind of paywall 49 a month model i think uh i think largely from the inside sales because last year we did not have uh last year same time we did not have a full-fledged sales team in place uh we were driving most of our sales through the online sales so we did very little inside sales and uh that is uh and in the last few months is when we put together a full-fledged sales team that uh that's pushing the inside sales how many people are on the sales team today uh six okay and what's the split like do you have like sdr to ae to cs rep or what do those six people do yeah we have we have three hdrs and three account executives so uh that's the split right now and it's a one-to-one ratio one sdr for 180 it's not anything it was updated so is it one sdr forever for every one sae yeah that's right yes okay and help me understand like are the sdrs quota carrying or just the aes um so it is the aes that are getting the sds have uh uh they have quota but it's not revenue based it's more on these meetings and the number of qualified leads generated so so let me ask you for one sdr in a month how many qualified leads do you expect for them to generate how many meetings in a month we gen we expect them to generate in the range of 10 to 12 uh qualified leads that's that's a number that we have right now and is that mean that's also 10 to 12 demos for the ae they're representing the identical meeting set up for the a's after establishing the band interesting okay and then for so each ae you basically expect them to have about 12 calls per month 12 demos per month that's right interesting and how do you model how many you expect them to close do you give them like you know you need to be adding a hundred thousand dollars of you know you know new arr every 12 months or how do you model it um so we have our own goals you know like we vary from uh from around 3000 to 4000 mrr net new mrr added every month to 10 000 80 mr added every month so depending on their uh you know the experience and what kind of clients they are handling so we check we vary that goal for each uh okay so basically each ae is generating anywhere between one and three thousand dollars and net new mrr per month um yeah that would uh be fair yes or twelve to thirty thousand dollars and new annual contracts sold each month okay yes yeah interesting and that's just your inside sales model that's not that's excluding all of your no touch website stuff that's good okay very cool churn's critical to kind of get this model working right i imagine your churn and your inside sales model is very different than your churn on your web kind of portal side so how do you measure churn uh yeah so chun we do measure them separately and yes the inside sales churn is a lot lower compared to the online model so the online model is uh uh is probably around eight to nine percent month over month and inside sales uh you know is probably a lot lower okay like do you do you know what that number is like two percent a month one percent a month yeah it should be one to two percent cases okay so call it twelve to twenty percent annually yeah do your aes also are they responsible for driving expansion revenue right now we are focused largely on you know smbs and not really focusing on expansion a lot but we are looking to scale the sales team and then start focusing on expansion across so 12 gross churn annually minimum means your net revenue retention is about 88 per year currently best case scenario yeah that's right okay very good but once you start getting expansion then all of a sudden you can get above 100 if you start growing that rapidly i think yes yeah that that's right yeah interesting and then last question here how aggressive are you being to get a new 200 a month customer in other words are you willing to spend you know you know four months five months eight months of acv to get them um so interestingly enough we've not we've not spent anything on paid marketing yet well fully i'm talking fully weighted so include includes the sales team includes all your expenses that are sales marketing related right yeah so i think uh you know we do two times uh the monthly so 400 dollars would be something that we would uh measure as of now yeah that's that's that's not bad at all that's good stuff all right man let's wrap up with the famous five number one what's your favorite business book um it's the speed of trust by stephen covey number two is there a ceo you're following or studying um satya nadella of microsoft number three uh what is your favorite online tool for building a company um number four how many hours of sleep do you get every night not a fixed number but enough to keep me going yeah what do you think it is an average six seven eight yeah six to seven okay and what's your situation well actually i think i know you have kiddos a married single how many kids married with two daughters two okay very good and how are you uh i'm 34. 34. last question what do you wish your 20 year old self knew uh just be open to more ideas and be open to exploring more stuff guys adapt.io gets you contact data great for ae teams they're currently serving over 500 customers at 200 bucks a month so north north of 100 000 per month right now in revenue that's up from call at 25 or 30 grand a month just about a year ago so nice growth they have a free model 200 000 free users that convert to 49 a month paid plan and then also a very separate inside sales model where they have six folks three sdrs three ies building that right now churns about 12 percent annually that's gross turn so net revenue retention about 88 annually right now because they don't have expansion revenue yet in terms of onboarding willing to spend up to two months of acv to get the customer so two months payback period there equals healthy economic surrender thank you so much for taking us to the top thank you nathan it's a pleasure