Founder Interview
How AeroLeads Reached $149 Average Monthly ARPU Selling B2B Prospect Generation Software (Interview with CEO Pushkar Gaikwad)
- Interview Date
- December 18, 2017
- Interviewee
- Pushkar GaikwadCEO and Founder
Company Metrics at Interview Time
Average ARPU (2017)
$149 per month
Starting Plan Price (2017)
$49 per month
Team Size (2017)
About 15
Year Founded
2015
Historical Snapshot
These numbers were reported by Pushkar Gaikwad during the interview recorded in December 2017 and are a historical snapshot, not current figures. See AeroLeads’s current numbers.
Key Takeaways
- 01AeroLeads is a bootstrapped B2B prospect lead generation SaaS launched in April or May 2015
- 02Starting plan is $49 per month for about 100 qualified prospects with valid email IDs
- 03Average customer pays $149 per month
- 04Team is 15 people total: 10 in-house and 5 to 6 working from home
- 05Most users find AeroLeads through search engines and sign up on the website; Pushkar said the company was not really spending on paid ads
- 06Credits roll over month to month rather than expiring, which Pushkar acknowledged contributes to churn
- 07Pushkar estimated the company's value at roughly 3x yearly revenue, around $1 million
- 08Pushkar's target for the following year was $100k per month in revenue
- 09The company is fully bootstrapped and Pushkar said he does not currently need outside capital
- 10In December 2016, the company did approximately $12k in revenue that month
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Average ARPU (2017) | $149 per month | Founder interview, Dec 2017 |
| Starting Plan Price (2017) | $49 per month | Founder interview, Dec 2017 |
| Prospects per Starting Plan (2017) | About 100 qualified prospects | Founder interview, Dec 2017 |
| Team Size (2017) | 15 (10 in-house, 5 to 6 remote) | Founder interview, Dec 2017 |
| Year Founded | 2015 | Founder interview, Dec 2017 |
| December Revenue (December 2016) | About $12k | Founder interview, Dec 2017 |
| Estimated Company Valuation (2017) | Around $1 million (3x yearly revenue) | Founder interview, Dec 2017 |
Growth Breakdown
Revenue
Pushkar stated the company did approximately $12k in revenue in December 2016 and described growing roughly 10% month on month on average.
Customers
Pushkar described the number of paying customers as being in the range of a couple of hundred, covering both the software product and services. He did not state a precise customer count.
Team
At the time of the interview, AeroLeads had 15 people total: 10 working in-house and 5 to 6 working from home. Pushkar said the whole team is focused on AeroLeads and promoting it.
Funding and Profitability
AeroLeads is fully bootstrapped. Pushkar said he does not currently need outside capital and is comfortable continuing without it. He estimated the company's value at roughly $1 million, based on approximately 3x yearly revenue.
Growth Strategy
Organic SEO
Pushkar credited organic search as the primary driver of new users, saying the company ranks for many keywords and that most users find AeroLeads through search engines. He said the company was not really spending on paid ads, which had not worked out for previous products.
Low Customer Acquisition Cost
Pushkar said AeroLeads has no sales or marketing team: most users come to the website and sign up on their own, so the cost of acquiring a customer is almost nothing.
Services Alongside Software
AeroLeads offers services in addition to the core software for customers who do not have sales development representatives on their team. This expands the addressable market and adds revenue alongside subscriptions.
Feature Expansion for Retention
Pushkar described plans to add features beyond data retrieval, such as prospecting from Twitter, Instagram, and other social platforms, with the goal of making AeroLeads an all-in-one prospect and lead generation tool to improve retention.
Annual Subscription Plans
A significant portion of revenue comes from customers who have signed yearly agreements. Pushkar confirmed that annual plan revenue is recognized on a 1/12 basis for monthly recurring revenue calculations.
Best Quotes
“So aeroleads is a B2B prospect lead generation software. It primarily works with various social media sites. So it find prospects by crawling the web and doing something at the background. It gives you the data and then you can pass that data to your sales team to take it forward.”
“So it's a SaaS model. We start somewhere in range of $49 per month. You can get like about 100 qualified prospects with valid email IDs, and then it goes from there on.”
“That would be mostly they are in $149 range.”
“So AeroLeads started, it was a soft launch. We were building another product in parallel, and we just decided to work on aeroleads. So the official launch will be somewhere in between April, May 2015. So it's about two and a half years now, roughly.”
“I believe we have grown organically and somewhat slow, but then the targets are definitely there and it has to be 100 k per month by the end of next year. The target was 100 k per month this year end actually, but somehow we just stopped focusing on development and we kind of lost track for a few months.”
“I think I probably wanted to start early on technology... I spent a lot of time on just sales and marketing... I knew a little bit about technology, but I did not spend a lot of time on coding and programming.”
“I think for SaaS, we are kind of okay. If you need outside capital, I'm okay for that, but right now the need is not there.”
What Happened Next
At the time of this December 2017 interview, AeroLeads was a bootstrapped B2B lead generation SaaS with a team of 15, an average ARPU of $149 per month, and plans starting at $49 per month. Pushkar's target was $100k per month in revenue by the end of 2018. He said the same target had been set for the end of 2017, but the team "stopped focusing on development" and "lost track for a few months". To improve retention, he planned to add features such as prospecting leads from social media. This page reflects the company as it stood at the time of the recording. Visit the AeroLeads company profile for current figures.
View AeroLeads’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Company Overview
- 0:19What AeroLeads Does and the Business Model
- 1:05Pricing and Plans
- 1:29Company Launch and Background
- 1:58Customer Base and Team Size
- 2:41Revenue Discussion and Monthly Recurring Revenue
- 2:54Annual vs Monthly Plans
- 3:33Growth Rate and December 2016 Revenue
- 4:07Churn and Retention Challenges
- 5:34Paid Advertising and Acquisition Strategy
- 6:22Why Pushkar Started AeroLeads
- 6:59Future Goals and Revenue Targets
- 8:39Capital Raising and Company Valuation
- 9:17Famous Five Rapid Fire Questions
- 10:22Advice to Younger Self and Closing
Introduction and Company Overview
Nathan Latka
00:00Hello, everyone. My guest today is Pushkar Gaikwad. He is the CEO and founder of a company called aeroleads, which is a bootstrap prospect generation software startup with over 20,000 users. When not working, he likes to work on finishing his time machine. We'll jump into all of in a second. Pushkar, are you ready to take us to the top?
Pushkar Gaikwad
00:18Absolutely, Nathan.
What AeroLeads Does and the Business Model
Nathan Latka
00:19Good. Okay. What is aeroleads and what's the business model? How do you make money?
Pushkar Gaikwad
00:23Right. So aeroleads is a B2B prospect lead generation software. It primarily works with various social media sites. So it find prospects by crawling the web and doing something at the background. It gives you the data and then you can pass that data to your sales team to take it forward.
Nathan Latka
00:46So you're paying for like FullContact access, Clearbit access, you're doing your own web scraping and then validating data points and selling it to people?
Pushkar Gaikwad
00:55Sort of. So companies like FullContact, they're more into B2C, whereas AeroLeads primarily works really well with B2B business data.
Pricing and Plans
Nathan Latka
01:05Okay, got it. That makes good sense. And what's your pricing models at SaaS?
Pushkar Gaikwad
01:09Oh, yes, absolutely. So it's a SaaS model. We start somewhere in range of $49 per month. You can get like about 100 qualified prospects with valid email IDs, and then it goes from there on.
Nathan Latka
01:21What do most of your customers pay on average, would you say?
Pushkar Gaikwad
01:25That would be mostly they are in $149 range.
Company Launch and Background
Nathan Latka
01:29So somewhere in the $150
Pushkar Gaikwad
01:29Yeah.
Nathan Latka
01:29A Okay. And give me more of the backstory, when did you launch the company?
Pushkar Gaikwad
01:36So AeroLeads started, it was a soft launch. We were building another product in parallel, and we just decided to work on aeroleads. So the official launch will be somewhere in between April, May 2015. So it's about two and a half years now, roughly.
Nathan Latka
01:51Okay. So 2015. And then, you mentioned in the in the intro, you're bootstrapped. Right?
Pushkar Gaikwad
01:57Yeah.
Customer Base and Team Size
Nathan Latka
01:58And what have you grown your customer base to? How many folks are paying for the platform?
Pushkar Gaikwad
02:03So the number of paying customers are in between couple of 100. So this includes both the product as well as services. So we also offer some services around the software because there are lot of people who say that we don't have the SDRs in our team right now. So maybe if you can just use the software and give us the data.
Nathan Latka
02:22What's your team size today?
Pushkar Gaikwad
02:25Roughly, we are about... So there are 10 people in house and about five to six people work from home.
Nathan Latka
02:30Okay. And they're all working on the software or they're also doing like consulting and agency work?
Pushkar Gaikwad
02:37I would say primarily the whole team is working on AeroLeads and promoting it.
Revenue Discussion and Monthly Recurring Revenue
Nathan Latka
02:41Okay. And then, I mean, can I do the math and kind of back into your monthly recurring revenue? If you have around 200 customers paying 150 a month, you're doing what, like $30k a month, something like that?
Pushkar Gaikwad
02:52It will be in something that range. Yeah.
Annual vs Monthly Plans
Nathan Latka
02:54Okay. And what percentage of that is true monthly recurring revenue versus one time consulting fees?
Pushkar Gaikwad
03:01So there are people who have signed yearly agreement and that kind of makes up for a very big chunk of that amount.
Nathan Latka
03:01But you should,
03:12that $30k a month you're recurring, anytime someone signs up for an annual plan, you then divide by 12 to figure out what actually hits your monthly recurring revenue. When you say $30k, are you including the whole year payment in that $30k or 1/12?
Pushkar Gaikwad
03:25No, no, that would be a 1/12.
Nathan Latka
03:271/12. Okay, good. So like last month you did, how much revenue did you do about $30k?
Pushkar Gaikwad
03:31Something in that range, something in that range.
Growth Rate and December 2016 Revenue
Nathan Latka
03:33Okay. And what mean, give me a sense of kind of growth. What were you at twelve months ago? Would you say?
Pushkar Gaikwad
03:39So we have come a long way. I'm going say we are growing about 10% month on month. Again, we are in that narrow range that if you get one big customer, suddenly it becomes like 50% month on month growth. So we are into that narrow range. But on an average, I think they're in that range.
Nathan Latka
03:57So in December 2016, about twelve months ago, how much how much revenue did you do that month?
Pushkar Gaikwad
04:02Oh, it's probably around, I don't know, some 12 k, I think. December are never good ones. Yeah.
Churn and Retention Challenges
Nathan Latka
04:07Okay. So you you kinda... You about doubled year over year, which is great. What about... This space is notorious for churn because people sign up for a month, they get a bunch of leads, then they leave. What is your churn and how do you manage that?
Pushkar Gaikwad
04:19Oh, so so this is actually concern for us. You know, like, this is part of the business, I think. We knew that this will happen because the requirements are always going to be right now and not on month to month basis. But that's perfectly fine. I think this part of the business. Primarily, right now what we're looking to do is we're looking to add more features to AeroLeads to make it not just completely data oriented but
04:44like for example, you can prospect leads from social media, like from Twitter and some other sites, Instagram, etcetera. So like let's have those kind of other features as well which kind of, you know, just takes us... It makes us all in one prospect or lead generation software.
Nathan Latka
05:02What do you add though today in terms of churn? How many customers are you churning a month?
Pushkar Gaikwad
05:06I think primarily, I would say the cycle, it's about three months. And for user basis, they use it for about three months. So let's say, price being $149. After three months, he's like, I have enough credits. So we don't... In our case, credits don't expire. So it's like you have it, you can
Nathan Latka
05:23So you're churning about your push cart, just to get to the point, you're churning about 30% of your customers every single month.
Pushkar Gaikwad
05:33In a way, yeah.
Paid Advertising and Acquisition Strategy
Nathan Latka
05:34Okay. So like that is not a SaaS business. That's a dying business, right? Because that means in order to just to say even you have to sign up first to fill up that gap. I mean, how are you driving any growth with churn that high?
Pushkar Gaikwad
05:47So most of the... We don't have any sales or marketing per se. Like most of the users are coming to the website, they sign up. So for us
Nathan Latka
05:47How are they finding you though?
Pushkar Gaikwad
05:47Find us through search engines, so we do rank for like lot of keywords. So for us, it's like the cost of acquiring customer is almost nothing and eventually it comes to be $500.
Nathan Latka
06:10Are you spending any money on paid like ads, Facebook on... Or Google?
Pushkar Gaikwad
06:14No. Not really. So that has not worked out for us in the past with previous products. So feel like, know, I don't think it's going to work out here as well.
Why Pushkar Started AeroLeads
Nathan Latka
06:22How did you decide to jump into kind of this business? It sounds like you're an idea guy. You have a bunch of different ideas, including a time machine.
Pushkar Gaikwad
06:30No.
06:32Don't know, just we were exploring some other options. We had built a marketing software in the past and it was kind of doing okay, but I believe that it wasn't going anywhere. So we just thought, okay, maybe we can build something which people really want. We also needed something like aeroleads. We thought, okay, fine, let's just build this, that's the whole goal. And it took off really well initially and we thought, okay, fine, it's working out,
06:57we are making money, so let's stick with it.
Future Goals and Revenue Targets
Nathan Latka
06:59Okay, that makes good sense. And so what's your, I mean, what do you want to do with the business? You're growing up to $30k, it's taken you two years to get there. What do you want to do over the next twelve months?
Pushkar Gaikwad
07:11So I believe we have grown organically and somewhat slow, but then the targets are definitely there and it has to be 100 k per month by the end of next year. The target was 100 k per month this year end actually, but somehow we just stopped focusing on development and we kind of lost track for a few months.
Nathan Latka
07:29Well, why do you think adding additional features and development expense is the way to grow this? It sounds like you already have paying customers. Why not focus more on content marketing and ranking for keywords?
Pushkar Gaikwad
07:39So that thing will be the... But, like, I told you about the retention part, you know, that it's just the nature of business as such that people are going to use the software because of the immediate need, and then they will move on. So maybe
Nathan Latka
07:39You could solve that.
07:53Like, part... That you can solve that. I've interviewed others in this exact same space where their churn is nowhere near that and the simple...
07:59There's one change you would make. Make your credits expire every month.
Pushkar Gaikwad
08:03I don't know. Personally, I think that's probably not a good idea. I mean, if I am the end user, if I have paid for something, want to have the credits even if I'm not paying for the software. There are others who are doing it. I just personally think that
Nathan Latka
08:14Oh, these are these are... Just to be clear, I thought you said that people paying monthly, they don't... If they don't use the credits, you roll them over to next month. Did I misunderstand you?
Pushkar Gaikwad
08:22Do roll them. We do roll them.
Nathan Latka
08:24Yeah. So look. That's that's like a... That's a key that I would say that's one difference between you and other people that have a much, much, much lower churn because it encourages people to use them or lose them.
Pushkar Gaikwad
08:32I know. Yeah. So that's... Probably I can look into it. Let me see. You know?
Capital Raising and Company Valuation
Nathan Latka
08:39Do you wanna raise do you wanna raise capital?
Pushkar Gaikwad
08:41No. I think we are okay.
Nathan Latka
08:43You have a have that Have you raised capital in, a past business and had a bad experience?
Pushkar Gaikwad
08:49Sort of, you know, back in... I I won't say it's a bad experience. It's just that I'm probably not the right guy for that. And I think for SaaS, we are kind of okay. If you need outside capital, I'm okay for that, but right now the need is not there.
Nathan Latka
09:02Yeah. What would you value your company at today?
Pushkar Gaikwad
09:06It all depends. Maybe somewhere in about a million or dollars, know, maybe a little bit here and there. But it... I I think it's for SaaS, it's going to be in that range, three x for yearly revenue.
Famous Five Rapid Fire Questions
Nathan Latka
09:17Yeah. Yeah. Interesting. Okay. Very good. Let's wrap up here, Pushkar, with the famous five. Number one, what's the last business book you read?
Pushkar Gaikwad
09:26I think Everything Store. I think that was the last chapter of the ones.
Nathan Latka
09:31The Everything Store?
Pushkar Gaikwad
09:32Yeah.
Nathan Latka
09:33Number two, is there a CEO you're following or studying right now?
Pushkar Gaikwad
09:38Not I can think of right now. There are a couple of SaaS startups in but not currently.
Nathan Latka
09:45Okay. Number three, besides your own, what's your favorite online tool?
Pushkar Gaikwad
09:52That's kind of difficult. You know?
09:57I think you use Pipedrive. You know? So maybe I can.
Nathan Latka
10:01Pipedrive. Good. Number four. How many hours of sleep do you get every night?
Pushkar Gaikwad
10:07Oh, for me, sleep is very important, and it has to be at least seven and a half hours.
Nathan Latka
10:10Okay. And what's your situation? Married, single, you have kids?
Pushkar Gaikwad
10:13Oh, I'm single right now.
Nathan Latka
10:15Okay. So no kiddos?
Pushkar Gaikwad
10:16No.
Nathan Latka
10:17Alright. And how and how old are you, Pushkar?
Pushkar Gaikwad
10:20I'm I'm 33.
Nathan Latka
10:2133.
Advice to Younger Self and Closing
Nathan Latka
10:22Last question. Take us back thirteen years. What do you wish your 20 year old self knew?
Pushkar Gaikwad
10:30God. You know? I think I probably wanted to start early on technology. You I spent a lot of time on just sales and marketing. I had... You know, I I knew a little bit about technology, but I did not spend a lot of time on coding and programming.
Nathan Latka
10:42Yep. There you guys have it from Pushkar. Learn coding and programming earlier, get an earlier start on technology. Launched his company AeroLeads back in 2015, helping businesses get other business leads through his software. There are now 10 people. They have... They're serving several 100 customers customers paying a $150 a month. So doing about $30k a month right now. Churn is really high at 30% a month, but he's trying to figure out how to solve that currently.
11:04They've doubled revenue year over year from $12k a month back in December 2016. Pushkar, thank you for taking us to the top.
Pushkar Gaikwad
11:12Thanks a lot, Nathan.