How Barcart Reached $130K Monthly Revenue and 114 Paying Customers with a Bootstrapped Husband-Wife Team (Interview with CEO Adi Pal)

Nathan Latka

00:00Hey, folks. My guest today is Adi Pal. He's building a tool called getbarcart.com. It's an ecommerce tool for alcohol companies. Adi, are you ready to take us to the top?

Adi Pal

00:08>> Yes, sir. Yeah.

Nathan Latka

00:09All right. So why is this needed? Why can't alcohol companies use regular ecommerce tools?

Adi Pal

00:14>> It's the law. Alcohol producers aren't allowed to sell directly to customers, so that's why when you want to buy a Johnnie Walker Blue Label, you are buying it from a retailer. Retailers pretty much across the country are the only ones licensed

00:31>> to sell alcohol, and that's why Drizly exists.

Nathan Latka

00:34Okay, and walk me through, I love Drizly. We just closed a big deal at Founderpath. Secured a lot of capital for our warehouse facility, and a celebration in the remote world, they were asking for my address. I'm going, Why do you want my address? I was in the middle of nowhere.

00:49I go, We're gonna ship

00:50you a bottle of this nice champagne, and sure enough, they use Drizly to do it, and sure enough, you delivered it right on time, which was very impressive.

How the Shopify Buy Button Meets Drizly Fulfillment Model Works

Adi Pal

00:57>> Yeah, so yeah, you should use us next time. But actually, that's a good example to walk you through this whole thing. Assuming those people wanted to send you a really nice champagne, right, that they went to the brand's website and tried to do that, they wouldn't be able to do that without a software like ours because the champagne company makes the product, they sell it to a wholesaler that then sells it to a retailer, and the

01:20>> retailer is the one that sells it to you. So when you order on Drizly, it's the retailer delivering it to you or shipping it to you. What we've done is we've essentially taken that whole fulfillment network of retailers. We've got our own fulfillment network of retailers, and it's the whole Drizly fulfillment model just plugged into a brand's website, all hidden behind one buy button. So think of it as Shopify buy button meets Drizly fulfillment.

Nathan Latka

01:48That makes sense. How do you bill for this? What's the average customer paying you per month?

Adi Pal

01:53>> So we have two customers. We're a SaaS enabled marketplace in a sense. So we've got the brands that are paying us $199 or $299 a month, depending on which plan they're on. And then

02:09>> once they're selling on their website using our button, we have a take rate off of each transaction, and that's an average of 10% with the average order being $100, $110, yeah.

Nathan Latka

02:20Yep, yep, and so last month, how many total orders volume wise did you process process through your system?

Adi Pal

02:26>> Last month, revenue wise, we were at a little over a mil. So yeah, with the average order being a $100, 10,000 orders. Yeah.

Nathan Latka

02:40Okay. 10 ks orders last month and your take rate on that is 10%. So your revenue on a percent of GMV was about $100k last month?

Adi Pal

02:47>> Yep.

Nathan Latka

02:48Okay. And then talk to me about the brands. How many brands are paying for the platform?

Adi Pal

02:52>> We have a little over 150 brands right now, I think 155 or so. And not all of them are paying. Some of these guys got on early, so we got our first paying customer, I just checked, June 2020, which is very recent. Was thinking it was November 2019. But June 2020, we got up for a paying customer, and now it's 150 something. How many me. Excuse me again.

Paying Customer Count and SaaS MRR

Nathan Latka

03:23No. That's better. So how many customers are actually paying? They're not one of your early beta customers. They're real paying.

Adi Pal

03:28>> Yeah. So 114 out of those. Okay. Yeah.

Nathan Latka

03:32114. Now can I take that 114 times a $200 price point? That revenue model is about $30,000 a month?

Revenue Breakdown and GMV Driver

Adi Pal

03:39>> Yeah, so that is correct. That's our MRR on just the SaaS piece. And then the average customer is bringing about 10 ks, 11 ks a month in sales, GMV. So definitely, I mean, if you do the math, obviously our big revenue driver is the GMV, right?

03:59>> It's not a recurring revenue, but there is a recurrence to it. And the average right now works out to 10 ks, and that's what we're trying to bump up working with the brands.

Nathan Latka

04:10This is a very interesting thing. I mean, you look at Snowflake, which just IPO ed, you would argue they're not, I would argue they're not a SaaS model, they're a usage based model. Your percent of GMV model is effectively a usage based model. Now, you're not selling data space. It's that you're selling alcohol. But

04:24>> would you ever move to

Churn Rate and Customer Retention

Nathan Latka

04:25a model where you're purely percent of GMV, no SaaS fee at all?

Adi Pal

04:29>> Very tempting because obviously it allows us to cast a much wider net. And yes, something we would definitely consider. Right now, honestly, it's growing so fast that, again, full transparency, we're just trying to make sure that we don't collapse under the weight of the new customers we take on because that's why we keep customers. Most of our customers don't have contracts except some of the large ones, and we haven't lost We've lost one customer so far,

04:59>> and it just wasn't a good fit. Churn rate's like 1.6.

Nathan Latka

05:04On a revenue basis per month?

Adi Pal

05:07>> It's on a, yeah, well, on a revenue basis, yeah, yeah. So there's downgrading happening as well.

05:16>> So the other piece that you said earlier that got me, you're saying we don't sell data. So there's also that piece. One of our plans actually shares customer purchase data insights with our brands to then help refine their digital marketing and increase their ROI on They ad spend,

Nathan Latka

05:36automatically put a lookalike audience together on Facebook, things Right. Like Okay, this makes a ton of sense. Give me the backstory here. When did you launch?

Company Origin: From Online Retailer to SaaS Platform

Adi Pal

05:44>> Well, Barcart has only been around since October twenty nineteen ish, but as a company, we started seven years ago as an online retailer for craft spirits. We thought we're gonna run a nice curated website with our selections, but then kind of like Shopify, right? They started off selling surfboards or something like that. And we realized that what we're trying to do, there's no platform that exists for that. And Drizly was starting off at that time, but

06:13>> they were doing delivery. We essentially, over those years, built out a network like Drizly to just be able to sell online on Mash and Grape, which is our marketplace. So that started seven years ago, but everything we built, we packaged it together into what is now Barcart. We solved our own problem and then packaged it and sold it to customers.

Nathan Latka

06:33Let me ask a better question here. This will really capture the change from selling your own alcohol to a technology company. When did you hire your first engineer? Do you remember?

Adi Pal

06:41>> Oh, that's a good one. Twenty nineteen May.

Team Size, Engineers, and Founding Story

Nathan Latka

06:46Okay. And how many total team on the team today?

Adi Pal

06:51>> 11. 11.

Nathan Latka

06:53How many engineers?

Adi Pal

06:55>> Three.

Nathan Latka

06:56Okay. And who are the what do the rest do?

Adi Pal

06:59>> Ops, customer support, and, you know, janitors like us. Yeah.

Nathan Latka

07:05And is it just you, or what's the founding team look like?

Adi Pal

07:08>> Well, my wife and I started the company seven years ago, so she handles the marketplace side, the matching grape side, which still is that curated marketplace and operates a traditional marketplace, but curated for our taste. Then I handled

Bootstrapped with 100% Founder Ownership

Nathan Latka

07:25market married in 2014?

Adi Pal

07:26>> No, we were married in 2000 and I better get this right.

Nathan Latka

07:30'8. Okay. Yeah. But you were married and then you founded the company, and now you're still married, so that's a good sign.

Adi Pal

07:38>> Yeah. Oh, yeah. I mean, if

07:40>> we make it through this, we can make it through anything, yeah.

Nathan Latka

07:43Did you bootstrap or did you raise?

Adi Pal

07:45>> Bootstrap, yeah.

Nathan Latka

07:46Even today, you're still bootstrapped.

Adi Pal

07:48>> We are, yeah.

Nathan Latka

07:49That's great. That's really great. Nice work. So you and

07:52your wife, what, you guys own the whole company together 100%?

Adi Pal

07:55>> That's right, yeah.

Nathan Latka

07:56Does

07:57she own more or do you own more?

Adi Pal

08:00>> So on paper, it's me, but, you know, really, it's fifty fifty. Yeah.

Nathan Latka

08:05Very cool.

Adi Pal

08:05>> Yeah. Okay. It just gets set up that way. Yeah.

Nathan Latka

08:07Yeah. This is great.

Adi Pal

08:09>> I mean You're get me in

08:09so much trouble, Nathan.

Nathan Latka

08:11>> Yeah. You're get me in trouble.

08:15No, this is cool. Wanna get like a husband and wife team, especially one that's pivoted sort of like this. This is great.

Considering a Raise for the First Time

Nathan Latka

08:23What's the next step here? I mean, do you go out and raise? Do you stay bootstrapped and go out? Or if you wanna go after Drizly, you gotta go raise, right? You gotta go grow faster.

Adi Pal

08:32>> Yeah.

08:33>> I think that raise conversation is now beginning to happen. We've had some people reach out. Honestly, we hadn't given it thought till I had those conversations with some of the people who reached out. And there's a lot of opportunity right now. And for the first time in seven years, obviously, we're feeling the constraints because there's so much room for growth, but we need people to support it. We need salespeople outside of it. We need ops people.

09:00>> Right? And then more engineers all the damn time. Yeah. Yeah.

Nathan Latka

09:03So So if you're at what is growth like? If you're at $130k a month today, where were you a year ago?

Adi Pal

09:10>> So we're two and a half times a year ago on an average, yeah.

Year-over-Year Revenue Growth

Nathan Latka

09:14Okay, got it. So you're doing like $50,000 a year ago, something like that.

Adi Pal

09:19>> Yep, sounds about right. Yeah, yeah.

09:23>> That's on 2019. Obviously the pandemic happened, and See, that was an inflection point, right? Because ecommerce for producers did not exist in the way it does today. Everybody had a website, but they had no way to buy from that website. The only thing that existed was a winery shipping you wine from the winery itself. But today, you go to a brand's website that's using us, you're having a traditional Shopify like ecommerce experience. But behind the scenes,

09:51>> it's moving through either being fulfilled by the retailers in our network or being fulfilled by the distillery themselves, because we also support DTC. So it's a hybrid fulfillment model and with delivery and shipping across both retailer and supplier. That's something that did not exist prior to last year, honestly. And

Profitability and Reinvestment Strategy

Nathan Latka

10:10are you guys profitable?

Adi Pal

10:12>> Yeah.

Nathan Latka

10:13How much?

Adi Pal

10:14>> Well, everything goes back into the company, but I don't have our net profit margin, honestly.

Nathan Latka

10:23Got it. So basically, you make money, you put it back in the company, you're basically operating at breakeven.

10:28>> Because we're like, all right, now we've got money, we can hire somebody else.

10:31Yeah, yeah, that makes a lot of sense. Now, if you do go raise, how much would you raise?

Adi Pal

10:37>> Again, I don't know how to answer that because, frankly, I have never raised for a venture. I had another small venture before this, So I need to understand that a little bit better on how that works and dilution and what are you getting. Is it just better to take on debt instead of equity? Again, because debt is easy to come by right now, obviously, but that's smaller. So I wish I had a number for you.

Potential Acquisition and Valuation Thinking

Nathan Latka

11:06Mhmm. Drizly offered you 5,000,000 all cash upfront today to buy the business, do you sell?

Adi Pal

11:11>> 5. Yeah. There is a number, obviously. They're a little lower than number, but it's not 5. Yeah. Definitely.

Nathan Latka

11:18Well, mean, I know my next question's gonna be.

Adi Pal

11:20>> I know. I'm gonna wait. I'll be waiting for that. We're doing somewhere around This year, it's gonna be around 15,000,000 GMV, right, across the whole thing. And I know there's some peers out there. They want for a multiple of revenue, so it's gonna be off of the revenue, I feel, is what the market's telling us. So it's not five with a crash.

Nathan Latka

11:46The GMV multiple is very different than your actual revenue multiple, which is your take rate on the GMV. I mean, I've seen GM Mark's last name of market with is trade at a one to two x GMV multiple. A recent example of that is divvy to bill, where they are processing several billion in GMV via their credit card they sell. I think your multiple is gonna be probably closer like five to seven x of your take

12:09rate, right? So of the and plus your SaaS revenue. So of 1.5 times five to seven, you start to get into the $10,000,000 range.

Adi Pal

12:16>> And again, so that's a great point, right? I don't know enough about what our valuation should be, and that's something I need to educate myself on. But honestly, now, the growth is happening at such a fast pace that to sell right now would be shortchanging ourselves.

Nathan Latka

12:30Oh, yeah, yeah. But let's get down to what really matters in a sale, though. Would your wife or me, would she kill you if you turned down a $6,000,000 $7,000,000 all cash upfront offer?

Adi Pal

12:39>> That number, yes. Yeah, we have talked about that. That is too small. But also because we're on the verge of a potential contract, I'm comfortable saying this, that would increase our customer base over 200, right? So if that's a month away,

12:55>> how do you It's too easy to keep building this, honestly.

Nathan Latka

13:00Well, I'm not pushing for a raise.

Adi Pal

13:03>> I'm just pushing No, get it. It's not fixed, I know that, because I don't need to, to be very honest.

Famous Five and Closing Advice

Nathan Latka

13:08We love bootstrap companies that go to 4 or 5,000,000 in revenue. You build a big, beautiful, healthy family life together. It makes a lot of sense. Adi, we're out of time here. Let's wrap up with the famous five. Number one, favorite book.

Adi Pal

13:23>> Kill a Mockingbird, yeah.

Nathan Latka

13:24Number two, is there a CEO you're following?

Adi Pal

13:28>> Elon Musk just stays top of mind right now.

Nathan Latka

13:31Number three, what's your favorite online tool for building Barcart?

Adi Pal

13:36>> What are we using?

13:39>> I'd say, mean, everything's homegrown, so just technologies. We're a Python Django shop.

Nathan Latka

13:47Okay, great. Number four, how many hours of sleep do eat every night?

Adi Pal

13:50>> How many what? Hours do I sleep every night? Aspirationally, eight, six, though, still, you know?

Nathan Latka

13:56And situation, we know you're married. Any kids?

Adi Pal

13:59>> One, yeah.

Nathan Latka

14:00And how old are you?

Adi Pal

14:01>> I

14:03>> nine, yes.

14:05>> 39.

Nathan Latka

14:06Last question, something we wish you knew when you were 20.

Adi Pal

14:09>> Oh, quit your job and just do something. Take the risk, take the chance. It took a long time to do that.

Nathan Latka

14:16Guys, husband and wife team, Get Barcart, was launched in 2014, selling their own alcohol. They realized, you know what? We need to build a tech company here to make this easier. I hired their first engineer in 2019, scaled up to about $50,000 a month in revenue last year. Now doing a $130,000 per month in revenue, two revenue lines. A percent of GMV, 10%. They did about a million dollars in orders last month alone, so a 100

14:36>> k per month there on a GMV side. Another $30,000 a month in just pure SaaS revenue, 114 customers paying about $200 per month.

14:43Healthy growth, they've done this all bootstrapped, which we love with their team of 11.

14:48>> Adi, thank you for taking us to the top.

Adi Pal

14:51Yeah, thank you. That was a great recap, yeah.

Nathan Latka

14:54One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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