How Bip.so Built 3,000 Workspaces Pre-Revenue While Burning $20K Per Month (Interview with CEO Phani Sama)

Introduction: Phani Sama and Bip.so Background

Nathan Latka

00:00Hey, folks. My guest today is Phani Sama. He's one of the founders of Bip.so. Prior to Bip, he founded redbus.com, the world the world's largest online bus ticketing company with operations in six countries and sales over $1,000,000,000. After exiting that company, he cofounded another one and worked for government as a... And worked for the government as a chief innovation officer for the government of Telangana, India. He's also a Young Global Leader, YGL, at the World Economic Forum, and

00:25has received the Fortune 40 Under 40 Award twice. He serves on the board of T Works, India's largest hard... Hardware prototyping center. But again, today focused on Bip.so, which is a workspace for Build In Public teams. Phani, you ready to take us to the top?

Phani Sama

00:37>> Yes. Yes. Thanks, Nathan.

What Is Bip.so? Document and Task Management Explained

Nathan Latka

00:40Bet. So what does what does Workspace mean? What do you mean by that?

Phani Sama

00:45>> Okay. So it's a space... It's a document and task management tool.

Nathan Latka

00:50I see. Okay. Got it. So folks are on... And is it for a specific team, engineers, marketers, or everybody?

Phani Sama

00:55>> It's for everybody. Everybody. It's for people building together. It's for the team. Yeah.

Pricing Philosophy: Why Not Per Seat?

Nathan Latka

01:00Okay. And so walk me through, you have a lot of experience with pricing because of your bus company, over a billion dollars in sales. So how do you price Bip? So is it per seat or something else?

Phani Sama

01:09>> Okay. So basically, Bip is a social workspace. So what we are doing is... I mean, basically, we're building it for the future of work. And we think that the future of work is changing rapidly. Until now, build as teams, full time employees. But in future, people also engage outsiders, freelancers, because the best ideas are outside the team. And people outside are also willing to engage in different companies. So Bip actually is a tool that enables that

01:41>> to happen. So how it makes that happen is, let's take, we have a workspace like Notion. On Bip, I mean, Bip is like Notion. It it it has documents and it has task management.

Nathan Latka

01:55Phani, my question my question was on pricing. So so what what do you Yes. What do you what do you charge on average per month?

Pre-Revenue Status and Founder Investment

Phani Sama

02:02>> Okay. So, right now, we haven't figured out pricing yet.

Nathan Latka

02:05Sorry, guys, pre revenue?

Phani Sama

02:08>> Yeah, pre revenue. But what I wanted to say is the pricing cannot be per seat because it engages a larger audience. So it probably won't be per seat.

Nathan Latka

02:19Understood. So let's walk through the process of building a waitlist and building demand. Right? Before I do that, though, obviously, pre revenue, how much of your own money have you invested so far in the company?

Phani Sama

02:29>> So we have a burn of about 20 k per month. So I would have spent about less than 200 k so far. Yeah.

Nathan Latka

02:38Does that make you nervous spending, you know, 200 k before before you have your first customer?

Phani Sama

02:42>> No, no, no. Because we are seeing some good adoption. We're seeing traction.

Nathan Latka

02:48And what does that mean? How do you measure adoption?

Measuring Adoption: Workspaces and User Traction

Phani Sama

02:51>> So the number of users coming in and starting their workspace on Bip. So we're finding very good traction in the Web three space because that's how the work happens in Web 3.0. Web 3.0 products are built as communities.

03:08>> And Bip enables collaborating in a community. So what is Bip is... Think of Bip as a Notion workspace.

Nathan Latka

03:16Well, Phani, sorry. Don't wanna go back. We've explained the product already. So we'll go back to that in a second. But I wanna go back to this adoption concept. You say you measure adoption based off number of users coming in and starting their own workspace. So in the past thirty days in September, how many new users have come in?

Phani Sama

03:28>> Yeah. We have about hundred hundred workspaces created.

Nathan Latka

03:33And and last month. Is it is it a one to one ratio of a workspace to a person, or do you have thousands of people in those a 100 workspaces?

Phani Sama

03:40>> Yeah. We have thousands of people in a workspace.

Nathan Latka

03:42Okay. So a 100 workspaces were created just in September?

Phani Sama

03:46>> Yes.

Nathan Latka

03:47Amazing. And how many total workspaces created to date?

Total Workspaces and Retention Rate

Phani Sama

03:51>> So totally, we have about 3,000 workspaces. But I would say that we have a retention of about 10%. So out of this 100, we'd expect 10 of them to be very active going forward.

Nathan Latka

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Defining Active Users and Activation Metrics

Nathan Latka

06:30the interview. How do you define very active?

Phani Sama

06:34>> So they shift all of their workspace from another to like a Notion or Google Docs onto Bip. So Bip becomes their primary source of truth. Yeah. But how do you measure that?

Nathan Latka

06:44How do you know if someone is using it as their primary source? Is it number of documents moved over?

Phani Sama

06:48>> Yeah. Number of documents, activity, and we also talk to customers because it's a small number.

Nathan Latka

06:56Well, you don't have customers yet. So there's no customers to talk to, but you're talking to users who are signing up. My my question is, a lot of times people will think activation is tied to one metric and then they learn, you know what? Actually, our users are using us in a totally different way. Our activation metric should be this other thing. So why why do you believe your activation metric

07:14is number of documents moved over from Google Drive to Bip?

Phani Sama

07:19>> It's not the number of documents. We look at it as Bip becoming their primary

Nathan Latka

07:25How do you measure that? Primary, that's not a number. How do you measure something becoming the primary workspace?

Phani Sama

07:33>> Yeah. So they create documents here, the new documents. See, earlier, they would have document in a Google Drive, and from there, they would copy and paste here. But they stop creating on Google Drive. They start creating only on Bip.

Nathan Latka

07:46How do you know they stopped creating on Google Drive?

Phani Sama

07:49>> Yeah. Because there's a continuous creation of documents. So, they they create maybe one, two documents a week. And we also talk to such customers, I mean, such users who are creating that.

Nathan Latka

07:59And But someone could create one or two documents per week on Bip and still be creating 10 documents per week on Google Drive. How do you know if they've stopped using Google Drive or not?

Phani Sama

08:08>> Yeah. We talk to them. We talk to

Nathan Latka

08:11You've talked to all 3,000 work... Workspaces?

Phani Sama

08:14>> No. No. Out of which maybe 300 is what we talk to because as we see that they're using repeatedly, that's where we engage with them.

Nathan Latka

08:22Okay. But by repeated usage, what you mean is they're creating at least one document per week for many weeks. Is that... Like, what is that metric? Yeah.

Phani Sama

08:31>> Yeah. Got it. One or two documents is what they create per week, and then we talk to such engaged users, and we learn that this is their primary workspace now.

Nathan Latka

08:40Okay. Visit the primary workspace. When you say that you signed up a 100 new folks in September work spaces and you believe that you have 10% retention, 10% will be very active. Your definition of very active is they create one to two documents per week for at least, what, three or four weeks. Is that accurate?

Phani Sama

08:55>> Yes. And it is becoming their permanent workspace. Yeah. True.

Power Users and Document Creation Patterns

Nathan Latka

08:59Interesting. Interesting. Yeah. Okay. And so how do... What... When you look at your power users, what... Your your most... Your... The user that created the most documents over the past three days, how many documents did that workspace create?

Phani Sama

09:12>> Okay. So what happens is initially,

09:19>> think document creation lifecycle is also front ended. So, for example, one of our active users probably has like 300 documents, but most of them are created in their first six months of usage. Because that's when they're ideating, when they create a new product, they're ideating, they're creating marketing plans, they're creating product PRDs and etcetera, and all that. But over time, it reduces a bit. And then the task management thing takes off, the Kanban boards and etcetera,

09:50>> and all that. That is almost a daily repetitive thing.

Nathan Latka

09:53Okay. So your most active account has created 300 documents in their workspace?

Phani Sama

09:59>> Yeah. Usually, about 200. Yeah. True. Yeah.

Nathan Latka

10:04True. What do you mean what do mean usually 200? I'm just saying your most active account has 300 documents created.

Phani Sama

10:10>> I... Yeah. That's true.

Nathan Latka

10:12Yeah. Okay. Okay. The reason I'm asking is when do you ask... That's your power user. If anyone's gonna pay, it's that user. When do you start talking to about pricing?

When to Start Talking About Pricing

Phani Sama

10:21>> Yeah. So... That we've been postponing, but we can't postpone it for long. Yeah, we need to figure that out soon. The only thing is we are figuring out if there is an innovative way to price. We know that it's not going to be per seat per user because each community is large.

10:43>> We are thinking in one direction, we're thinking, okay, if there is

10:48>> bounties, because we cater to Web3 communities and there are bounties. So, we're thinking, hey, can we take a percentage of that bounty that is placed using Bip? So, that is one thing that we are exploring. And hence, we have not really jumped into pricing.

Nathan Latka

11:03Yeah. Well, if you launch this though, and this most active customer says, I'm not willing to pay that?

Phani Sama

11:11>> Then it's bad luck. Then we need to figure it out again.

Nathan Latka

11:15Yeah. But that's what I'm saying is like, why are you waiting? I I just don't understand. Why are you waiting so long? You've already put $200,000 of your own money in this thing. What's taking so long to figure out if people are willing to pay for it?

Phani Sama

11:25>> Yeah. I think, yeah, we need to we need to try that out soon.

Nathan Latka

11:29No, no, I'm not asking you to agree with me. I'm just asking, what's the business reason that you haven't brought that pricing question up yet? There's a reason you haven't.

Phani Sama

11:38>> Yeah, the reason is this.

11:41>> We... I mean, until now, we've only been building product. We're always falling short of bandwidth to build product. So, it just needs bandwidth. I think it's the bandwidth problem. And

Nathan Latka

11:52Why do we tell ourselves it's a bandwidth problem, though? I mean, you're working on this full time, right?

Team Size and Feature Parity Challenge

Phani Sama

11:55>> Yeah. And are 10 of us working on this full time. But there are all these other features that we need to build. We need to get feature parity with, let's say, Notion, because our customers move from Notion, and they ask these feature parity and etc. So, we're spending a lot of time on the product.

Nathan Latka

12:13Yeah. But how do you balance that? If you wait to launch pricing until you match Notion's product, you're never gonna... I mean, you're never gonna catch up because Notion has more engineers than you do.

Phani Sama

12:22>> Yeah. That's true. But at least the major features. I mean, I I can't say we'll have all the features, but the major ones. Yeah.

Nathan Latka

12:29Yeah. I I I think the space is like, there's... The the closest comp to this is SmartSuite. Right? I... I'm I'm close with John, and he said, Nathan, we can't launch until we have all the features that ClickUp has, which is kind of in the same space that you're in. Well, Phani, he spent $1,500,000 of his own money on the MVP. Right? Be... Before before, like, before he launched pricing. He spent another $6,000,000 of his

12:51own money before he had his first customer. So, like, are you ready to spend $7,500,000 to keep chasing feature parity with Notion before you have your first paying customer?

Phani Sama

13:00>> Yeah. No. No. No. I think... No. I think we'll we'll we'll hurry up. We we have to do that. Yeah.

Nathan Latka

13:08So, okay. So you already have an inclination that you might price around the bug... Basically a percent of the bounty. How does this user respond when you pitch that to them?

Web3 Bounty Pricing Model Explored

Phani Sama

13:19>> See, right now, basically, most of our users are Web three users, and they pay using their own tokens.

Nathan Latka

13:28Yeah. Out of the treasury.

Phani Sama

13:30>> Right? Their project tokens. And they're generous with those tokens because they mint their own tokens. So they're fine to pay as a percentage of their tokens. But we have to think how do we convert the tokens into USD soon and at what value and things like that. So it is a little more involved thought process. And I think that's one of the reasons why we have not jumped into pricing yet.

Crypto Market Volatility and Pricing Risk

Nathan Latka

13:56Well, how do you deal with the volatility in crypto markets, though? I mean, everyone's treasuries today, if they're tied to fiat, they're like, they're way, way down. 90%. No one wants to give out bounties right now because it's extremely expensive. You know, it's dilutive long term in terms of the total token pool. So Yeah. I mean, is this a thing where you don't have a real business until crypto takes off again? No.

Phani Sama

14:19>> Basically, when the token price goes down, we will peg our price on their USD. It's just that they have to pay more tokens to catch up with their pricing. And for us to de risk ourselves from the volatility, we need to convert their tokens into USD quickly enough. But we need to figure out that whole thing before we jump into that side. But these Web three customers, because they're moving from Notion, they're also equally okay to pay

14:49>> a SaaS pricing. But they would love if

14:55>> a tokenized thing because there's utility for their token and things like that.

Nathan Latka

14:59I understand. But back to my question. Right? Let's say there's there's token x. Right? A company that you're selling to is token x. Right? And they've got a treasury with a thousand tokens in it. Right? And they need they need an engineer to do some work, and they need to pay that engineer for one hour. And that engineer charges a $100 an hour. Right? For a $100, they used to be able to just give him two

15:16tokens as the bounty. Well, now with everything devalued, they have to give him 20 tokens for the same hour of work, the same $100. 20 tokens out of the total thousand available is way more dilutive than two tokens out of the total thousand available. That's what I mean. How do you deal with volatility in the crypto markets like this? No one's gonna wanna issue tokens like this right now because it's very dilutive.

Phani Sama

15:40>> Yeah. But I think, I mean, at least the conversations that we've had, people are okay to give

15:51>> 20 tokens because they made their own tokens.

Nathan Latka

15:55But it's just like the federal government printing its own money, then you have inflation. You can make a bunch of tokens you want, but it's going devalue the token. The market's going go, they're just going to keep making their own tokens. This token's bullshit.

Phani Sama

16:03>> But that's a compulsion. I mean, even the non Web three companies, right? Today, given the funding winter, they're all diluting more. For the same $5,000,000 they have to dilute more. So, it's not that it is different in Web two. So, it's a cost that everybody is paying today.

Nathan Latka

16:20Well, no, I mean, in Web two, they're using other sources of capital. There's debt, right? There's no version of debt for crypto, But

Phani Sama

16:25>> Not that I know. And debt today in this market will also be expensive. No. It's not. I

Nathan Latka

16:31run a $150,000,000 debt fund, so I'm pretty familiar with the pricing. And I can tell you it's it's it's relative to equity dilution. It's not bad at all. I don't know that that same instrument exists for web three treasuries. I don't think treasuries have a backstop. Right? There's no debt that you can't take debt out against your treasury from what... At least that's... I don't know. Maybe you know something that I don't.

Phani Sama

16:51>> Yeah. In this market, I mean, all those fancy fancy things have stopped. Is...

Nathan Latka

16:59That's what I'm trying to get to though. Why tie your pricing to something that is so volatile? Why not just charge a SaaS fee and be done with it?

Phani Sama

17:11>> Yeah, that's an option. But yeah, we also want to figure out if there's an innovative way.

17:19>> Yeah, I mean, the human thing is all about making progress that way, right? I mean, take a chance

Build In Public Origins and DAO Traction

Phani Sama

17:29>> and see if that works. But that is one part of our business. I mean, Bip stands for Build In Public. We did not build this for Web three It's just that actually, built it as a workspace for people who are building in public. Because people are building in public, our hypothesis is that people are building in public also want to expose their workspace so that people who are following them have full context of that project. So

17:59>> that's how we started building social workspaces. But while we're building and showing it to the Build In Public, we found good traction in DAOs. In the last fifteen months, I mean, DAOs and Web 3.0 was big. So, we saw initial traction there. So, most of our customers now happen to be from Web 3.0.

Nathan Latka

18:19But you don't have any customers yet. I don't wanna use the word customers because I misguide my audience. You don't have... You're... You are trying to figure out how to get people to pay for what you've built, something you've already sunk $200,000 of your own money in.

Famous Five: Books, Tools, and Lessons Learned

Phani Sama

18:30>> Yeah. That's... Yeah. We can say so. Yeah. That's true.

Nathan Latka

18:33Alright. Well, listen. We're we're rooting for you. I'm pushing you hard here because I wanna see you make a lot of

Phani Sama

18:38>> But in the meantime Do that. Do that. Do that. I mean, if you if you raise capital build up, this is do that. But

Nathan Latka

18:45Yeah. Alright. In the meantime, let's wrap up here with the famous five. Number one, favorite business book?

Phani Sama

18:51>> It's Atlas Shrugged.

Nathan Latka

18:53Number two, is there a CEO you're following or studying?

Phani Sama

18:57>> Yeah. It's Girish of Freshdesk... Freshworks.

Nathan Latka

19:02Yep. Good good guy. Number three, what's your favorite online tool for building Bip besides your own?

Phani Sama

19:08>> Okay. Figma.

Nathan Latka

19:09Number four.

19:11How many hours of sleep do you get every night?

Phani Sama

19:14>> I get seven hours.

Nathan Latka

19:15That's good. And what's your situation? Married, single, kids?

Phani Sama

19:19>> I'm married. Two kids.

Nathan Latka

19:20Two kids. Very good. And how how old are you?

Phani Sama

19:23>> I'm 42.

19:25>> 42.

Nathan Latka

19:26Last question. Something you wish you knew when you were 20.

Key Lesson: Sales and Marketing Matter as Much as Innovation

Phani Sama

19:32>> Marketing and sales is as important as innovation. My previous startup was innovation, and we got a lot of word-of-mouth. But, yeah, I wish...

19:45>> I mean, I would have built a lot of expertise in sales and marketing if I knew this in twenties.

Nathan Latka

19:50Guys, there we have it. Bip.so started building about a year ago. They've got 3,000 workspaces created. About 10% of them are active, which means they're creating documents every week. Bip is a workspace for communities, specifically focused on DAOs early on, but really for any communities that are building in public. They're burning $20,000 per month right now. Phani's putting over almost $200,000 of his own money, hoping to get pricing figured out here in the next

20:13couple of months so they can start building that monthly recurring revenue. Phani, thanks for taking us to top.

Phani Sama

20:18>> Thanks, Nathan. Thank you so much.

Nathan Latka

20:21One 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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