How Bizom Reached 307 Customers and $4M Raised Helping Multinationals Get Distribution in India (Interview with Lalit Bhise)

Host Introduction and Company Overview

Nathan Latka

00:00Hello, everyone. My guest today is Lalit Bhise. He's an enterprise mobile mobility veteran with seventeen years of experience building over 150 different products. He invented hybrid mobile programming and has a patent in visual merchandising using image recognition. His six plus years of sales force automation experience with FMCG market leaders has resulted in Bizom being at the forefront of digital sales transformation in India, helping over two fifty enterprise enterprises achieve data driven transformation via automation and analytics. Lalit,

00:30are you ready to take us to the top?

Lalit Bhise

00:33>> Let's go for it.

Nathan Latka

00:34All right, tell us quickly about the company and then jump into your revenue model. How do make money?

Lalit Bhise

00:39>> Right. So Bizom is the name of the flagship product. Bizom stands for business on the move. It's a mobile first cloud solution aimed towards consumer product good companies, to digitalize their sales force, their distributors, and their retailers, especially in emerging markets. In simpler terms, it is a bunch of workflows in their sales processes on their distributions that we digitalize and provide ROI to businesses in terms of efficiency, improving manpower efficiency, improving channel performance or improving product

01:18>> placements, especially targeted towards India and other emerging markets and for consumer product goods companies, which is like FMCG companies, fashion companies, and so on.

Revenue Model and Pricing

Nathan Latka

01:28And what do you price around? Is it a pure play SaaS model, volume, GMV, what?

Lalit Bhise

01:33>> It's a pure play SaaS model. So it's a pay per use per month and paid in annual or quarterly cycles.

Average Customer Value and Use Case

Nathan Latka

01:40Okay. And walk me through, just give us a I wanna get more of your backstory here, but what's an average customer paying you per month, you say?

Lalit Bhise

01:46>> An average customer for me pays me about $2,000 a month. Okay.

Nathan Latka

01:52So call it mid market, maybe pushing enterprise a bit.

Lalit Bhise

01:55>> Yes. That's right. That's a mid market pushing enterprise. Yes. Absolutely.

Nathan Latka

01:58And if someone's paying you $2K a month, what are they getting for that?

Lalit Bhise

02:03>> So what the organizations are that our brands are looking for is in terms of improving the efficiency of the So in emerging markets, we end up having a lot of large feet on street workforce.

Nathan Latka

02:16Lalit, can tell you me this story through? Is there a real customer you can mention? I know you have a bunch listed on your website.

Lalit Bhise

02:22>> No, no, no. That's fine. Yeah. That's a good idea. So

02:28>> I'm trying to think about a global name on top of my head.

Nathan Latka

02:31Coca Cola, Hershey's?

Lalit Bhise

02:33>> Yeah. PepsiCo is, for example, one of the companies that we work with in India. So PepsiCo has in India, I don't know, 10,000 odd feet on street sales executives who go in the market, talk to these mom and pop retail shops, generate demand for Pepsi products, make them aware about Pepsi products, generate demand for them, and get orders for them, which are then passed on to the local distributors. Local distributors will come and deliver those orders

02:58>> to those retailers. It's a very complex, organization which goes in remote areas of a large country like India. Right? So keeping a track of this particular manpower and improving their efficiency directly impacts business top line in general.

Nathan Latka

03:13And that's where your software comes in.

Lalit Bhise

03:15>> That happens. That happens through our software. The second part where our software helps is improving the performance of the channels. The channels are retailers as well as distributors. Figuring out what is the right channel, which is the right performing distributor, what is the turnaround time of a particular distributor, what is the fill rate of a particular distributor, how the right retailers are identified, and then the product performance. So PepsiCo may be more interested in selling as

03:39>> a high margin product in certain kind of outlets. So is that particular part what are the kind of schemes, discounts are working on that product and so on and so forth? So essentially, all of these three parameters combined together, PepsiCo looks at increasing their sales and reducing their cost or increasing availability in the retail shops.

Nathan Latka

03:55And what are the actual numerical metrics though that they're paying you $2K for versus a $10K a month client? Is number of locations? What is the numbers you use?

Lalit Bhise

04:05>> It's a distribution fee. So it's paid per user per month. For us, a user is a sales executive or a distributor.

Nathan Latka

04:12I see. Right?

Lalit Bhise

04:14>> So so the number of sales executives so PepsiCo has 10,000, so they may pay me more. An SME who has, let's say, 500 would pay me less. Then another SME who's only 100 would pay me even lesser.

Company Founding Story and First Customer

Nathan Latka

04:24Yep. Makes good sense. Okay. Give me more on the backstory here. What year did you launch the company in?

Lalit Bhise

04:28>> So Bizom is product that was launched in 2012. This is about six year old product now. I I am a technologist. I mean, I am a geek. I have no idea how the I I did not have any idea how this whole FMCG and distribution and other stuff work. Chance meetings with a couple of other entrepreneurs, who were building products in that particular space. They talked about their difficulties in understanding the sales on the ground, working

04:56>> with this mom and pop fragmented distribution ecosystem in a place like India. It looked like a really silly problem to me, to be honest with you. It looked like a simple problem that a technology or a mobile application could solve. In 2012, if you remember, smartphones weren't as prevalent weren't as prevalent as they are in India, today. Although iOS was, fairly popular, it was too expensive in a country like India to afford. Android phones weren't as

05:25>> cheap as they are today. So there was this kind of a barrier to entry for all of these brands to use mobile first technologies. But for me, it sounded very simple as a smartphone app connected to cloud, a workflow automation platform, which can digitalize multiple workflows, so to say. So I converted that business problem into a tech problem, built a quick, so to say, MVP, for first two customers. We rolled it out in the market, measured

05:51>> that ROI. My first customer had only four users, if I remember correctly.

Nathan Latka

05:55And was that like one of was that one of your friends?

Lalit Bhise

05:58>> It was one of the guys two guys that I spoke to in the first place. So I essentially told him, will you pay me money if I build this? And he said, okay. Here is not only that, I'll pay you money. Here is my first check. Prepay. Kind of prepay.

Nathan Latka

06:10Yeah. How much? How much was that first check?

Lalit Bhise

06:13>> The first check was about $10,000.

Nathan Latka

06:16That's great. Instant validation.

Lalit Bhise

06:18>> Absolutely. And it provided me the seed money. Yeah.

Customer Count

Nathan Latka

06:22Didn't know that money. Non-dilutive seed money, which is even better. So fast forward to today, how many customers are you working with?

Lalit Bhise

06:29>> We've worked with about You mentioned two fifty plus. Actually, the right number is somewhere around three zero seven. So yeah, about three zero seven odd customers.

Nathan Latka

06:36Three zero seven?

Lalit Bhise

06:38>> Yeah.

Nathan Latka

06:39Okay. And again, they're paying you on average $2K a month, what it's fair to say you guys are doing about $600K a month right now? Something like that?

Lalit Bhise

06:44>> Yeah. Something around that time. Yeah. And

Growth Rate and MRR Trajectory

Nathan Latka

06:49what does growth look like? So if you're doing that today, go back a year. What were you doing?

Lalit Bhise

06:53>> Look, for the last whole year or last two or three years, we have been growing at like 8% month on month. So we don't track ARR as much as we track MRR. MRR has been growing at somewhere around eight, seven, 8% month on month for the last three years.

Nathan Latka

07:10Do do you know do you know off just to make that easy for my audience to kinda grasp it, if you so today you're doing $600K a month. If you go back twelve months, do you know what you were doing the same time last year?

Lalit Bhise

07:19>> Yeah, we were doing somewhere around three fifty ks a month.

Nathan Latka

07:23Okay, got it. So July 2017 call it $350K a month. Now obviously almost double that, which is healthy growth. Where is most of that growth come from? New customers or expanding current ones?

Lalit Bhise

07:34>> So actually they're both parts of it. For the longest period of time, we were just focusing on new customers, to be brutally honest, because that's where we saw the growth was. Somewhere last year, we realized that there's a lot of potential to be gained from existing customers as well. Existing customers were growing organically, not as fast as the new customers were growing. Somewhere last year, we put focus on what we call as farming, customer success, so

07:58>> to say. That meant we now have currently have two growth engines. Suddenly how so my, you know, my board asked me the question saying, you know, okay, great that you're growing at 7 to 8% month on month, how can you grow at 12% month on month? The answer to that was essentially, look, I have there is a lot of untapped potential in my existing accounts, which I'm not. Good news for us was the churn was less than less

08:21>> than 1% at any given point in time.

Churn and Net Revenue Retention

Nathan Latka

08:24What what is churn today?

Lalit Bhise

08:26>> It's about so last month, was a zero churn. But on average, over a year, it's somewhere around 1.3% or something. Okay. So I'm talking about logo churn. And my churn is

Nathan Latka

08:38Just to be clear, that's that's gross logo churn or net logo churn?

Lalit Bhise

08:41>> Yeah. It's a gross logo churn.

Nathan Latka

08:45Okay. Gross

Lalit Bhise

08:46>> gross logos I'm talking talking about. Net logo net logos will always keep on increasing. I mean, at this point last year, we would have, what, I don't know, less than 150 odd accounts.

Nathan Latka

08:54Yep. Now do you know do you know the revenue side of this? So what's net revenue retention annually?

Lalit Bhise

09:00>> So the so the corresponding MRR churn again, gross MRR churn is somewhere around 0.39%, which is essentially we are okay with the growth of growth as long as that is from the lowest end of the MRR.

Nathan Latka

09:18And, Lalit, that 0.39% number, that's on that's on a that's on a annual Lalit, that 0.39%, that's an annual number. Correct?

Lalit Bhise

09:28>> Yeah, annual number. Yes, absolutely.

Nathan Latka

09:30Okay. So you had net negative revenue churn then?

Lalit Bhise

09:33>> Yes, absolutely. Very much.

Nathan Latka

09:34How negative?

Lalit Bhise

09:36>> So

09:38>> when we look at our cohort, the last year's accounts essentially grew in a net MRR by about 150%. So the accounts which we had acquired before July 2017 are paying us about 150% of what they were paying us in July 2017. And the rest of the growth came from the new accounts.

Nathan Latka

09:57Yep. So just to be clear, annual expansion year over year is about 150% on current accounts. Do you know though what your net revenue retention is? So your expansion minus your churn revenue?

Lalit Bhise

10:12>> Actually, don't have, honestly, I don't have that on top of my head.

Nathan Latka

10:15That's okay. It's above a 100. It's above a 100 though, percent.

Lalit Bhise

10:18>> Yeah, yeah. It's above a 100%. It's more than a 100.

Customer Acquisition and CAC Payback

Nathan Latka

10:21Okay. Let's get more into the growth engine you're leveraging here. Where are you acquiring new customers and what's your current CAC?

Lalit Bhise

10:28>> So our CAC payback period, again, oscillates between six months to twelve months, which is half a year to about a year. That's a CAC payback period. So last month, it was somewhere around 8.6, if I remember correctly. But we track it month on month, obviously. Okay. My net new logo come so I have two engines for new logo emissions. Most of we have only six people hunting team, so we don't have a lot sales sales.

Nathan Latka

10:55Hold on. Hold on. Before you get into the engine, just to just to round out that number to get a dollar figure. So six to twelve month payback period, if the average customer pays $2K a month, you're saying you're willing to spend $12K to $24K to acquire the customer?

Lalit Bhise

11:06>> Yes. But that is about when I'm calculating CAC, I'm calculating CAC on MRR growth, monthly MRR growth. The way we calculate CAC is we take last month's MRR to new month's MRR, take a gross margin. So our gross margin is somewhere around 88%. So we take the gross margin figure out of that, and then look at the entire sales marketing cost, which is customer success plus sales plus travel plus marketing, and divide that number to get,

11:32>> our CAC. So when we are let's say we grow $10,000 MRR, we have we would have spent less than $120,000 getting that particular MRR. So the CAC payback period is tracked on top of the MRR growth. Not we don't track on top of new logo acquisition.

Nathan Latka

11:46You don't track it per customer. You track it overall?

Lalit Bhise

11:49>> Overall overall net net MRR growth.

Team Structure and Offices

Nathan Latka

11:51Yeah. Yeah. Okay. Good. Okay. Now go into more of the engine. Tell me more about your team.

Lalit Bhise

11:56>> Right. So we have about six people hunting team, what we call them. So we have a sales team divided as a hunting and a farming team. Hunting team is responsible for acquiring new logos. Farming team is responsible for acquiring rather growing existing logos or customer success, so to say. We have a larger farming team, about 30 people, a very small hunting team, about five, six people.

Nathan Latka

12:16So total, you're about 56 people total right now?

Lalit Bhise

12:19>> 36.

Nathan Latka

12:2036 total. Okay.

Lalit Bhise

12:21>> Six sales. Yeah. That is in sales. That is only in sales.

Nathan Latka

12:24Yes. Sorry. What is your total team size today?

Lalit Bhise

12:26>> That's about 150 people.

Nathan Latka

12:28150. And is everyone based over there in India?

Lalit Bhise

12:30>> Everyone's based over here in India. In India, we have three offices. We are headquartered in Bangalore where I'm based. We have also offices in Mumbai and Delhi, which are primarily customer facing offices.

Funding History and Profitability

Nathan Latka

12:39That's great. And have you bootstrapped the company or have you raised?

Lalit Bhise

12:44>> We have raised. We have raised two rounds. One was seed round of about 300 ks USD, which was raised back in 2013. We turned profitable in 2015. I think till 2017, were profitable. I think last financial year, had a very small loss, about 200 ks USD.

13:05>> And we raised another round very recently. That explains the loss, to be honest.

Nathan Latka

13:10Yeah. So how much total have you raised?

Lalit Bhise

13:12>> So totally, we have raised about 4,000,000.

Nathan Latka

13:154,000,000.

Lalit Bhise

13:15>> Got it. Including the round in May. Yeah. May this year.

Future Cash Flow Plans

Nathan Latka

13:19The one you just did. Yeah. And so you'll obviously be investing for many months to then drive growth, which has obviously, you know, it'll take a couple of months to drive that growth. When do you think you'll go cash flow positive again? Or that a target right now?

Lalit Bhise

13:31>> So going cash flow positive is not honestly a target. Mean, remaining somewhere near the black is always a target. We are always I mean, so on a month on month, we look at what is the maximum net burn that we can afford to have, and we try to stay within that, which is essentially to use the funds that we have recently raised, looking at market expansion point of view. So if you want to be cash flow

13:55>> positive, we can be today if we reduce some of the expansion efforts that we want to do. But in the current predictions, we say somewhere around, you know, July, August 2019, we will be we wanna be back again.

Famous Five: Books, CEOs and Tools

Nathan Latka

14:09Very good. Alright, Lalit. Let's wrap up here with the famous five. Quick answers here. Number one, what's the last business book that you read?

Lalit Bhise

14:16>> It's called Sapiens. I don't know whether it's considered as business book.

Nathan Latka

14:19What's it called?

Lalit Bhise

14:20>> Sapiens. Sapiens.

14:21>> Yep.

Nathan Latka

14:22Number two, is there a CEO you're following or studying right now?

Lalit Bhise

14:26>> I studied Mahat Benihov for a longest period of time. Yeah, that's possibly the last one that I followed.

Nathan Latka

14:32If someone offered you today something equivalent to three or four X your ARR, would you sell?

Lalit Bhise

14:40>> Three or four X ARR, I don't think so, no.

Nathan Latka

14:42You don't think so? Okay, good. Number three, what's your favorite online tool for building your business?

Lalit Bhise

14:47>> I use Asana quite a lot.

Nathan Latka

14:49Asana?

Lalit Bhise

14:50>> Yep.

Personal Background and Life Lessons

Nathan Latka

14:51Number four, how many hours of sleep do get every night?

Lalit Bhise

14:54>> Ah, I sleep a lot. I sleep. I sleep eight hours a night.

Nathan Latka

14:58That's great. And what's your situation? Married, single kiddos?

Lalit Bhise

15:03>> Oh, yeah. I'm married with two kids. Yeah.

Nathan Latka

15:05Two kids. And how old are you?

Lalit Bhise

15:07>> I am 39.

15:09>> 39.

Nathan Latka

15:10Last question, Lalit. What do you wish your 20 year old self knew?

Lalit Bhise

15:14>> I'm sorry. I missed that part.

Nathan Latka

15:15What do you wish your 20 year old self knew?

Lalit Bhise

15:18>> Twenty years? Twenty years?

Nathan Latka

15:20Yeah. What do you wish your 20 year old self knew? When you were 20, what do you wish you knew?

Lalit Bhise

15:25>> Ah, I wish I knew that the formal education doesn't have a value in real life. That's about it. I should have skipped formal education altogether.

Nathan Latka

15:34Guys, you have it. Formal education sometimes does not have value in real life. Launched Bizom back in 2012 and got one of his friends to basically give him seed money, but it was non dilutive because it was a customer paying. That's the best kind of money I think, right? So 10 ks upfront to get going. Now they have a team of 150 people in India. Again, helping retailers like Coca Cola help their salespeople basically go in,

15:56get accounts, land accounts, expand accounts and drive product adoption for whatever product is they're working with. Again, mainly in India, healthy growth, doing about call it 80% year over year growth or 8% month over month growth. They're doing about $600K today per month in revenue. That's up from $350K just a year ago in July 2017. They've got three zero seven customers that pay an average of 2 ks per month for the product. Churn is super, super

16:19low. Annual expansion on accounts is over 140, 150%. Willing to spend up to $120K to acquire 10 ks in new MRR. So healthy economics, 4,000,000 raise, burned about $200K last year. Lalit, thank you so much for taking us to the top.

Lalit Bhise

16:33>> Thank you very much, Nathan. Lovely talking to you. Thanks a lot.