How Blue Sky Analytics CEO Kshitij Purwar grew Blue Sky Analytics to $201.4K revenue and 8 customers in 2024.

hey folks my guest today is abelasha parwar she's a fulbright scholar yale alum having 10 plus years of work experience in private equity big data analytics product development environmental policy she's now building bluesky hq dot i n which is helping large brands play in the data set space using satellite data and ai alaska are you ready to take us to the top yeah sure let's go for it all right so this is sort of a big idea here you have some good examples on your website about forest fires in india and quantifying those help me understand what you're building um so we take satellite data large volumes a bit about 30 terabytes plus and ground sensors and we use this data to give more spatial and temporal resolution so for instance the forest fires that we have in india you have in california siberia spain greece everywhere on the planet and we just don't know how much fires is happening how much are the greenhouse gas emissions and all of this information is needed by electric utilities for planning for future by climate insurance by like banks and everybody for like making decisions especially as we have the frequency of forest fires or any extreme climate events rise up in the coming ten years and who are the buyers are these governments um no so it's majorly infrastructure companies because they have to take care of all of this large infrastructure that is like you know supporting our life in the face of climate change and its insurances and investment firms so okay guys so insurance investment firms when you say infrastructure companies can you name one or two real ones electric utilities for instance you know if your electric utility you face forest fires you also face the danger of your infrastructure causing forest fires so it's like a very very important thing you know uh i mean even like for instance home insurances uh in the year 2021 the forest fires in california affected 40 times more houses than the last 10 years of fires combined so you really see how this problem is growing exponentially and then there's a lot of great house gas emissions that come from forest fires and the other thing is with blue sky we don't just focus on forest fires we focus on all environmental data whether it's air pollution water pollution carbon emissions from industries carbon emissions from forest fires the whole spectrum of environment and climate data interesting avalanche and so what might an electric company pay you per month or per year to access your data set or your software um so our data sets go anywhere from like ten thousand dollars to like a million dollar depending on the resolution for instance if you want something with one kilometer square resolution it's cheap but if you want something with like you know 100 meter resolution it's expensive okay and so it's a ten thousand dollars a month or a year uh a year it can go anywhere from 10 grand a year to uh to like a million a year what would you i understand there's a massive range here but what would you say the sweet spot is is 10 000 bucks a year a good average um see we i really can't say the sweet spot because it depends on resolution right well no i get that but if you take all your customers all your revenue divided by all your customers you can get an average um i think it would be good to say that we do 100k a year is it good okay yeah okay and if someone's paying you 100k a year what resolution are they probably getting is that like 10 kilometers 50 no no no you get more resolution with that you get like three hundred dollars for got it yeah got it it really depends on what is the data set right for instance if i'm doing like water pollution monitoring it's very complex monitoring so it's more expensive air quality is cheaper because it's like cheaper modeling the science or the engineering that's needed behind both of these models is like different interesting okay got it so so um and are these people are they paying for a one-time data set a snapshot or are they truly recurring no so our data set is not static it's dynamic so once we deploy our algorithms on the cloud that data set is being generated at a temporal frequency of that particular category so it could be daily it could be once in two days it could be weekly usually our frequencies temporal frequencies for everything is less than once a week so yeah you get like either daily or once in two or three days i see give me more of the back story here this is fascinating when did you write the first line of code for this so we started in january 2019 we're gonna finish three years uh we started my living room actually just there and me and my brother and two of our first engineers and we were all literally operating out of my savings because i used to work at a private equity firm in connecticut before this so we were just you know chilling on a computer table eating pizzas and writing code and we got interested in satellite data because you know it's growing very exponentially both the number of satellites that are going in the orbit and the resolutions that they capture it's same to our iphones you know their resolution you can now zoom your iphones by like 6x this wasn't happening like five years ago and that's the same thing with satellite so we are able to get snapshots of earth all the time for different locations for different parameters and we clean that data crunch that data makes sense of all of this huge volume the data that comes down and we put it for climate action because we really need to know what's happening on our planet to be able to save our planet and avilashi did you and your brother split equity 50 50 on day one or who kept more no i think uh i think we are like one so it's just basic rules of founders that there has to be one final decision point so you never split equity 50 50. one person takes more majority and the other person takes less all right so how much did you take i think i took the majority but then we flipped last year because uh my brother initially started like oh i'm gonna help you for two months and then he was like oh this is so exciting and there's ai and cloud and apis and this is so tech so he's my seat here and he's like okay so this is a technology company and i think we flipped uh flipped out equities last year so he's the majority shareholder now i got it so you just sort of issued him more options one year cliff for your vesting and now he's a little more well we are founders right so for founders that's different because your brother and sister are we just like it's like hey you just take like 10 more are you guys the only have you raised capital or do you bootstrap yeah no we raised capital we raised the seed round last year of about 1.2 million and we have gotten a lot of grants and a lot of prizes like ai innovation prices so it took us up to like i think eight hundred thousand dollars or something yeah uh-huh and so when you did the raise last year for 1.2 million did you do it on a safe or price round we did a price round oh oh right out of the gate why did you make that decision um i think uh you know it depends on different markets in the u.s market you can do 1.2 million of safe but in the indian market you know it's not that easy like usually the rounds get priced also first time founder problems like you know we don't know you don't know better somebody's coming like oh i'm going to invest in millions like for climate change you should sell it so the valuation is totally depends on your ability to tell a great story and sell the vision so what valuation did you end up raising at i think it's something around seven million i i have to look again okay and any plans to raise now or you can stay bootstrapped for a while you can skate capital efficient for a while so we are capital efficient because we are like you know um we are we are just a tech company of about 20 people completely remote so mostly it's engineering and data talent but we are planning to raise more capital and actually flip the netherlands because it's a very exciting domain for like space data and like climate change so we are looking to raise about five to six million dollars more and just flip it over the you know in the next year beginning tell me a little bit more about customer growth tell me how did you get your first customer oh my god so we initially made the data set and we thought that nobody would care about it like nobody and then the largest mobile company in india was like oh my god can we take your data and integrate it with like millions of mobile phones in india and that was so exciting because you know we literally spent first seven months listening to people telling us hey air pollution that should be done by governments or non-profits this is the army by the way yeah that is xiaomi so they took our data and like you know our apis the hits went from 10 000 to like a million like overnight also our api gateway broke because we didn't imagine that much amount of like customers that much amount of users taking interest in environmental data even today the idea that nathan would want to know how much is water in the reservoirs and the town that he lives in is very bizarre people are like oh abby no one's gonna pay for it but i really feel that as the years go by like three years four years five years later climate data is going to be extremely valuable yeah i mean you're seeing this in california right now i mean it's insane um okay so that's how i got your first customer that big telecom company how many customers are you working with now today i think about eight to ten customers now different sizes different down i'm not even in sales team anymore so i do not know much of information yeah no you're good so can i take like eight times a hundred thousand dollar average acv you guys are doing about 800 000 bucks in terms of run rate right now um i don't i think you should i think you'll have to go down a little lesser because it depends some customers are non-profits and they're not that like they don't pay that high we give them a huge amount of subsidies i see i see are you guys passed a half a million in ar at this point do you know no no can you break it this year uh probably so in india our cycle is in march march of 2021 okay so our the financial cycle is not january to generation march to march so we have six months left to go i see so do you think over the next six months you can break them a half million run rate that is what you're hoping they're really really trying very hard for it we have some like customers that we're trying to work with right now so like you lot your big name clients essentially you know and if we are able to crack one of them then we will cross half a million when i look at your website i look at your customer logos like i just feel like you guys would have customers that are like i mean didn't you say you had customers that were paying like a million per year for data set there are customers there are data sets that we are pitching for a million for your different data different customers but none have closed yeah oh i see got it okay i'm just saying yeah because you build off a number of api hits you have very good utility based like upsell metric because it's based off resolution on kilometers i mean i feel like you guys should be closing enterprise deals like crazy right well we are really so one of the things is that we are trying to get more expansion in the u.s and europe because that's where most of our customer base comes from at the moment we are a small team only three people two people in new york and one in netherlands so we will be expanding out and placing more people in these geographies in the next two to three months yeah wait sorry i thought you said you had 20 people fully remote 20 people fully remote out of which 17 is in india and three is outside of india so we have two in new york and one in netherlands i see but therefore everyone's full time yeah no everyone's got time yeah i see i see i see okay cool so how are you i mean with that many employees and you're still early on the revenue side how are you managing burn right now [Music] um so one of the thing is that when you're you know i think between america europe and india the capital is very different so for instance in india you can get like a lot of talent you can also live a very high standard of living at a much different cost actually so the cost of running a startup like us in the us and new york would probably like 10 million a year but for cost of running a startup like us here is about a million a year so what are your total headcount expenses per month right now um i don't know i don't think i can also reveal this information to you why not i think it's like a little more confidential right like well i'm not asking for what you pay yourself or an individual employee but generally speaking the show is really about helping sas founders and if there's clear arbitrage on developer talent in pune or bangalore et cetera you know there is a there is a huge arbitrage on the developer talent like for instance we i would say let's say thirty thousand dollars is something like you know you can get really really good senior engineer you can get senior engineers for like coding amazing stuff for 30 grand you get nothing in the us for 30 grand yeah yeah interesting okay so 2017 how many are engineers i think we have about like eight teams in the engine or eight people in engineering team five in the data team and then rest is like you know the all the other teams i see and then why did you you mentioned you're not doing sales anymore most founders like that you know you hear general advices you know the founder should really do the first million dollars of sales why did you stop doing sales i i focus a lot on the market client so i chase after one client and the rest of the team chases after all the clients like i go very much like i'm gonna close like one big name like morgan stanley right now in the next six months so i have like some like you know individual one big client that i'm chasing after right now i see what gives you the it sounds like you came from a private equity firm in up in connecticut or the northeast what give you the confidence to leave that i imagine it's probably a cushy job cushy salary what give you the confidence to leave that and start this um well actually uh you know i think over time it was you know my boss was very very encouraging he was like just go for it if you failed and just come back and join it again which farm were you worth i was in a firm called golden's capital based out of stanford connecticut i see interesting okay was it cushy or they weren't paying you enough so it was easy to quit no it was pretty cushy actually the other thing i was really interested in doing a phd in economics on climate change induced financial depression and i was working with uh professor gary gordon and yale so i'm a yale graduate in the master's program and i really really wanted to do that because i was obsessed with the great depression in the like in the early 1930s and i really saw a parallel coming in 2020s so that was like my whole thesis and then instead of doing that phd my professor was like well you know this is a good company because climate risk is going to be a very big sector for a private company why don't you go that and if it doesn't work out you can always do a phd so i had like you know a phd in yale a good job in private equity as like backup so i you know also coming back and working with my brother has been so much fun i think it was the best call ever i love that okay let's wrap up bobby here with the famous your famous five number one what's your favorite book my favorite book um oh my gosh i love this book called the worldly philosopher by i'm forgetting his name he's a it's a book about a bunch of economists and how they thought about the world number two is there a ceo you're following or studying oh yeah lots of ceos but i do really like the guts of elon musk i mean i do not completely follow him i'm not a fan but i really love the fact he takes a problem which is so impossible i'm sorry for my french so pause so impossible and you know climate change is the most impossible and the most difficult problem so seeing him go head to head with everybody saying you're going to fail is something which does give a lot of courage number three what's your favorite online tool for building blue sky notion notion notion guys if you're not using notion if you're on google drive please come to notion did you switch yes completely like you know in 2019 my brother was convincing me to join notion he was one of the first hundred users or something and i was like no no no i can't use this tool or something like i'm gonna do google drive and we had a big fight also but now now i'm the biggest proponent of notion on like twitter and every platform i love that number four how many hours i sleep to eat every night i take eight hours of beauty sleep man the girl's gonna sleep i love that and what's your situation married single married single kiddos uh i was single for the last four years which was a very very bad side effect of being a founder it was kind of annoying but i recently started dating actually my first crush from 2008 so it's kind of very cool but not married yet no okay no kids right no okay and how can i ask a mom can i can i i'm not saying go have kids i'm just curious um and i'll be gonna ask how old are you i'm 31. 31. last question what's something you wish you knew when you were 20 what's something i wish in my 20s oh my god ah i wish um actually i don't i think my 20s are pretty good it's not something you would change it's just something you wish you knew it's not a regret something um i wish i had gotten on the path of software development just a few years earlier uh it was something i was just mildly scared of even though i had so many friends around me who were doing it and even though i myself was like you know a computer i used to code when i was 17 years old actually and i got like really good grades in computer science but i don't know why i stopped doing it i don't know why i stopped doing it uh but it's been super exciting to pick it back yeah there you have it bluesky hq dot i n their customers are electric utilities insurance companies and infrastructure companies who pay them for data satellite data they upsell based off the resolution based off kilometers uh they have customers paying as little as 100 grand a year chasing million dollar a year deals as well they just passed eight paying customers and caught about a half million dollar run rate hoping to break five hundred thousand dollars in terms of run rate in the next six months it looked to scale raised 1.2 million dollars last year at around a seven million dollar evaluation uh a uh a uh a abi and her brother team brother sister team working either growing this bad boy we'll see what happens next abi thanks for taking us to the top thanks so much have a good one nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya