How ClientJoy grew to $3M revenue and 500 customers in 2018.

hello everyone my guest today is josh shaw he did his mechanical engineering and then worked as an investment banker before founding his current company griddle he's a cnbc tv 18 young turk kairos fellow and mitx boot camper currently he serves as co-founder and chief executive at griddle where he looks after finance resource management and business strategy yash are you ready to take us to the top yup absolutely all right break down your background real quick before we talk about griddle so what does the cnbc tv 18 young turk mean so uh cnbc basically runs a program where it honors uh 12 entrepreneurs every year uh who built phenomenal uh companies or phenomenal startups um and so so the award is called young turk and cnbc is one of the television channels that we have over here um and so so that was the award that we got for in then 2016 which was cnbc tv 18 young talk yeah oh very cool okay what's the company doing what's your business model how do you make money so company essentially uh offers a cloud-based solution for teams enterprises to collaborate and communicate internally um so uh if you look at most of the teams right now they use different tools and channels to communicate so they'll use skype and and dropbox and email and whatsapp to kind of work together and so griddle essentially forms a centralized platform so you can communicate through your tasks files chats audio video calls within your teams around projects on the go in just one place and and just by the act of unifying all of these tools and platforms in one place it increases productivity by anywhere between 11 to 13 um and and and so we we're a software service provider we charge five dollars per user per month so um so and that's that's pretty much it it's it's kind of um simple and robust platform we've got about um you know what uh about 100 000 users over 500 enterprises we're using our platform 500 enterprises they're all paid yep and about how many team members do the 500 companies have all together a hundred thousand total users yeah yeah but total users does that actually mean paid seats uh amongst so okay so total number of registered users is north of 250 000 100 000 are the paid seats of these uh 500 enterprises okay so can i take a hundred thousand times five you're doing about 500 grand a month right now so our revenue model has been changing so in a lot of enterprises what we do is instead of doing a month-on-month licensing we essentially offer um licenses which are um let's say either three years or or five years or in some cases even perpetual um so month one month a number that would be closer is 250 000. okay um but then there are a lot of so just just be clear you're doing 250 grand a month right now in revenue yeah yeah okay that doesn't include one i don't care about plans where you sell for a lifetime that's not sas you're purely monthly recurring revenue you're doing about 250 grand a month yeah yeah okay and so that's obviously across those 500 customers which means each customer pays on average what about 500 bucks so it actually uh depends because uh because a lot of our customers are fairly large customers so it varies so we have some customers who are 35 people strong some customers over 8 000 people strong and and so that's why i said average so the average would typically be around 200 to 250 people per um organization okay but that doesn't that that doesn't okay if it was 200 people per organization right times 500 so that's not where i'm dividing 100 000 divided by 500 that's not the division so it's essentially a mean stack so if you see the graph of the total number of so each company and how many average employees that they have it will come to around 200 to 250 uh people per organization okay again you said you had 500 paying organizations correct yeah so if the average is 200 i can take 200 times 500 and it means you've got 100 000 total paid seats correct you can say that yes well i don't i mean correct me if i'm wrong i'm just i'm multiplying the numbers you're giving me is that accurate that is that so so i so the most number of enterprise have anywhere between 200 to 250 uh teams team members but then there are companies who have a lot smaller so there are companies who are 30 people strong and then there are companies who are 8 000 people strong i understand that i understand that i'm asking across your 500 paid accounts do you have about a hundred thousand seats okay got it okay so so why doesn't the math work out when i take a hundred thousand times your five dollar per seat price you should be doing 500 grand a month you're doing half that 250 grand a month why because a lot of those 500 enterprises uh we've got an on-site deployment or it's a solution deployment where we've sold a lifetime license okay okay but okay got it so so got it the 250 the 250 000 bucks in sas revenue that's not including all the one-time like that's not the tools yeah okay got it but i like i just wanna talk about the sas side so 250 grand per month right now um which means you know divide 500 customers into 250 grand a month that means each customer is paying about 500 bucks per month in sas revenue now obviously it's different based off you know because that's an average so i get it walk me through put this on a timeline for me when did you launch this company what year um 2013 we got registered but we launched the product end of 2014. 2014. okay and did you bootstrap or raise capital no we raised capital so we've raised uh three rounds of funds thus far the third round is something that we are yet to announce um the first one was very small about twenty thousand dollars which was seed capital from one of the incubators over here in india um which is the oldest incubator that we've got in and i am ahmedabad um and then the second round was from a group of angels which was about a hundred thousand dollars okay and how so how much total have you raised to date um so hundred and twenty thousand in announced and um more than a million in unannounced capital okay got it very good so call it kind of 1.1 million kind of total when will that when will that round close do you think so the round is already closed we will essentially announce sometime in the first quarter of next year oh very good and who uh was it equity or debt all of that is equity all of debt is equity no all of that all of the all of the funds is equity okay got it all equity and so what's up what's the funding environment like in india or did you raise that capital from the states or somewhere else no so we we all of the funds that we've raised is exclusively from india and from indians and i love that um so yeah so uh so the environment is is uh is is pretty supportive of course the people over here are a little more risk averse so they would like to invest in companies that start generating revenue as quickly as possible so you'll see um not a lot of b2c companies at an early stage getting funds unless they are absolutely cutting edge um but but b2b startups it's fairly easy to raise funds so if you're generating um you know even even a sample amount of revenue or even certain validations that you've uh kind of cross verified or you've validated then then it's fairly easy for you to raise funds over here however those numbers do not match um the the amounts in which the funding happens over there at silicon valley or uh you know out here in singapore and so on and so forth but but yeah so it's it's similar so in the sense if you're looking at if you're looking at an adjustment in the sense if you're looking at income disparity then the funding disparity is kind of in the same trend so so if i were in in silicon valley and i was starting this startup i would have raised probably a million dollars when i raised hundred thousand dollars but then i can do the same amount of work with hundred thousand that i can do with million in day in understood understood what does growth rate look like today so if you're doing 250 grand a month today what were you doing a year ago so um a year ago we were we were not doing um that well so we were doing about about 40 000 um in in month on month revenue which is which is good for that time time uh because we were only about eight people strong at that point of time today we are 32. okay uh where's everyone based yeah all of us are based over here in ahmedabad india from from the same office that's great so 32 people based in india 40k per month in october 2017. now you're way bigger than that 250 grand per month where did all the growth come from so um essentially we were able to uh get resellers so we were able to uh crack the the mod so it's so there's something that i believe in so you know for the first three years or four years of our of our journey we were focused a lot more on the product and for the last year year and a half we've been focused a lot more on our distribution as to how do we make sure that griddle is available to to whoever you know wants it so so we've got a third of our customers in australia we've got um you know one-fourth of our customers in the us um and then we have southeast asia and india as our as a typical kind of market in terms of um in terms of user we have negotiable presence in in africa and middle east uh but that's okay so that's something that's a piece that we're kind of trying to figure out right now um but yeah so the growth mainly came from resellers so um being able to identify uh people who would sell your uh your software as an idea this is your biggest reseller who sells the most for you um so we won in we know we have one reseller in australia that kind of does the best it's called iron global limited and they they what's it called it's called i'll share with you the link it's called iron global limited and so they kind of share they do the best or the most of um of the reselling for us interesting and what kickback do you pay them um so it depends as of now we do uh we kick back so it depends on the on the customer and the year so for the first year when you acquire a customer we pay you 20 uh for the second year for that same customer it goes down to 10 for the third year it goes down to five however if you acquire a new customer in the second year then that's kind of at the 20 rate so so it's per year per customer kind of is it five percent in perpetuity after the third year no the fourth year it goes down to zero okay got it very good so if you look at if you look at your fully weighted cac to get a new 500 per month account what are you paying to acquire that customer so we typically uh it costs us including all the uh costs that we have to put in it costs us about 250 to 300 to acquire an account okay 300 bucks and that's again including your sales team content people everything in case if we have to travel in case of which which does not happen uh very often but in case if you have to travel anything so less than less than a one month payback period because people are paying 500 bucks a month and you cost 300 bucks to get them no it's not one month so it typically takes about three to three and a half months because uh when you say one month payback period you're assuming that the organization will kind of start using griddle at once which is typically not something that happens so if so everybody in the since we have a five dollar per user per month price point so everybody in the company or the organization kind of starts using griddle over a period of time so so we don't start generating you know 500 from the first one itself i see and what is your churn look like today uh it's it's currently on last month it was 2.5 percent that's logo churn setting that's logo churn or revenue churn no that's that's user i mean the paid account so that's revenue okay that's revenue churn got it right because sometimes higher poo accounts charges yeah i understand uh and why are people oh you know why are people churning how are you driving turned down um so that's something that we are yet to focus on we've not yet focused on in terms of and so the first thing that we've done is is kind of trying to make the product as good as possible and all of those things but outside of the product we don't have a comprehensive strategy as of now to drive the churn down it's essentially as of now uh the churn does not hit our revenue goals and pipelines uh however that's going to be our first priority starting first first quarter of the next fiscal which is april uh to june uh quarter very good all right josh let's wrap up here with the famous five number one what's your favorite business book um it's uh zero to one by p two t number two is there a ceo you're following or studying right now um it's uh it's it's the exeu it was kunal shah free charge who sold features for 450 ml away here and you sold what so if the ceo's name is kunal shah uh he was a founder and ceo at the company called free chart um free charge spell spell the company name frwe c-h-a-r-g-e free charge okay yeah and he sold the company to snap d yeah and what is your favorite online tool today for building your company it's intercom.io yeah that's a good one number four how many hours to sleep to get every night um i sleep nine hours a day i mean nine hours three nights that's great and what's your situation married single kids um just got uh just got married six months ago um thank you and and uh kids are a long time okay good so no kids yet and how old are you um i'm 28 28. last question what do you wish your 20 year old self knew um that it's going to be harder than it looks um and uh and that if you uh which is something that turned out to be true but if you kind of stay in there long enough you'd uh eventually crack it because for the first three years it was essentially almost zero revenue for the company guys it's harder than it looks team productivity company griddle launched back in 2014 just past 250 grand per month in revenue that's up from 40 grand a month uh back in a year ago in october of 2017. they've got about 500 customers caught paying caught 500 bucks per month uh they've raised they've done that by just raising 1.1 million bucks so fairly capital efficient 2.5 percent revenue turn per month today spending about 300 bucks to get a customer 3.5 month payback period team of 32 people based in india number one growth channel resellers josh thanks for taking us to the top thank you thank you nathan thank you for your time and hope you enjoyed it