How Coditas Grew to 440 People Serving 35 to 40 Clients with 360 Engineers (Interview with CEO Mitul Bid)

Introduction and What Coditas Does

Nathan Latka

00:00Hello, My guest today is Mitul Bid. He's the founder and chief coder at Coditas. He believes coders are artists whose art is the code they write. He's a computer scientist, from IIT Bombay and has been delivering quality software solutions for more than sixteen years. Believes he's just getting started now building again, coditas.com. Mitul, are you

00:18>> ready to take us to the top? Yes.

00:21Okay. So what is Coditas? Is this a marketplace to hire developers or the SaaS tool? What are you building?

Mitul Bid

00:27>> So Coditas is essentially a team of engineers and designers who offer an entire software development life cycle services. So right from user experience of architecture of software development, deployment, support, quality assurance. So the end to end services are on the software development life cycle.

Founding Story and First Customer

Nathan Latka

00:47And when did you launch this this services team?

Mitul Bid

00:51>> This is in November 2014. Yeah.

Nathan Latka

00:552014. Okay. And walk me through how you got your first customer and then the story that I sort of wanna dig into here is you are the exact persona. You start off doing custom work and then eventually go, oh my gosh. So many of my customers have the same problem. You build an internal tool and before you know it, you're building a great SaaS tool. So we'll work... We'll build that story, but take us back to

01:14day one. Who was your first customer?

Mitul Bid

01:17>> So my first customer... Actually, we had a couple of customers, and these are all people I have known from my previous roles and you know it was before I started, had reached out to them on what to start and like I was amongst the first quarters of the company and you know I scaled myself in one or two months and then then I stopped doing myself and getting into it.

Monetization: Time and Materials Billing

Nathan Latka

01:42So what were they paying you? Were they giving you a spec and they're... You're paying for a project or is it an ongoing retainer? How did you monetize?

Mitul Bid

01:49>> It's always time and material for me. We've always charged for the hours that we spent on it. And the initial projects were largely ongoing projects, which were already done and we needed some support around getting a few more developers in the world.

First-Year Revenue and 2015 Growth

Nathan Latka

02:02Okay. Do you remember that first year in business 2014, how much revenue you did?

Mitul Bid

02:07>> So because of financial year in India ends in March, it was barely, you know, I have to convert it to dollars, but around upward of... We don't... $100,000 to $150,000. That was, like, for five months, six months.

Nathan Latka

02:22And and and in that six months, did that feel like success to you? Were you happy with a $160,000 in sales?

Mitul Bid

02:29>> Yes. Totally.

Nathan Latka

02:30And then what happened in 2015?

Mitul Bid

02:33>> In 2015, it grew. It grew to almost 2,000,000. And then since then, it has been growing on year on year more than 50% or at least, you know, upwards of 50% for an hour.

Nathan Latka

02:45So what? You did about 5,000,000 last year, something like that?

Mitul Bid

02:49>> No. No. This is good for the bookings. Last year, we did upwards of 10.

Nathan Latka

02:53You did what? Above 10?

Mitul Bid

02:55>> More than 10.

Nathan Latka

02:56More than 10. So so this is obviously, I would say, one of the, you know, a a hugely successful, right, sort of services firm. You must have had software ideas. Do you have some internal software products you're using?

No Internal IP: A Deliberate Choice

Mitul Bid

03:09>> Actually, no. So I I was very clear about this that, you know, the... That's a that's a biggest problem by a lot of software services companies are not able to, you know, scale well because they are always in two minds, they want to build their own IP and they want to offer services. I saw it as a conflict of interest, I wanted to make sure I focused on what I was actually wanting to provide services. So

03:31>> we have zero IP even today. We have lots of things which are repeatable, reusable. We do not gain IP. I just see it as a conflict of interest right now. Our services are doing really well. I'm... I strongly believe in it and I want to pay.

Team Size and Engineer Breakdown

Nathan Latka

03:43Yep. Okay. So you see it as a conflict of interest, so you really are a 100% services. There is no SaaS tool here. What's your team size today? How many people bolt on?

Mitul Bid

03:51>> We are about 440.

Nathan Latka

03:54Four forty. And how many of them are engineers?

Mitul Bid

03:57>> So almost 360 would be our engineers.

Working with Indian Dev Teams: Mistakes and Differentiators

Nathan Latka

04:01Can you can you explain me? A lot of my listeners are trying to open up or find firms like yours in Bangalore, right, or or just, you know, other places in in Chennai, other places in India. Help me understand how and what it's like working with a development team in India. What... What's a big mistake that Americans make when they try and open an Indian center for development?

Mitul Bid

04:21>> Right, so actually that's one of the biggest reasons. So the story about why I started in this first place about this was exactly because of the feedback I got from a lot of colleagues. I used to the first ten years of my career, I was a boarder myself, I used to travel to The US and go to developer conferences. In a lot of developer conferences, I used to get one very, very common feedback around the code

04:45>> quality which India produces. So when we if there was some metric which would get an average code quality, which India writes, of course, would be below standard, below average. And I as a coder in India, actually personally, I was a clean coder, I was very passionate about quality coding and I wanted to make a change. And the fundamental difference and reason over here was, it wasn't that Indian coder was not good because that most software services

05:12>> businesses in India looked at it like a business, nothing wrong with it, but they missed the mark by looking at the building block, which is code. So clean code was not something which is promoted by a lot of companies. And I was fortunate to have worked in companies where clean code was genuinely promoted. And while starting the company, wanted to make sure I focus on that. So if look at the name of the company, Coditas, the

05:35>> tagline code is art, strong believers, the entire growth, the entire philosophy hasn't changed from days ago. And that's the biggest thing, you you're the people who have tried to work with India and found that difference, right. So when you're working with techies from the Bay Area, for example, they expect a similar level of thought process, multiple. So that's number one. And the number two, which I really, really also wanted to focus on was entire cultural aspect

06:07>> about work life balance, making sure the team is culturally aligned with the clients and timelines, making sure deliverables are met, saying no at the time. Lot of people do not know how to say no. So we are super transparent. We never promise a bug free software, for example, right. Most of my counterparts of the companies will say we give you bug free software. Anyone who promises bug free software has never written software or hasn't been. We

06:33>> are very on.

06:33There are always bugs.

06:35>> There are always bugs, right? And like, we are clear about we'll write clean code, it will be easier for you to find the bugs, easier to maintain. So we are very honest, right? And this is another thing, right? Look for companies which are honest, which are focusing on the basics around code quality. And you know, speak to us, speak to any of those like a lot of my friends have seen the companies, I know a lot

06:56>> many companies like ours. So it's very easy for you to if you dig in, you ask the right questions, you'll get the right people. There's a lot of different lots of kinds of companies in India, right, which are offering services. But I think this should be the largest differentiator on focus on the code quality or focus on the quality.

Hourly Rates and How Billing Works

Nathan Latka

07:14The article sitting right now signs up goes to coditas.com and wants to work with you, what should they sort of expect to pay per hour for development work via via Coditas?

Mitul Bid

07:23>> So since we are offering services, which is a very wide variety, we also have qualification services, product management services, user experience services, and we have people with all experiences, we have people who have just one year of experience to people with twenty five years of experience. So the range over there is very nice. So it starts with literally $10 to $12 an hour to up to $50 plus an hour, right. And a lot of our rates

07:47>> also blended. So we typically do not, we avoid charging or even getting some of our key guys as dedicated people on the projects and like a CTO, know, we have people at the CTO level, but they are never dedicated on a single project, they'll be on multiple projects and that's how a lot of our clients get the benefit. They get the top people shared across budgets and they get the knowledge that they want and shared. How

Nathan Latka

08:15many clients did you work on for at least an hour last year?

Active Clients and Lifetime Client Count

Mitul Bid

08:20>> So last year, so we currently have around 35 to 40 active clients. And that's the kind of size we've been maintaining. Over the lifetime, we would have served more than 150 clients, because what happens is, we used to get a lot of small projects and then get over. But our engagement now has largely been product development. In fact, for a lot of our clients, we own the entire engineering for them, to end, right from we are the

08:47>> CPO, we are the like 100% of the software product engineering is being done by us. And I have clients whom I began with six years ago, who are still with us, we have clients who are playing a multi, so it's going so a lot of we're moving towards longer teams and larger projects now, but 30 to 35 clients is kind of an average you should go on this hand.

Nathan Latka

09:08Yeah, that makes sense. Mean, you did get 40 clients last year, you broke 10,000,000 revenues here, they're paying something on average of like $20,000 a month, something like that.

Mitul Bid

09:17>> Right. Right. So, again, average is a, you know, good metric, but, you know, we have projects where we only have only one developer. We have projects with 90 developers. Right? So, difficult. Big, big range.

Nathan Latka

09:29Is your top of the 10,000,000 of revenue did last year? What is your top customer make up?

Mitul Bid

09:35>> So I have three, four large clients. Of the largest was in the travel and loyalty space. And then you we have clients in the the person who introduced us, ConnectAndSell, which is into the automated dial space. And then we have people in the genetic space, we have a very wide variety of practices. At one end, we are doing cancer detection based on your genetics and then we're building software to manage horses.

10:07>> It's a big variety. And so as a company, I have never looked at a domain or even a technology as a niche area. We are fairly open. So we have a very large breadth that way.

ConnectAndSell as a Case Study

Nathan Latka

10:18Yep, that makes sense. So I'm trying to put my head in my listener's head. So let's use ConnectAndSell, for example. Chris came on my show, gave a great interview. It shocked me when he said he scaled to $25,000,000 in revenue, and, basically, the entire dev team is you. Yes. So so if Chris ever wanted to sell ConnectAndSell, and an acquirer got in and started doing diligence and realized the whole tech team was

10:42with you, is that a good thing or a bad thing for the acquisition?

Mitul Bid

10:46>> It really depends, right, on what the acquirers are buying it for, first of all. Right? And we do... And so we've we've got this question very often, from potential investors. So, you know, we we we we make in a clause whereby the client can potentially buy the team, if they want, as well, the acquirer can buy the team for some so that can be fixed at a pre agreed upon on the contracts and there's a build

11:10>> up a transfer agreement or a transfer of team agreement that we have. Usually not a preference because even so we've had some clients who've been acquired, but they've continually grown the teams with us because there's a different they understood the whole thing very well. They came and met us and they've grown the teams or we have multiple such instances. But yeah,

Scaling Teams and Talent as the Real Challenge

Nathan Latka

11:36it's very interesting because a guy like me that doesn't care about chasing a VC valuation or even exiting one day. I just want really good developers to build a great product. This is a way easier solution than trying to hire developers directly, train them, set up their environments, etcetera. You know, you do this for a living. Can you handle more clients or are you sort of tapped out at 40?

Mitul Bid

11:58>> No, so we've always been on the edge always. So since we began, think the biggest challenge we've always had is getting the talent at the quality levels we are kind of hiring for. So we've stepped up the game in our learning and development, know, coaching and you know, so we have, we are overall improving our way to getting more people, hire more people. And that's the challenge. Clients has never been a challenge. But you know, between

12:23>> projects, we always generally have some small capacity, a lot of clients who we've done well with our clients, we started small with and we grew the teams together. So you know, in fact, a lot of clients, we started the project from scratch, know, we started with three people and today they are very large clients with you, or even post acquisitions have become very large.

Nathan Latka

12:40This is your advantage, right? If I tell you and email you one day, hey, we're half three engineers, I want to move faster, can we double it to six? You can flip a switch and have six instantly. That would take six months of my time as a founder to go hire engineers.

Mitul Bid

12:53>> Correct. That's true. That's one of the biggest and now since we are scaling and we overall have a larger bench, we always try to maintain a certain percentage of the team as a bench as buffers and available. So it's always kind of for short term large bursts and you can have three of them for three months and then we can scale down back to the original three.

Non-Solicitation and Team Transfer Clauses

Nathan Latka

13:14That's smart. And one of my questions is going be how do you prevent founders like me from falling in love with your developers and hiring them directly, but you already have a plan for that. There's clause where you can actually buy the team already.

Mitul Bid

13:24>> Yeah, so that's the eventuality and it's an expensive clause and that's for investors to make sure that there is

13:31an option to do it.

Nathan Latka

13:32>> It's like when you're getting a company acquired, you'd pay a multiple of your earnings. How much is that?

13:38If I'm paying you $10,000 a month for three developers and I want to end up bringing them on to my team full time, what might that look like?

Mitul Bid

13:44>> So again, it will depend on we'll first have to agree upon a minimum commitment, number So I wouldn't allow you to transfer them for the first one or two years. And after that, it will be relatively high. Typically would take a fairly minimum six to ten or one year of a billing kind of a thing to execute that. That's rarely happened. In fact, a lot of clients speak for us running the teams, even a post acquisition

14:08>> or post investor understanding this, which is an option available, So in the worst case kind of scenario, but the other part is my IP is my team, right, the biggest challenge is not getting clients, it's getting the right team members. So we have a very strong non solicitation clauses, which our clients understand, right. So you can, ideally should not be hiring from you directly. A relationship also and our team members also have signed up with us

14:32>> that they cannot work with clients.

Nathan Latka

14:35And they're loving it. I'm seeing pictures of you guys rafting together in a white water on your website. There's clearly a strong culture here which is important.

Bootstrapped from $1,500 and Co-Founder Story

Mitul Bid

14:42>> Yes, yes. So we're very, very clear. People first culture is, I think I can go on record saying, I don't care about investors because I don't have any. You're bootstrapped? 110. So $1,500 to whatever, 15,000,000.

Nathan Latka

14:58So you personally, when you launched, you put in $1,500 to start?

Mitul Bid

15:02>> Right, and that was because that's a paid up capital required to start. We declare some money which is the starting level. So if we put in $1,500 why don't we use that fully and we've never follow more to the company yet. Are

Nathan Latka

15:16you a sole founder or they're co founders?

Mitul Bid

15:18>> No, so me and my wife are co founders. And

15:23>> we've now brought in a lot of team members and stakeholders And that's what I want to do. I want to keep on getting team members within the team to come and become stakeholders. I strongly believe that. I want the pie to grow, Raj. I don't necessarily hold on to the share of the pie.

Profit Sharing and Equity for Team Members

Nathan Latka

15:37Do you pay any profit sharing out to the team?

Mitul Bid

15:40>> So that's the engagement I had with some of the people who joined us in Equitable. There was a profit sharing, which I had with a few team members, and now they are part of the larger of them. They are part of the equity world and they really helped grow the team. So I think one thing I always tell everyone is that the growth of the entire organization is dependent on each and every person. Everyone has contributed

16:03>> and that's very clear about how we want to continue moving forward also.

Famous Five Rapid Fire Questions

Nathan Latka

16:07This is a heck of a story. Thanks for making time for me. Let's wrap up here with the famous five. Number one favorite business book.

Mitul Bid

16:14>> I'm not a much of a reader, but recently read a book by a friend called Let's Build a Company, a startup story minus a budget. I was pretty impressed by the book. Two, is

Nathan Latka

16:27there a founder you're following or studying?

Mitul Bid

16:30>> I love Shreedhar Vembu, Zoho CEO. Great role, I just love him.

Nathan Latka

16:36Number three, what's your favorite online tool for building Coditas?

Mitul Bid

16:42>> I no longer code, as in because I don't have time for it,

16:47>> G Suite, I think that's where most of my time is, particularly with G Suite entirely or companies. Four, how many hours

Nathan Latka

16:56of sleep do you get every night?

Mitul Bid

16:58>> Oh, I need that. I'm very clear, if I don't sleep, can't function. So how many hours? Minimum seven.

Nathan Latka

17:05Seven. Okay. And what's your... Well, you mentioned married. Do have any kids?

Mitul Bid

17:09>> Yep. Two daughters. Wow. Okay. Two kids.

Nathan Latka

17:13And how old are you?

Mitul Bid

17:14>> I am 39.

Nathan Latka

17:1639, last question. What's something you wish you knew when you were 20?

Mitul Bid

17:22>> I wish I knew people were complex.

17:26>> So over the period I've learned, I've improved myself and my people's skills and learned more.

Nathan Latka

17:31Guys, so many statios I have on would whisper in my ear and say, we use this firm called Coditas in India to do all of our development like Chris at ConnectAndSell who broke $25,000,000 in revenue. I said, I gotta talk to the guy behind Coditas. It turns out it's Mitul and his wife building a great organization. There were 400 folks on the team. They did over 10,000,000 revenue last year, really helping folks, again,

17:51build great development and software, not bug free, but highly responsive team. They moved quick working with top firms, 50 clients last year as they continue to scale all 100% bootstrap. Mitul, thank you

18:02>> for taking us to the top. Thank you very much, Nathan.

18:06One 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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