CrawlQ Revenue (2021)

[00:00] Hey, folks. My guest today is Harish Kumar. He's a product design engineer who's passionate to fix poorly defined target audience profiles, notoriously low conversion rates, and a high cost of conversions for SaaS founders and marketers. He's now building crawl q, crawl q. All right. You ready to take us to the top? [00:16] >> Yes. Yes, Nathan. That's great to meet you and I'm really excited to be part of this podcast. [00:22] It's great when you too. So if people wanna follow along, what's the URL they can go to to view the company? [00:27] >> Just crawlq.ai, httpscrawlq.ai. [00:32] Okay. Who are you selling to? [00:35] >> We are selling to B2B companies, especially the SaaS founders who are in the tech space. And of course the agencies that are willing to migrate to SaaS. So agencies who are already in the traditional space and they wanted to move to SaaS and we're typically dedicated to helping SaaS founders, SaaS agencies And [00:58] >> the main goal or main USP of the product is, as you said, in many times I have listened to your interviews, first build audience, build distribution network and then build your product. And this is exactly the problem we are solving with crawlq and my fellow founders who are busy with building outstanding product. I really wanted to help them. I really wanted to help the agencies who are willing to help. [01:22] So Harish, just to be clear, so crawlq is helping anyone create content automatically, correct? [01:30] >> One step before that is to identify your niche audience and that's the USP of the crawlq. And once you have identified your niche audience using AI insights and using AI, then we put our machine into to create content. So content is latter part where first part is to really identify a perfect buyer persona, perfect ideal customer. [01:52] Understood. And you guys are built on top of are you guys built on top of GPT-three? [01:58] >> We use multiple platforms. We have our own proprietary AI layer that's called Athena. Athena is a smart AI assistant which communicate between user and all kinds of models like GPT-three or AI21, you name it. We have created a layer which is agnostic to the models. [02:19] Understood. And so what are customers paying on average per month to use this technology? [02:23] >> On average, our customer pays $250 per month. And of course, for agency packages, it starts around $1,000 per month. [02:32] When did you launch the business? What year? [02:34] >> It was launched in 2019 and the whole 2000 half part of the '19 and '20 was pivoting and experimenting, [02:45] >> working together with beta customers. But this year, of course in March we launched in a big way from AppSumo to different many platforms. So it was How many customers [02:58] are using the platform today who are monthly recurring? So not App Sumo customers. [03:03] >> Apart from the monthly sort of customers that are on our platform is around three fifty customers. [03:11] Okay, three fifty that are paying per month and they're paying on average two fifty per month. Right? [03:17] >> Yes. Yes. But before that, we also have AppSumo customers. [03:20] Just to finish that thought out. So you're doing about $88,000 a month in revenue right now? Yes. Okay. Very cool. Nice growth. Congratulations. [03:28] >> Thank you. Thank you. [03:30] And if you're doing that today, where were you exactly a year ago? Do you remember? [03:34] >> Well, it was really difficult to tell when we're a year ago, almost we started from zero, nothing. Three, four Well, you [03:40] launched in '20 you said you launched in 2019. What were you doing in November 2020? [03:45] >> I was working with five beta customers into entire year, pivoting with them and I did not scale myself to more customers because I got perfectly five different clients or semi or mid sized client and I was fully dedicated to them, pivoting, optimizing. [04:01] So you had five in December of last year. So one year ago, you had five total customers at $250 Right. A Okay. So you went from $1,250 a month in MRR to 88,000 a month over the past twelve months. Yes. What drove most of that growth? [04:16] >> That comes from the traction that we built around the unique USP of the product and also our launches on the different places. Of course, AppSumo was the biggest growth channel, but after that [04:28] How many did you sell on AppSumo? [04:31] >> We sold total revenue of $650,000 on AppSumo gross revenue. [04:36] And how much of that did you get to keep? [04:39] >> What do you mean? [04:41] AppSumo takes a cut. How much of the $650,000 do you make, do you get to keep as a company? [04:46] >> Ah, yes, right. Of course, know, it's the most. So 110 ks is a net net that came to us after all the commissions from Epsom out of. [04:56] Yes, you basically made 100. They made like $500,000 off of you. I mean, does that how do you feel about that? [05:03] >> Well, very, it's not really a good feeling about it, but the amount of traction that we got, the amount of like visibility we got, of course, it was not possible sitting inside the room and not opening our software. [05:20] So you sold $650,000 worth in dollars, but how many people purchased the AppSumo deal? [05:27] >> Right now, have 3,500 customers who purchased AppSumo deal. [05:32] Okay. Got it. And how many of them have you been able to convert to a paid monthly plan? [05:38] >> That percent is quite low at this moment. It's not more than 3% or 4% to be very Yeah. Honest with [05:45] the reason I'm asking is it's rare. Very rarely can you convert someone that is a discount shopper on AppSumo into someone willing to pay $200 a month for your plan. So it can be a distraction sometimes to launch AppSumo because then you have all these people you have to support. How do you manage that? [06:00] >> It's a difficult part. Today only I put in group communication that I missed my eight year old boys teacher reminder three times on a school last eight months. And he was stressed out last night. Was saying, I'm, daddy, I'm really stressed out. You have to really talk to teacher. So it was very difficult and I'll now [06:22] Sorry, talk to who? [06:24] >> To my little boy who was eight year old and he was really stressed out because I missed his teacher's call three times. So it was very very difficult time last eight months supporting all these customers. So from today I said no, I'm going to put $269 per call that you are going to book with me. [06:44] Yep. So this [06:45] >> is something I had to take this step, but it was difficult to support all the AppSumo customers. [06:49] Well, that's good. Yeah. Good. Nice, nice move. I mean, you now have three fifty that are paying in your AppSumo, you know, $88,000 a month. You're north of a million dollar run rate now today. Have you done all this bootstrapped or did you raise capital? [06:59] >> It's completely bootstrapped from my own funding, $350,000 I have already put from last two years. I have sold my house two times, moved to a lower, a smaller house. So I'm fully invested. I have thick skin in this game and it's really, really excitement of building something, but also fully invested myself. [07:21] You are 100 all in. [07:22] >> Do you own [07:23] >> 100%, Harish? Yes, I own the 100% of the company. [07:26] I love that. Nice work. [07:30] You take all the risk, you get all the reward, right? [07:33] >> I hope. Yes, yes. That's not the basic idea, but I had this dream of helping and bridging this gap between sales, marketing and product development because I have lived with this frustration for last twenty years, product marketing and sales work in [07:50] How do you manage churn? [07:52] >> Currently, of course you can see that 3,500 lifetime deal, they are not going to churn. But the customers who are coming and joining free trial, of course I need to provide them a lot of value and the churn numbers are getting now visible, not that in a significant way. So far I have no So Hariich, way to [08:16] measure churn is ignore free trials, ignore AppSumo last month in October, take your total paid customers. How many of them stopped paying or downgraded this month, November? [08:24] >> No, it's not a single customer. [08:26] Okay. We're five days in, but you get my point. So you have Yeah. Yeah. What was your churn from September to October in terms of revenue? [08:33] >> As I said, those who joined me paid hardly two or three customers dropped. [08:39] Okay. So maybe a thousand dollars of churn each month. Yes. Got it. But how much new revenue did you add last month? [08:46] >> The last month on the recurring revenue, it was, I have to keep all these numbers in my head, but it was almost around 2,500 was the revenue that we had. [08:59] Very cool. So you add 2,500, you churn 1,000. So net you grew 1,500 in new MRR last month. [09:04] >> Yes. [09:05] Very cool. Nice work. Where do you plan to get new customers moving forward? What's the growth plan? There are three growth tiers. [09:12] >> One is working with affiliate. Second one is also launching on the different channels. For example, we are going big way in the product hunt that we wanted to get more visibility and traction from there. And the third one is we launched our own inbound and outbound marketing program. We are using our own tool to create very niche specific content dedicated to SaaS founders, agencies and the one I talked about the growth consultant. So their people, business [09:44] >> consultant basically or growth consultant. They are my primary target audience. [09:50] And Harish, how many people are on the team today? [09:53] >> We are 10 people on the team. [09:54] 10 people. How many engineers? [09:57] >> I have eight developers eight developers. One of course, delegated product design for product owner who also do the agile scrum and manage my backlog. Myself, I am also the CTO and main person behind it. But of [10:14] course So how much do you pay when you add up all the salaries except your own? How much do you pay for headcount right now each month? [10:21] >> Headcount currently is larger. So still I'm in end up like a run rate of $7,500. [10:30] So all in your monthly expenses for an ITAAC are $7,500 [10:34] >> Everything everything including my AWS or other type of infrastructure cost GPTD. Counting together 7,500 is the total run rate. I Harish, [10:46] that doesn't make any sense. Sorry. What do you mean total run rate? [10:49] >> Like the total amount cost of goods sold plus what I pay to the developers. [10:55] You're spending your own expenses each month right now are $7,500, correct? [11:00] >> Yeah. So currently it's not breakeven and you can see it already. [11:05] Well, mean, if you're doing 88,000 a month in revenue and you're spending 7,500, you're making $80,000 a month in profit right now? [11:17] Yeah, yes, correct. [11:19] >> The breakeven is not in terms of the, so you can see it's the 7,500 is total the expense like every month, the run rate, right? And the numbers that you just mentioned is also sort of not stable because of the last few numbers that you're getting from maximum. The both, you add together. [11:47] Sorry, sorry. No, no, I don't understand. I don't understand. You said you have three fifty customers who are not from AppSumo that are paying $250 per month. Is that correct? Yes. If I take $250 a month times three fifty customers, that means you're doing $88,000 a month in revenue, ignoring AppSumo. Is that correct? Ignoring AppSumo. Yes. Yes. Yes. Okay. And you're telling me that your all in expenses every month, your headcount, your payroll, your AWS is [12:16] 7,500 per month. [12:18] >> That's 7,500 per month. [12:21] So why can't I take your revenue of $88,000 per month, subtract your expenses of 7,500 per month to get your profit of something around $80,000 per month. [12:32] >> Oh, yes, yes. That will be the true number. I was saying, whatever I have invested, I was also trying to take away from the profit and get the breakeven. So what my definition of breakeven will be at a point where what I have invested so far and what I have earned together should make a net profit. So that was my calculation. So I understand your calculation now. [12:54] How are you paying 10 people and only having to spend 7,500 per month to do that? [13:03] >> What do you mean by that? [13:05] If your all in expenses are 7,500 per month, including paying 10 full time salaries, that means each person is making on average under a $1,000 per month. [13:16] >> So some of them are really I work with interns or junior people, [13:24] >> my out of eight people, my six people from India, so their salaries are of course lower, so I managed completely remote team, I don't have anyone working inside this room, it's all remote team and I always get people who are interested to learn NLP and all those things. I have really optimized this headcount expenses. I have not put expensive marketer or anyone who is asking me $2,500 per month. I get everyone which is under $600 per [13:53] >> month which who are working with me this has to that's how I survived. Otherwise, it's not difficult. [13:59] That makes sense. What are you doing with all the profits? Your bank account is going up by $80,000 per month every month. What are you doing with all that profit? [14:07] >> Well, have to still recover a lot of debt or the house I have sold and I have my own money. So I have to take back some of money, put back my savings because I have invested my life savings on it for the last two years. And that's what I'm doing, I'm trying to get it back where I have taken out. I have taken all my investments, policies, [14:32] >> youth call me and then every investment that I have made, I've completely zeroed out on this. So I'm taking out and making sure that I break even at some point of time where my own investment is taken out from the system. [14:46] It should be pretty quick though, if you're making $80,000 per month in profit and you've put in $350,000 of your own money, you should get all your money back out in the next four or five months, correct? [14:55] >> Yes, that's my target. So in the March all my investment should be out and that's where I'm looking for an external funding or preparing my company for an external funding. [15:06] How much do you want to raise? [15:09] >> At this stage, we wanted to raise around 1,500,000 to 2,000,000. That's what our currently our current calculations are. [15:19] And if I write you a $2,000,000 check today, how much equity would you give me? [15:23] >> That would be a difficult question to answer around. I'm looking around the 25 to 30% dilution of the capital. [15:32] So you would sell, someone wrote you a check today, you would sell 30 percent for 2,000,000, which would effectively be a $6,600,000 valuation. [15:43] >> Yeah, something like that. Yes. [15:45] That feels cheap to me. If you've gone from nothing to $88,000 a month in revenue right now or zero to a million dollar run rate very fast, you should be valued at a minimum $10,000,000 [15:54] >> That's close the valuation I have in mind around 10,000,000. That's my valuation. The numbers of course is difficult to arrive at this stage, but 10,000,000 and above is evaluation at this stage. [16:09] Got it. Very cool. Let's wrap up with the famous five. Number one, what's your favorite book? [16:14] >> My number one favorite book is Jim Edwards and he's my famous copywriter and copywriting secrets is the one that I recommend everyone. I have implemented everything what he has said. If you're looking for the book, I have it here in [16:29] I have it. I have it as well. And then these are also very good books for copywriting. [16:35] >> Yeah. I have implemented both Jim Edwards and also what you showed the words that sell everything in crawlq with the Very cool. Have you heard about Eugene Schwartz? It's also one of my favorite book. Eugene Schwartz. [16:48] Of course. Breakthrough advertising. That's like the OG. Let's move forward here. Number two, is there a CEO you're following or studying? [16:57] >> CEO I'm following and studying. Wow, that's a difficult one. I'm following Steve from Apple. Who? The Apple CEO. [17:12] Oh, Steve Jobs. You mean Steve Jobs. Or Tim well, he's dead. You're talking about Tim Yes. [17:17] >> I follow him from his last speeches and those. [17:20] >> Got it. Yes. Got it. [17:21] Number three. Motivation. Number three. What's your favorite online tool for building the business? [17:28] >> My online tool for building the business is [17:34] >> you mean the marketing tool or any kind of tool? [17:36] Just a tool that you like a lot. [17:39] >> ActiveCampaign is one of the tool that I really like most. [17:43] Number four. How many hours of sleep do get every night? [17:49] >> It's difficult. Five hours of sleep I'm getting every night. [17:51] Okay. And what's your situation? Married? Single? Kids? [17:54] >> I have two kids. And married? Married, yes. [17:58] And how old are you, Harish? [18:00] >> I'm 41. [18:02] >> 41. [18:03] Last question. What's something you wish you knew when you were 20? [18:07] >> I was in my 20. [18:09] Something you wish you knew when you were 20. [18:16] >> When I was in 20, if I could that time I wish that I should have left my nine-five job, I would have been billionaire by this time now. [18:24] Guys who would have left this job faster, crawlq.ai, they help you target the right audience and then write great content automatically for that audience. They were doing $1,000 a month in revenue a year ago, now doing $88,000 per month, three fifty customers paying $250 per month on average. He's done all this bootstrapped. He's put in $350,000 of his own money, sold his house twice, but now he's profiting almost $80,000 per month to get all that debt [18:45] back and he owns 100%. We love this story. He is all in. Harish, thanks for taking us to the top. [18:51] >> Thank you. Thank you, Nathan. [18:54] One 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 one [19:19] p. M. Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at two 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 SaaS world, whether it's [19:40] an acquisition, a big fundraise, a big sale, a big profitability statement or 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 SaaS 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 [20:02] are saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty 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, I do it so that we can all learn. We have to counter [20:22] those people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.