How Firsthive CEO Aditya Bhamidipaty grew Firsthive to $3.8M revenue with a 78 person team in 2024.

hello everyone my guest today is aditya bamaripathi he's the ceo and co-founder of first hive the company co-founded with his partner in 2009. he acquired his engineering bachelors from jntu and postgraduate diploma in management from another university and then began his career with procter and gamble and soon moved into a leadership role where he was responsible for the southern region he turned around a loss making regent into a profitable one in record time and also the highest growth area for png he's also worked with iget and london before moving back to india to set up e-smart solutions and jump in to first time you're ready to take us to the top yeah absolutely looking forward to this conversation nathan all right tell us about first type what does the company do and are you a pure play sas company we are a pure place as company uh first hive uh is a product that we launched in 2016. uh it's about 30 months since we launched and we're very very excited about what we're doing uh it's essentially a customer data platform we go to large consumer marketing companies like banks financial services uh companies retail cpg organizations and what we're doing is we're helping them take control of their marketing if you if you're familiar with the marketing landscape today you know the number of tools out there that enterprises have to deal with have exploded along with the interfaces that have exploded and with all of this uh what has happened is consumer data today in a typical consumer marketing company is just thrown all over the place in many different platforms and uh and and we all see the result i mean most marketeers today struggle with uh a typical conversion rate of less than two percent which probably makes this the only trillion dollar industry with a 98 failure or a leaky bucket and that's what we are helping these enterprises take control of and and and solve and so help us understand if there's an enterprise listening right now what's an average enterprise going to pay you per year to use this this technology you've built uh it's it's it depends on the scale of marketing intensity that we handle for these enterprises if you if you look at a typical large enterprise which has presence across multiple geographies uh a few a few tens of millions of consumer interactions a day and you know a lot of international content and maybe anywhere from 30 to 200 different systems where they have consumer data sitting and and it is that dispersed uh when first hive comes in we connect into all of these channels and then we we are actually the world's first machine learning layer to build that unified entity so there's a lot of compute that happens which is directly linked to the marketing intensity the pricing therefore varies anywhere from i would say about 150 000 all the way up to a couple of million dollars depends on the intensity of integrations and these events okay now yeah again there's a big range there but just because we're short on time i mean would you say 150 per year is a fair average or you think it's probably closer to 250 or 500 or i would say that a typical large enterprise the average would be closer to the 250 000 at a couple of million events a day okay so 250 a year and which comes out to come and be 20 at 20 grand a month something like that yeah okay very interesting and then you said you launched in 2016 right tell us the story of how you got your first you know one or two customers oh absolutely i mean i am an ex-proctor myself and therefore have some familiarity with this space working inside one of the probably one of the original marketing companies of the world and then when i moved out and i moved to iget i was selling to companies like that uh you know selling analytics solutions and technology solutions to them and then i came back and i started you know a firm that ran for six years which was in the marketing services space so i got a very very interesting you know perspective into marketing and the opportunities that we saw both being inside an organization selling tech to these organizations and then servicing marketing campaigns and a lot of it was really born out of uh the opportunity that i saw in the data that was that was getting generated but not necessarily getting leverage most marketing campaigns end up being expensed out at the end of the campaign rather than looking at that as a data asset on customers on customer behavior customer experience so do you sorry just to be just to be clear your first what i'm looking for is your first couple customers and first time it sounds like you had a marketing agency for six years prior to this were your first customers and first time the software from the marketing agency yeah yeah because i had relationships with customers there and therefore i had access to a few cmos my first customers therefore were from relationship that i had built in the past and uh yeah and that's how we got rolling on this and then how many over the past caught three years how many customers have you are you now serving today we are now at 29 paying customers as an enterprise okay these are large enterprises which are you know across these two primary verticals that we mentioned that we focus on which is banking financial services and then manufacturing cpg and retail okay and what's the team that you built around you what do they look like how many people we're a 40 member company today largely engineering as you can imagine this is a heavy engineering product with 27 engineers led by our ceo and vp engineering and then we have a product management team that's again around ad tech and martech so that's that's really the core of the team and then we have a client customer success team which helps our customers leverage the product and aja have you decided to bootstrap the company or did you decide to raise capital a lot of a lot of first time has been built bootstrapped uh and i'm actually very excited in the way we've done this because while we did raise a small angel round uh early on as we started the first time uh the the core of the company was actually bootstrapped initially but we we ran a really really tight ship here and then we hit uh we we hit cash flow positive within 18 months of launch of the product and then uh so just to get the funding number so so total funding into the company today is about how much marginal less than half a million dollars okay less okay that's great no that's that's wonderful i look i like i love kind of bootstrap story so this is great say that again largely bootstrap yeah yeah well let's you're either bootstrapped or you've raised capital there's not like largely bootstrap so you've raised very little money as how i would say it less than 500 000. yes yeah very good okay and then and then um so so uh less than 500 thousand dollars raised you turn cash to a positive early on um how did you fund kind of the early creation of the technology did you raise early on or did you use like professional services stuff to fund the growth no the initial amount of it was bootstrap and then we uh we funneled some of our uh because of the marketing services company we had cash flows and therefore we funded that into the product i in the initial days and then we switched over to the product completely okay yeah that makes sense that was when we raised the little bit of capital that we raised and the initial 29 customers today at that price point you told me earlier you said an average of about 20 000 per month i mean that would put you out about 580 000 per month right now on revenue is that correct uh that's not that is not correct because not all our deployments are at that scale uh the typical scale that uh that we are at is closer to about a third of that number okay got it so so maybe closer so maybe more like seven thousand dollars per month or twenty four thousand dollar per year uh kind sorry seventy sorry eighty four thousand dollar per year kind of contracts yeah now and that would put you at about two hundred thousand dollars per month today in revenue is that more accurate that is closer to the act okay still by the way still great considering a bootstrap company three years in still a great story what's growth look like so if you're at 200 a month today where were you exactly a year ago do you know uh we grew about um we doubled in terms of number of customers over the last year uh and uh our revenue also kind of reflected a very similar number okay so revenue about revenue about doubled as well revenue has doubled as well revenue is slightly less than double because we are going in for a little more aggressive pocs at this stage uh and therefore uh you know the revenue is less than double but then the number of customers have doubled the exciting thing for us is what's happening in the future we just launched our operations in the us we started in bangalore uh for the last uh you know 30 months and then last month we set up our us us office and uh so yeah we're really excited we're hoping to kind of hit like a six to eight x uh growth in the next uh 24 28 months so we're quite excited about where we are what we are seeing right now in terms of the early days on the would you say in the next six to 12 months you want a 6x no 24 to 28 months so over the next two years you want to take 200 grand a month or 2.4 million a year and get up closer to 12 million or 13 million per year run rate 12 million run rate is what we want to and where do you see what's your best guess today in terms of where that growth is going to come from upselling your current 30 customers or landing new customers all together no landing new customers is going to be the biggest growth accelerator why do you say that why do you say that so definitively uh because while uh because of two things i think the market is um this is a very early market in that sense for a customer data platform and therefore there's uh this is just very very wide and open and therefore the new customer acquisition growth is what i expect to be very rapid for example we expect to quadruple the number of customers in the next two years so that's going to be a very very important part of the growth having said that also expansion of the existing customers into new geographies is going to be an important second component of that growth but uh the first one is definitely going to be the leading one between these two yeah i mean you mentioned you mentioned eric early on the interview when you looked at their s1 40 of their new revenue came from expansion not new customer ads i mean they can be a very especially your acvs expansion can be very critical do you know what that number is to date do you know what your historical year over your expansion has been on contracts it is about 40 4-0 yes okay our one year is also about 40 today and we've seen very very little transition less than three percent churn in the last two years uh that's that's per month or annually okay so it's about three percent gross revenue churn per year forty percent expansion right on revenue that puts you at about 137 percent net revenue retention annually is that accurate about 100 yes 137 to 140 is what our incremental revenue is as well from customers and and therefore new customer acquisition is a while new customer acquisition is a really important thing existing customer growth is going to be an equally important thing but the new customer becomes a little more important because we're also getting into new geography and therefore we're going to get access to uh you know a new market and therefore that's that's going to be our number one objective followed by of course revenue retention or revenue growth expansion revenue how aggressive are you being in terms of getting the customer in the first place and specifically if someone's going to pay you 84 000 bucks for a year-long contract will you spend that full amount to acquire them no our ltv to cat ratios today i would say are very healthy we have we have an upwards of eight on that number today uh okay just to be clear so i wasn't ltv is is is something that has kind of extrapolated over time and can be a weird number to look at you're just pure you're pure cac to get a new eighty four thousand dollar contract is what so if you look at a payback period then our sales payback period is close close to about four and a half months okay four and a half months okay which means you're what you're spending about twenty thousand dollars to get a new customer okay yeah that's gonna pay you eighty four thousand dollars for a year that's great i mean can you be more so you said you had a team of 27 out of your total team of 40. do you have a sales motion built yet how many sales people do you have on your team we have about four people in our sales today so the sales has actually been uh something that we've uh we've done more inbound and most of our acquisition has been inbound or referrals customer referrals or through the different awards that the platform has won and therefore we've got inbound interest from customers the sales machine is something that we've just set up in the last four months and that is what we are kind of hoping will start a lot more acceleration and therefore the aggressive numbers on the next two years you mentioned your altitude a cac you said was about eight so if you're spending twenty thousand on cac that would put your ltv it caught 160 thousand dollars where are you getting that number from the ltv to cap ratios uh is the 160 number because typically today what's happening is we are seeing about one and a half to two year history on our customers and you know we've not really played out on all the contracts it's still early days and like you said for us to be able to put an ltv to cad yeah but this is this is the existing history and this is i was going to say if anything you have the opposite problem which is if you extrapolate your gross churn data the average customer you could argue and stay with you for 400 months which we know is a very stupid number to plan around because right that you're just dividing but that would put your ltv at like 2.8 million right which is again ridiculous to plan around but that's the numbers say so you're saying our historical data shows called 250ish is is more accurate 250 grand is or what our most expensive customers paid yeah interesting okay very cool what about any plans to raise capital or no uh we do plan to raise capital later in this year but that's going to be once we kind of get the initial velocity in the u.s market and we are uh we're about six weeks into the u.s market okay so i i think in six months from now we would have landed our first few customers in the us market and that's when we are going to be looking at raising our cpa and what do you think the right amount of money to raise would be at that point yeah it's i cannot put a number on that right now oh range is fine i mean we're talking like 5 million or a million or 10 million yeah i think it will be maybe in the ballpark of the 10 million round that we'll be looking at uh as we get because this is going to be uh to fund our next next growth was from a series a standpoint and therefore i i suspect that's what it's going to be like yeah so so and then i mean you have a general sense and again this is very speculative at this point but you have a general sense of of what valuation you'd like to raise on six months from an hour 12 months from now i think that's a little premature right now because the way i look at this is that the capital is really coming in to help us grow and i think we'll get a much better sense of the velocity and the valuation that the product deserves as we look at the market in the next three to four months how we are how quickly are we able to land our first customers what kind of velocity we are able to build in the pipeline uh the last six weeks has been incredibly encouraging we've kind of already seen phenomenal response on our lead pipelines in the last six weeks we're very excited about what we've seen with very very limited inputs that are that have gone in from our site so far um but i think four months from now we'll have a much better handle on what is a fair evaluation for us to go in but you know i'm sure you know this i mean valuation is just one of the many metrics that will kind of go into making a choice yeah i just mean i just wonder why a guy like you wants to raise it all i mean you've bootstrapped really effectively at this point and you raise money especially if you raise 10 million dollars right right now you're doing 2.4 million bucks in arr right let's say six months from now you get up to 3 million if you're gonna raise 10 million you'd have to i mean your valuation you'd have to look at raising if you want to only give up 10 on the company you have to raise it 100 million dollars post money right which is you can do the math on 3 million ar what what x that is right that's going to be hard to get that kind of deal so you're going to take a lot of dilution if you raise 10 million bucks and i just wonder why a guy like you wants to raise versus trying to stay bootstrapped see i think part of it is driven also by the most of our acquisition like i said so far has been inbound and organic we've not really spent on marketing and i don't think we will be able to uh fund the kind of marketing that the product deserves uh for us to get to the number and there is always a time to market if you look at first time we were actually the world's first full stack customer data platform with a machine learning layer on identity building and we still continue to be the only full stack customer data platform for the machine learning on the identity building although there are a couple of other products which have come up on the machine learning on identity building but they are not full stack yeah so there is a time to market for for a product and given the reception that we've seen we've been incredibly encouraged by how the time to market advantage we have uh because of the feature set that we are bringing into the market yeah and you know a little bit of dilution but then if you are able to grow the pie and then capture market i think that's going to be a much larger objective for us than uh maybe an incremental dilution at this stage yeah you're talking to a lot of vcs because that's the story they sell you no not yet i've not not yet begun talking to a lot of vcs i'm just i did yeah i'm just giving you a hard time man i just think you've done a fantastic job bootstrapping and i want to congratulate you on that all right let's wrap up with the famous five number one what's your favorite business book um i just read um horowitz uh the hard thing about hot things last last month and i really loved a lot of those insights that he gave i could relate to a lot of those small nuggets of pieces that he referred to loved it number two is there a ceo you're following are studying right now um no i don't have one ceo i'm following a lot of different people and a lot of different vlogs pick one difficult to do that okay number three what's your favorite online tool for building your company online tool my favorite tool is what we do at first besides your own right oh zoom i absolutely love what zoom is done i think it's such a seamless experience love it uh having said that i also love another tool in the same video space which is appear we use that a lot uh i absolutely love the ease at which we were able to do it so i really love the way these tools are done i love intercom intercom is an interesting beautiful tool number number four how many hours of sleep are getting night many hours of sleep per night i'm per so that varies with all my travel i don't think my body knows which time zone i'm in right now so i would say you know between six to eight okay and what's your situation married single kids married with two kids and how are you how old are you i'm 39 all right last question what do you wish your 20 year old self knew um i should have probably gotten married earlier guys there you have it first time 29 customers paying on average 84 000 per year doing about 200 000 per month right now in revenue that's up from 100 000 per month just a year ago they've only raised 500 000 to do this they are cash flow positive team of 43 gross churn annually 40 expansion for 137 net revenue retention annually spending 20 grand to get a new 84 000 per year customer so a healthy payback period there of three months as they look to scale again cross channel b2b customer engagement and marketing automation product adia thank you so much for taking us to the top