Fitbots Revenue, Valuation & Funding (2023)

[00:00] What is going on YouTube? You know, we are just two weeks away from Founder500 in Austin, Texas on September first and second. There's over 500 B2B SaaS founders all coming together. You don't want to miss it. Ticket prices increase every three days. I have it on an automatic accelerator every three days, and we're almost sold out. You can see there's about nine left when you go to the event bright link, about nine left, and it's updating [00:23] real time. So check it out today. It's founderpath.com. And then in the upper left, you can hover over our product drop down and click the event stream. I'll also put it in the description here of the YouTube video. I'd love to see you there. Hey, folks. My guest today is Vidya Sanpanam. She's the co founder of fitbots and leads growth. She started the company after a sixteen year career, Her last company being Mindtree, she led strategic [00:44] talent and leadership building. Vidya, you ready to take us to the top? [00:48] >> Absolutely, Nathan. [00:49] Alright. You told me before you listened to the show, so this should be really easy interview. Right? [00:54] >> I memorized all your questions, by the way. [00:57] So you should just do the whole show. I'm just gonna leave here. You just do it. Alright. Tell tell us about fitbots. So what is fitbots? What are people paying you for? [01:07] >> Yeah. Absolutely. So fitbots, we are an OKRs company. We have both the SaaS product for OKRs along with the network of OKR coaches. The problem that we really solve is the big problem of misalignment, especially when teams are hybrid and CEOs are really struggling to get everybody focused on outcomes. So that's where we come in. [01:25] Interesting. So when you say your SaaS that helps teams manage their OKRs, what does that mean usually? [01:31] >> Yeah. So so we have a product we have an OKRs product. And along with that, we have a network of OKR certified coaches. So let's say a team wants to get spun up on OKRs, they take a subscription for our software along with the coach from our network. [01:47] Yep. So guys, this is one of those things, like, one of the things we look at at Founderpath, the one where deciding which bootstrap founders to give capital to. If they have like a healthy business cadence, which means there's like a monthly review of OKRs. Every quarter, they're looking at last month's OKRs and protecting the next ones. We like this kind of business discipline. Vidya is building this nicely at fitbots. OKR stands for objectives and key [02:07] results. Now, Vidya, there's a lot of sort of frameworks around this. People have heard of, you know, I would say some of the older guys would be like Vern Harnish and Rockefeller Habits, this sort of a version. Traction is sort of a newer version. Just to be clear, you're not selling like a new way to do OKRs. You're selling software to empower systems that already exists to do OKRs. Right? [02:28] >> That's correct, Nathan. So objectives and key results, as you rightly called out, it's very similar to the revolution around agile, which happened a few years ago when tools like Asana and all came up. Agile was already a known concept. So it's very similar to OKRs. We're not really here to educate the market on the framework. We are trying to help companies to adopt OKRs using our software. [02:53] I love that. Okay. So what are companies paying you on average per month to use the technology? [02:58] >> So we get paid the annual contract value is about 6,000 USD, so it's about $500. [03:05] Okay. And are you charging based off team size or product features? What do you charge based off of? [03:11] >> We charge per per person, per user per month. [03:14] Per user per any product based upselling or no matter what plan you're on, you get all the product functionality? [03:20] >> Yeah. So we have three plans and the plans which are, of course, you know, the more expensive ones have got stronger integrations. [03:28] I see. Okay. So the average company is paying $500 per year, though? [03:34] >> The average company is paying around $6,000 per year. [03:37] Oh, 6,000 US dollars per year? [03:39] >> That's right. That's right. [03:40] Oh, amazing. Okay. Got it. Got it. Okay. Very interesting. And then put this all on a timeline for me. When did you write the first line of code for the company? [03:48] >> Yeah. So we started the company in 2018, me and my tech co founder Kashi. We launched the OKRs product in 2019. And from there, in the same year, actually realized that many teams being new to OKRs used to come over to us and say that, hey, tell us more about OKRs and how to use it correctly. We're familiar with it, we want to know how to use it correctly. So we got certified as OKR coaches, coached [04:16] >> about six fifty plus teams, ran about 1,000 plus check-in meetings and built the product as we were close to users. [04:24] >> So from there Wait. What did you get certified through? [04:26] Like, from from who? [04:29] >> We got certified from the OKRs Training US. They're one of the global best in OKRs, also bringing the certifications into Asia Pacific. So the learning that we had, Nathan, was that not every problem in the world can be solved only with software. So you need some amount of handholding for teams as well so that they do it correctly. So that was our learning. [04:52] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this, we've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect [05:16] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:40] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is [06:02] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're [06:27] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're gonna go back to the YouTube video here in a second. But [06:49] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into [07:16] the interview. Interesting. Okay. So you you think about in 2018, you really launched at 2019 then. Right? [07:21] >> Correct. [07:22] And how did you get your first customers? Did this coaching company give you a bunch of early customers after you graduated as coaches? [07:29] >> Yeah. So we got our first customer through our own network. And from the first customer, we took that experience and we got the second customer. The first two were really through networks. [07:42] Mhmm. Okay. Very cool. I love that. I love that flow. And now fast forward to today, how many customers are you working with? [07:47] >> Oh, we have 50 customers. [07:49] Five zero? [07:50] >> That's correct. [07:51] That's wonderful. Okay. So how are you We talked about your first customer who came from your own network. How are you adding new customers today? Because you rank very high on G2. You're getting a lot of word-of-mouth, I imagine. [08:02] >> Yeah, that's right. Top two sources for leads are through inbound. So, we write a lot of content on OKRs because we have a lot of expertise around OKRs with the software. So, that's converted into high quality content and we get leads through inbound. The second source is through reference. Reference could be either through our own customers or through word-of-mouth or through reviews like on G2. So these are the top two tools. [08:31] Okay. And 50 customers times $500 a month means you're doing about $25,000 a month in revenue? [08:37] >> Yeah, you're absolutely correct. [08:39] Amazing. And what were you exactly one year ago? [08:43] >> We were about close to about 14 ks MRR. [08:48] Okay. So last year at this time, you're doing 14,000 a month? [08:52] >> Yeah, a little lesser than that. We closed the year last year. We closed the year at 14 ks. So we're probably doing a little lesser than. [08:59] But more than about 100% year over year growth. Have you done this all bootstrapped? [09:04] >> Yeah, we were bootstrapped for about two years, Nathan, first two years. And then so we really learned how to use capital efficiently. And we raised a pre seed round in 2020. [09:14] Interesting, 2020 pre seed. Now, I love how you preface that statement. You said you learned how to be capital efficient. You must because you know my show, you know I love it when people are bootstrapped. But tell me about this. How did you discover ways that you could spend a dollar and make $2, the capital efficiency? [09:33] >> So the first and foremost is, I think, in the context to how we organize the teams. So we had to so this was a toss-up. So it's very easy to keep hiring and then burning quickly. So we had to be very capital efficient in how many members of the team that we had to hire and how quickly can we build using the existing team. We then optimized on cloud spends and then we started writing content. We [10:03] >> actually didn't do Google Ads at all. We didn't have the money at that point of time to spend on ads. So, just started building a lot of content led lead generation as an engine and in order to get leads. So, these were the three tactics that we used in the early stage. [10:17] And talk about contents. Like, what's a keyword you rank really high for on Google? [10:22] >> Actually, we rank for OKR coaching for some reason. [10:27] OKR coaching. [10:29] >> Yeah, because I think it's also because of the network that we've built. [10:34] >> So that's one of the top keywords. The other is around OKRs templates. [10:42] Interesting. [10:43] >> So we've got about 100 plus templates and that helps us rank up as well. [10:47] Yeah. Now I'm seeing, you know, you're competing like Miro ranks for that, Better Works ranks there, OKR templates dot com ranks for that keyword as well. I mean, Atlassian's ranking here. How do you how do you try and outrank, you know, HubSpot, Smartsheet? How do you try and outrank some of these massive players that have raised hundreds of millions of dollars in VC? [11:06] >> Yeah. So, would look at it as judo moves. So, you don't need to necessarily be the strongest to actually survive. So, that's how we look at it from a mindset perspective. So, for us, it's really about creating high quality content and distributing it and constantly working on our SEO, though it's a long term strategy. So, we basically do a lot of collaborative posts as well. So, we work with global OKR coaches, we work with founders who [11:35] >> practice OKRs to collaborate to post and then keep amplifying it in our social media as well. So these are some of the ways in which we've been [11:42] And how much has all of this marketing generated in terms of new sign ups last month? [11:48] >> We had about [11:52] >> 40, around 55 trials and about 15 high quality demos which came in. [12:01] And how many closed new customers? [12:04] >> We closed five. [12:05] Five new customers. That's a 30% close rate on demos. That's pretty good. Yeah. Very cool, Vidya. And when you did the pre seed round, how much was that for? [12:14] >> It was for 250 k USD. [12:17] 250 k. And can I ask what valuation that was at? [12:21] >> That was at $2,000,000. [12:23] And did that feel fair to you at the time? [12:27] >> So, when we were actually raising our pre seed round, actually wanted to use it to accelerate our growth. So at that point of time, I think if I look back, yeah, I wish it was more, yeah, at that point of time, it seemed fair to us as founders. [12:42] And are the sole founder here or do you have co founders? [12:45] >> I have a co founder. My co founder was my ex colleague in the previous company that I worked in. [12:52] Oh, So [12:53] >> we knew each other from our workplace and then he's my tech co founder and both of us started fitbots together. [12:58] You guys split fifty fifty at the beginning? Were you friendly? [13:01] >> Yeah, we're friendly and we split fifty fifty. [13:04] Oh, that's very cool. [13:06] That's great. Now that obviously the pre seed investors come in 250 k on a 2,000,000 valuation, so they bought around 10% of the business. So each of you guys own like 40 ish percent, 45% today, they own 10%. [13:18] >> Yeah. That's That's accurate. [13:20] That's awesome. Well, listen, we're certainly rooting for you. Are you looking for more capital now or are planning to bootstrap from here on out? [13:25] >> So we are looking for more capital and looking to place it on growth. We find US is a very big market for OKR software. So really looking to double down on that. [13:36] How much capital are you looking for? Well, like, what's the smallest amount you could get today to drive growth? [13:40] >> Yeah. We're looking for 2,000,000. So we're looking to raise about 2 to 3,000,000 at the moment. [13:45] And how much equity do you think you have to sell for that? [13:48] >> I think we need to part with about 20% is what I believe. [13:51] Okay. So you think you could get sort of like a $6,000,000 to $8,000,000 valuation? [13:56] >> Yeah. Correct. [13:57] That's Interesting. Have you opened it up? Do you have a term sheet? You have a lead yet or if you're just getting started? [14:02] >> Yeah. So we've just actually got started about a month ago and still looking for the lead at the moment. [14:07] Interesting. Yeah. Mean, valuations are so compressed right now. I mean, look, you're doing $25,000 a month in revenue. We just closed $145,000,000 fund this morning for Bootstrap Founders. We could get you like 5x of your MRR. It's not $2,000,000, right? It's only, what is that? Call it $150,000, but you can come back and take more capital every like thirty, forty five days. Would you ever look at non dilutive options? [14:28] >> Yeah, absolutely. Think and and they are a lot more founder friendly because you still have control of the company. And in fact, I just signed up for that just before the call. [14:38] Oh, for Founderpath? [14:40] >> That's right. [14:41] Oh, that's amazing. Well, I hope let me just ping my team right now on Slack and say, give Vidya an amazing offer. [14:46] She gave me a great interview. [14:47] Okay? We'll see what we can do for you. [14:50] >> Thank you, Nathan. [14:51] We tell founders all the time. We say, look, even if you don't take money from us, if you have an offer from us, you can use it as leverage with the VCs to try and get better terms from them. You know what I mean? [14:59] >> Yeah, absolutely. [15:00] Very cool. I am certainly rooting for you, and thanks so much for supporting the show and listening. How many episodes do you think you've listened to? [15:07] >> I've listened to about 25 episodes of yours, but I keep doing that every day. In fact, I just keep looking at your episodes because I think there's a lot to learn from founders, bootstrapped in other ways, and it's just great learning when scaling a SaaS business. [15:22] When you open the app, your iTunes app, and you're looking at episodes to play, how do you decide which ones to click? What do you look for in the title? [15:29] >> So I usually search for zero to one. And I saw your most recent one with Missive and how these scale from zero to two. So that was really interesting for me. The other is there's a thing which comes on YouTube, the notifications. So I usually look at that as well. That's awesome. Yeah, the Typeform Founder as well. So that was like 75,000,000 ARR. So that was really exciting. [15:54] That's awesome. Well, listen, I'm certainly rooting for you. Let's wrap up here, Vidya, with the famous five. Number one, favorite business book. [16:01] >> I like Predictable Revenue by Aaron Ross. [16:04] That's a good one. [16:05] Number two, is there a CEO you're following or studying? [16:09] >> Yeah, so I follow so it's kind of hard to say. Of late, I've been following both Anjali Sood as well as G from Lemlist. I did a podcast with G from Lemlist, I think he's really done a lot to bootstrap and grow his company. [16:24] He certainly has. Number three, what's your favorite online tool for building fitbots? [16:30] >> I would say HubSpot. We are on HubSpot. So I think it's really it's a good tool. [16:38] Vidya, number four, how many hours of sleep do you get every night? [16:42] >> I try and get about six to seven hours. [16:45] Okay. That's a good amount. And situation, married, single, kids? [16:49] >> Married with kids. I have a 11 year old. [16:52] Oh, amazing. One kid. And do mind me asking how old you are? [16:55] >> I'm 43. [16:57] Amazing. Okay. Last question. Something you wish you knew when you were 20. [17:02] >> I wish I'd learned how to scale SaaS business. I wish SaaS was known when I was 20. And I wish I'd learned how to scale it back then. [17:11] Guys, she cut her teeth in corporate, then went out on her own in 2018 launching fitbots. She started by getting officially certified as an OKR consultant. They've coached hundreds of companies on implementing OKRs and said, You know what? Now we're gonna launch software to help people do this. They've done that. They now have 50 customers paying for the software on average $500 a month. $25,000 a month in revenue. That's more than a 100% year over year. [17:32] They were doing 13,000 a month a year ago. They've done this all fairly capital efficiently. They raised $250,000 pre seed back in 2020 at a $2,000,000 valuation. Now to raise a seed round, call it 2,000,000, willing to sell, call it 15% to 20% of the business. We'll see what happens next. Maybe we can consider to use Founderpath and non dilutive capital, but in the meantime, Vidya, we're rooting for you and thanks for taking us to the [17:52] top. [17:53] >> Thank you, Nathan. And it's a pleasure being here. Thank you very much. [17:58] 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 1PM [18:23] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM 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 an acquisition, a big [18:45] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna 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 are saying. Sign up [19:07] 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, but I do it so that we can all learn. We have to counter those people. We [19:26] 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.