How Geospark CEO Manoj Adithya grew to $288K revenue and 3 customers in 2019.

hello everyone my guest today is manoj aditya he is the founder and ceo at geospark with an aerospace engineering background all right knows you ready to take us to the top yeah talk to us about geospark what does the camera yeah yeah so geospark is a location tracking and intelligence platform the biggest problem with location tracking these days is battery train and actually we solve this problem but through one of my personal experiences where i was in paris uh waiting for a train and my phone had died but then by the time the train uh by the time i could cash the train i missed all the last trains and i had to sit down and uh empty train station for almost five hours so that's when we realized this location was the main reason why my phone battery tried so that's how we got started started with geospark and the developer platform where any developer can download their sdk and and start paying for free i think that's uh how we got started and as of today we actually worked with a lot of enterprise fintech companies and banks who use our location technology for user behavior analytics and understanding what does that mean so what name name a bank that uses you and why do they care about location a location on what their customers uh so they use location for fraud prevention i'm not really allowed to mention banks but i can maybe mention uh one of the fintech companies they call scc pay the saudi telecom companies digital payments uh they use uh geospark for location triggered fraud prevention so when you make a payment at a store they match your location on the phone's location to verify that is you who's making the payment uh to instead of people making big copies of your car or card spoofing so preventing uh informations like that and then help me understand kind of what people pay to get access to your technology so on average what's the customer going to pay per year to use your tech right for enterprise uh clients we charge between 75 000 to 100 000 a year and our technology runs on the client servers to prevent any data distribution to uh our servers so yeah so it is on-prem but still kind of a sas model yeah okay that's true okay great and then um do you only work with enterprise clients uh we do work with a lot of developers we have around i think 2500 plus developer active developers who's using our platform with around um i think our 250 to 300 apps on the platform i think we have a total of 1.6 million monthly active users serving through these apps that are being built by developers and does that matter to you though at all in terms of revenue or is that kind of all free uh the developer platform almost 70 of it is free because most of these developers are not using it on a live uh scenario they're using more on testing environment so it's not it's not our biggest revenue maker more of the enterprise side is what makes us most of the route and put this all on a timeline for me so when'd you launch the company what year so we launched uh geospark in feb of 2018. that's when we went for uh we went live we launched a product hunt and we were the second best product of the day and after we launched we raised our seed round of funding on april 5th so how much total rates uh vc we have raised a total of 620 000 euros okay so we'll call it 800 000 kind of usd and then how many customers have you scaled to today over the past two years uh for now we have uh we are working with three enterprise clients those uh i think that's the best number we have in usb still have a lot in the pipeline because the sales cycles are pretty long and these companies have to deal with a lot of privacy and gdpr issues before they can start signing up but so three customers and you mentioned a hundred thousand dollar acvs earlier so that would put you at about 24 000 a month right now on revenue is that about right yeah a little bit more because we also have to make some money on the developer side yeah okay and then where were you exactly one year ago which would have been a couple months after launch what were you doing in terms of revenue then do you remember uh we were doing nothing in terms of uh revenue i think on three for the first three to four months we made zero revenue i think it started kicking in after the sixth month once we started uh working with these developers and they started converting them into paying clients because we had to change a lot in our back end so it took a bit of a challenge to convert these free cloud free developers to paying clients let me ask a different question just take me back six months ago do you remember what you're doing in december of 2018 uh in december of 2018 i think it was somewhere around 10 to 15 okay okay so you've kind of doubled or so over the past uh call it six seven months right and where are you finding these customers how are developers finding you so developers basically find us through uh the number one source is google google search they just look us up on google searching for specifically they're not just randomly finding you okay no they're looking for location sdk as a location intelligence sdk this a location with like main or location api and the second most thing is about developer referrals or friends that they refer to so how do i again oh i see so if someone searches like location sdk you've got like skyhook that's paying for space ground truth radar.io and then you guys you're saying a lot of your traffic comes from this third place in it right interesting um okay very good and then help me understand uh more about the team so how many of you guys are there uh we are a team of 17 so we have our uh more of our management and operations sales team here in the netherlands and we have our entire tech team uh based out of bangalore india and then how aggressive are you being in terms of growing the company in other words i assume you're probably burning capital because you've raised are you burning caught 10 grand a month 100 grand a month where are you at i think our burn is around 30 000 to 35 000 euros a month and uh since we do have a good amount of revenue that's coming in in large sums with the enterprise deals uh we're fine i think yeah because they're most of these enterprise deals are paying all up front right yeah they're paying around 200k up front yeah do you have any ideas well just to be hold on so they're paying on average a hundred thousand dollars per year you're sending two-year contracts and you're getting them to pay the first 24 months of revenue all up front uh we we sign a five-year contract and we get uh depending on what kind of a deal we get two years up front or three years up front since an on-premise solution and then they pay the rest uh after year three yeah that's by the way that's extremely impressive manoj i i mean i hear people all the time getting a year of contract value up front but convincing an enterprise customer to pay you for two years up front is is extremely impressive yeah i think the reason why they do it is because we do give them a very impress a good discount for the later years and since we don't have any any server cost and it runs uh completely on the client servers so we are able to give them this big big discounts which makes it easy for them to pay upfront uh a large sum yeah but let me pay doubles advocate for a second they're going wait why do you want me to pay you 200 grand up front you're a startup you've raised barely any capital and you could be out of business in 12 months and then i lose all my money uh no because our technology runs on their own client servers on their own servers so they don't really have a risk of losing out on jio's part because the end of the day even if you run out of money they're still going to have the technology and the access to the technology on their on their servers okay then flip side then why do they sign why do they need you after two years why are they sending five year contracts if they don't need you at all then why are they paying you every year uh because because we have a licensing deal it's not like we're selling our technology term it's more like they it's a right to use a license right they have the right to use our technology so what happens if you've got a business so that's why they uh so if you go to business to get access to our sdk and they would still end up using our technology to pay based on the contracts uh the backend technology sits on an escrow where they can still get uh they get access to the core i see is it too early to know things like kind of gross like gross revenue churn and expansion revenue uh yeah things now because i think uh we just started signing these big enterprise clients and i think in the next six months most of these sales processes or revenue streams will get solidified a bit better because we're going to have a lot of case studies and a lot of repeated sales yeah do what about what about like total cost to acquire a customer do you track kind of fully weighted cost of acquisition uh yeah we did i think the last uh client i think it would it takes i think it take costs around and uh if you around like 5k overall to to just acquire a single client including time spent and the resources spent on the clients of around 5000 to 7000 depending on how much how demanding the client is okay that seems to me to be like that barely covers a flight to a client that you're charging two hundred thousand dollars a year for spending seven grand for a new two thousand dollar client something doesn't something feels off to me there um because everything is done offline online where we we talk to them or skype or hangouts depending on them so it doesn't really cost us to fly there you don't have to meet face-to-face people paying you 200 000 upfront checks how do you even know what their on-prem infrastructures if you've never been there because we because because these back-end developers provide us with all the information and we send them these uh docker packages where they install all of this and we still have live access to these docker containers so what's preventing you from growing faster if it only costs you seven grand to get a new hundred thousand dollar acv account you should be putting billions into that marketing channel the math works our first client paid is 200k our second one paid is 75k so it was only one client that we signed three days ago that paid us 200. the last two paid is 75 and another one paid 100 so it's not like every client pays that was the one last client that we signed paid us to 200 upfront okay so it was a saudi company so to acquire a 75 000 your customer what are you paying to get them up front uh same around five to seven k ten percent okay still same the math works right so why are you not pouring like way more money into that channel if the math works uh because it's very hard to convince uh these enterprise lines because they need the use case has to be correct and they should be able to find a need and it should be solving a problem and improving revenue or getting new use cases because not location is very sensitive and unless and until they find a proper use case or a proper need it's going to take them they're going to take their own sweet time to uh close a deal yeah all right very good let's wrap up with the famous five number one what's your favorite business book uh my favorite business book uh i don't really read a lot of business books but the recent book that i just read was venture deals i think that was a very good book that i obviously read and the hard things about the hard things was really good so i think these are the two books that i've recently read are you looking around right now uh not not at the moment because we are working on getting to a better uh better arr before we can start uh raising any capital what ar do you think you have to get to before you think about an x-rays uh maybe a million and a half okay and and what are you at right now uh around three three hundred on i think roughly around 360 370. yeah yeah no that makes sense all right number two is there a ceo you're following or studying uh i'm sorry is there a ceo you're following or studying uh no i'm not number three what's your favorite online tool for building your company don't really use an online tool for building a company you don't use any online tools to build your con it could be any tool you're using whether it's docker kubernetes anything else oh like that okay makes sense uh yeah i think really you use uh docker we also use kubernetes i think the best uh online tool what we love uh to use uh from a from a tech perspective is pycharm that's one of the one of the tools that i love using and then the second one is uh i i don't know if you call it too but aws is great and then if you're looking at offline tools or taking notes i think notion is something really good that i really use a lot i think notion really puts the business in a very clean and structured way very good number four how many hours of super getting every night maybe five if i'm lucky and what's your situation married single kiddos single okay and uh how old are you i'm 24. 24. last question what do you wish your 20 year old self knew uh product doesn't sell itself guys product doesn't sell coming from geospark again helping banks and other clients understand location-based data they have three customers right now dude about 360 000 per month they just signed their first 200 000 account looking to scale over the next couple years they've raised eight hundred thousand dollars burning about call it forty thousand dollar for forty thousand united states dollars per month on their team of seventeen as they look to scale manage thank you for taking us to the top thank you