How Hashtagloyalty CEO Krishi Fagwani grew Hashtagloyalty to $5M revenue and 1K customers in 2024.

hello everyone my guest today is krishi figuani he is the co-founder of hashtag loyalty a loyalty and retention marketing platform for businesses in the food and beverage and retail industries before diving into the company full-time he worked at ernst young as an associate where he worked within the it consulting practice on engagements with ubs bank nomura holdings and other large financial institutions before that he worked as a systems engineer at cisco systems krishi you ready to take us to the top sure all right what is hashtag loyalty and how do you guys make money so hashtag loyalty is a retention marketing tool for businesses specifically within the retail and the food and beverage industries uh essentially we help a business uh with everything from capturing first party customer data so they get information about who their customers are and then understand their information and then thirdly kind of leverage that information to engage with their customers so essentially tackling the complete uh chain of customer acquisition and engagement okay now uh how do we make money uh typically we charge a monthly subscription fee from our clients uh the fee uh given that we're based out of mumbai at the moment and uh primarily located in india uh the fee ranges between uh 30 dollars to about 50 a month uh which is paid up in most cases annually okay so you average kind of average rp is going to be about 30 bucks a month or 360 bucks a year that's correct that's great and when did you launch this company what year so we launched the company in 2015 however we actually underwent a massive pivot towards the end of 2016 and kind of started from scratch okay and uh and what happened what were you doing first so when we launched it's a funny story actually so when we started the company we were all loyalty programs and we felt that there was a big need in the market uh specifically in india for businesses specifically cafes and stuff like that to have their own loyalty program so the model we chose at that time was a very simple approach wherein we had these physical tablets at all our partner locations and customers would go and scan a qr a physical card a loyalty card which had a qr code on it on those tablet applications installed to collect loyalty points per visit it's a lot of work it's a lot of work so that scaled up pretty quickly we got some good engagement going because people kept seeing the tablet and kept reusing the product but uh operationally it was very difficult to manage because of the high capex involved in the cards and the tablets and stuff like that yep okay so you pivot and and then you launch this in 2016 so on the new product up to today how many customers are you now serving so currently we are serving about uh a thousand plus businesses okay so a thousand plus customers paying 30 bucks a month you're doing north of 30 000 a month right now in revenue approximately yes okay and where were you about a year ago so a year ago we were about uh one third that okay so call it ten thousand dollars per month uh that's great and then have you done this all bootstrapped or have you raised capital so we were bootstrapped until now we just raised the seed round of about three hundred thousand dollars okay and was that a convertible note or equity equity why did you decide to do that so uh actually the reason we decided to bring these investors on board right now is because of the value addition that they had with for our industry and for our business uh i'll just name a few of our investors so one of them is imsa capital which is a new york based small boutique vc fund one of the partners at imsa capital has a big presence in the hospitality sector in india from connects to investments that he's personally made that opened up a lot of doors to new business for us uh similarly in the uh in in that venture one of the lp's owns one of the largest prosperity chains as well in india so it was a very very uh tactical decision to bring these guys on board because as soon as these clients go live that doubles up my uh monthly revenue immediately yeah and look i know it's a really smart way to raise capital i know that this is obviously a sensitive question but would you convince them to raise would you would you convince them to invest in you at in terms of valuation so we raised it at about a two million dollar uh valuation money okay very good that's good um and look you're doing you're doing 360 a year right now so that's you know about call it three four x i mean that's healthy right it's pretty good correct yeah all right um where are you gonna spend the money so i think majority of the resources we raised for is is for engineering resources so product development uh uh we've we've identified certain gaps in where our product is today where it should be uh there's a lot of focus that's gonna be on artificial intelligence and machine learning because what we're actually trying to build over the next 12 months is more of like a personal assistant for marketing for different businesses that we work with uh essentially what we've realized is the way people kind of buy goods overall has kind of changed and their expectations have become very different so today people are not looking for generalization they're looking for personalization they're looking to connect with brands in omnichannel manner not just offline or online and they're looking to kind of see a better experience through the entire product so what what we're looking to do is essentially enable that for a business so they can create a lot more meaningful relationships with their customers versus just go around this pay and pay approach of mass media marketing you know look i get by the way i get you don't get me on the product i totally get the product it makes perfect sense to me uh talk to me about the team how many people are on the team so currently we're a 21 member team okay 21 folks and then obviously it sounds like uh now you raised capital so you might be burning cash are you are you break even cash flow positive where are you right now so we are slightly in the negative right now like negative five or nine or more uh negative three to four grand at max okay that's not bad and then churns critical in this kind of company right so what's your churn annually and how to keep it low so a monthly churn is about uh one percent uh but we're working on kind of uh so i think the biggest challenges return that we faced was uh lack of engagement between us and the business uh and that's something that we've tried to tackle uh in the indian market we noticed that uh it was very it was critical for the business owners to have access uh to the entire dashboard and the entire system on a mobile application as well so we've kind of just launched which is launching that right now so we can increase uh engagement at the same time we made the product a lot more easier uh to use because instead of the business owner actually thinking about marketing activities that they should run and stuff like that our product recommends them activities and so with all this in mind do you know what your net revenue retention annually is uh sorry what do you know what your net revenue retention is so you take your churn plus your expansion and that gives you your net uh i don't have the number right now okay do you have any expansion revenue uh our current arr is about uh or 360 000 as you mentioned yeah expansion revenue is you take the co-owner that signed up exactly a year ago twenty twelve percent of that revenue churns one percent a month you just told me do you expand that same core that sign up a year ago by more than twelve percent or no by more than twelve percent yeah do you expect do you upsell that cohort that signed up a year ago by more than 12 percent correct that's correct so we do so uh the idea is that when we started off right we we offered a loyalty and a crm platform now we've added a lot of ancillary services like marketing automation uh reservation management feedback management stuff so i our proof of those clients are slightly shorter which compensates for uh the turn rate from that uh client pool that you mentioned yeah and then how aggressive it being to get the customer in the first place so what's your fully weighted cat to get a new 30 a month customer i'm sorry what what's your fully weighted customer acquisition cost to get a new thirty dollar a month customer acquisition cost at the moment is around uh uh eighty dollars okay i mean that's a three four month payback period that's pretty good exactly very good all right let's wrap up here with the famous five number one what's your favorite business book grishi my famous business book is a lean startup number two is there a ceo you're following or studying uh elon musk number three what's your favorite online tool for building your company slack number four uh how many hours of sleep to get every night five to six and what's your situation married single kids single uh no kids no kids and how old are you i'm 28. last question what do you wish your 20 year old self knew i wish i knew a lot more about bitcoin on the blockchain because i see the blockchain having a big impact in the next couple of years and if i could have gotten early things would have been different hashtag loyalty serving a thousand customers at 30 bucks a month so thirty thousand dollars a month in revenue up from ten thousand dollars a month just a year ago they just raised three hundred thousand dollars on a two million dollar evaluation today burning about four thousand dollars per month their team of...