How HiverhqHiver CEO Niraj Ranjan grew to $25M revenue and 1.7K customers in 2024.

hey folks my guest today is natesh mandy he's the cto and co-founder of hybrid a help desk built for google workbook uh workspace he's been driving the project technology vision hybrid and has scaled the platform right from the first customer to thousands of customers who use the product now today he's passionate about building products which are used and loved by people globally and it's actually ready to take to the top yes that's great all right so tell me a little bit about hyper so when you say help desk for google workspace uh let me give an example how customers using you day we have close to 1700 businesses globally using the product give me an example how do they use you typically uh customer support teams would say foreign there is a travel vacation rental company and they would be servicing their customers through through our email channel where the customers write to them and they need to respond and resolve their queries so hiver lets them set up that shared mailbox where they can write to and they can respond to the customers and resolve their queries like a typical ticket management but built right out of gmail do you when i when i open up a hybrid on google workspace marketplace i see you've got 70 reviews you have over 270 000 downloads is this your main distribution channel there are two distribution channels uh we have the google uh marketplace as one of the channels the other channel is a pro map store uh you can install uh hiber as a browser extension and then proceed and use the product from there too and how many signups are you getting per month from these two sources we get close to around 300 to 400 signups [Music] month yeah and that's free or paid th this is uh including free and free and paid interesting and i guess take me down the funnel so what do you know that a new company has to do in the first day or two to increase the chances they convert to paid sure so it is very important for the products to become valuable as soon as possible for the onboarding customer uh that would mean they should see value immediately we help the customers to get the first win as quickly as possible which is setting up their shared mailbox and ensuring that the first email comes in and they uh see they can assign that email to an agent and see how the complete process works once that flow is done uh that is a big win for the customer and then we start on boarding the higher more advanced features on on the product which kind of exposes more value to them gradually and what are these customers today what do they pay you on average per month to use hyper we have different subscription plans so we we start from a 15 per month per user seat and we go till 59 per month per user our typical business might have maybe 10 to uh 20 users but it can even be bigger accounts when we have more than 100 200 users on the same account so 50 to 59 a seat if we sort of take something in the middle at 30 bucks a seat times a 20 person team is it fair to say the average company might pay you 500 or 600 bucks a month that is right okay and that's up a lot because i don't know if you remember this i had you back on the show in 2018 do you remember that uh that might be my co-founder niraj ah okay oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner 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was only 115 so you you've almost four or five x with the average customer paying you per month was that intentional yeah that is right and that is intentional we have invested a lot on the product to take it to that place and that's definitely helping us now 1700 paying customers at 500 bucks a month would mean you're doing about 850 000 a month in revenue is that about right uh it's more or less in the same ballpark okay do you think you can cross that this year 850 000 a month by december yeah yeah we shouldn't be okay and are you how are you funding a business did you decide to bootstrap or raise capital we have raised capital recently earlier this year uh but but we are fairly independent in how we operate all the money that we uh raise raising is going into funneling our marketing efforts and help me understand what that raise looked like how much did you decide to raise we raised 22 million in the last round and that was your series b yeah that's right and why did you need the capital obviously you have to you know you give up equity there's dilution there why take on another investor because there is an opportunity to grow faster and for that we need money capital so there is a big market out there we have a very good product market something that customer loves there is a huge opportunity to grow faster and this is the reason we went ahead raising more money and tell me what that opportunity is you mentioned pouring money into marketing and sales so do you know what it costs you to get a new 500 a month customer yes so uh you see the whole idea is to move the complete uh funnel faster that would mean you need more number of leads entering the funnel uh per per unit time per unit month so we wanted to have more leads entering the funnel every month on month and for that to happen usually your cost to acquire a customer would increase it will not be as optimal as it would have been before because you are competing on the same adwords same same keywords bidding on the same words so you would need more money if you want to increase the number of leads entering the funnel and that was the whole idea that we need to increase the budget push harder there and then get things moving but where paint that strategy for me so you have 20 million extra dollars where are you going to spend is it facebook ads linkedin ads google ads where you're going to spend it it's a mix of many things but yeah primary focus is google ads for us and so how much do you have to spend to get a lead from google we spend close to around around around 1600 to uh get a customer from google right now okay and is that just on google ads uh that is on google ads right okay so regular google ad on google ads and if you spend 1 600 to get a 500 a month customer yes okay so that's obviously good payback right that's a three month payback um any other strategies you plan to use besides google ads we we go heavy on content uh so you you would see that we produce a lot of content we do a lot of uh blog post uh guest guest posting uh that is also part of the strategy a lot of organic traffic also comes in uh through through all the blogs and the guest posting that we do [Music] is excuse me is there a particular keyword that you optimize for that brings in a lot of your traffic we focus on uh help desk for uh gmail google workspace uh that is something uh which which is very very targeted for us so if i type in help desk for gmail uh and search you guys should rank pretty high right so yeah so i'm seeing obviously google's organic listings uh and then obviously you guys are running ads there and then yeah you are the first you guys are the first non-google uh listing and then there's front and a bunch of the others that are competing with you not just is that who you see your base competitors at front so you're coming in is that who you believe your biggest competitor is would it be front uh to some extent yeah because the approach that they have taken is somewhat similar but we have used gmail as our canvas and built the product on top of that yeah is there are there any downsides to that uh there are uh there are definitely a lot of advantages but from our downstand standpoint uh we are limited uh with whatever gmail allows us to do on on on the on the interface and on the products front uh but we and we have to be very very creative in solving the same problems uh that might be much easier for front to solve but this also gives us a lot of advantage on what is already pre-built on top of gmail we don't have to reinvent the video and tesh obviously spending 1600 to get a customer you want to keep them as long as possible so what is your churn today and how do you try and improve that our churn is a pretty uh good we have close to around minus two percent net mrr at this point of time what we do is we try to keep and ensure that customer is engaged on the product very very well wherever we see the usage popping off which we keep driving throughout the product we get in touch with them and then try to see what is happening and try to retain them so we do this directly from the product as well as a team which keeps tries to keep track of the activity of a customer that makes a lot of sense now again you guys uh and you're right by the way what's your co-founder i had on the 2018 garage right yes yeah i i had him on he gave a great episode uh he said back then you guys were just breaking as is 2018 about a 1.5 million dollar sort of run rate if i look at uh your numbers today 1700 customers we already talked about this 800 ish thousand a month i mean it sounds like you guys can break sort of 10 million uh run rate this year why did um when you go out and raise 22 million bucks you raise it from k1 which is a private equity firm they're known for being pretty founder friendly meaning if you guys wanted to take secondary you could did you guys take any secondary there's no way to do it so all the 22 million went on the balance sheet yeah more or less why did you why did you make that decision why not try and ask for a secondary and get early liquidity for you and some early employees we we had a very small secondary but uh because the number was so small it's literally negligible so we wanted all the capital to go into the company and that was the primaries oh you mean like under a million dollars yeah that is true very very small well you guys what's impressed me about your story is you've been very capital efficient you raised a four million series a back in 2018 to scale up past five million are and then you raised four million in debt last year to buy some runway explain to me why you made that decision what was it like raising debt and how do you use it see we wanted to have some money to do some experiments that we wanted to show before we go for series b uh and we got those debt for very very good terms uh uh right and then we decided on picking that up uh using that to funnel our marketing uh show some good progress before we go for series b so that worked out for us very very well uh and i think it was a good call at that point you say very very good terms for an entrepreneur listening right now considering doing the same thing what terms would you consider very very good for debt uh i would say uh first it's it's like a pool of money and you get charged for only the money you uh you end up using and not the complete pool so that definitely helps and any any interest rate uh which which might be uh say under under 10 uh right that that i think is fairly reasonable uh from a understanding very very cool all right so that makes a lot of sense um you're now scaling now if you're doing just help us understand growth a little bit if you're doing about you know 800 000 bucks a month today in revenue do you remember what you were doing exactly one year ago uh we were we have nearly doubled [Music] oh wow so you were doing like 300 or 400 000 a month a year ago yes that isn't wow okay that's incredible growth did most of that growth come from expanding current customers getting them to buy more seats or was it adding new companies all together it's combination of both for us the expansion is a big level uh and that adds to a significant growth out of the complete growth that amazing well look you guys are building this very efficiently most folks when they're raising a series b are selling about 10 to their business is that about how much you guys sold uh some somewhat in in that ballpark did you feel like it was a fair evaluation yeah yeah very much okay so just for context if you sold 10 it would be something like 180 million dollars pre-money 200 million dollar post money something like that around that ballpark and why did that feel fair to you at the time obviously today markets are crashing right public stocks are crashing everything's crashing so you closed at the perfect time see one of the reasons why we liked talking to k1 and we thought they would add a lot of value when they come on board and especially the markets we were operating in particularly we are based out of india uh the complete team uh so uh we thought that was a fair valuation and the type of team we are bringing on board uh that that would be very helpful to help the business propel forward yep and how many folks there on the team full time we have close to around uh 120 folks at this point of time 120 on how many engineers close to uh 45. now natasha have you been able to hire all of those engineers in india more or less we have couple of folks works from outside india but yeah most of them are from india which city bangalore chennai punai uh post kovar we started uh hiring all from all over india uh but yeah still the primary workforce is based out of bangalore bangalore okay i feel like that's where all the sas companies are bangalore bangalore bangalore huh that is true all right good stuff what a great story let's wrap up here with the famous five number one what's the last book that you read uh it's it's a book called soul of money uh so it talks about how how uh you can uh what what is the purpose of money yeah and and how should you think about utilizing money for your growth number two is there a ceo you're following or studying uh not really okay number four number three what's your favorite online tool for building hiver besides your own retool is a good uh tool that we use very very commonly in product use number four how many hours of sleep do you get every night um i i i think i get pretty good probably six to seven hours sleeps maybe okay that's pretty good uh what's your situation married single kids married any kids none okay and how old are you natash i am 38 38 last question what's something you wish you knew when you were 20 that's an interesting question i think i was not experimenting too much being very very scared about uh failures uh right and and probably i should have experimented more when i was in twenties uh so probably this is what i'll tell if i meet my twenty year with myself when i was from here uh guys experience experiment more hybrid hq launch back in 2011 broke a million dollar run rate in 2018 broke a 4 million run rate last year and this year on track to break a 10 million run rate growing nicely 1700 teams are using them to do support and help desks right inside of gmail that's their number one go to market chrome extension and google work uh workplace marketplace uh workspace marketplace they just raised a 22 million series b sold around 10 of the business 120 on the team as they look to scale 102 net dollar attention so it's a sticky tool as they look to continue to build and grow and double down on marketing and sales natash thanks for taking us to the top thank you thanks for your time one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry 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hello everyone my guest today is Niraj Rondo and lt started his company hiver in late 2011 over the past 7 years have virtually bootstrapped it to 1.5 million bucks in ARR there mr r grew sixty percent in the last five months and they're now growing ten percent month-over-month announced in your series a sooner are you ready to take us to the top let's get started Nitin all right what is hayver and how do you guys make money so however is basically a tool that lets teams manage emails coming in to you know a shared email account like support at your company dot-com or in foetal company.com right so you know let's say you are a team of say five to ten people that basically handles that emails that come into a shared email account you would want to delegate emails keep track of who is doing what look into analytics of you know how you are doing you know where we are and what needs to be done and you know how your team is performing right you basically let you do that right from a gmail account interesting so this is kind of there's other companies like front app which kind of do something similar to this but if that's in their own interface not inside of Gmail absolutely so think of quests like front or Zendesk to some extent or is just to some extent that inside the Gmail code interesting okay and and walk me through numbers so what's your monthly recurring revenue today so yeah we are at one hundred and fifteen thousand dollars in a mama murder right now okay one hundred and one one five you said well okay so they're about 1.4 million in air are right now yeah yes that's great now you bootstrap today but you're gonna really rate up to announce the series a yeah we did not actually accurately bootstrap so we raised around one hundred and seventy-five thousand dollars through engines back in two thousand twelve or so and then we bootstrapped it you know there's a small team we just kept growing it and and we went through a couple of pivots on the product too and then we have basically have brought it to one point five million dollars in error and now we're going to announce it next month and so how much are you raising the series a so the city's a is close to a million dollars okay you're raising four million yeah got it and and are you raising mostly in India or folks back in the states how's that working so they did mr. Scindia in India okay and what is it are you getting terms that are similar to the US or like is it on a safe note or equity or what it's an equity in or it's it's it's equity pretty much like what a typical Series A in the US would look look like got it and what valuation are you raising at I don't know whether it's tape to disclose that but it's in the 15 to 20 million dollar range okay got it so you call it your song somewhere between what is that fifteen and twenty five percent of the company yeah interesting and and how did you negotiate that so that you know that's like that's like a ten or fifteen X your current air are yeah so you know the way we negotiated was basically you know to essentially show the velocity at which we are right now essentially show the size of the market that we are in which is very very big if you take into account you know how how many people actually need it right so yeah it's it's basically a function of the venice velocity that we have been able to hit and the size of the market and of course the fantastic project that we have managed to build you know which is really intuitive and easy to use so I think everyone we showed the product to whether the invested or not everyone was really impressed with our vision that we bring to the product and how simply we made it you know and is the round actually done how do you actually have the money in the bank or no so it should be so we are in the final stages of the diligence and should be there that's great I think we have fifteen days away from getting the check that's great put all this on our timeline for me when did you launch the company so yeah so the company was launched around the middle of 2011 okay and we were a small four to five people team for the largest part of our existence okay and it was a very different product when we launched and we actually went through two I creations on the product before we came to this sometime in 2017 okay and what are you at today how many teammates we are 36 people no 36 people everyone based in Bangalore absolutely okay well so there's 36 people and cashflow positive or no yeah we are okay so cash flow positive today and you mention it was yeah yeah okay so about break even yeah what what is growth so today you're doing a hundred fifteen grand a month what were you doing a year ago in August 2017 so as I mentioned right I mean we really accelerated in the last you know six months or so the product was very different earlier and it took some time for us to you know really build it out to the point where it is and mature it right so six months back we were at you know fifty five to sixty thousand dollars in emerald only give me more after twelve months ago months ago would have been you know the growing pretty slow idea so we would have been at around forty five to fifty k forty five thousand bucks okay that's great so good growth you've you've more than you almost tripled kind of year over yeah which is great and what's total customer count today how many paying customers so we are approximately 2,000 customers yeah 31,000 awesome customers and what are they pay on average per month so on an average customer would be you know one hundred fifty two hundred and sixty dollars yeah yeah or if I take a hundred fifteen grand per month divided by a thousand HP about 115 bucks per month right now yeah and what are they what are they getting for that is it a number of seats feature sets same size what is it yeah so it's it's basically so we have three plants and on an average the customers which we have acquired recently you know would be paying twenty to twenty seven twenty three dollars per seat right so an average account is usually six to seven seats mm-hmm and what is churn look like today so we have neck- you know mhm and of course so our net amount L is around minus two point five percent at this point I'm sorry so net negative revenue churn of negative two percent minus two point five percent yeah yeah that's it yeah that's great and um and and what about logo churn noble Chen would be at around two percent per month two percent per month gross or net of course okay that's great and and what have you done so at this price point you know getting churned that low is pretty impressive what have you done a drive turned out so the park is really sticky you know I think I think it's primarily a characteristic of the product you know once we get people on board it they tend to grow right because you know it's very sticky it is something that you really need on a day-to-day basis you know I mean an average user would have you know twenty five to thirty interactions with the product in terms you know what they're doing with it every day right so very sticky you know people once they get used to it it's hard for them to move out so I think the most of the chair actually happens in the first three months but you know if we can get people through the first three three to four months you know they tend to stick end in basically grow with the product mm-hmm and what about customer acquisition cost walk me through how you're driving all this growth and what he paid a question new customer so almost all of it is organic first of all you know if you we we do pretty well on some very high intent low traffic high intent keywords right if you sell for shared inbox or if you look for a way to do customer support or don't see where it says for any combination of Gmail and help desk for example right you'll find us very very easily so you know I think we are acquiring 80 to 90 percent of our customers free of cost you know through organic search right and the rest is actually coming through Adwords we have a small 8 to 9 8 to 9 k 8 to 9 thousand dollars per month in address spend which is you know driving some of our acquisition so again what's the CAC on the pay channels okay so you know I have this blended khaki lies you'd sail across organic and you know they would be around $150 to acquire a single logo okay and so what payback period there is four or five months this is yeah some one month where's most money you're about to raise where you gonna spend it yeah so you know I mean the product needs a lot of work you know so basically we are a very small you know 20 people product team and if you look at where the product can go if you if you look at the you know the scope to build out on top of email is a platform it's huge right so so a huge amount of the investment will actually go into taking the product into new directions you know basically improving what we have right now and the rest of course will go into marketing right I mean we will play a lot more with paid marketing it will go much more aggressive on that interesting what do you assume lifetime value in months and in dollars is so our current lifetime value right now is five thousand four hundred dollars approximately and how do you calculate that so you know it's basically what char COBOL tells us based on our current channel expansion you said you use char mobile you have this champion you like it absolutely love it good good good all right very good um let's see here what about expansion revenue so besides adding additional seats any other way to drive expansion remember currently or no yeah so you know I mean that's that's where a lot of the product work on the particles is needed because you know our our pricing test you know I mean we basically sell you know one tier which is the mid tier we cannot push a lot of the people the higher pricing tiers because you do not have the features which basically will help us you know get you get them to pay more right so we need a lot more in the product in terms of feature depth and that is where a lot that lot of the investors will go into right because that will directly help us you know get more money out of you know the existing customers by giving them more stuff besides SEO and besides the direct ad spend that your you're currently doing are there any other growth channels that are really working well for you I think I think the deserve pretty much the two things that we have tried we have we are dabbling with a lot of stuff you know we have a very strong presence on G to crowd the sass you know marketplace okay for a third organic we are still not paying for it I mean oh I mean we definitely start paying for it you know when we have you know the investor money coming in but we are seeing that as a strong channel because the presence is very strong we are actually rated one of the top ten has just for 2018 we are also featured on the report on the space right so so yeah that the marketplace is in general should come out to be a very very strong shell Express very good alright let's wrap up here Niraj with the famous five number one what's your favorite business book as either good one number two is there as is there a CEO you're following or studying right now no I I don't do that video number three what's your favorite online tool for building your business besides your own help spark ready haven't used number four how many hours of sleep to get every night I try to grade seven okay is that what you get I managed to okay alright and what's your situation married single kids I am I'm I'm married I have one kid I'm expecting the seven Monday the second one next month oh that's exciting in how old are you I'm an last question what he was your 20 year old self new I wish I was better at quoting but you have it sounds like a pretty big dev team there yeah but do you know I mean it you know speed in the early days is is very dependent on the founders coding themselves you know and I think we took quite a lot of time getting to you know a real product market fit and I think that could have been shortened you know if we handled a lot of things better than we did yeah do you have how many founders are there is it just you we're just just too as me yeah is the other one the developer yeah hardcore but not no J's moved to product no you know so we are both out of you know coding thanks good very good Niraj well guys there you have it again launched back many years ago 2011 they're now helping hyper hyper HQ they're basically helpdesk inside of gmail they have over a thousand customers paying them on average 115 bucks a month doing about 1.3 million in AR today that's up from just 45 K per month back in August of 2017 is almost 3x growth year over year they're getting ready to announce a four million dollar series a at a fifteen to twenty five million dollar valuation so healthy growth four point three million bucks total in the company to date again acquiring customers through ad spend but economics are making a lot of sense there's also you know just search ranking results that are driving them new customers for and $15 kak blended four month payback period lifetime by about 5,400 bucks negative revenue churn of negative two point five percent and they'll go turn about two percent gross per month Niraj thank you for taking us to the top thanks David thanks a lot