How JustCall CEO Gaurav Sharma grew JustCall to $12M revenue and 2.2K customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is gurav sharma he's a founder and ceo of sas labs inc maker of just call he's a chemical engineer by education but loves writing code he's a four times entrepreneur has two exits so the last business of the new york times he's now an active angel investor in sas companies ready to take us to the top let's do it all right so first off tell me about this company sold to the new york times is it a media company or what yeah it was a advertising tech company so i was running it from santa monica uh yeah so we we were doing so we were like probably the biggest players in influencer marketing what was the name of the company hello society okay got it and what year was that exit um 2015 i guess okay so a while ago not at this point did they did they can you give me a general sense i mean was that a really good exit for you or break even or like you know fu kind of money not really few but it was a good example all right let's talk about just call now so what does just call do and what's the revenue model so just call is a cloud phone system for sales and support teams and it integrates with all your crms so it just automates all the call logging and recording and everything uh it's a pure sas business which are like 25 to 50 dollars per user per month uh pretty straightforward business model yeah and how many users do teams typically sign up with or yeah so we have about 1600 plus paying customers users or customers or brands yeah businesses businesses okay i mean young businesses uh and they're paying about uh on an average 150 bucks a month okay very good so 1500 1600 15 bucks a month so what you you have like it's like team sizes typically like five to ten that's a sweet spot for us and that's average yeah okay and then i mean you told me before you listen to every episode soon i'm gonna do this can i take the 600 customers times 150 bucks you're doing about 240 000 bucks a month right now that's right okay and where were you a year ago about 80 000 a month good growth you know that's good growth you've done this before where did you get most the growth was it new customers or expansion revenue i think it's a mix of both uh so we worked a lot on our integrations so integration gives us free customers so we haven't spent any money on ads till date and we're now getting and investing money into marketing now but we haven't done that we get a lot of natural organic sort of expansion because people come with support team then they bring their sales team so it's a natural expansion going there and then there's upgrades from 45 bucks to 50 bucks for each of the months what are driving mostly upgrades like is there a utility based metric or is it all feature based in seat based it's it's mostly um two ways uh seeds based or it's feature based okay so once they start liking it and they want to get more out of it we they just go for a bigger plan okay so there's no like thing you measure like number of calls per month you know things like that and these are those there but we really can't uh predict those so we never really put pricing on that okay got it so just feature-based upselling and seat based up selling for now i mean we know that we know that if it's a sales team they're gonna be needing more powerful features on sales so let's build those features and put them in the premium plans yeah now you have on your standard plan it's just it's one phone number and one team member and again if they won't go anything above that it immediately goes up to 50 per user per month no i mean you can you can use the drop down and increase the number of users from there and you can see the bill i see i see i see okay so is that does it stay flat like if i go up to 20 customers it's just 20 times 25 or is there discounts no we play we play some something there so on a standard plan after 15 15 accounts you get like 10 discount oh yeah i'm seeing that very good okay and how did you so take me back you put this on a timeline when you launch this company so we launched the product on product hunt on six seconds december 2016 but we really got our first customer in march 2017. okay march 2017. when did you write the first line of code uh september 2016. okay and how much did you spend on the mvp before your first dollar revenue uh not really i mean we've been like bootstrapping so i don't know 20 20k maybe okay and who's we what's your team look like so now the team has grown up i mean we have about 35 people we just hired today about eight eight more people so it'd be like 43 now what were those eight people sales reps or yeah like support and sales yep um so how do you i mean what are you most nervous about in terms of seeing if these eight hires will pay off um i think on the sales cycle sales ideas i mean they should start kicking in from probably third months or so because all our numbers are depending on number of humans we have so yeah uh the maths will work only of their work what what have you put so let's say i'm joining i just joined you today as a sales rep and my base is thirty thousand dollars and then let's say i do hit my quota target right what is the quota target for these new sales reps see our sales are pretty much uh they're not really sales sales i mean we have a very strong inbound interest so all you have to do is give a good demo that's all uh so our our metric is just the percentage of a conversion so we normally convert like 60 demos into paid customers so we really don't have such uh whatever salary and all that so there's no it's all it's all based there's no commission i see okay and so fill out the rest of that funnel so 60 demo to paid each month how many new trials are you getting so another one thing uh so we don't give any free trials so our first month is at 70 discount so that's the unique sort of way we figure out you know so just to make sure that we are not losing any money because we are bootstrapped and so how many how many demos are you doing per month about 220 250 okay like yeah and we can what about 150 customers we get about 115 new customers you said 150 new customers or 115. 150 five zero one five zero uh that's that's more than a sixty percent conversion rate yeah i mean it can be like 200 demos at times so i'm just giving an average yep um it's about 200 something demos and like 140 158 about so about 60 um because i have stopped counting those last few months when i got a leader for that so yeah so i mean if you're signing up 150 new customers per month at 150 bucks a month i mean what you're adding like 20 000 bucks a new mrr per month that's almost like 200k yeah yeah that's i mean that's obviously a healthy machine you got cranky and people actually eventually expand they start with a smaller team right i mean they start with a single or two people team and then they expand so obviously not really always but yeah maybe more like five or ten thousand a newton true new mrr but they expand like whenever it's about 100k a month yeah now expansion is critical into your model new seats new features over the past 12 months what was your expansion revenue on average we're doing about uh i can't give you the number and expansion because i haven't measured that but it's almost about 1 00 106 percent as the retention net revenue retention yeah yeah what was gross revenue churn over the past 12 months um it's so we can we just measured it on a monthly basis so it's almost about three percent uh revenue term five percent lower chance okay so three percent monthly revenue term i mean if we extrapolate 36 percent annually right if you then add back another 42 in expansion that gets you to your 106 net revenue retention number that's right yes that's good and then so take me back to getting these customers again you're just bringing on sales people you have a good idea i imagine what your cac is what's it cost to get 150 a month customer it cost is about the same like 150 200 okay so you're getting paid back in i mean you're getting paid back pretty pretty quick then like second month yeah do you want to get more aggressive there i mean a lot of people say that whoever can spend the most for a customer will get the customer and you're not spending that much now we're gonna spend so what's the plan for last two years was do you know accumulate enough money to pay people for next 24 months so now that we have money in the bank and we are safe for next two years now we can spend money so what does that mean i mean how much money do you need in the bank to feel that kind of safety about about uh quarter to half a million dollars and what's the math you're doing now you're taking 500 000 divided by what no it's like uh what's what's my monthly spending on the salaries and the rent and multiply by that by 24. okay got it got it so so you're basically you're including their salaries and rent right so if you're planning for 24 months of that that's 20 thousand dollars a month in salaries tomorrow then we are safe for next 24 months and we can always build you something new so just to be clear 500 000 divided by 24 months is 20 grand a month you're basically saying your rent and your salaries is about 20 000 per month right now so so is it i mean if you're doing 240 000 a month in revenue minus your head you're like extremely profitable yep like what percentage what are you taking like 60 percent ebitda margin yeah that's close that's amazing um i mean okay so let me ask you different let me shift gears here then right um how do you personally in your founding team how do you decide what to do with that money do you keep it in the business for the best return do you pay out dividends uh we don't really pay our dividends yet i mean we do profit sharing with the team members how's that structured so what we do is we take out about 20 to 30 of the profits after the year end the financial end and then we have this formula built in where uh the money is divided among people depending on that formula so formulize it's actually based on how for how long you're with the team uh your performance and that there are many metrics there so people make some good money another year interesting so if you're a lot with the team longer you get a couple you know higher percentage so that's the page like every day at sas labs is more sort of valuable than previous day that's a good retention strategy and then what about performance obviously a sales person performance is very different than an engineer's performance how do you measure an engineer's performance so what we're doing now we just started recently so what we're doing is so for every action there are some points so let's say there's a push there's a there's a critical customer query solve uh solution something like that or if the if those engineer helped in some closing some sale so there are points attached to that and we just track on on those basis it's not really clear to me i mean the the guy who's adding the team knows it better but that's something what we do around points yeah okay so i mean does it boil down to like number of lines of code push kind of that's not not really the right uh right thing to track that's one of the factors yes it's more about how much influence you're creating on the business itself so it also includes how good you are with support teams and how good you are with sales teams measure by like response times the sales person email yeah i mean maybe like how you help the support or customer success team to save a deal or how you have the sales person to close a deal by doing some sort of customization or something interesting i just i'm asking these questions because i imagine this is just very difficult to build this formula which is why most people haven't done this at their own companies yeah yeah i mean it's it's evolving all like every month yeah okay so so bootstrap's taking 60 of your 240 000 a month to the bottom line so called 140 000 ish dollars in free cash flow um how many engineers are on the team we about 14 15 14 and uh and how many any quota carrying reps are none at all none i love that interesting okay very good and then so i mean any plans to raise capital pour money on the file or fire or no i mean i i think we are we are liking the debt part of it like we we we got like some that i mean just raised some debt from strike like that 25 000 and just to play around with like how it works then we also talking to clear bank to get some 50 60k to you know pay to some of the agencies that we are hiring by the way we just hired elio like from your show for one of our sdr operations uh yeah yeah good good good are you are you liking working with him so far so we just signed the contract and it's going to start from 12th october and that happened after watching your episode i love that yeah he gave a great episode tell me real quick about the clear bank thing you're like look i mean a lot of entrepreneurs don't do the math on the capital because if you if they give you call it 50 grand and they will market it as like no no interest rate but no there it isn't there's a fee and it's usually on a two-month term and it's usually six percent so the effective cost of capital is typically 36 percent kind of apr it's very expensive does your math match that yeah so it's actually like uh six months payback and that's like six ish percent so that's twelve percent a year and if i can generate roi more than 12 percent i mean it's a positive for me so that's free money for me right are you sure that is all the cost the reason i'm asking is i know what their cost to capital is and they would be losing money on that loan to you at twelve percent that's that's what we have done until now uh that's about twelve percent that's interesting i think it also depends on like what who is doing the deal and how much the amount is so for some people that you will be better than the others well how much how much money are we talking here 50k oh okay so this is like this is like one what is that and it relates to your ar this is like a very very small percentage yeah yeah yeah somebody said yeah interesting okay very good um would you i mean so so you like debt uh to drive growth um i mean would you ever go do like you know you're doing three million in ar there are some firms that would go do like a million dollar kind of round with you i mean do you know where you the thing is with you is you have cash flow right so you don't really need money do you know where you'd spend a million extra bucks so that's what we're learning so the 2020 will be about that how to spend money and i don't know then we'll figure out but i i don't think we'll be raising money for the next one year or so yeah yeah very good man all right grove let's uh wrap up here with the famous five number one what's your favorite business book uh bill to sell built to sell number two is there a ceo you're following or studying number three what's your favorite online tool for building your company um either base camp or intercom number four how many hours of sleep to get every night that's tricky one i mean i don't know four or five hours okay and what's your situation married single kids so married no kids okay and uh okay mary no kiddos how old are you 31 31 last question what do you wish your 20 year old self knew build a sas product guy it makes sense he's saying that right just call sitting on 240 000 a month in revenue up from 80 000 a month a year ago taking 150 000 a month to the bottom line so hugely profitable they're also bootstrapped team of 35 folks 14 engineers just hired eight more today on the sales side to crank through more demos doing call 200 ish demos per month adding 150ish new customers per month as well so call it 10 grand issue new mrr every single month founded in 2016 now serving 1600 customers helping them with their cloud phone system uh across their teams raw thank you for taking us to the top thanks a lot these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now