Founder Interview
How DBSync Reached 700 Customers and 63% Growth Bootstrapped (Interview with Rajeev Gupta)
- Interview Date
- November 7, 2018
- Interviewee
- Rajeev GuptaCo-Founder
Company Metrics at Interview Time
Customers (2018)
700
Year-over-Year Growth (2018)
63%
Average ARPU (2018)
About $250 per month
Team Size (2018)
55
CAC Payback Period (2018)
2 months
Historical Snapshot
These numbers were reported by Rajeev Gupta during the interview recorded in November 2018 and are a historical snapshot, not current figures. See DBSync’s current numbers.
Key Takeaways
- 01DBSync had approximately 700 customers as of 2018
- 02The company grew 63% year over year
- 03Average ARPU across all customers was about $250 per month
- 04Gross customer churn was 13% to 20% per year; revenue churn was less than 10% per year
- 05CAC payback period was approximately 2 months
- 06The company was fully bootstrapped and cash flow positive
- 07Total team size was 55 people, with 12 engineers and 11 in sales
- 08Growth was driven primarily through app exchange ecosystems including Salesforce, Microsoft, and e-commerce platforms
- 09DBSync was expanding into Microsoft, inventory management, and e-commerce integrations beyond its Salesforce roots
- 10Pricing ranged from $200 to $1,000 per month on annual contracts
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2018) | 700 | Founder interview, Nov 2018 |
| Year-over-Year Growth (2018) | 63% | Founder interview, Nov 2018 |
| Average ARPU (2018) | About $250 per month | Founder interview, Nov 2018 |
| Gross Customer Churn (2018) | 13% to 20% per year | Founder interview, Nov 2018 |
| Revenue Churn (2018) | Less than 10% per year | Founder interview, Nov 2018 |
| CAC Payback Period (2018) | 2 months | Founder interview, Nov 2018 |
| Team Size (2018) | 55 | Founder interview, Nov 2018 |
| Engineers (2018) | 12 | Founder interview, Nov 2018 |
| Sales Reps (2018) | 11 | Founder interview, Nov 2018 |
| Pricing Range (2018) | $200 to $1,000 per month | Founder interview, Nov 2018 |
| Contract Type (2018) | Annual | Founder interview, Nov 2018 |
| Bootstrapped | Yes | Founder interview, Nov 2018 |
Growth Breakdown
Customers
DBSync had approximately 700 customers as of 2018, spanning small businesses to large enterprises. Large customers showed very high retention, while smaller customers experienced higher churn rates consistent with industry averages.
Revenue and Pricing
Pricing ranged from $200 to $1,000 per month on annual contracts, with an average ARPU of about $250 per month across the full customer base. Revenue churn was less than 10% per year, reflecting stronger retention among higher-value accounts.
Team
The company had 55 people total, with 11 in sales, 12 in engineering, 7 to 8 in services, 3 to 4 in account management, and the remainder in support. The majority of the team was based in Bangalore, India, with a smaller presence in the United States, Europe, and South America.
Funding and Profitability
DBSync was fully bootstrapped from its founding and was cash flow positive at the time of the interview. Rajeev Gupta said the priority was to invest the cash coming in back into the business before going out to raise money, which he would look at once the cash started to trim down.
Growth Strategy
App Exchange Ecosystems
DBSync's primary growth driver was participation in app exchange ecosystems, starting with the Salesforce AppExchange. The company leveraged these partner marketplaces to generate inbound leads at low acquisition cost.
Expansion into New Ecosystems
Beyond Salesforce, DBSync expanded into the Microsoft ecosystem and e-commerce integrations with platforms like ChannelAdvisor and SkuVault. These new ecosystems became key growth areas at the time of the interview.
Relationship-Based Sales
The company relied mostly on relationship sales within each ecosystem. Marketing played a part, but Rajeev Gupta said DBSync did not spend heavily on it. Sales operations based in India kept costs low, enabling a CAC payback period of approximately 2 months.
Upsell Through Additional Connectors
Existing customers grew their spend by adding more connectors over time, moving from two integrations to three, four, or five. In Rajeev Gupta's words, that is where the growth was going: from $250 to more like $500 to $600 per month.
Retention Improvement
Rajeev Gupta would not disclose the overall retention rate, but said it had improved by 7% over the prior year. For large customers he put retention at "more like 97%", and revenue churn was less than 10% per year.
Best Quotes
“Yes, it is a pure play SaaS company. We are in the iPaaS and cloud data application space.”
“If you're a salesforce.com customer and you want to integrate your Salesforce with your accounting system, be it QuickBooks, Great Plains, or any other systems, you're likely gonna call us. We integrate sales being completed into invoicing and payments getting received.”
“So last year we have grown about 63%.”
“It's new customers, customer adding stuff. So they've just had two connectors now, they're having three and four and five. That's where the growth is going from $250 to more like $500 to $600. So we're having a lot better retention rate now.”
“Oh, so we break even second month for most of the customers. So our cost of acquiring the customer extremely low, mainly because a lot of this is through our relationship sales that we go through in each of these ecosystems and our cost of sales from sales and operation being in India and the way we have optimized it. So we normally break even like two or three months.”
“Yeah, bootstrapped it all the way.”
“I think right now we are making more cash. We are trying to figure out how to invest that first before we go ask for more money. We are rapidly hiring across every department. So I think as soon as the cash starts to trim down, that's when I would see. But I think my problem right now is to invest this cash coming in back into the business more efficiently.”
“So yes, a good question. We initially started with Salesforce, so that still dominates most of ours. But we have got into Microsoft space. That's something we are doing pretty well. And then there are other SaaS integration spaces like e-commerce. So doing very well in the inventory management space and e-commerce with ChannelAdvisor or SkuVault, those kinds of spaces. So right now, growth area is around those ecosystems.”
What Happened Next
At the time of this interview in November 2018, DBSync had 700 customers, was growing 63% year over year, and remained fully bootstrapped. Rajeev Gupta confirmed it was cash flow positive and said the priority was investing the cash coming in back into the business, with hiring under way across every department. This page reflects the company as it stood at that moment. Visit the DBSync company profile for current figures.
View DBSync’s current profile and metricsFull Transcript
Chapters
- 0:01Introduction and Company Overview
- 0:32Pure Play SaaS and iPaaS Positioning
- 0:38How Customers Use DBSync
- 1:04Pricing and Contract Structure
- 1:39Company Timeline and Founding Story
- 2:04Customer Count and Revenue Discussion
- 3:57Churn and Retention Rates
- 6:11Team Size and Breakdown
- 7:26Growth Channels and Ecosystem Strategy
- 7:55CAC and Payback Period
- 9:09Bootstrapping and Cash Flow
- 9:49Famous Five: Books, CEOs, and Tools
Introduction and Company Overview
Nathan Latka
00:01Hello, everyone. My guest today is Rajeev Gupta. He has extensive experience with application architecture and on demand computing and over sixteen years starting and growing tech companies. In 2002, he co founded Avankia, which was one of the first companies incubated by Salesforce. The enterprise gave rise to
00:18DBSync, a data management platform that provides a wide range of functionalities, including integration, backup, and archiving. Rajeev, are you ready to take us to the top? Yes. Okay, so DBSync, first question, is it a pure play SaaS company?
Pure Play SaaS and iPaaS Positioning
Rajeev Gupta
00:32Yes, it is a pure play SaaS company. We are in the iPaaS and cloud data application space.
How Customers Use DBSync
Nathan Latka
00:38That's great. Okay, yeah, so give us an example of how a customer is using you.
Rajeev Gupta
00:42If you're a salesforce.com customer and you want to integrate your Salesforce with your accounting system, be it QuickBooks, Great Plains, or any other systems, you're likely gonna call us. We integrate sales being completed into invoicing and payments getting received. Anything to think about cloud data into other applications, we do those.
Pricing and Contract Structure
Nathan Latka
01:04And how do people pay you on average? Is it kind of annual contracts only, monthly?
Rajeev Gupta
01:10Yes, so we do annual
01:14We do annual contracts and it's basically $200 a month and it goes up to $1,000 a month. So wide range based on what services you're looking for.
Nathan Latka
01:25What would you say is a fair average in terms of ACV? Is it about 200 per month? So $2,400 a year?
Rajeev Gupta
01:31It's about 500 to $600 a Okay,
Nathan Latka
01:34got it. So maybe closer to call it, you know, $6,000 a year or something like that.
Rajeev Gupta
01:38Right.
Company Timeline and Founding Story
Nathan Latka
01:39That's great. And put this on a timeline for us. So it sounds like you got pretty active at Salesforce. You launched this in 2007?
Rajeev Gupta
01:46Yes, so early days. We bootstrapped that all the way. So we launched the... The first version got launched in 2007, and then that was a desktop only version. We rebranded the company and reset it up in 2009, and that's when the SaaS, the iPaaS got launched.
Customer Count and Revenue Discussion
Nathan Latka
02:04I see. And And what have you been able to scale to today in terms of total customers on the platform?
Rajeev Gupta
02:09So we have about 700 plus.
Nathan Latka
02:11700. Okay. That's great. So fairly healthy. And I want to dive more into kind of how you're growing in this space, where you see the space going. But first, I mean, can I take 7? Well, no, you said ARPU was about $500 a month, right?
Rajeev Gupta
02:24Right.
Nathan Latka
02:25Yeah. So that would put your, if I take 700 times $500 a month on average, what you guys are about $350,000 a month right now in revenue, something like that?
Rajeev Gupta
02:32Less than that.
Nathan Latka
02:33Okay. Which
02:37of those numbers is wrong? The 700 customer count or the 500 average?
Rajeev Gupta
02:40500, that's the recent way. You're gonna likely look at whatever has happened from 2009 to 2000 So if you were to average that,
02:51we'll be more like,
02:55you can cap it as
02:59two fifty.
Nathan Latka
03:01Okay, so by the way, that's pretty typical to start off cheap and then kind of increase price over time. So two fifty as an average across our 700 customers, that puts your revenue more about $170,000 a month, is that right?
Rajeev Gupta
03:12Yeah.
Nathan Latka
03:13Okay. Yeah. And give us a sense of growth. So a year ago in October 2017, what were you doing per month?
Rajeev Gupta
03:18So last year we have grown about 63%.
Nathan Latka
03:23Okay, so call it maybe about $110,000 a month about a year ago?
Rajeev Gupta
03:27Yeah.
Nathan Latka
03:28That's great. And help us understand the story here. So where's the growth coming from? New product lines, deeper, customers paying more or just new customers altogether?
Rajeev Gupta
03:37It's new customers, customer adding stuff. So they've just had two connectors now, they're having three and four and five. That's where the growth is going from $250 to more like $500 to $600 So
03:53we're having a lot better retention rate now.
Churn and Retention Rates
Nathan Latka
03:57We What's better, so what's your retention rate today?
Rajeev Gupta
04:02Again, we don't disclose those numbers, but it's improved by 7% over last year.
Nathan Latka
04:09Okay.
04:11Mean, churn is like the critical number in a SaaS company. Can you give me some insight into what your churn is and how you manage it It and how you've improved
Rajeev Gupta
04:18depends. Classical way to think about churn is if you're, we have a wide spectrum of customers. We have very small customers and very large customers. Now large customers, we don't lose them. It's more like 97% retention rate. But small customers on an industry average is about 2% a month. So that's 24. We are round about that percent on the smaller side.
Nathan Latka
04:42Okay, but if you ignore customer size, and this is why people look at revenue churn instead of logo churn. So if you look at your revenue churn across your entire base per year, what is that?
Rajeev Gupta
04:54So we are about,
04:57again, we don't disclose it.
Nathan Latka
05:01Would say You can give
05:01me a range if you want.
Rajeev Gupta
05:03Yeah, so it's gonna be about 13 to 20%.
Nathan Latka
05:0713 to 20? Yeah. Okay, so if you're churning 13 to 20% of your revenue per year.
Rajeev Gupta
05:15I'm sorry, the customers, that's the customers. Got it. And that doesn't quite correlate with their revenue. Revenue churn is less than 10%.
Nathan Latka
05:24Okay, yeah, that's what I was asking because, I mean, by the way, I don't know why, this is why revenue churn was invented. It was to make up for differences in customers that have much different ARPUs. Because usually higher ACV accounts you keep, right, in terms of a logo basis and churn on a logo basis is much higher for low ARPU. So this is why people measure revenue churn. So your revenue churn is only, call it
05:4410% per year is what you're saying. Less than 10% per year. That's great. And when people are churning, why are they churning?
Rajeev Gupta
05:51Any integration company, if they just have two points of integration and we drop one point, like they're signing off from Salesforce and Microsoft are outgrowing QuickBooks into new systems, that's when the churn comes in. So that's where we see, especially in the smaller and larger segment, we don't see that much churn at all.
Team Size and Breakdown
Nathan Latka
06:11And can you help me understand more about kind of your team today and the breakdown between sales and engineering?
Rajeev Gupta
06:19Sorry, your voice was breaking. Can you ask me that question again?
Nathan Latka
06:23What's your total team size today?
Rajeev Gupta
06:25Oh, we have 55 folks.
Nathan Latka
06:2755, and what's the breakdown between sales and engineering?
Rajeev Gupta
06:31So sales, we have about 11 in sales. Again, we have 12 in engineering, and then we have seven, eight in services. Account management, we have three, four, and the rest is support.
Nathan Latka
06:49And where's everybody based?
Rajeev Gupta
06:52So we are scattered all around. So we have a couple in The United States. Majority are there in Bangalore, India. We have a presence in Europe and South America.
Nathan Latka
07:02Okay, and obviously this space is growing rapidly. Would you say that most of your success is directly tied to the Salesforce AppExchange? Or are you getting customers from other sources?
Rajeev Gupta
07:17Again, your voice was breaking. We will have to repeat that one more time.
Nathan Latka
07:20Yeah, my question was, is most of your growth tied directly to the Salesforce AppExchange or are you getting customer growth from other sources?
Growth Channels and Ecosystem Strategy
Rajeev Gupta
07:26So yes, a good question. We initially started with Salesforce, so that still dominates most of ours. But we have got into Microsoft space. That's something we are doing pretty well. And then there are other SaaS integration spaces like e-commerce. So doing very well in the inventory management space and e-commerce with ChannelAdvisor or SkuVault, those kinds of spaces. So right now, growth area is around those ecosystems.
CAC and Payback Period
Nathan Latka
07:55So as you look at growing amongst new ecosystems, I'd love to understand more about how aggressive you're being in terms of CAC. So if a new customer is paying $500 per month or $6,000 per year, how much are you willing to spend fully weighted to get that customer?
Rajeev Gupta
08:10Oh, so we break even second month for most of the customers. So our cost of acquiring the customer extremely low, mainly because a lot of this is through our relationship sales that we go through in each of these ecosystems and our cost of sales from sales and operation being in India and the way we have optimized it. So we normally break even like two or three months.
Nathan Latka
08:37So just to be clear, if they're paying $500 per month, you're spending anywhere between a grand and $1,500 to acquire the customer for a two to three month payback?
Rajeev Gupta
08:44Yes.
Nathan Latka
08:45Okay. And where are you typically spending that money? Is it the sales rep traveling around? Is it direct paid spend on Facebook and Google? Where is it?
Rajeev Gupta
08:52So it's partly, it's marketing. Again, we don't do a huge spend. Most of it is the sales. As soon as the inbound sales comes in, the time spent from sales to demo to closure, that's where we spend most of our energy and time.
Bootstrapping and Cash Flow
Nathan Latka
09:09I see. And talk to me about kind of funding history. Have you bootstrapped this or raised capital?
Rajeev Gupta
09:13Yeah, bootstrapped it all the way.
Nathan Latka
09:14Oh, I love that. That's so great. More CEOs need to bootstrap. That's wonderful. How have you resisted the urge?
Rajeev Gupta
09:21I think right now we are making more cash. We are trying to figure out how to invest that first before we go ask for more money. We are rapidly hiring across every department. So I think as soon as the cash starts to trim down, that's when I would see. But I think my problem right now is to invest this cash coming in back into the business more efficiently.
Nathan Latka
09:46Yep. Cash flow positive today then?
Famous Five: Books, CEOs, and Tools
Rajeev Gupta
09:49Yes.
Nathan Latka
09:49That's great. Very All right, let's wrap up here with the famous five. Number one, what is your favorite business book?
Rajeev Gupta
09:57Steve Jobs,
10:00Isaac, famous Steve Jobs books.
Nathan Latka
10:03Number two, is there a CEO you're following or studying?
Rajeev Gupta
10:08From a management style, I was with GE, so Jack Welch, something I followed for quite a long time. Right now, I'm very fascinated by Elon Musk and obviously Steve Jobs has been there.
Nathan Latka
10:21Number three, what's your favorite online tool for building the company?
Rajeev Gupta
10:25Oh, salesforce.com. We literally run on Salesforce.
Nathan Latka
10:28Number four, how many hours of sleep do get every night?
Rajeev Gupta
10:33Seven hours.
Nathan Latka
10:34Okay. And what's your situation? Married, single, kids?
Rajeev Gupta
10:37Married with two kids.
Nathan Latka
10:38Two kiddos. And how old are you?
Rajeev Gupta
10:41I'm 47 now.
Nathan Latka
10:4247.
10:43Last question, Rajeev. What do you wish your 20 year old self knew?
Rajeev Gupta
10:48More on marketing and sales.
Nathan Latka
10:50More on marketing and sales. Guys, there you have it. They're doing about $175,000 per month today. That's up about 60% year over year. They're serving 700 customers and kind of the database and really they call it DBSync space, really tied directly to Salesforce, especially as they started now scaling out into NetSuite integrations and many other integrations as well to get all your apps talking with each other. They've got about a 100... Sorry. They got about 55
11:17people based in remote locations, totally bootstrapped, which I love, and healthy economics. Less than 10% revenue churn per year, two to three month payback period as he continues to scale the company. Rajeev, thanks for taking us to the top.
Rajeev Gupta
11:30Thanks, Nathan.