How OpsLyft Reached $400K in Annual Revenue with 10 Customers in 2022 (Interview with Founder Ayush Kumar)

Introduction and What OpsLyft Does

Nathan Latka

00:00Hey, folks. My guest today is Ayush Kumar. He's a software engineer by heart with a deep passion for building products for developers all around the world. He's now building opslyft.com, which simplifies operational complexities for cloud management. Ayush, are you ready to take us to the top?

Ayush Kumar

00:14>> Yep, absolutely. Hey, thanks, Nathan, for inviting me to the podcast. Wonderful to be here.

Nathan Latka

00:21What does cloud management mean? Is that like keeping my AWS spend low or setting up my servers in the most operationally efficient way? Or what's it mean?

Ayush Kumar

00:30>> Yeah, I think cloud management in general to me really means around that given that more and more organizations in current days are like really running every piece of their workload upon the cloud, right? So as and when basically the organisation kind of like really hits a certain size and scale, right? The cloud footprint like really grows like on a massive levels per se. There are like hundreds of machines being running and thousands in some cases that

00:55>> are like huge amounts of data that is kind of being stored, etc, etc. So the overall, I would say, requirement of managing this entire infrastructure and keeping it stable, and also at the same point in time, that all of your applications are running at the lowest amount of cost being possible also, right? So all that requires like a huge amount of time and effort for engineers on a day to day basis, right? And that's where I

01:21>> would say the complexity part of the management of the cloud operations like really comes about, wherein engineers in today's state really find it time consuming and hard to really solve the problems around managing this entire cloud infrastructure.

Pricing Model and Contract Values

Nathan Latka

01:35Understood.

Ayush Kumar

01:36>> That's something that we do.

Nathan Latka

01:38And so help me understand how you price this. What are customers paying on average per month to use your technology?

Ayush Kumar

01:44>> Yep. I think we typically sell into the category of the customers, which are who are spending above, I would say, in the bracket of, I would say, two to ten million dollars annually on the cloud, right? So our price point usually like ranges somewhere between $20,000 to a $100,000 annually. Yeah.

Nathan Latka

02:02Sorry. 20 to 100,000?

Ayush Kumar

02:03>> Yeah.

Nathan Latka

02:04And what would you say a sweet spot is? Like, is 40 or $50,000 a year appropriate, or is that too low?

Ayush Kumar

02:09>> I think our sweet spot typically should range around, I would say, to 40 k per month. Sorry, per Okay.

Nathan Latka

02:15And is it a flat fee, or do you only get paid if they save money on their cloud spend?

Ayush Kumar

02:20>> No, I think it's a mix of both. I think ours is a usage based pricing wherein, you know, the more and more basically customers, you know, use our platform to like really analyze more and more resource. So our pricing is majorly focused around the resource based pricing, right?

Nathan Latka

02:35Measured by what? So you say utility, what kind of utility? How do you measure it?

Ayush Kumar

02:39>> Yeah. So our utility measurement criteria typically revolves around the two factors. First is basically how much of the, I would say savings potential are we able to like really generate for the customers, right? So I think, let's say if you say that we're able to generate like a 100,000 per month, right? So that's one criteria that we generate. And then secondly, I would say on the basis of the utility that how much of the number of

03:00>> resources that we are basically able to like analyse and produce opportunities against the people for. So I think that's the two criteria that you can say.

Nathan Latka

03:06So what would one resource be? Like one server? What do you mean number of resources?

Ayush Kumar

03:11>> Yeah. So the number of resources here, as you rightly mentioned, it would be either a one server or is it like a storage device that you kind of at least subscribe in the cloud, an IP address, etcetera, etcetera. So all I would say the constructs that like infrastructure as a service by default, like really offers you, right? That would be a resource.

Nathan Latka

03:27I see. Okay. Put this all on a timeline for me, Ayush. When did you launch the business?

Company Timeline and Launch

Ayush Kumar

03:31>> I think we launched our business full time in December 2020. I think it's been roughly around, you can say, fifteen to eighteen months for us running this business, right? So yeah, that's when we launched, yeah.

Nathan Latka

03:42Do you remember when you landed your first paid customer or are you guys still pre revenue?

Ayush Kumar

03:47>> I think we landed our first customer somewhere, I think, around in February 2020, if I could remember correctly, right? Within the two months. So we were bootstrapped, I think, in the first year of our business, right? So our only source of money was basically from our customers. So, I think that's when we landed up our first customer.

Nathan Latka

04:04Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:28your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

04:52a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here.

Ayush Kumar

05:05>> Right? So

Nathan Latka

05:06the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter

05:29by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than

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06:20ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview. Now are you still bootstrapped or have you raised?

Pre-Seed Fundraise of $500,000

Ayush Kumar

06:32>> We have raised, I think, capital in this year itself. I think we raised, I think, about $500,000 so far. Yeah.

Nathan Latka

06:37Okay. So you raised $500,000 this year and called a pre seed round. Was that like family and friends or an investor?

Ayush Kumar

06:44>> I think it was a mix of, I would say, family and friends plus, like, some multiple Indian investors across India and The US. Right? So that was basically the pre seed round consisted of.

Nathan Latka

06:54I see. I see. And most people are selling, you know, 10 to 20% of their business in their seed round. Were you sort of in that same range?

Ayush Kumar

07:01>> Sorry, I didn't follow you on this question, Nathan.

Nathan Latka

07:03Most people like, so you raised $500,000, you sold equity. Most people are selling 10 to 20% of their equity in their pre seed round. Did you sell about the same amount?

Ayush Kumar

07:12>> I think ours was like quite less in that sense because I think we were already generating a significant revenue, you know, like before we raised out basically a seed round, right? So I think definitely can't disclose out the number of equity that we kind of like really sold, but I think it was much lower than to what basically, you know, like to typically what we see companies selling out in the pre seed round.

Nathan Latka

07:36Okay. So I won't push you harder, but fair to say you sold less than 10% of the business in that round?

Ayush Kumar

07:40>> Around. Yeah, definitely.

Landing the First Customer: InShorts

Nathan Latka

07:42Okay, fair enough. Fair enough. Okay. So first customer is back in 2020. Do you remember who it was? How did you land that first customer?

Ayush Kumar

07:48>> I think ours was typically The first customer was one of the largest, I would say,

07:54>> news reading apps across India. It's by the name of InShorts. That's basically one of the news reading apps here in India, right? So, we landed our first customer, I think, through references only. Connected. I did a lot of networking across different, different founders, right? And we got into to their CTO, etc. He liked the product and things like that. And that's where I think things went. And then I think so far, all the customers that we

08:15>> have got are through basically organic ways only that our customers refer us to basically other customers. And that's all kind of like we have basically like acquired customers so far.

Nathan Latka

08:24So from one customer in 2020 to how many customers are using it down today?

Current Customer Count and Revenue

Ayush Kumar

08:28>> I think around 10 at this point in time, you know, that we have the current customers.

Nathan Latka

08:32Okay. Got it. I mean, so can I take 10 times $40,000 ACV? I mean, you guys are doing about $400,000 a year in revenue right now?

Ayush Kumar

08:38>> Roughly around the same.

Nathan Latka

08:40So why take capital? Why can't you fund yourself from that revenue?

Ayush Kumar

08:44>> It's growth actually. Think so think from this perspective, right? That like it's about fueling the momentum of the growth, right? We knew, I think at some point in time, right, we need to basically invest more in our R and D at a faster pace to roll out basically things to acquire customers even more, right? At a faster pace, in fact. So like initially our sales cycle was basically that we were going from one customer to another,

Why Raise Capital with Existing Revenue

Ayush Kumar

09:06>> right? That okay, until we basically, you know, reach a product market fit, we have to kind of like really follow the cycle because, you know, with the revenue that we get, we like fuel our R and D, etcetera, etcetera. Right. But of course, we want

Nathan Latka

09:20to And how big are you? How much R and D are you spending? Like how big is your team today and how many are engineers?

Team Size and R and D Focus

Ayush Kumar

09:24>> I think currently we are like, 20 people in total of the company, amongst which I think we are half the company is basically R and D at this point in time. Yeah.

Nathan Latka

09:33I see. And which part of India are you based in?

Ayush Kumar

09:36>> I think we are currently based out of in Delhi NCR, like Noida to be very specific. Yeah.

Nathan Latka

09:40Are you seeing more and more competition from just other software companies hiring in Delhi and Pune and Chennai and Bangalore?

Ayush Kumar

09:47>> Yeah, of course. I think that's there. Given

09:51>> that, I think India is a booming market in terms of startups also as well, right? More and more startups are really coming. So talent acquisition is definitely one big of a problem that we definitely focus on our experience, given that we are also a young startup.

10:09>> So, definitely, it's a challenge for us right now.

Year-Over-Year Revenue Growth

Nathan Latka

10:11And help me understand a little bit about growth. If you're doing 30,000 or $35,000 a month today in revenue, where were you exactly a year ago? Do you remember?

Ayush Kumar

10:19>> I think a year ago, we were somewhere, I think, in the lower brackets of 16,000 to $20,000 angle, somewhere around that.

Nathan Latka

10:28So nice growth, congratulate, and maybe doubling year over year, which is nice. What's the plan moving forward? You just raised this capital. What are you going to spend it on? More R and D hires?

Plans for the Capital Raised

Ayush Kumar

10:37>> More R and D, definitely. Think, you know, our target is to basically kind of see that how, you know, we can basically quickly, you know, scale up our basically revenues and even like achieve more, I would say, growth in terms of our revenues. Of course, I think R and D is the primary focus at this point in time to kind of really nail down upon the product and the features which are really working well for the

How OpsLyft Wins Enterprise Deals

Ayush Kumar

11:01>> customers, even more investing in that, etc. And discovering the newer problems, things like that. I think more or R and D only.

Nathan Latka

11:06And Ayush, a lot of first time SaaS founders or even second and third time have a lot of trouble signing enterprise deals right out of the gate. You've got 10 customers paying on average $40,000 a year. How did you convince them that it was worth spending $40,000 a year on your brand new startup?

Ayush Kumar

11:21>> I think our customer obsession has kind of like really led us to do so, right? I think one of the things that differentiates us basically, I think strongly with respect to our competitors, you know, in the market is that we do anything and everything that basically that customers, especially when like when we are at this stage, right? That I think our inability to say no to a customer's demand is basically like given us basically a very

11:44>> favorable like advantage that the things that basically let's say our competitors weren't willing to kind of like offer to our customers, you know, in terms of a product feature, service, etc. Right. I think we said yes to almost everything. I think that's where, you know, we've been able to kind of like really convince most of the people that it's worth kind of like doing business with us because we could basically go up to solving customers'problem

12:08>> to the levels that I think we couldn't have really imagined so far. Right. So I think that's, I would say, the primary thing that we have been able to kind of really help do so. That's why customers really love us for that reason.

Famous Five Rapid Fire Questions

Nathan Latka

12:18Very cool. Let's wrap up here with the famous five, Ayush. Number one, favorite business book?

Ayush Kumar

12:24>> I would say, I would say, a business book, The Hard Thing About Hard Things. Yeah.

Nathan Latka

12:29Number two, is there a CEO you're following or studying?

Ayush Kumar

12:33>> No. Not really. I think that I at this point in time, yep. I do not idolize anybody, but, yeah, there are, like, a number of people whom I could idolize, sir. But I couldn't name any specific at this point.

Nathan Latka

12:41Number three, what's your favorite online tool for building opslyft?

Ayush Kumar

12:45>> Online, sorry, online tool for what?

Nathan Latka

12:47It's just your favorite online tool, one you use a lot.

Ayush Kumar

12:51>> I think favorite online tool at this point in time for me would be Twitter, I would say. You know, that's where I spend most of my time on.

12:57>> Yeah.

Nathan Latka

12:58Number four, how many hours of sleep do you get every night?

Ayush Kumar

13:01>> Hours of sleep? I think I at this point in time, five or six maybe. Yeah. That's that's Okay.

Nathan Latka

13:06Not bad. And what's your situation? Married, single, kids?

Ayush Kumar

13:10>> I am single right now.

Nathan Latka

13:11Okay. No kids. And how old are you?

Ayush Kumar

13:15>> At this point in time, I'm 27 years old.

13:17>> 27.

Nathan Latka

13:18Last question. Something you wish you knew when you were 20?

Ayush Kumar

13:22>> When I was 20, I think, yep, I think at that point in time, coming from basically the roots of India, I think I wish I had known, you know, to like really also explore, I would say, things outside my academic constructs. Was really focused on basically securing, you know, good amount of grades, etc. But yeah, I think had I basically been more open minded or that exposure would have been basically given to me to like really

13:47>> explore things outside my academic books, etcetera, that would have been like really fruitful.

Nathan Latka

13:50Guys,

13:51there you have it. Opslyfts launched back in 2020 to help you manage your cloud spend and your cloud setup. They've got 10 customers paying an average $40,000 a year today. So about $35,000 a month in revenue, up from $16,000 a month just a year ago. So nice growth. They just raised a $500,000 pre seed round, and were able to do it by selling less than 10% of their business, which is great. Good economics there. 20 folks

14:10on the team, 10 engineers as they look to continue developing product. Ayush, thank you for taking us to the top.

Ayush Kumar

14:15>> Yeah. Thank you. Thank you, Nathan. This was like really helpful. Yeah. Bye bye.

Nathan Latka

14:20One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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15:29for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, I do it so that we can all learn. We have to counter those people. We got

15:48to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments.

Ayush Kumar

15:55>> See you.