How Picbackman CEO Vaibhav Domkundwar grew to $144K revenue and 1.7K customers in 2019.

hello everybody my guest today is he is an entrepreneur and seed investor with dual basis in silicon valley and india he runs better which is the parent company of pick back man which is a micro venture firm that builds and invests in category defining businesses at the seed stage before better he co-founded mobile roaming platform leader rome ware which is acquired by audux he is a graduate of the university of california berkeley and runs marathons to put health and fitness as high up as his work and family life in terms of priorities five are you ready to take it to the top yep absolutely all right so let's talk pick back man today what's the company do and how do you make money you know big batman actually helps you keep your memory safe and like pretty described it it said you know it helps you get rid of that photo backup anxiety if you know what i mean and what's your revenue model how to make money um so you know big batman is an application people use to upload their photos and their videos to their online accounts um so let's say when you're when you go for a trip and you have let's say a few hundred to a thousand photos uploading them to a google or smart mug or flickr account is really really time consuming and that's where big batman comes in it's just a one click two click and third and you're done it does that job automatically for thousands of photos and um we have a freemium version so people download the version and use it for free for some time and upgrade uh we charge them a monthly 695 or annual uh 69 or we have a lifetime plan that we're going for a little bit right now for one time um so it's a subscription business um we actually focused a lot on the product first and i started monetizing very recently so just to be clear the the price point on the sas model where it's not freedom is about seven dollars a month that's right okay and put this on a timeline for us when did you launch the company what year um so we've been working on the product for about two and a half years okay so 2016 would have been go time yeah that's right okay and your model is unique you know there's a lot of companies now where they're led by someone who's experienced and has a lot of wisdom like yourself you've seen a lot where you're actually sometimes buying you know little side projects with a lot of traction but no revenue and then kind of investing and growing and turning on revenue i mean is this kind of how your incubator or better labs is working um not really so better is really two parts one is better labs where we essentially build products from scratch or sell so we have a 60 people team so big batman is an example of a product company that is built within better labs and then we've got better capital which is an early stage investor so we do seed precede and pre-series a rounds and structured as a angel syndicate in india and the us and uh last year in 2018 we were the number one angeles india syndicate and how much did you deploy in that year um so you know i can give you the exact numbers but we did 16 deals and um we were somewhere in the um let's say about 2 million to 3 million dollars um largely in indian companies so it's a significant amount have you bought any companies that you were previously an investor in uh no i don't i don't think we're investing in companies that we would buy um i think we're investing in companies that are really kind of going after very large markets yeah so what i'm trying to do is delineate here so just to be clear these are two very different things one is an angel is a syndicate to support kind of the indian kind of startup ecosystem the other is 60 people building your own products in-house from scratch get it i see that's right okay um how do you how do you so let's let's say i was an entrepreneur launching my own company and and and i got a thing on angelus that you wanted to invest but i knew that if you invested you'd have information in the company i would help businesses you're building on the other side of kind of your you know your internal team how do you keep those pieces of information separate um i think there's uh honestly we've never had this problem because what we are building internally at labs is a very very specific we're not building multiple ideas at a time we actually have about four product companies that we are going deep in um whereas everything that we are investing in is of course segments we've done uh crypto uh we've done um agritech we've done sas we've done companies focused on the indian domestic market that have done a very good in terms of growth and scale so they're very very different i think better labs is essentially an outcome of my entrepreneurial career in terms of you know knowing how to start from an idea to get to scale and revenue and profits and better capital is essentially saying that you know we i just don't believe we can do it do it again and again for tens of ideas so capital is essentially to bring all that um experience to early stage founders where you know if you look at the 16 deals we did last year i was very instrumental in essentially building rounds from scratch for some of these companies right so i think um labs and capital are actually very very um um kind of empowering each other more than anything else got it what have you scared let's go back to pick back man now how many customers have to scale to today um so we have about 50 000 plus users in 130 countries and we have paid users that are a fraction of that we hit about um twelve thousand dollars in revenue last month twelve thousand one uh twenty twelve thousand dollars mri and uh will we expect to kind of really scale that this year we just started monetizing and optimizing uh towards the later part of last year okay so you turned not you had 50 000 freezers you turned on the seven dollar paywall late 2018 and now you've got about twelve thousand dollars in revenue coming in per month and at a seven dollar price point that would mean you've converted about what is that seventeen hundred of the fifty thousand into free and paid um yeah i think i don't know the exact numbers from uh from that percentage perspective um but essentially over the last three months we've gone from uh you know multiplying our revenue per day we really track on a daily basis as well um so that that's been a good trend over the last 90 days and i think there's a lot of optimization and just to clarify i think we had had kind of a um price plan for a longer time just started to optimize and really kind of push our customers to the paid service uh with with our launch uh of our latest version in uh middle of last year and so how do you go i mean at this price point you have to sign up such a high number of customers to build a meaningful business right i mean you either have to you know stay low price point and go for a million customers or as you know flip the script and go the complete opposite way um how do you go from you know fifty thousand free users and two thousand paid to you know five million free and two million paid that's right so i think you know uh we're solving a problem that is very universal so for example if you look at what just happened in terms of uh smugmar blind flicker and saying we're turning away the free plan and you had 50 million plus users who now suddenly had to find a new place there and a good majority of them are going to google photos right and we are probably the one google photos migrated today that you can actually use to move thousands and thousands of photos in a very efficient manner right so what we are really looking at is there are um you know hundreds of millions of people who actually need to keep their memories safe and you know first it was flickr then it was smug mark today it's just google photos tomorrow it might be something else but big batman is here to actually help you uh keep it safe uploaded and move from one service to another depending on what you're doing right so i think it's going to be a necessary utility and that's where i think we think there is a there's a lot of upside in terms of um growth uh everything that we've done so far is zero marketing spends how are they how are they finding you i get the whole word of mouth thing but i mean they have to find you somehow how are people finding you i think majority of them are finding us through google right what search term what do they go on google and search um use you search for flickr uploader you search for google photos uploader you search for a smug mug uploader and a variety of keywords we've got a very long tail set of keywords as well we're answering questions about people um who are you know asking how do i manage my iphoto library after you know apple discontinued it how do i take it out and move it to google photos or something like that right so we've got a lot of that as well that that's kind of working to help people find us and and is this i mean is this you have a team that is solely focused on seo and long tail or have you built kind of a machine that identifies these keywords and auto launches landing pages for them uh no we are actually doing a very curated effort because i think uh i'm personally of the opinion that um you know from a uh it's a very human uh driven seo that we that we look at we really look at you know what is happening in the market like let's say you know the flicker migration and we've got a big landing page around that so it's all written up and uh not really automated interesting how many unique landing pages do you have up for these kind of keywords are we talking hundreds of keywords or thousands or tens of thousands no so we've got thousands not tens of thousands but including our uh you know how to articles we've got thousands okay walk me through the team today so you said 60 people across all of your product categories how many just on pickpacman five okay five people and have you how much capital have you guys put into the business so far um i think it's a very very complex product in terms of making it work with multiple apis and things like that so i think um the total that we've invested over the last two and a half years would be probably about 750k to a million okay all year oh no have you raised outside capital no this is all my own yeah yeah is it profitable today uh big back man i mean there is a lot of product development rnd costs that that if we take away on a month-to-month basis we are profitable now yeah do i mean do you separate out your four different product categories so you can actually run separate pns or do you really just roll them all up together i know we run it separately now you do run separate okay so if i looked at the bank account for pickpacman specifically it would not be losing any money each month absolutely not that's great okay so just be clear you pay on twelve thousand bucks revenue that's enough for you to pay the five full-time people yeah i'm just discounting a lot of the r d investment though what do you mean um as in you know what we spent before we started monetizing and making money right so now on a month-to-month basis you're profitable yeah yeah okay yeah yeah break even today very good and then what about churn turns critical in this kind of business how many people that signed up for seven bucks a month churned yeah so honestly i don't have the exact number but churn is not uh pretty right now in the sense that we have um we have customers who are churning for a wide range of reasons that we're looking to optimize this quarter but but we we also see that there will be users who will come in for specific needs like migrations and things like that so it's a slightly different than a typical sas where you just want them not to churn for a certain amount of time right but so for example you know we've had somebody who came in who used the product uh paid for it uh downgraded came back and the next year and then subscribed again so it's sort of a um you know uh different use case where we will have this temporary churn as well yeah i mean but just be clear someone who's paying you seven bucks a month every month is very different than someone that pays you seven bucks one time a year when they do the one photo upload they're you know the photo download they're gonna do that year i mean it's a seven dollar customer versus seventy dollar your customer yeah no no absolutely so i think majority of our customers are in the seventy dollars thing right and um and we are seeing more your annual subscriptions than monthly subscriptions now um it's just that there are some people who are coming in for specific use cases which we intend to kind of convert them to um you know help them understand how they can use pick backman for their ongoing photo and video management right which there is really no tool that can help them you know keep automatically backed up on multiple services so what is the number right now what is monthly churn you know i don't know the exact number but we are in double digits so we're very high so call maybe north of 10 percent logo churn per month yeah yeah yeah i mean obviously that's i i would say that it's really not a sas business then i mean you're churning more than 100 customers every single year right why why try and force this into a sas model um [Music] good question so again i think you know there are use cases where we have a segment of customers who who have not churned for a very long time right so i think uh what we are focusing on in terms of understanding churn is what is really churn versus what is you know um uh use case driven kind of one-off use case right so that's why we've got a uh we're experimenting with with a few different options uh this quarter that will give us a better idea of you know um what is a one-time purchase uh use case versus somebody who will will be with us for a longer time and sas will make sense what is your what's your cac today what are you spending fully waited to get a seven dollar a month customer um you know honestly like i said you know spending any out any money for marketing at all but you just said you have a super high touch seo thing meaning humans have to spend time to write articles they have salaries yeah yeah so that's all within our five person team right so that's all within our five person team and we've been writing for a long time so this is not you know the thousands have been written over the last two years essentially well no but that doesn't mean that that's not included in your cac so i mean they're still included in your fully weighted cac um or do you just not calculate you don't have that growth engine like to the point yeah yeah we're really not calculating because i think there's just so much on product and customer support that we're focusing on and making our users uh really really successful with the product so if you look at our website there are about 200 plus testimonials and these are not customers saying i love it i love it i love it these are customers that if you read the testimonials they're actually stories about what they wanted how it happened and how they're really really thankful right so i think um we're really saying that okay we have millions of customers to acquire can we get the right product can we optimize correctly can we get success right um so that's why we haven't really been forced to really um calculate uh all of those metrics we really focused on um you know one or two metrics right now yep very good all right let's wrap up with the famous five number one what's your favorite business book uh you know from an operational perspective i absolutely love ben horowitz is uh the hard things a hard thing about hot things yup are you by the way do you have any team members in the states or no um no i don't okay no not even yourself um i i split so i'm i'm i'm here half uh half and half now in silicon valley in pune okay but do you have a like a us subsidiary or no we we are all u.s companies okay companies yeah yeah california have you sorry i'm gonna i'm gonna ask another question here have you ever considered using venture debt to drive additional growth so you don't have to put up 700 grand on your own capital to launch these companies yes i have have you used it no i haven't i haven't used it i think uh um for a while we've been profitable so i i didn't consider an optimized way but what we're considering now interesting um have you talked to lighter capital uh i haven't i haven't uh like like i said i think we we haven't taken the step yet yeah all right number three uh what's your favorite online tool for building the company um i think if i were to just name one i think it's gmail it just does a lot of things for us i skipped two who's your favorite ceo right now when you're following or studying um you know i think my all-time favorite is jeff bezos because i think he's probably the only one who's created multiple billion dollar companies in the time that i've been in in the workplace number four how many hours of sleep to get every night six to seven that's good and what's your situation married single kids married two kids nine and eleven that's great and how are you i'm 44. last question what do you wish your 20 year old self knew uh you know i i wish uh i i knew what systems are and how they can be really good in personal and professional lives i think everything that i do now is really driven by systems and i wish i knew more about them then guys systems are important pick backman just past 1700 customers 12 thousand dollars a month in revenue again helping you upload and save and make sure you don't lose any memories these are you know photos videos when you just want your last trip and then you put them into google or flickr wherever you put them pickpackman sits in the middle they launched in 2016. charge seven bucks a month per customer their breakeven today team of five about 750 grand into the company to date as they look to scale churns problem though at 10 logo turn per month looking at bringing that down vipel thanks for taking us to the top thank you so much thanks nate