How Pliance Hit $15K MRR and 30 Signed Customers Combating Financial Crime (Interview with Co-Founder Siam Choudhury)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Siyam Chowdhury. He's building pliance.io, Stockholm based founder with background in from Facebook, Acast, and many fintech companies. His core focus and interest now is around product management, but he's grown to learn and enjoy sales during the startup journey at pliance, where he's helping combat financial crime. Sam, you ready to take us to the top?

Siam Choudhury

00:19>> Yeah. Thanks for inviting

Who Pliance Serves: Regulated Financial Institutions

Nathan Latka

00:21Who'd you build this for? Who are your customers today?

Siam Choudhury

00:24>> Our customers are primarily regulated financial companies. So companies that fall under anti money laundering legislation, where there are risk for financial crime and money laundering.

Nathan Latka

00:35You're talking like KYC, know your all this kind of stuff?

Siam Choudhury

00:38>> Yeah, exactly. So knowing your customer, transaction monitoring, those kind of things.

Pricing Model: Volume-Based SaaS

Nathan Latka

00:43Interesting. Okay. And and what are customers paying you on average per month to use this technology?

Siam Choudhury

00:48>> Excuse me?

Nathan Latka

00:49What are customers paying per month on average to use the technology?

Siam Choudhury

00:52>> It's quite varied. Our model is a sort of SaaS volume based model. So it can go from a few $100 a month to sort of thousands of dollars per year.

Nathan Latka

01:03Mhmm. And what are you pricing off of?

Siam Choudhury

01:05>> Active users. So active end consumers that need to be screened against, for example, sanctions list or sort of KYC or that need to be done on transaction monitoring.

How Continuous Screening Drives Recurring Revenue

Nathan Latka

01:19So how do you- Okay, let's say that a bank uses you, right, and they have 1,000 new customers sign up in October. They obviously have to pay you to scan those 1,000 people one time, but then next month, they don't have to scan those 1,000 people again. So how do you deal with churn?

Siam Choudhury

01:34>> So actually, for the legislation, you kind of, as an institution, need to do continuous screening on your customer base. So as long as you have an active business relationship with a bank, for example, then they need to know this information about you. So for us, we basically, as long as a customer is active within a bank, we monitor them and have that as part of our pricing model, which is why we sort of refer to it

01:58>> as an active customer instead of each screening.

Nathan Latka

02:02I see. I see. I see. Okay. And what do you I'm sure the seat price varies with volume, but on average, what do you pay per active or what do you charge per active customer?

Siam Choudhury

02:10>> For active customers, I'd say it's about maybe $0.50 But then we can also scale that as the volumes grow. Where if they're very low volume, we also pay as you go models.

Nathan Latka

02:20Yep. Fair enough. The the but what's customer that you're working with today? How many scans or customer checks are they doing per month?

Siam Choudhury

02:27>> They're doing about two hundred and fifty k active customers per month. Okay.

Customer Segments: SMB and Mid-Market Banking, Gambling, Insurance

Nathan Latka

02:34That's great. And am I right with it's mainly banks?

Siam Choudhury

02:36>> It's mainly financial institutions. So we kind of focus on the SMB to mid market segment within banking and finance, also within gambling and insurance. But it's the I'd say the SMB to mid market is our sort of key customer segment.

Nathan Latka

02:51Okay. Interesting. And I imagine if someone's doing that many scans per month, they're able to get a discount from 50¢ per customer. Right?

Siam Choudhury

02:58>> Yeah. So that's where we have sort of a volume based stair step, where as they go up to higher volumes, the pricing scales with them, allowing us to grow with them, but they can also make sure that their margins improve and they can sort of scale as well.

Nathan Latka

03:12And Sam, how low can that price per scan or price per customer go? I mean, I'm talking like 10¢?

Siam Choudhury

03:17>> It can. Really depends on sort of what those volumes look like and

Nathan Latka

03:22sort of what Well, that's why I'm curious. With the volume example you just gave at that volume, can it be 10¢ as a scan? It'd be have to

Siam Choudhury

03:29>> be higher to get to that level.

Nathan Latka

03:31Why is that?

Siam Choudhury

03:32>> It's basically so that we can get a sort of better discount on the volumes that we process, and we still have scaling effects on these sort of sources that we manage to get these kind of information.

Nathan Latka

03:45Okay. So that biggest customer then, they're they're paying more than 10¢ per active customer per month. You need more volume in order to give them a bigger discount.

Siam Choudhury

03:52>> Yeah.

Nathan Latka

03:53I see. Okay. Give me the backstory here. When did you start writing code for this platform?

Founding Story and First Lines of Code

Siam Choudhury

03:58>> I actually never did. So I was more of a product manager, and my two co founders started. But I think the the first line of code was around late two thousand eighteen. That was when we sort of really validated the the product, the sort of the customer base, and we felt that we had something to offer sort of more sort of fintech or techie finance customers that wanted a sort of an API focused solution.

Nathan Latka

04:21And did you guys just split equity evenly?

Siam Choudhury

04:24>> Yeah.

Nathan Latka

04:25Yo, you're nice to each other.

Siam Choudhury

04:27>> Well, we can saw each other's strengths and realize that, hey, we if we wanna do this really well, we all need to be equally incentivized to sort of put everything into this.

Bootstrapping Three Years, Then a $500K Seed

Nathan Latka

04:36Yep. Now did you guys raise capital or bootstrap?

Siam Choudhury

04:38>> We bootstrapped the first three years and also just recently this year, end of end of April, sort of took in our first seed round.

Nathan Latka

04:47And how much was that for?

Siam Choudhury

04:49>> That was, I think, dollars, just 500,000 or something around that.

Nathan Latka

04:53And why did you need that? Why couldn't you keep bootstrapping?

Siam Choudhury

04:56>> For us, it was we wanted to sort of wait with sort of raising funds to show that we have a business that we know how to sell, and we can sort of recreate all the steps of it. And then show that, you know, with funding, we can scale faster and go into other markets and show that there's a model that we can scale in terms of sales, in terms of outreach, versus experimenting, like being like, oh,

05:22>> we're trying to figure this out. We don't know yet. And at that stage, we really felt that we could take it to the next level. We could sort of staff up and sort of go into other markets.

Nathan Latka

05:33And Sam, obviously, you wanna grow to other markets, but obviously, you need to take care of current customers as well. How many current customers are you working with?

Current Customer Count and Market Expansion

Siam Choudhury

05:39>> We have about 30 current customers.

Nathan Latka

05:42And what market are you excited about moving into?

Siam Choudhury

05:44>> At the moment, it's to move outside of Sweden, which is where we have most of our customers. We also have customers in all the Nordic countries and out in Europe. So our sort of next focus is on being more proactive in our outreach in the Nordic countries and in the European countries.

Nathan Latka

05:59I see. I see. And what would you say of those 30 customers on average? How many customer checks are they doing per month, would you say?

Siam Choudhury

06:07>> On average, I think it'll be about fifteen to twenty thousand.

Nathan Latka

06:11Okay.

Siam Choudhury

06:12>> It varies quite a lot from our smallest, which maybe has a few handful, a few 100, to, as I mentioned, the largest one, which is around 250,000.

Nathan Latka

06:21Yep, yep. But if you're doing, mean, 15,000 scans per month and you get a little discount off the $0.50 per scan, let's say it's $0.30 scan. These are like enterprise customers, right? That's like $4,500 a month for you in terms of revenue, right?

Siam Choudhury

06:34>> Yeah, it can be.

Team Size and Structure

Nathan Latka

06:35Yeah. Yeah. Interesting. Very cool. Okay, that makes a lot of sense. So you're looking to expand. You mentioned your three co founders. What's the other what's the rest of team look like today? How many people?

Siam Choudhury

06:43>> So we're six people today and then excluding a couple of sort of interns. But the team sort of structures basically are my two co founders who are developers. We have a designer, a product designer, and a salesperson, and are sort of now adding another couple of salespeople and another developer. And then we have some additional help within sort of market, PR, and interns within sort of sales and prospecting.

Nathan Latka

07:09And it sounds like you guys are with that. I mean, it sounds like you have a small team relative to the larger amount of revenue that you're doing. Can we take 30 active customers times $4,000 to $5,000 a month? You're doing about 130,000 a month in revenue right now.

Siam Choudhury

07:20>> We're not quite there yet. Okay. I think we're still activating customers. We kind of get them sort of signed up, and then they kind of, depending on when they receive their license to go live, that's when they sort of start paying when they actually are sort of have active live customers in the platform.

Nathan Latka

07:37How many of the 30 are active?

Siam Choudhury

07:39>> About half of them.

Nathan Latka

07:40So Oh, I see.

Monthly Recurring Revenue: $15K

Nathan Latka

07:41I see. I see. Okay. So you're more like 60,000 a month in revenue, something like that.

Siam Choudhury

07:46>> I'd say it's closer to I'd say was the number? So it's about, like, 15,000 right now.

Nathan Latka

07:52How much?

Siam Choudhury

07:53>> $15,000.

Nathan Latka

07:55Okay. Got it. What so so how do you I mean, how where do you think most of growth is gonna come from? Is it getting current customers to do more customer checks per month? Or have you already penetrated your current base at, a 100%?

Growth Path: New Customers and Expanding Existing Accounts

Siam Choudhury

08:06>> No. So it's basically around getting new customers. We're in a sort of a niche market, but it's a quite big niche with sort of, as I mentioned, banking and finance customers, insurance, gambling. And our product is sort of internationally viable. So we have customers from outside of Sweden as well. And it's also looking at customers that we can grow. So as our summer customers are already small, but they're- as they're scaling and they're growing, we have

08:33>> another opportunity to grow with them. So it's sort of a two pronged for us. We want to have new customers, but we also sort of see ourselves growing with our existing customers.

A Year Ago: Under $1K/Month and 15 Signed Customers

Nathan Latka

08:42And speaking of growth, if you're at $15,000 today in revenue, where were you exactly a year ago? Do you remember?

Siam Choudhury

08:48>> A year ago, we were maybe in less than 1,000.

Nathan Latka

08:50Oh, wow.

Siam Choudhury

08:51>> That was a really sort of early stage for us. We just figured out that, okay, the product works, people are willing to pay for it, we just need to learn how to reach out to customers and sell it. So we had three customers, I'd say, by beginning of twenty twenty and end of twenty twenty, we had 15.

Nathan Latka

09:10Yep.

09:12Well, end of twenty twenty, you had 15. You said you had 15 active customers right now.

Siam Choudhury

09:16>> Yes. So those were signed customers and then sort of the active actives are essentially just sort of catching up and

Nathan Latka

09:25How many new so sorry. I think you just said you had 15 active customers today, but then you also said you had 15, you know, twelve months ago. So have you had growth the past twelve months?

Siam Choudhury

09:34>> No. So we had 15 signed customers by end of twenty twenty. And out of those, there were like three to five customers that were active. We just tripled the sort of active customers and the signed customers as well.

Nathan Latka

09:46Got it. They were signed, but they weren't active yet.

Siam Choudhury

09:48>> Yeah.

Customer Acquisition Cost

Nathan Latka

09:49I got it. Okay. Very cool. And then do you know anything yet about CAC? What's it cost you to onboard a new $5,000 a month customer?

Siam Choudhury

09:56>> At the moment, it's relatively high. I think we have around, say,

10:05>> $8,000 in sort of counting sort of our salesperson salaries as most of our sales are sort of outreach based. But as we're getting sort of scaling up our sales and getting more and more customers, that's going down on a per customer level.

Churn and Product Stickiness

Nathan Latka

10:20Yep, that makes sense. Do you know anything yet about churn or is it too early?

Siam Choudhury

10:24>> I'd say it's still too early, but we have our oldest customer is three years old and we haven't lost a customer yet. So our churn is really good. Sort of there is a stickiness in an API based product that is a sort of must have for these kind of customers. And then, of course, it's wishful thinking of 0% churn forever, but we're still pretty confident that we have a product that offers a lot of value and

10:48>> it's only our customers to lose. So we kind of make sure that we're on top of their needs and make sure that they don't really want to leave.

Famous Five Rapid Fire

Nathan Latka

10:54Sam, on that note, let's wrap up with the famous five. Number one, favorite business book?

Siam Choudhury

10:58>> Oh, I think it's WeWork. I forget the name of the author, but

Nathan Latka

11:03Number two, is there a CEO you're following or studying?

Siam Choudhury

11:07>> None really, actually.

Nathan Latka

11:08Okay. Number three, what's your favorite online tool for building clients?

Siam Choudhury

11:13>> It's probably Slack. That's all the communication, all the planning that's going on there.

Nathan Latka

11:17Number four, how many hours of sleep do get every night?

Siam Choudhury

11:21>> Eight to yeah. Seven to eight hours.

Nathan Latka

11:23And what's your situation, Sam? Married? Single? Kids?

Siam Choudhury

11:26>> Recently married. About to have kids.

Nathan Latka

11:28Oh, congrats. Very cool. And how old are you?

Siam Choudhury

11:31>> I'm 37.

Nathan Latka

11:3237. Last question.

11:33Something you wish you knew when you were 20.

Siam Choudhury

11:36>> I think I wish that I had more of a direction when I was 20. I was still figuring out like, hey, what do want to do?

Nathan Latka

11:44Guys, pliance. Io is working with financial institutions to help them make sure that their customer checks are accurate and legally comply. They have over 15 customers paying today. Over 30 have signed. They bill on a sort of price per check month. Our largest customer scans over 250,000 customers each month. Again, scaling nicely, 500,000 pre seed round as they broke $15,000 a month in revenue this year, looking to scale obviously bigger in 2022. Siyam, thanks for taking

12:07us to the top.

Siam Choudhury

12:08>> Thank you.

Nathan Latka

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