How Process Street CEO Vinay Patankar grew to $15M revenue and 500 customers in 2024.

this is the top where i interview entrepreneurs who are number one are number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have i'm now at twenty thousand dollars per talk five and six million he's helped on global domination we just broke our 100 000 unit soul mark and i'm your host nathan latka this is episode 706 coming up tomorrow morning i talked to manny where the government gives him power to let non-accredited investors invest i asked him i said manny are you in with the government why did you get the first rights to do this you beat out all the big guys you beat indiegogo kickstarter everyone else why you well tune in tomorrow to learn about learn about this new way that you can invest in any company hello everyone my guest this morning is vinay patankar he's the ceo of process street the simplest way to manage your team's recurring processes and workflows you can easily set up new clients onboard employees and manage content publishing with his tool he also co-hosts the podcast business systems explored where he goes deep dives into business systems with industry experts if you see how other entrepreneurs structure their sales recruitment marketing engineering teams check out business systems explored all right renee are you ready to take us to the top yeah i'm ready let's do it all right good so tell us we got a little taste of what process street is but how would you describe it and how do you make money uh yeah so we're a tool that helps companies build and manage workflows and processes uh we're a sas product we make money by charging a monthly or yearly subscription to the product based on the number of users you have on it um and so yeah like the kind of vision for the product is to make workflow really easy and when you think of what workflow is it's kind of two two main parts one is coordinating tasks so who needs to do what when um and then the second is like coordinating data um because a lot of the time who needs to do what when depends on some type of data along the way so there's been a lot of tools that have uh and there's a lot of incumbents that have built workflow products you know all the big it companies you can think of oracle microsoft ibm all have kind of incumbent solutions um but they've all come at it from a very enterprisey textbook how you kind of design a business process and we're basically trying to come from it from a very user and intuitive perspective so it's kind of like if you've never gone and studied business if you don't have an mba if you've never drawn a flow diagram before if you don't know what bpmn is it doesn't matter like it's just intuitively oh things need to get done in disorder and this person needs to do this and when and this is what i need to do now right um so just kind of taking it taking workflow and consumerizing it essentially and what is the average customer paying you per month uh we don't really we don't really publish that but uh hold on your what do we know about your price points on your website 12 yeah yeah price points on our website we have we have between you know single user receipts all the way up to hundreds of employees in the company um and then you know you can see our pricing on the website which is currently 15 user a month yeah so i want we only have 15 minutes so i want to avoid the conversation of having to like break down every single cohort i'd rather just talk about averages so i mean are we talking the average customer's paying you 100 bucks a month or two bucks a month or 10 000 bucks a month what's a range yeah it's it's it's probably it's four figures a year would be like in that range of four figures a year so between like kind of two and five thousand a year got it got it that's helpful good so between two and five thousand per year and do you do you make them sign annual plans or do you have a a monthly product uh so we have both options for pricing we give you discounts and incentives for going on annual uh we even do two-year contracts as well on some of the bigger deals uh just to get that cash up front so yeah we incentivize annual basically okay got it per year got it and then what is the give us some more of the backstory here so what are your launch company in autumn what year did you launch the company in um so we we launched the company in 2013 uh pretty much as a side project but we raised our seed round one and a half years ago and so now so that's kind of really when we actually built the proper engineering team and took it out of a prototype into a into into a proper product um now we're 21 people in the company okay so that would have been that seed round would have been late 2015 early 2016. you're now 21 people how much total have you raised uh 1.3 okay got it so was that round that you just did re i guess about a year and a half ago is that a priced round or was it a convertible note debt comparable night okay basically yeah it's like the safe right the yc safe basically yeah did you go through yc or one of those accelerators yeah we went through angel pad got it and what was that are they what are they doing like five percent for a hundred grand or something like that uh i believe angelpad has changed it many times over their cohorts but when we did it was like six for 55 so six percent for 55k yep got it and how are you so going back to this product space first off this space is like super fragmented and people i've interviewed many ceos in the space and anytime they try and tell me their technology is a differentiator i just call because i think the person that's going to win this space is the ones that are better at distribution yeah so like first off let's talk about the elephant trello right you could argue it's in the space just had a massive exit you didn't have other companies like depauls right which is doing very very well you have smartsheet which is kind of old and ugly but they're killing it in the google chrome store with over five million users then you have smaller ones that are embedded in like gmail like yana do that are doing like 30 grand per month so how do you beat all these guys yeah it's a good it's a good question um the distribution is definitely key finding a scalable repeatable sales process and then getting like your price point right is important as well but i think that in this market it's not necessarily about being the market leader um like you said it's very fragmented um even in the incumbent space there's 300 plus companies that don't include any of those products that you just mentioned right um and so there's kind of two there's there's kind of two big parts of us you need to basically take that market which is like a giant 13.5 billion dollar market um sharepoint's the biggest product in that market um and then there's the kind of emerging smb market mid-sized companies market where it's like a lot of these people are moving off excel essentially excel and word right and then they're moving on to something like trello and base camp or whatever um and so i don't think that you need to beat the companies i think that you just need to be able to grab a large enough share of both the the incumbent enterprises that are moving off and then the kind of new emerging so let me let me change my question what distribution are you going to go try and own i mean why is somebody gonna find you and not find sharepoint yeah i mean we've currently been focusing on on seo um we're probably we're very strong in it i think um relative to our competitors like we definitely destroy sharepoint um and so that's been imagined that's been great uh just in terms of in terms of ranking for the keywords that we're targeting um and and uh that's that's been a really cost effective strategy for us but i believe as we scale we'll continue to go after less efficient channels um as long as they're still profitable right someone might be listening going wait what do you mean seo is costly what does that cost you so i basically have a team of a marketing team right so i have a team of riders and um marketers that help with distribution and so it's pretty much like a flat cost for the team um you know we have some some products or whatever that we use and it's and so it's relatively cheap because basically my lead volume of seo increases every month from the same same spend right um so now our blog probably gets around 200 000 visits a month um you know and that's grown you know kind of doubled each year and the spend has pretty much been the same um throughout that whole time and so i think that's a great channel i don't know how big it will scale you know if we want to hit 100 million in revenue but you know it's definitely not going to be the only channel that we're using but at this point it's very cost effective as a channel when you look at kind of its cost effectiveness i assume you know that because you look at that cohort of kind of traffic and you kind of divide total new signups per month from the blog by your total spend or whatever what is it the revenue they generate yeah yeah what's it costing you to acquire a new customer just through your seo cohort currently yeah um it's about 150 uh right now and that's really cheap um you know because some of our customers can can be much much larger than that well yeah you said earlier your minimum annual price point is like two grand some up to five grand and if i take is that right that's our average average deal size but our minimum is is a one one seat user which is 150 bucks okay so two grand is average across your entire customer base yeah okay well if i divide it by 12 it's 167 bucks per month so if you're spending 150 a one year period that's good yeah yeah uh interesting what's your least profitable channel that you're still trying to fine tune and figure out uh like we're not really investing in other channels at this point um so what we're doing right now is kind of the marketing budget is being set um and we're essentially investing in sales which are building our sales infrastructure around um converting the leads so we're kind of we're investing deeper in the funnel um versus investing at the top of the final because until our whole sales infrastructure is is really strong we don't want to continue pouring money in in the top of the funnel um because to make sure the conversion conversion rate and price point is right you know have you gotten to a point where you can predictably kind of guess what expansion revenue is and for each new customer if you're focusing on the funnel stuff like we have an average right so we can look at like at an average across the customer base but it does vary dramatically depending on the size of the customer right yeah like for example smartsheet knows that when they get a 10 per month customer paying call at 120 per year they know that that's gonna expand to at least 150 bucks per year year over year like do you know some of those expansion numbers we we know like what the average expansion rate of our customer base as a whole has been um i mean you know we know we have a pretty healthy kind of expansion revenue as a portion of our our new revenue that comes in each month um what is healthy though i mean help people understand that uh for us it's it's it's about depending on the month it's between 20 and 30 percent um so if i'm paying you ten bucks in month one you can be pretty you can pretty much count on me going up to 12 or 13 bucks the next month not the next not yeah not necessarily the next month but uh yeah that's like what we're seeing is is the percentage of our of our expansion revenue well it's going to drive over what time period a month or a year yeah that's that's per month yeah but yeah but i guess if you average it out over all the customer bases of the entire customer base then you'd expect that yeah but you just told me that 10 doesn't go to 12 the next month well yeah that's the thing it's not necessarily per customer right one customer could just sorry on average exactly yeah okay got it um okay interesting and are you so of the 21 folks you have how many of those are focused on either marketing or sales uh 15. okay and is your price point high enough where you actually can have inside sales people putting a lot of time on closing deals um not not exactly and that's something that we're going to be optimizing this year that's a big focus of our pretty much our number one focus uh this year is increasing our acv um so we'll be rolling out some higher price points and products uh around that do you have to add features to like make yourself feel good about increasing price or do you say you know what it we're gonna triple the prices uh we'll kind of we're going to do a little bit of both [Laughter] i love that some people that's one of the biggest things like people ask me to consult all the time and i say i don't do consulting but all you have to do is on your pricing page double the prices you can thank me later i mean it works almost every time yeah less support like that that's awesome okay so you launched it 2014 again up sorry 2013 up to 21 people now 1.3 million dollars raised where are you at now in terms of kind of total companies using your total customers using you uh we're between 500 and a thousand okay so good range so again we'll just look at the minimum if i take the 500 multiplied by you said again average call it two grand per year if i make that monthly you're doing well over you know call it 80 grand per month right an mrr uh we're we're on our way there yeah okay so you maybe have some historical users that you let in kind of early at a cheaper price yep got it got it fair to say between 70 and 80k around that range yeah all right fair enough good what's your goal by the end of the year let's talk about it maybe that way what's your goal to get to by december 2017 in terms of run rate yeah so we want to we want to raise an a round um say kind of q1 q2 next year um and the typical range for that is you know 1.5 to 2.5 arr um kind of for air rounds at the moment so that's that's kind of the range of our target so you want to get to by december 2015 or 17 doing somewhere we'd call it 150 160 170 grand per month that would be nice yeah yeah that's great good and then you said you mentioned earlier marketing budget but you only really talked about the people aspect of that are you spending on paid acquisition through like ads so marketing budget is just you mean just people's salaries yeah all right guys i talked about this earlier but i schedule like so many meetings that would blow your mind i mean all my podcast interviews right hundreds of entrepreneurs i talked to monthly i schedule and you know what i do it so efficiently i get them all to agree to my calendar so all the calls are back to back to back that means i'm not switching in between tasks all day long i get them to batch so i can be very efficient it's so critical i use a tool called acuity scheduling to do this at nathanwacka.com forward slash schedule it eliminates back and forth between me and people i'm trying to meet with it makes it very simple and most importantly they help me keep my no-show rate very low because they send out reminders it helps you look very professional so go to natalmecca.com forward slash schedule to sign up and you get a great deal you know you guys know this i hit people hard i make great deals and gavin the ceo has given us a great deal if you sign up like normal people okay on their website you only get a 14 day free trial to use my link nathan michael.com forward slash schedule to get 45 days free okay it's the best it's free go to nathanwacky.com schedule right now to sign up and i'll see you there all right dude let's wrap up here with the famous five you ready let's do it number one what's your favorite business book uh good question i mean for our four-hour workweek was uh was one of my initial inspiration books um i think hard things the hard way uh has been um i mean ben's book hard thing about things exactly yeah i think about that things that's been kind of a more relevant book to me recently i think so i think it depended on my on my stage but those are two big standout ones number two is there a ceo you're following or studying right now uh yeah a lot um you know elon musk i always always follow i follow quite a lot of the uh ceos like larry ellison and mark benioff do you listen to my show uh there's a right answer to this question [Laughter] all right what's your favorite online tool process street of course you know besides your own uh um we use a crm called close i o uh i like it a lot yep close dot io and i believe that's with uh steli runs that right yep exactly we actually have an episode of our podcast with him yeah and if you guys want to hear uh steli on my uh my up my podcast nathan lika dot com forward slash the top 463 he revealed that they passed 200 grand in mrr passed 500 customers paying a minimum or an average of 400 bucks per month um so listen to that one and listen to uh vinay's version on uh what's it called better or was it again better business systems explode business systems explore good all right number four uh how many hours of sleep you get every night uh eight and what's your current situation married single do you have kids i have a girlfriend okay so not married no kiddos yet and how old are you yeah uh 31 31 all right take us home man take us back 11 years what do you wish your 20 year old self knew uh that you could make money on the internet there you guys have it from vinay founder of process street you can make real money on the internet coming from a guy that launched his company back in 2013 has raised 1.3 million dollars in funding has a team of 21 currently uh again has 500 customers that pay him to help make and streamline their business systems those customers pay on average about 167 bucks per month or about two grand per year they're doing somewhere between call it 70 and 80 grand per month currently with the gold to grow to between a 1.5 or a 2 to point five million dollar annual run rate by q1 of 2018 so they can go into their series a round but nate thank you for taking us to the top thanks have a good day if you enjoyed today's episode with finnay go back and listen to scott's episode yesterday he's raised 8.8 million dollars and look i think this could be the ultimate machine learning tool because of what scott has done you have to tune in to find out what he's done it would mean the world to me if you guys got any value from this episode if you would go leave a review on itunes right now and then subscribe you know i hustle like have to get these episodes out every freaking day for you guys and trust me i love it i would do it with no listeners but boy oh boy it makes my day and it makes my team's day when we see great reviews and get your feedback so thanks so much okay top tribe i love giving away free money i feel like we're giving away cars and i have something special for you today how many of you have heard our super sharp guests talk about success they've had with facebook and google ads well all of you listening right now yes if you're listening you get a hundred dollars in free adwords here's how you get it okay again thanks for listening get to 300 from google right when you sign up with my website post provider hostgator go sign up now to get your free money hostgator.com forward slash nathan again that's hostgator.com forward slash nathan