Richpanelrevenue, valuation & funding

hello everyone my guest today is a meet RG he's an outgoing he's outgoing and loves meeting new people and gets most ideas from listening to folks he meets he's now the founder and CEO of rich panel which is his second bootstrap company's first company is now at 20 million dollars in annual or revenues I mean you're ready to take it to the top absolutely all right let's talk rich panel here in a second but first what's this first company founded with 20 million bucks in annual revenue so that's that's a company which is based in India okay and yes or no Oh interesting well services companies you know they're okay but their margins are nowhere near as good as a SAS company right all right tell us about rich tell us all rich panel so we started rich family last year and we are a customer service software which is specifically designed for e-commerce stores okay and as this one SAS model yeah completely says so on average what are these e-commerce stores paying per month to use the technology would you say so we have eight new divisions the SUV division means about hundred dollars a month and yeah we have about 70 paying customer okay and is there another division as well if that's the enterprise division but that's that's more focused on so we actually started off the company with the enterprise division that's four people doing the entire we were in last year and that's that's the area where you know you're funding in Japan that's a problem so can I say that 200 a month times 70 customers you're doing about 14,000 hours a month right now in revenue oh that's good where were you a year ago do you remember so yeah we actually launched the beta version of the product and we didn't have any news okay so and also in July of 2018 there was no money coming in why do you separate that out I assume they're all belong on the same cap table correct no sorry I don't mean me Pope we don't know what the vision means you have your own version of what that means is it on a separate cap table the enterprise company no it's the same cap table but that's analytics and some company okay so real quick take your entire business that part included over the past 12 months what percent of your revenue was services base the ones you're just describing enterprise cohort versus true SAS so which is which is there any paying customers yes my question let's take your total revenue over the past 12 months what percent was pure SAS versus enterprise and like custom services so need a name the major chunk of the business and like more than 80 more than 80 90 percent not there but yeah okay so fair like so maybe 70% of last 12 months revenue what's coming from professional services in your enterprise cohort you basically going oh my gosh we're doing this great work for enterprises let's codify it so that small businesses that can't afford our enterprise vision can use it at scale no touch on a recurring basis absolutely so that's that's kind of true because a lot of the work that we did for enterprise found its way and some of the good that we did for enterprise clients found its way to the product which is now being used by a lot of SME companies I see okay so I mean it is the whole company all together watched you break the million dollar mark or know you think that's this year yeah well it's not like did you or did you not last your break a million in total revenue across both parts of the business okay you think you will this year though yes yeah so how do you I mean this seems to me it's a tricky focused question because you're dealing with like fifty sixty thousand dollar enterprise deals which are hard to resist versus focusing your time on scaling getting more customers no touch at $200 a month how do you split your time that is tricky so what have you been trying to do with the last one year is you to limit the focus and you know you've stopped taking the enterprise business because it just requires so much amount of custom development and we were only taking the business which which aligns with the goods of what we have for the scalable SME business so you know from from day one we saw this opportunity because even when you are working with enterprise right the customer service teams are usually using like a suite of softwares and they have to do length this multitasking capabilities versus the customer so we saw that there is an opportunity and because which panel is so deeply integrated with a platform we're able to give contextually relevant information next to each message so that you know agents have like full information before starting a conversation so that's why we really stand out and focuses you know really the cool dark part because we'd be a scene legged or thought into place clients also be interested in that have you raised capital for the business or you bootstrapped few moves not love that that's great and what's the team size today total 15 and what's the split between kind of engineers Versailles so we have but people in the customer success team be able people in prologue and the Nestor okay so 10 are engineers five are other the three that are customer success today are they carrot quota carrying obviously do they have a quota using the customer success teams people give academics I know people to that Center day so when you go on the website today we are using the customer success team on board these people under the platform and take their feedback as to you know what made us what made them you know come to the channel and stuff like that but the short answer is we don't have a these three people actually came in the company almost like a month ago okay but most people serving this role even when right when I joined the company this is a quote of bearing role typically you want to incentivize them to close more deals why didn't you do that with them either in the first month you know they have B they are handing a little bit of enterprise accounts as well so you know going forward we will have that clear line clear division where you know we were thinking of giving about sixty to eighty thousand dollars of turning to each each person target a new heir are close per month okay so if let me just make sure I get this right so if a new salesperson signs up with you you're saying their quota target would be for them over 12 months to sign up sixty thousand dollars a new annual revenue okay that salesperson though you would be losing money on them if you charged an average commission of thirty percent on sixty grand that's twenty thousand dollar Commission which essentially means their base has to be lower than 40 grand for you to make a dollar on them no so basically we beasts in India you know so to see people in the customer success demons based in India and that's that's when you know the economics really works so how well can you hire just the base component of a sales person in India would be about what base compensation so it would be 1% of see people would work on 1 percent commission yeah yeah good say I dunno I feel like good sales people would not ever work on 1 percent commission they would be doubling down on their award them performance which is you know 15,000 plus 5,000 is your performance payable plus you get like 1 or 2 percent which is the fastest eyelids plus you know I need all of these leads that we're getting today the helium bomb they don't they have to do like 0% outreach so there's money of inbound sales reps they do know how to reach at all they're still incentivize with quota which is which is true but that's that's what it is you know that that's what the CH people are being paid here yeah I mean I I know Girish should fresh works that's not how his sales team is structured and he's based there he's based there in your back yard as well I guess it all just depends on the quality of sales people that you're hiring right if you feel like they don't have to be great because your inbound channels are basically doing all the work then that's fine no it's not so basically the kind of people that we have today their responsibilities I mean it depends upon the sales portion as well right so there are people who want plate like you know or fixed versus like the high or incentivize and good sales person will always want more upside they will bet on themselves and they will want more Commission if a weak sales person will try and fight like hell for no Commission and pure fixed base so they can be lazy and do no work which is which is true but I think I think that's that's for more predictable businesses so all the revenues that we have accumulated here will will now get the confidence in the people and you know more towards like a high available in yeah so what are you talking about you know costs to get a new customer right what is your fully weighted CAC to get any $200 a month customer as of as of today Lea is spending like literally nothing moment now Google Ads most of our you know signups are coming through marketplaces because we have absolute state on commerce Magento and other platforms so that's why we're getting like most of the organic leads yeah fully weighted so that it would include salaries of your CSM's or anyone related to onboarding sales or marketing that would be about you know down your nose okay so you're spending $1,200 to get a $200 a month customer yeah it's about a six month payback you know okay fair enough and again that money's being spent on some placement in these are all the marketplace placements free WooCommerce you know all of three and the only way you can rank higher is using traditional you know issued on things the way you would rank higher they don't have we promote the listings what's your monthly turn today so because the customer base is too small it's it's hard to tell but you know over the last two or three months we will be using about 100k so that would mean like three or four percent monthly turn with 70 customers okay and I mean are they going at a bit wider churning so these customers when they signed up with our site so I promise for that abb be different from a Zendesk or address this because we're letting you take ecommerce actions right inside this like if I'm assisting a customer you see data rich customer profiles right next to the conversation and if it comes to like canceling what are you finding the order can take those actions so that was a promise when we paint them but what we didn't realize is hey you know they expect this in addition to the parity with existing players so you know when they see that we don't have like each a parody with the existing more established players what they do is they find out that maybe maybe that that's an important part of the workflow and that's that's why they're joining right so one of our major focuses in in the product roadmap is to achieve feature parity with these existing more established players right I mean let's wrap up here with the famous five number one what's your favorite business book zero to one number two is their CEO you're following or studying I really found a big one number three what's your favorite online tool for building your company okay we take on imagine number four how many hours you sleep to get every night six and what's your situation married single kids thinking okay okay and how are ya so you come again how old are you I'm thirty years thirty years old last question what do you is your 20 year old self now if I would say start soon you know I always wanted to become in that was that was something which is in a to me so yeah if I can move back in time guys rich panel calm I think of them kind of like intercom but for e-commerce brands live conversations but heat for e-commerce brands did almost a million dollars last year to this year now they have about 70 customers paying pure sass two hundred bucks a month it's at fourteen grand a month the rest their revenues from Enterprise deals custom installations but again most the revenue they're just using to reinvest in their staffs product scaling that nicely they've got a team about fifteen people building it three to four percent monthly churn spending about twelve hundred bucks get a new $200 a month customer for a six month payback period a meet thank you for taking us to the top thank you thank you