How Richpanel Reached $2M Revenue and 200 Customers by End of 2022 (Interview with CEO Amit RG)

Intro and Company Overview

Nathan Latka

00:00Guys launched in 2018. He is now working with 200 ecommerce brands processing and helping them get support questions answered faster. He ended last year with that $2,000,000 run rate. That's an average ACV of $10,000 a year, hoping it'd double this year to 4,000,000. He raised a 2,000,000 pre seed round back in 2020 at a 20,000,000 post from Sequoia, now raising a 5,000,000 seed at, call it, a 30 or 35,000,000 pre, both from customers and two additional potential

00:22traditional VCs. Again, building richpanel to get rid of these horrible support experiences you and I know when we're checking out with most ecommerce brands. Hey, folks. My guest today is Amit RG. He's a CEO and cofounder at richpanel.com. Under his leadership, the company has grown to over 2,000 brands in three years. He leads everything product and engineering at the company and is obsessed with their motto, the best service is no service. Amit, you ready to take

00:45us to the top?

The Best Service Is No Service Philosophy

Amit RG

00:47>> I am.

Nathan Latka

00:48What does that mean? The best service is no service?

Amit RG

00:51>> My my funder is simple when I started the company. You know, if you look at any business, you look at their customer service, customers usually contacting about the same, you know, same seven to eight types of issues. But customers but business are still using agents to handle these issues. And if you contrast it with which is stupid. And if you contrast that with what happens in Amazon, where I bought like 50 items this year, maybe more,

01:15>> and I've never contacted them once. The difference is that Amazon is productizing each of these contact reasons, you know. If I want to like return an order, cancel an order, edit anything in my order, I can do that within Amazon. I can manage my subscriptions. They now have situations where if somebody forgets a coupon code, they have a flow for it. Right? So that's the kind of interfaces that we build for other companies. And then, you

01:39>> know, you basically eliminate all the contacts and customers able to, like, self resolve, business are able to scale. It's a win win.

Business Update: Revenue and Customers

Nathan Latka

01:47That's awesome. Now when you came on the show back in July 2020, you told me you had 70 customers and you're doing about $90,000 a month in revenue. So you just passed a million dollar run rate, I think. Give us an update on the business. Where are you at today?

Amit RG

01:59>> We we crossed $2,000,000 in December 2022, and we are on path to take this year to like 4,500,000.

Nathan Latka

02:06So sorry. Last year, what did you finish at? You finished at a 2,000,000. Right?

Amit RG

02:10>> Little about 2,000,000. Yes.

Nathan Latka

02:12Oh, that's great. And how many customers?

Amit RG

02:15>> 200 paying customers with the ACV of around 10,000.

Nathan Latka

02:19Wow. Okay. So 208, that makes tons of sense. Walk me through what a customer is paying you for and if you can, you use a real customer.

Pricing Model Explained

Amit RG

02:27>> As of today, a customer pay us for self-service resolutions approximately like $1 per resolve, and they pay us for ticket because we have both the modules. We have the agent at desk for which you pay by tickets, and we have the self-service where you pay by self-service results where an agent wasn't needed. So if it's a ticket, you pay approximately 20¢ per per ticket. If it's a, you know, self resolve, you pay like $1. So what

02:51>> we both have vested interest to do more self-service results.

Sequoia Raise and YC Decision

Nathan Latka

02:55And I think when we last spoke, you said you were looking at raising a $2,000,000 round, but you weren't sure if you're gonna close it or not. You've been bootstrapped previously. What'd you end up deciding to do?

Amit RG

03:03>> I did raise $2,000,000 from Sequoia at a $20,000,000 valuation. I did that in 2020. We also got selected Y Combinator but we decided to not go ahead with it. Because because this thing happened like one week before YC. YC was all remote. I'm a big YC fan. But it didn't make sense, you know, to dilute so much when we were already getting

Nathan Latka

03:24They wanted what 7% for 125?

Amit RG

03:27>> Yeah. So they put you they give you a standard valuation of like 2.1 post. And the the disadvantage that it immediately is it was remote so you don't build a network, right? When you go into a thing like YC, the major takeaway or the major benefit is the network and the kind of people you meet. That that doesn't happen over Zoom calls and like those Zoom sessions where 100 people are coming together.

Nathan Latka

03:49Yep. Now, obviously, Sequoia put money in just at the same time at a 20,000,000 valuation. YC wants a 2,000,000 valuation. I mean, did you wanna do YC but Sequoia blocked it because it's a massive haircut on the valuation?

Amit RG

04:02>> Not really. I think Sequoia was very open about it. Lots of other people in the same, you know, cohort like being funded at the same time, they did decide. My friends did decide to do with YC. Sequoia had no problem. I think they were like very cool as investors. Very open minded. If you have a reason to do it, they never block. I just spoke with a few of my existing customers where, you know, they wanted

04:23>> in at the previous valuation because I'm doing like my next round. But they wanted in at the previous valuation. And the reason is because these people are like extremely influential. They're people like you that can like promote the shit out of richpanel. So they were like, you know, we we, you know, we are your customers over the last two years. Give us in and we want to like, you know, work very closely with you because each

04:40>> time we do a catch up or a one hour catch up over like a review call, we're like forty five minutes just discussing personal life. Right? We're just helping each other grow and like whatever. Both the founders both have like similar problems and like similar state that we go through. So forty five minutes is that and they're like, you know, we want to invest in each other's success. And they did this and I went to Sequoia

05:00>> and they're like, yeah, absolutely cool. You know? It makes complete sense to have these people as your.

Nathan Latka

05:05Oh, 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

05:28your Stripe account, you see your valuation real time. You can see what it 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

05:53get a 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. Right? So the 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

06:14not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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 by 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

06:40going 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 what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if

07:02you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead 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

Current Fundraise: $5M Seed Round

Nathan Latka

07:29interview. How much are you raising right now?

Amit RG

07:32>> So I'm doing a $3,500,000 round. Actually, $5,000,000 round with like a with an extension, seed extension. And I'm doing like a 500 k round for with the angels. But I started off like with like 3, 3.5 but just after my two calls that I did with VC they were like, you know, you need to take at least five. Your business is at a decent scale. So we want to take you five and then you can do your

07:57>> series a. They they understood why I'm raising like a small round. They respect it. And they're like, if you want speed, we get it. But we want minimum that much ownership in the company. So we were like, okay.

Nathan Latka

08:07Yep. And what what is the minimum ownership they want?

Amit RG

08:10>> So, you know, they're looking at like, you know, whatever if we do, like, we close our round at 30, 35 at current stage, then they're like, we we want like substantial percent. It's not about the ownership. There are few firms that are not willing to write check sizes below that, if that makes sense.

Nathan Latka

08:26No. It makes it makes total sense. I mean, this is these folks in seed rounds, they want 15 to 20% of the company. So even if you don't need that much money, they still wanna figure out how get to 15 to 20%. So hearing your math, it's a $5,000,000 check into a 35,000,000 post money valuation.

Amit RG

08:39>> 30 it could be 30 as well. Yeah. It could be 30.

Nathan Latka

08:4130 pre 30 pre money, 35 post. It gets them 20% of the company. That's what they want.

Amit RG

08:45>> Correct. Correct. Yeah. Yeah. I mean, why not

Nathan Latka

08:47just push back and say, guys, listen, either you're giving me less money because I don't wanna get this diluted or you're not getting in the company.

Amit RG

08:53>> I I don't do that. You know, I'm I'm actually never been the guy that will, you know, over index on valuation. I over index on the partner. I just did a call with one of the partners and I made my Sequoia partner write to him saying that if you need reference on Amit then, you know, he's he's a stand up dude. Just, you know, call me for anything. And that VC replied back to my partner at

09:15>> Sequoia that this guy came so prepared that it was mind blowing. You know, I was I was mind blowing. So what I do is like I try to watch the partner. Like I would spend a few hours watching their videos. And I don't even ask for like 15 introductions. I'm like, you know, I'm gonna go after these three or four and I'm gonna like, you know, I'm gonna aim to shoot it. Like I'm gonna aim to

09:32>> like bring it home. Because I think that's the right way. You're gonna work with this man for the next man or woman for the next ten to fifteen years. Very very important that you choose the right person to work with. So that's what I'm doing with my angels as well. Know. People that I love. People that are. Want the best in you and will challenge you. You can brainstorm with them. And they also understand like the

09:53>> macroeconomics. But they can like go down to the ground level and also brainstorm when you're, you know, stuck with something. Those are like the ideal partners I want.

Moving Down Market and Pricing Strategy

Nathan Latka

10:01Yep. Fair enough. Fair enough. Take me back a little bit here to the ACV conversation. So when we spoke last year, you had 70 customers paying 1,500 a month. Now you've got way more customers, 200, but they're paying half as much per month. So are you moving down market?

Amit RG

10:14>> Yes. Yes. Because what happened is we did an analysis even today, by the way, Jason. I just gave my bad. Even today, we we are going to reduce our pricing even further. So when I'm saying that we're going to cross 4,000,000, the number of customers going to like probably triple or quadruple. Because we're three x more expensive than the competition. And we as sales team were making a mistake because we're so confident of the product and

10:40>> the value it delivers, we're making it too expensive to sign up with. They get value later on, but there are so many people that just shy away or don't try the product just because of that high price tag. So I want to change that model. I want to get them in at a lower price, then invest in CSM, then invest in delivering value, and then, you know, getting them on like higher tiers or like, you know,

10:59>> more services. I think that's the right way.

Nathan Latka

11:01So I want to What how do you get

Largest Customers and $100K Contracts

Nathan Latka

11:03How do you get your first customer paying you a $100,000 a year? What do you probably have to provide for them?

Amit RG

11:09>> When you say that, what did I do to get a 100,000 or what

Nathan Latka

11:13Well, is it well, don't name the customer, but what does your largest customer pay you today?

Amit RG

11:17>> I think I have around that price, 100,000. I have like three, four customers that pay 100,000. And they've all closed like in the last quarter. I've started to go after them. And it just makes sense, you know. The only thing the only thing stopping us was not knocking on the right door.

Nathan Latka

11:32I mean, just to be clear, the reason they're paying that much is because they're processing so many it's it's based off number of transactions per month. Right?

Amit RG

11:38>> Yes. Yes. It's number of transactions per month and number of self resolves per month. Yeah. Number of self resolves per month.

Nathan Latka

11:44So how many how many self resolving like support tickets are you resolving for someone paying you a $100,000 a year?

Amit RG

11:50>> So, you know, it's it's it boils roughly boils to like 50,000. So if you take like a 100,000, it's like 8,000 per month is what they're paying. I And will have to do like, you know, 15,000 results for them for them to justify that. But it won't be 15,000. It would be more like, I'm doing like 10,000 results for them and they also are paying me additional $5,000 for oh, sorry. You know, they're also paying me

12:10>> like a portion of that for agent help desk. But that's the Yep.

Nathan Latka

12:14No. This makes tons of sense. So the question I was asking you, I'll just make it a bigger number now. How do you like just think product wise for a second. What these customers want? What do you have to give them where you think they won't even blink at paying you a million dollars a year?

Amit RG

12:28>> Go to a bigger customer. That's it.

Nathan Latka

12:31Well, if what okay. What if you can't? What if you have to take some of the current customers paying a $100 a month and you to give them so much value that you are able to upsell them to a million? What other things would you sell them?

Amit RG

12:40>> I I cannot. I cannot because so many of my customers today are at the GMV of 10,000,000 or like 50,000,000 ecommerce guys. You know, the margins are notoriously low. If if a guy that's making like if a man that's making like 50,000,000 a year doing e commerce, maybe he's netting like 2,000,000, 3,000,000. I can't ask him to give me a million. That would be stupid. So my value to him is limited. So the way that I

13:02>> can ask a million dollars is to get go after a person or go after a company that's doing 500,000,000 GME or billion dollars in GME and that's what I'm

Nathan Latka

13:11So you never if 500,000,000 is your target, you're basically saying you never wanna be more than point 2% of their annual expenses?

Amit RG

13:17>> I've never done that kind of a math. I'm just saying like, you know, if if you have to do that kind of a math, I'll tell you like the order to ticket ratio. Right? So depending of your like a let's let's do the math. If you're like a billion dollar company, you're doing like, you know, 800 or 80,000,000 a month, you're going to do $4,040,000,000 tickets a month with a 50% ratio. Or you know by that

13:39>> stage will be like too efficient. So you'll be doing like 15,000,000 tickets a month. Right? And with 15,000,000 tickets, if I charge you like 10¢, that will be like 150,000 for for that month. And then on an annual basis, you'll pay me like 1,800,000.

Nathan Latka

13:56But how many brands are there that do that how many brands are there that do a billion in GMV?

Amit RG

14:00>> I can actually forget 10¢. I can even ask for like 50¢. Right? So if I do 50¢, then I'll make like 5,000,000 of that brand. Right? Mhmm. And by that same token, if I go after like a $100,000,000 brand or a $200,000,000 brand, then they will be able to pay me like a million dollars.

Nathan Latka

14:15But Amit, how many of those are there? How many how many 100,000,000 brands are there?

Amit RG

14:19>> I didn't do that math, but I can tell you that there are 50,000 stores that do more than a million dollars.

Nathan Latka

14:24Right? My What on Amazon or where? Stores where?

Amit RG

14:28>> Everywhere. Like e commerce stores that are doing like more than a million is 50,000 in the world. Right?

Nathan Latka

14:32Interesting. What's your source on that? How did you get that number?

Amit RG

14:34>> So I Pipe Candy is one source. Pipe Candy, then built with. I did Alexa ranking and then what else? What else? Shopify Plus are like 15,000 stores, that's like a straightforward math. But I think I got the number from Pipe

Nathan Latka

14:48Interesting. How much is Shopify? All the 15,000 Shopify stores, how much do they process by themselves each month?

Team Size, Engineers, and Sales Reps

Amit RG

14:55>> Which 50 the 50,001 are the ones that are 15,000 Shopify are Shopify Plus. They pay Shopify Plus $24,000. So they they must be doing at least a couple of million dollars to justify that 25 k fee. 24 k I see. Shopify. So they are directly in my target market. Then there is WooCommerce, then there is Magento. And that's just the e commerce as a vertical. I'm just starting at e commerce. I just took that as an

15:18>> opportunity because 2020 was the year of COVID. We knew that this is vertical we have to start with. But in quarter four, are going to launch in other verticals this quarter.

Nathan Latka

15:26How close are you mean, everything you're talking about is about support support support. How close are you to the actual transaction? The actual dollars getting paid?

Amit RG

15:35>> On my platform? Yeah. Why would I do that?

Nathan Latka

15:39I'm asking, are you close to the actual dollars being transacted?

Amit RG

15:44>> No. No. I mean, the dollars get transacted in the sense like the agents, like there are things that you could do within the widget and check out, like it can give you a recommendation.

Nathan Latka

15:51Yeah. I mean, you have an example on your websites. A customer says, I'm looking for a pair of running shoes under 300. Your bot responds, how about these? And there's a buy now button under two options. If they buy one of those and it's They're

Amit RG

16:01>> going to the Shopify checkout or the Magento checkout. I'm not processing it. And by the way, and others are getting very strict about who's processing this payment because they wanna control it. Yeah. Yeah. They want to control it. They want their cut. Right? So that's what their business is. So I'm

Nathan Latka

16:15hoping Is is there a world where you use the support product as a wedge to eventually get into your own payment processing?

Competing with the BPO Market

Amit RG

16:21>> No. No. I I wouldn't do that. See, my my vision is very simple. I don't even look at Zendesk, Freshdesk, all of these as competitors. Our real competitor is the $80,000,000,000 BPO market. That has to stop existing. I mean it's never a pleasure calling like an airline being on hold for thirty minutes and still not getting a resolution. Do you think the CEO of United, the CEO of Southwest doesn't wanna help you? Of course they wanna

16:44>> help you, but the technology is so limited. They need to do what Uber has done. They need to do what Amazon has done. They need to get to a stage where their product handles 95% of the issues and only 5% come to them. When the issue is only 5%, then these people will not be somewhere in India or Philippines. They will be right here in the headquarters. These agents will have the permission, authority, and the know

17:08>> how to actually resolve the question then and there.

Nathan Latka

17:11>> Yep.

17:12Or I can make It's a great vision. Listen, I'm on board. I love it. I guess, give me more of the team and the team information today. How many folks are full time?

Amit RG

17:20>> 32 people.

Nathan Latka

17:2132 people.

Amit RG

17:22>> Yeah. I should know that number. 31 or 32. Yeah.

Nathan Latka

17:25And how many are engineers?

Amit RG

17:28>> Fifteen, sixteen.

Nathan Latka

17:2915, Interesting. And do you have an inside sales team at this price point or it's too cheap?

Amit RG

17:33>> No. It is we we do have like two salespeople, only two. Two account execs that bring in like all the revenue.

Famous Five: Books, Sleep, and Tools

Nathan Latka

17:39They What's their quota?

Amit RG

17:41>> Thousand per month of ARR is what they have to do.

Nathan Latka

17:43One five or five o?

Amit RG

17:45>> Five o.

Nathan Latka

17:4650,000 of new ARR per month. So 600,000 of ARR per year.

Amit RG

17:50>> Yes. Actually it's a little more than that. Maybe it's 6,000 MRR. So, you know, one AE would do 600, one is doing like 780, but that's what they have to bring in. Yes.

Nathan Latka

17:59Got it. That makes a lot of sense. Very interesting. Well, listen. We're out of time here. I love the growth. Let's wrap up here with the famous five. Number one, what's your favorite book?

Amit RG

18:09>> I'm liking 12 Rules of Life. I just started it today.

Nathan Latka

18:1212 Roots, Rules of Life?

Amit RG

18:14>> 12 Rules of Life by Jordan Peterson.

Nathan Latka

18:16Number two, is

18:17there a CEO you're following or studying?

Amit RG

18:19>> I love Elon Musk. I aspire to be like him. So

Nathan Latka

18:23Number four, how many hours of sleep do you get every night?

Amit RG

18:26>> Off late, I've been getting three or four hours, but I feel very refreshed. It's it's willingly willingly I'm working myself. Yeah.

Nathan Latka

18:33Alright. I skipped number three. What's your favorite online tool for building richpanel?

Amit RG

18:38>> Oh my, Notion. Notion. I'm a big Notion fan.

Nathan Latka

18:41Number of and then what's your situation? Married, single kids?

Amit RG

18:47>> Married to richpanel. Richpanel is the baby and that's all.

Nathan Latka

18:50And how and how old are you?

Amit RG

18:52>> I am 33. 34. Sorry. 34. I became 34 in December.

Nathan Latka

18:58Happy late birthday.

18:59>> Last question. Something you wish you knew when you were 20.

Amit RG

19:03>> Something. That's a tough one. So many things, so many things. Take more risks, you know, make better friends, and be more unapologetic.

Nathan Latka

19:14Guys launched in 2018, he is now working with 200 e commerce brands processing and helping them get support questions answered faster. He ended last year with that $2,000,000 run rate. That's an average ACV of $10,000 a year, hoping it double this year to 4,000,000. He raised a 2,000,000 pre seed round back in 2020 at a 20,000,000 post from Sequoia, now raising a 5,000,000 seed at, call it, a 30 or 35,000,000 pre, both from customers and two additional

19:37potential traditional VCs. Again, building richpanel to get rid of these horrible support experiences you and I know when we're checking out with most ecommerce brands. Amit, thanks for taking us to the top.

Founding Date Clarification

Amit RG

19:46>> Nathan, one last thing before I leave you. It's 2020 is when we started richpanel. That was a previous company. We need to update that.

Nathan Latka

19:52Now are you just cheating when you say that because you want your growth to look more impressive over a very compressed period of time? Or was it was 2018 really the start date, but you pivoted in 2020?

Amit RG

20:01>> No. I can I can show you when the richpanel in was incorporated? The first customer date came in, like, March 2020.

Nathan Latka

20:07When did you write your first line of code for richpanel?

Amit RG

20:11>> December 2019.

Nathan Latka

20:13Okay.

Amit RG

20:14>> Founded December 2019.

Nathan Latka

20:15There we go.

Amit RG

20:16>> Come on, Nathan. It's March 2020 and that's what I you know, your website is being referred by a lot of investors. I'm telling you, there's a company called JetCommerce where I used to do like a million dollars. I reached million dollars in ARR but it was mainly custom services. I did 2018 to '19 and I completely shut that down. It's it's also the thing that funded my richpanel initiative but richpanel first customer came in March

20:40>> 2020.

Nathan Latka

20:41Okay. That's fair enough.

Amit RG

20:42>> But $200 a month. I remember the customer. He's still friends with me.

Wrap Up

Nathan Latka

20:47Alright. Yeah. I love that. I love that. We'll give you we'll give you late twenty nineteen, early twenty twenty first customer in March. I'll get that updated for you. But Amit, thanks for taking us to the top.

Amit RG

20:56>> Thank you, Nathan. Pleasure.

Nathan Latka

20:58One 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

21:23Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

21:45fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

22:07for 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, but I do it so that we can all learn. We have to counter those people. We

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