How Shoppinpal CEO Sriram Subramanian grew Shoppinpal to $2.1M revenue and 153 customers in 2024.

you're gonna love this interview just got done editing it I'm glad I got it live for you I'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think's gonna happen to the company and I will respond to every comment additionally if you're just loving the content click the thumbs up and I will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest daesh rom Subramanian he is the founder and CEO of a coming called shoppin pal calm integration and apps for s small businesses and b2b SAS previously as product manager he grew a company to forty billion dollars in payment volume and products at eBay and PayPal and was the first non founding engineer at truss genex which was acquired by HP again now all and on shop and pal Shriram you ready to take us to the top yes absolutely alright so how does shop and pawel work and what's the revenue model is it a SAS company or is it a percentage EMV or what it's it's a hybrid model moving towards pure SAS so I'll explain how we work there's two parts to the company for a small business let's say a retailer that has about twenty locations when they're looking to move to the cloud we help but migrating their data seamlessly over to the set of cloud systems that they want to move to second once they're on a set of cloud systems we make sure that all those systems talk to each other correctly okay so there's two components to it when we acquire customers the platform the cloud platform itself becomes our first customer and we help them build the right set of integrations that are missing for their customers so they become our first paying customer so there's a build cost associated with that for the capabilities that are missing let's say a new set of accounting integrations and now if a second platform comes to us and ask for the same accounting integration it already exists so there it's pure subscription so those are the two components so you're voting your product development in any new product development with customer contracts essentially yes yeah so let's use Daniel Wellington you have them their logo on your website as a customer explain to me how they use you to really drive home what you do so Daniel Wellington is a international watch retailer headquartered in Stockholm and they're currently in about thirty nine countries and on a rapid expansion spree so in countries like India the way that they set up is they go to a mall and set up shop inside a mall now the mall asks them to send daily sales data to the mall servers so Daniel Wellington uses a specific cloud point-of-sale and certain set of other systems from which sales and other related data needs to be pulled and automatically pushed by FTP the mall system and they had no way to do this besides manually some IT managers pulling out excels and sending it to the systems until they found us through the past company to be able to do this in an automated way for pushing daily sales reports to whichever malls they operate in I see okay that really helps to understand I think what you guys do so then again let's back into how you price for that so it will you know what on average what is a customer like Daniel Wellington or your average customer paying you per month to use the technology so when we talk about this use case which is custom reporting or analytics it can start at as low as $50 a month and it works on a per outlet kind of model by it so if it says if it's a small retailer with just one or two outlets they will be in under the $100 price bucket versus someone who is you know 15 locations 20 locations across four states they could be at five hundred a month okay right so that's that's a difference and and then if there are customers that want additional capabilities for example new sets of attributes that need to get added to the report that goes back to the build model that I talked about but the beauty of that is if new attributes get added they go into the master library which is now available to every other customer on the planet of course yeah yeah but I guess let me try and get it let me trying to ask a good question here so if you look at your total revenue from last year on a percent basis what percent was custom development fees for new stuff versus true recurring sass so last year it was 70% was custom development okay whereas this year we are quickly moving to the model where hopefully by March we would have reversed it to less than 20 person being custom development okay okay got it so so obviously trending that direction so well when did you launch the company so I launched this as a in in the custom integration and apps phase back in 2014 where I would be were just getting out and learning about how to build integrations into different systems and in fact if you've heard of the Amazon go experience initially we built out a self checkout experience very similar to Amazon go that was the first we tried and we realized that it was completely non scalable right I actually went out of customers built out two Linux servers myself and deployed it and realized that how am I going to get this to a thousand or ten thousand customers there's no way we can do that so that was sort of the first failure and the learning for us as to what's our DNA and that's where the focus just to be to be evolved okay and so now how many b2b customers are you serving today so we have 13 enterprise like customers and then end retailers and businesses are about 153 I believe this is the recent count that use our technology so what's the difference between 30 and 153 the 13 and the 153 of the actual physical locations and Daniel Ellington would be one of the 13 the so Daniel Wellington would actually be sitting as the end user the retailer for us it's as a b2b business the first touch point is the platform the cloud platform itself right a payments platform or a post company right that is that is the 30 number it's a it's a cloud platform right okay a cloud platform or a large reseller of the cloud platform okay got it so you don't have a direct relationship with Daniel Wellington you sold them through a cloud platform partner right but now we do once we sold them through it we work directly with the customer and their team okay and so 153 brands like Daniel Wellington use you how many locations they make up the actually we don't know the total number of locations because if you take certain relationships we're a reseller would have taken to let's say 30 customers across different countries in Europe we don't have visibility into all the different types of businesses and the locations they serve because the reseller in those cases would own that relationship so it's tough for us to get visibility because we also support a model where our entire stack of micro services can be deployed into a customer or partners environment so there's only limited metrics that we can get in that scenario okay didn't you say that you price based off number of locations so isn't a problem if you don't know how many locations people are installing on that's the model where we are directly serving the customer but then there is a model where we are deploying inside of the customer or partners environment as well right so in that model is where we don't have the visibility but yes if we are onboarding them directly in a pure SAS hosted by us yes then we absolutely know and be priced accordingly ok so you have at least 153 locations using you assuming everyone only has one location correct right absolutely yeah ok our idea more than a thousand locations like across the 153 or like is it probably usually one to one ratio one brand has one location on you know it's usually that our sweet spot is multi location and multi country retailers so definitely there's a pretty good chance that that would translate to thousand plus locations comfortably I say most of these would be on average let's say our typical profile would be five or six locations so yep yep yep yeah okay good okay shion's 153 accounts you can obviously do the math there and figure stats that out okay good so so launched in 2014 have you bootstrapped the company or do you raise capital we just raised some seed capital mostly through angels and the idea there was just to get to a proof point where we can get to profitability and sustained revenue growth and not require VC funding for sustainability and that's where we are now so we are now profitable and and then we haven't really made up our mind of like having to raise VC capital is that the right path or not but the focus is entirely on making this a big sustainable business how much have you raised today a little over one 1/2 million ok and and when when did you close that round it was a rolling close all the way to 2018 and in fact we got check one check even in 2019 okay guys you basically did you raise on a note or a safe or something yeah we did our own convertible note not unsafe but the traditional convertible note got it and so one of the challenges with these rolling notes if someone puts in a dollar today be an angel round and then you let someone in a year and a half later on the same terms when your business is more de-risked the early investor is gonna want more you know upside a reward for the early risk so did you do this on multiple term sheets or did you just say no we're gonna roll it on the same notes and even if you came in...