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 later we're gonna give you the same upside that the early investors got no it's the former you have to update your cap and discount accordingly I mean that's not fair to the early guy right okay mint so every time you reach a new milestone you assess what it realistically is worth and then obviously talk to the new guys and then get an okay from your existing folks as well yeah yeah that makes sense what's your team size today how many folks so we have in India we have a team of eleven people full-time and we have a few developers working out of two and New Zealand one and Hungary and a good advisory team based in the Middle East and a couple of guys in California this is a total team like full-time is 11 or how many yeah total is full-time is 11 yep okay and how many engineers nine is engineering design QA all combined yep okay got it so then kind of yeah you left for business marketing all that any quota carrying sales reps or know your price points to chief or reps actually a price point is not necessary to achieve because but we we are we started with the hypothesis of a business model where we don't have to build out a sales team to I mean we have to see how far that we can carry that but the latest deals we have closed have an annualized revenue of close to $75,000 damn but it was primarily close by like me and my co-founder just hustling right okay guys I still found your cell or cell selling yeah founder we have one more guy who rotates but there's three of us are primarily responsible for that and then a lot of our partnerships with the platforms have worked working very well so we get at least one very qualified warm lead a fortnight from our partners so when I mean it sounds like you're signing up deals today that are very much in the enterprise space when I mean when do you think you'll pass a million dollars in terms of protection of run rate that's the plan is July of this year okay so you think you break it this year that's great and then what would that be an increase from over last year so it would be about a tripling in size okay she did about you did about three hundred thousand dollars in total revenue last year right okay okay very good and and as part of transition you're also moving hopefully to les custom development development and more sass that's right and that that is because the first school which which I think we will hit by March itself is is to make sure that well if we left and and no the company left on a holiday for two or three weeks that we would still be able to meet payroll mm-hmm and that would comfortably happen now and then then it's about like really growing the margins and so on right and making it a true recurring model yes yeah and the depth we have to build in terms of technology also has to be there in terms of focusing on point-of-sale accounting and employee management so those are the three verticals that we have chosen which are critical to let's say a restaurant or a retailer to run their operations so once we have achieved depth there then it can all be based on subscriptions what about churn so hundred fifty three paying today is there anyone else paying a year ago that's not paying today there's two customers in that bucket and one of them we lost out because there was a dependency on I think they were on NetSuite ERP or something and then that did not work out for them so it wasn't because of our integration or fault how much revenue do customers make up those about six thousand okay but we did not actually we got the revenue and then they decided not to get on to the monthly model after that because they stopped using that suite and so I it was good to know and in a relief of sorts that it wasn't our fault or in a product not being up to the mark yeah but that's one thing we've been fortunate is that churn has been nearly zero at this stage I'm sure what's early yeah exactly yeah I mean I mean is this math right I can take every 153 customers times at least $50 per customer so many only have one location I mean you're doing about seven thousand eight thousand dollars a month right now and true SAS revenue yes so since some of those end up being higher amounts as well because of the enterprise slash platform guys are recurring component is crossed $20,000 okay ready okay good yeah so the average the average the average brandon is paying more like $125 a month for three or four locations right which gets you up to about 20 grand a month in pure sass so the the split is a little uneven and there's a handful of these larger accounts the platforms themselves like some of them are doing excess of three thousand dollars a month in billing with us so they make up in some sense for the lower revenue or the the free palace that we would be running for in the freemium model right but I understand in the 100 M yep so I understand you so your top five customers make up more than 15 grand a month in revenue basically yep yeah very good all right let's wrap up here with the famous five number one what's your favorite business book actually it's it's a it's not an exactly business pool but autobiography of a yogi' is is my favorite book and if when you read urdu you realize that it's it's seems to be a spiritual book it has but other as tremendous amount of business guidance as well sharam is their number two is their CEO you're following or studying not one in particular but many number three with your favorite online tool for building shopping pal LinkedIn number four how many hours of sleep you get every night sake so most days that's pretty good and what's your situation married single kids married with two adopted daughters oh very cool okay how old are you I'm 40 okay busy busy guy take us back to your 20 year old self what he was she knew that I didn't have to wait til 30 to start my business guys there you have it shopping pal again helping brands like Daniel Wellington report back to the malls that they have locations and what they're you know daily sales volume was he's making this easy sells directly through people like the malls or other cloud platforms to the end users they serve over 153 brands with over coffee 300 or 400 locations doing north of 20,000 dollars a month right now I'm pure sass revenue last year when you combine in their custom development revenue did over three hundred thousand dollars I wouldn't break a million bucks this year sharam thank you for taking us to the top thanks so much Nathan it was a pleasure to be here do you guys know I fight like heck to get these data points for you from these CEOs that rarely do these kinds of shows if you want more shows like this make sure you subscribe right now we're trying it ten thousand YouTube subscribers by the end of September here 2019 and it would be in the world to me if you clicked now to subscribe additionally I've got two more great interviews for you if you want more data points from the world's leading SAS CEOs click and watch one of them right now