How SPIDR Tech CEO Rahul Sidhu grew SPIDR Tech to $2.5M revenue and 60 customers in 2023.

hey folks my guest today is ross uh sudo he's the known as silicon valley's expert on policing currently works with over 50 local law enforcement agencies across the continent on police reform initiatives he's the ceo and co-founder of spider tech spelled s-p-i-d-r he created the world's first automated customer service platform for public safety agencies role are you ready to take us to the top trim all right what does that mean who are the customers of policing agencies well i mean anybody who is interacting with a police officer or deputy sheriff at a local law enforcement level is essentially a customer uh if you're paying taxes or you know you're basically whether you're getting you're calling 911 because you need help or you're a victim of crime or even if you're getting pulled over because you're basically paying for them to keep the roads safe too you're technically a customer of that agency so who's paying you then well the agencies themselves so the cities and counties uh pay spyder tech for the software that allows them to provide better customer service and that customer service comes in the form of automated texts and emails that go out to the customers of that agency to keep them informed let them know what's going on with the status of their case their now one call their traffic collision etc but it also goes out in the form of mobile friendly surveys that are being sent to people who are interacting with those police officers so that those agencies can gather feedback every time someone interacts with them that can better improve their operations and why they need to use you for this versus sort of an instant of twilio's you know sms texting api well in order for this process to be automated you need to have a basically all-in-one system that integrates with the data systems that they're using today for me to be able you know for for our platform be able to send out a survey to someone who just recently interacted with the police officer because they call 9-1-1 or they're a victim of crime whatever the circumstances we need to be able to connect to intelligently connect to the dispatch systems that they have or the records management systems that they have so those messages can go out and that they every single survey that comes back can be attached to an interaction which we have a record of so all those surveys for example we have uh you know a plan of action because we know it's in reference to this officer this now one call this this report whatever the circumstances this traffic stop because we have that integration in place and you can't just do that with like let's say survey monkey or twilio by itself you have to build a platform that works with these configurations and then uses those integrations to do this automatically understood what are these agencies paying uh you per month on average to use the technology uh well we do yearly contracts and in some cases multi-year contracts uh the pricing's based off of how large the agencies are in terms of their sworn size is the term sworn size would be how many you know police officers or deputy sheriffs they have you know work in the fields et cetera to be able to get a sense of how much data is going to go in and out how many customers are they likely interacting with on a daily basis and they pay an annual fee based on that and that covers the entirety of the platform or they can purchase it kind of all a carton module by module they can decide we only want to send messages to 911 callers or crime victims for example they can decide that they want to specifically do you know uh surveys or they want to have a module on their website which allows people to go and track the status of their case directly from the police website they can pick and choose or they can take the old platform and that's what you know basically how we set up the annual fee so i'm going to force you in an average hero just to help us stay focused so what would an average contract be for the year uh well i guess you'd say you know at a smaller agency of 100 folks it could be you know somewhere between 10 000 to 40 ish thousand dollars a year depending on how much of the platform that they wanted okay so you upsell based off number of seats there's also a feature-based upsell and also just utility-based upsell based off number of customers in that jurisdiction yeah and it's not necessarily seat based because you know they can't go oh we're only going to give this to 10 cops or 100 cops it's based on the entire size of their agency so they can't just buy it and test it with 10 cops it has it's all or nothing we do do pilot programs for larger agencies that you know have 500 to 1000 plus cops where we'll do like a three-month kind of custom based trial period at a lower cost but generally speaking no it's based on the size of the agency because the amount of data is going to be the same either way i see i see okay what's the back story here when'd you launch uh well we started the company in 2015. my background is in uh public safety i formerly worked as a paramedic and also a police officer on the east and west coast so i had a better understanding of what it was like to be a police officer and how to provide that type of customer service i also had the technology background having a startup in high school to kind of help pay my way through college so i combined my love for technology and public safety in 2015 with two co-founders one who was also in policing and another one who was on the technical side of things and we launched for our first customer in 2016 and ever since then we've been growing considerably and tell me uh about first year revenue do you remember how much you did in 2016 uh yeah i can tell you uh wholeheartedly it was a big fat goose egg in 2016 because in the beginning we had to have law enforcement agencies to take a chance on us they weren't willing to pay um it was until 2017 that we started seeing any revenue and it was just a couple contracts what was 2017 revenue your first year revenue i was curious uh it was less than 100k a year okay less than 100k and did you what did you learn from that first sort of 100k was your were you too cheap too expensive sales motion longer than you thought shorter what surprised you um well i mean focus on doing a couple things really well i think is that of life i mean just everyone knows this lesson but it was just really you know shown to us doing a couple things really well is more important doing a bunch of things kind of okay just to try and catch as many customers as you can so i wouldn't say that we you know pricing was necessarily an issue uh it was more so just making sure that we found that what we were doing is really good for those particular customers and then trusting that that referral process and the network effects of that especially in regional gov tech will work out as intended and that's essentially what ended up happening so first customers 2017 you learn from them how many customers are now working with today uh we have over 60 different agencies across the united states and canada okay and how many paid seats are there for officers uh i couldn't give you the the the most recent sworn number off the top of my head but i can say it's in the tens of thousands tens of thousands okay and now can i multiply that can i take those 60 customers times call like a 2 000 a month average contract size you guys are about 120 grand a month right now on revenue something like that it's certainly a little bit more than that a little more than that okay i mean have you guys broken a 2 million right at this point or is it something you're focused on doing this year we have you have okay okay so a couple questions on capitalization here there were two years that you were essentially pre-revenue you started in 2015 first customers 2017 how did you fund yourself uh we actually went through the stars program in late 2015 tech stars in new york it was the horizontal program with alex's gold and kj singh from there we uh did a pre-seed round of about a million dollars with winklevoss capital and a couple other folks um buddy greg troy taylor adams no name what year was that million 2016. okay and then in 2017 towards the end we raised a proper seed round of about 2.5 million dollars it was priced with uh alphabet sidewalk labs birchmere ventures stage ventures uh you know heartland and a few other more institutional-sized funds with repeat investors and a couple strategic angels as well and from there we just started raising inside rounds uh to continue our growth in 2017 that 2.5 million that was your first price trend what valuation did you negotiate um i i can't actually uh mention that right now that was like five years ago man come on you can't talk about the valuation from 2017 uh well what i'll tell you this is you know we were recently acquired actually uh about uh a month and a half ago so i'm still constantly figuring out what it can and can't i see okay yeah that explains things okay so you raised okay let's talk pre-acquisition here for a second so the total you raised pre-acquisition was about 3.5 million or you did another inside round before that uh pre-acquisition is about 3.5 plus another about a million so it's close to about 4.5 and total money okay that's a big moment to decide to sell why'd you decide to sell you know we got a couple offers and we didn't really want to sell and i basically told the you know folks that we were talking to um here's the only way...