Founder Interview
How Tradable Bits Bootstrapped to 250 Customers and 50% Year-Over-Year Growth (Interview with CEO Darshan Kaler)
- Interview Date
- February 22, 2018
- Interviewee
- Darshan KalerCEO and Founder
Company Metrics at Interview Time
Customers (2018)
250
Year-Over-Year Growth (2018)
50%
Gross Churn (2018)
5%
Total Funding
$0
Historical Snapshot
These numbers were reported by Darshan Kaler during the interview recorded in February 2018 and are a historical snapshot, not current figures. See Tradable Bits’s current numbers.
Key Takeaways
- 01Tradable Bits had approximately 250 customers as of early 2018, ranging from large promoters to solo artists
- 02The company grew 50% year over year for the last three years at the time of the interview
- 03Gross annual churn was approximately 5%, driven largely by a deliberate refocus onto sports and music verticals
- 04Customer acquisition cost ranged from $3,000 to $5,000, primarily through live event sponsorships rather than digital advertising
- 05In most cases, CAC was paid back within six months, depending on which events the company sponsored
- 06The company was fully bootstrapped with $0 raised in outside funding
- 07Tradable Bits first rolled out its suite of apps in 2011 and had a team of over 17 people, all based in Vancouver
- 08Starting price for the platform was $15,000 per year, scaling up based on volume of fan records
- 09Approximately 20% of revenue came from ad spend fees, with the remaining 80% from SaaS contracts
- 10Estimated customer lifetime value was $50,000 to $60,000 over a three-year window
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2018) | 250 | Founder interview, Feb 2018 |
| Year-Over-Year Growth (2018) | 50% | Founder interview, Feb 2018 |
| Gross Churn (2018) | 5% | Founder interview, Feb 2018 |
| CAC (2018) | $3,000 to $5,000 | Founder interview, Feb 2018 |
| CAC Payback Period (2018) | Within 6 months | Founder interview, Feb 2018 |
| Total Funding | $0 | Founder interview, Feb 2018 |
| First Product Rollout | 2011 | Founder interview, Feb 2018 |
| Team Size (2018) | Over 17 | Founder interview, Feb 2018 |
| Starting Price (2018) | $15,000 per year | Founder interview, Feb 2018 |
| Revenue from Ad Fees (2018) | About 20% | Founder interview, Feb 2018 |
| Estimated Customer LTV (2018) | $50,000 to $60,000 | Founder interview, Feb 2018 |
Growth Breakdown
Revenue
Darshan did not give a single revenue figure, saying monthly revenue "changes from month per month" because the company also takes a percentage fee on ad targeting, which varies with the time of year. He said Tradable Bits was "in the millions in revenue," having grown from hundreds of thousands, and that 50% a year, the rate it had grown for the last three years, was "harder to do" at that size. His target for the year ahead was $2 million to $3 million in total, which he agreed would be flat rather than growth "if we don't go into Europe."
Customers
Tradable Bits served approximately 250 companies as of early 2018, ranging from large promoters to individual artists. Accounts are counted by entity, so a large promoter with many events still counts as one customer.
Team
The team stood at over 17 people at the time of the interview, all based in Vancouver, Canada. Darshan indicated the company was actively adding headcount.
Funding
Asked whether he had bootstrapped the company or raised capital, Darshan said, "We've raised $0." He added that Tradable Bits had never raised any money and that "at this point, it's all organic growth through word-of-mouth."
Growth Strategy
Live Event Sponsorships as Primary Acquisition Channel
Tradable Bits acquired customers mainly by attending and sponsoring live events. Darshan said the spend was "predominantly tied to events," with CAC ranging from $3,000 to $5,000, and that the company was strategic about which events it went to.
Enterprise Integration and Stickiness
The platform integrates deeply with ticketing vendors such as Eventbrite and Front Gate, making it difficult to remove once deployed inside an enterprise. Darshan described churn in the focused sports and music segment as very low because of this stickiness.
Vertical Refocus on Sports and Music
Over the year and a half prior to the interview, the company deliberately exited tourism and other adjacent verticals to concentrate exclusively on sports and music. Darshan said churn was "more tied to the refocus" and put total revenue churn from the change at about 5% a year.
Word-of-Mouth and Organic Growth
Darshan said that "at this point, it's all organic growth through word-of-mouth," and that the company did not do a lot of digital advertising.
Sub-Accounts and Cyclical Events
Darshan said that once Tradable Bits signed a large account, the work was "trying to get their sub accounts inside in there," the separate events under the parent company. He gave this as the reason he had not seen room to grow in North America: those events are cyclical, so "if we get them in at a particular timeframe, we might not get them again the following year."
Best Quotes
“So we've never raised any money, and at this point, it's all organic growth through word-of-mouth.”
“It's going to range between a starting point of $15,000 a year, all the way up, depending on the volume of data that we're going to be providing services to.”
“Yeah. So we're growing 50% year over year.”
“Churn is more tied to the refocus. So in the last year, a year and a half, we focused exclusively on sports and music, and so we did have companies that are tied to tourism and things like that, that we've slowly said goodbye to.”
“It's a very sticky product, so once it gets deployed inside the enterprise world, it's very difficult to remove.”
“cost per acquisition can range between 3,000 to $5,000”
“On average, depending on which events that we go to, some are more expensive to sponsor, but in most cases we get those return at least within six months.”
“I would say each customer is within... Let's take a look at the last three years of most of our customers that have been on the platform. You know, lifetime is going to be between $50,000 to $60,000 in a three year window.”
What Happened Next
At the time of this February 2018 interview, Tradable Bits was a bootstrapped, Vancouver-based company with 250 customers, a team of over 17, and 50% year-over-year growth. Darshan was evaluating potential expansion into South America and Europe but had not yet committed to that direction. This page reflects the company as it stood at the recording date. Visit the Tradable Bits profile on GetLatka for current figures.
View Tradable Bits’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Company Overview
- 0:28What Tradable Bits Does
- 1:55Who Are the Customers
- 2:57Starting Price and Fan-Record Pricing
- 3:54Founding Story and Origin at the 2010 Vancouver Olympics
- 5:25Team Size and Headcount
- 5:52Total Customer Count
- 8:06Revenue Growth and Annual Growth Rate
- 10:16Bootstrapped with Zero Funding
- 10:32Churn and Vertical Refocus
- 11:48Customer Acquisition Cost and Payback Period
- 12:33Customer Lifetime Value
- 13:14Famous Five Rapid Fire Questions
Introduction and Company Overview
Nathan Latka
00:00Hello, everybody. My guest today is Darshan Kaler. He is the CEO and founder behind a company called Tradablebits, which helps music and sports brands know their fans and marketers and market smarter. Their fan data platform is built for one purpose, to create the best possible fan experience. Music festivals and sports teams trust them to collect, analyze, and activate their fan data at scale, increasing ROI with automated personalization. Darshan, are you ready to take us to the
00:25top?
Darshan Kaler
00:26Alright. Sounds good.
What Tradable Bits Does
Nathan Latka
00:28Alright. So tell us more about what the company does, and and how do you price this thing? How do you make money?
Darshan Kaler
00:33Well, first of all, its main purpose in life is to really understand the fans that actually go through to sporting games or go to a festival or concert. We all know that each individual person that comes to a given event has multiple different reasons, right down to the affinity of the artist, meaning that they like the artist, that's why they're going, to a group activity, where a group of friends coming together to enjoy a moment in
01:03time. But bottom line, for a lot of people that are in the entertainment industry, you know, they're all about trying to make sure that they get the best experience. But in the end, in the digital world, when you're trying to do advertising, it becomes a much harder struggle to make sure that, one, awareness on the particular event that's happening, and then also trying to maximise your advertising budget, so that you can get into a scenario where
01:30you're reaching the right audience for a given type of event. So our platform does all of those things to ensure that the fan experience, you're getting ads that are more appropriate to you, for example, all the way down to communication basis where informing you of certain activities and events that may happen within your neighbourhood.
Nathan Latka
01:30So Darshan, who are
01:51you charging, the company, the event organizer, or the attendees, the fans?
Who Are the Customers
Darshan Kaler
01:55This is actually tied to the promoter. So in this case, our clients are going to be companies like the Live Nations of the world, Ticketmaster, or right down to a potential artist that's trying to roll out their new album and things like that tied to a label.
Nathan Latka
02:12And how you price to them? Is it number of attendees predicted? Is it a pure play SaaS model, fixed fee? What is it?
Darshan Kaler
02:18It is a SaaS model. Again, it's a long term play. It's not necessarily, oh, I'm going to do one campaign with you and then run with that. So we do an integration with the ticketing vendor of choice, whether it be Eventbrite, Ticketmaster, or Front Gate, whichever models. And then we then integrate that also as part of your enterprise. So typically most people that are going to be buying this thing is not a consumer base, it's a B2B,
02:45so this is a business to business transaction. But providing, certainly our platform provides services onto the consumer basis. When Tradable
Starting Price and Fan-Record Pricing
Nathan Latka
02:57Darshan, give me, sorry, give me an example, right? So all these companies are paying you, whether it's a small artist or Live Nation, on average though, if I force you to give me an average, what's the average customer paying you per year to do and use the platform?
Darshan Kaler
03:10It's going to range between a starting point of $15,000 a year, all the way up, depending on the volume of data that we're going to be providing services to.
Nathan Latka
03:21Measured by what? Number of events, number of attendees, how do you measure the data?
Darshan Kaler
03:25Data's tied to individual fan records. So for us, for example, you as an individual is one potential fan record ID. However, you might have an Instagram account. You might have a Facebook account. You might have a LinkedIn account. All of those things are different personas of yourself. You're still considered on our platform as one fan record.
Nathan Latka
03:45Okay. Got it. So minimum is $15,000. I mean, is that an accurate average though, or is your average much higher than that?
Darshan Kaler
03:51No. That's about a good starting point.
Nathan Latka
03:51Okay.
Founding Story and Origin at the 2010 Vancouver Olympics
Nathan Latka
03:54Give me more of the backspace here. Were you at like an EDM concert rocking and rolling, know, sniffing all kinds of crazy things, you said, you know what? I gotta create a fan engagement platform. How'd you launch this thing?
Darshan Kaler
04:04That's a great question. So prior to starting Tradablebits, I was a director of Olympic services during the winter twenty ten Vancouver Winter Olympics.
04:17As part of my mandate was to deliver flawless games, and it was really interesting to see media competing with mom and pop down on the bottom of the hill, where they're sending a tweet of the time and awesomeness of that activity, and then NBC going, guys, we have to compete now in real time, so these photos and images need to be up on our website as fast as they go on to Facebook or Twitter. So that
04:48really dawned on me as something the unique change in our industry, where everybody is an editor, an opportunity to engage in the world, and what shocked me the most was that people didn't really understand an individual who was on Twitter, maybe different than they are on Facebook, and certainly different than they are on LinkedIn, but it's still the same person. And so then we came up with with a model of understanding social media and in the
05:17enterprise world.
Nathan Latka
05:18Interesting. So what year would that have been? Year one?
Darshan Kaler
05:21Year one would have been 2011 when we first rolled out our suite of apps.
Nathan Latka
05:24Okay. And
Team Size and Headcount
Nathan Latka
05:25how how many people are you at today?
Darshan Kaler
05:28Well, the engagement platform, if we go and take a look at it, so we've gone through a lot of different, ebbs and turn in the technology. So when we first rolled out Tradablebits in 2011 was to really understand social media. So we actually gave the platform for free.
Nathan Latka
05:42Yeah, Darshan, sorry, what's your team size today?
Darshan Kaler
05:45Oh, team size, we're over 17 people, and we're adding more people from there.
Nathan Latka
05:49All in Vancouver?
Darshan Kaler
05:51All in Vancouver.
Total Customer Count
Nathan Latka
05:52Okay, So now go back to the question I think you were answering, which is what have you scaled to in terms of total customers?
Darshan Kaler
05:57Yeah, so you have to take a look at it from an engagement perspective. So total customers for us, you know, for example, if we have a Live Nation, that's one company, but they may have multiple different events, concerts, and so on, so there's hundreds, if not thousands, of activities. So we have to look at it from engaged audience. So today, we're about on an active basis, over 20,000,000 engaged audiences on a yearly basis.
Nathan Latka
06:26Okay, but price that out. So what I'm trying to do is price that out. So when you say an account pays you on average $15,000 a year, right? I mean, do you include Live Nation as one customer in that scenario, or you break them down into the 30 different events that they run?
Darshan Kaler
06:41Yeah, depending on the engagement component, it might change. So if we're looking at actual... Let's take a look at companies by entity. We're about two fifty different companies that we deal with.
Nathan Latka
06:55It. And that's including the Live Nation all the way down to the solo artist that wants to use you for three events a year?
Darshan Kaler
07:00Correct.
Nathan Latka
07:01Okay. Got it. Now can I? So I mean, can I multiply two fifty times, you know, dollars 15,000 ACV, assuming that you're doing about $300,000 per month right now in revenue?
Darshan Kaler
07:09Well, it it changes from month per month, but, you can you can go between... Anywhere between, you know, 200 to 300.
Nathan Latka
07:16Okay. And why does it... I mean, most SaaS revenue is very predictable, why is yours changed month to month?
Darshan Kaler
07:21Great question. So we do audience targeting as well for ads and so on. So in some cases, depending on the time of the year, there might be more ads, and we take a percentage fee associated with those things.
Nathan Latka
07:34I see, I see. Okay, and what percent of your revenue is that versus a pure play SaaS model?
Darshan Kaler
07:39It's about 20%.
Nathan Latka
07:41Okay, so it's not, okay, so you're mainly SaaS model.
Darshan Kaler
07:43Yeah. Yeah. It's insignificant compared to the overall.
Nathan Latka
07:46So I mean, is it fair to say if... I mean, pure SaaS, you're around $200,000 per month right now in revenue, and then you make another $50,000 ish per month on paid stuff, paid ad optimization?
Darshan Kaler
07:58Yeah. It goes up and down. Yeah.
Nathan Latka
07:59Sure. Depend... It's probably very seasonal.
Darshan Kaler
08:01Yeah.
Nathan Latka
08:02Yeah. Interesting. And what's growth look like? I mean, are you doubling year over year?
Revenue Growth and Annual Growth Rate
Darshan Kaler
08:06Yeah. So we're growing 50% year over year.
Nathan Latka
08:09Okay. 50. Okay. So 50%. So about a year ago, call it, you were doing, you know, maybe $130,000 ish per month Yeah, pure play
Darshan Kaler
08:16and it changes. From our perspective, it's interesting now that we're in the millions in revenue, growing from hundreds of thousands of revenue to millions is significantly
Nathan Latka
08:16Yeah.
08:32Yeah. Yeah. So over the past twelve months, what'd you do? Like like like two two, two three, something like that?
Darshan Kaler
08:37Well, at this point... I mean, we're looking at growth or we're looking at
Nathan Latka
08:41No, just total revenue over the past twelve months. It was what, 2.5, something like that? Yeah. And then what do you think you'll do this year?
Darshan Kaler
08:48You know, depending on... Right now we're just focusing on North America, And, you know, we are taking a look at potentially going South, South America and Europe. We haven't decided whether we're going to go that route, but if we do, then yeah, then that's going to generate some other significant income. But for now, it will be between, you know, I'd say targeting to about 2 to 3,000,000 in growth.
Nathan Latka
09:13Okay, so that would be on top of the three you're currently doing, so hopefully hitting 5,000,000 in total revenue, something like that.
Darshan Kaler
09:20No, no, no, no. Sorry. 2 to 3,000,000 in total that we wanna try to attain. So the growth every year, 50%, we've been doing in the last three years. It's harder to do when you're starting to get it to 2 to 3,000,000.
Nathan Latka
09:32Yeah. Darshan, sorry, just to be clear though, if in the past twelve months you've done $2,500,000, and you're saying over the next twelve months you want to do between 2 and $3,000,000 that's not growth, that's flat?
Darshan Kaler
09:41Yeah, it's flat from that perspective right now, if we don't go into Europe.
Nathan Latka
09:45Got it, so you don't think you can drive growth if you just stay in North America?
Darshan Kaler
09:50At this point, we haven't seen the growth capacity, because once we start signing up some large accounts, it's more about trying to get their sub accounts inside in there. So for example, if we sign up a company like a Live Nation, there's multiple different events underneath there, and so they're cyclical. So at that point, if we get them in at a particular timeframe, we might not get them again the following year.
Bootstrapped with Zero Funding
Nathan Latka
10:16Yep. Interesting. Have you bootstrapped the thing or raised capital?
Darshan Kaler
10:20We've raised $0.
Nathan Latka
10:22That's a nice place to be. Congratulations.
Darshan Kaler
10:24Yeah, thank you. Yeah. So we've never raised any money, and at this point, it's all organic growth through word-of-mouth.
Churn and Vertical Refocus
Nathan Latka
10:32Tell me about churn.
Darshan Kaler
10:34Churn is more tied to the refocus. So in the last year, a year and a half, we focused exclusively on sports and music, and so we did have companies that are tied to tourism and things like that, that we've slowly said goodbye to because
10:53our
Nathan Latka
10:53So much model total revenue churn has there been with the model change?
Darshan Kaler
10:58No, a small amount. I say about 5%.
Nathan Latka
11:02Okay, five, okay, annually?
Darshan Kaler
11:04Annually, yeah.
Nathan Latka
11:04And does your expansion revenue across the fifth, you know, customers you're going more after now, more than make up that 5% so that net growth is there or no?
Darshan Kaler
11:12Oh yeah, no, we are growing every month and so the churn is not something that is impacting us.
Nathan Latka
11:12So do
11:18you know what net revenue retention is?
Darshan Kaler
11:22Well, let's see. If we're taking a look... At this point, we're just focusing on music, right, music and sports.
11:32The retention on that side is, would say, or churn I would say, is probably less than 1%, because it's not like... It's a very sticky product, so once it gets deployed inside the enterprise world, it's very difficult to remove.
Customer Acquisition Cost and Payback Period
Nathan Latka
11:48What are you spending to acquire these customers? What's CAC?
Darshan Kaler
11:52So the spend is predominantly tied to events. We don't do a lot of digital advertising. We go through and inform a lot of our clients through those scenarios. So cost per acquisition can range between 3,000 to $5,000
12:10and from that perspective, we're pretty strategic about which events we go to.
Nathan Latka
12:16Yeah, and if you're making a grand or $2,000 per month from customer, it means you're getting paid back in two to three months, right?
Darshan Kaler
12:20Pretty well, yeah. On average, depending on which events that we go to, some are more expensive to sponsor, but in most cases we get those return at least within six months.
Customer Lifetime Value
Nathan Latka
12:33Six months, okay, good. And then what do you... You know, this is hard, but what do you assume these customers are worth to you over their lifetime?
Darshan Kaler
12:41I would say each customer is within... Let's take a look at the last three years of most of our customers that have been on the platform. You know, lifetime is going to be between $50,000 to $60,000 in a three year window.
Nathan Latka
12:54Okay. Interesting. Interesting. And folks, you're signing up now, is that kind of what you're using for forecasting? You think $50 to $60 grand lifetime value, which means call it three, four years?
Darshan Kaler
13:04Yeah, yeah, yeah. That's pretty well our overall view. Mean, if we get a large account, it might be much larger than that, mind you. We might attain, you know, three to four times the size of value.
Famous Five Rapid Fire Questions
Nathan Latka
13:14Yep, yep, interesting. All right, let's wrap up here, Darshan, with the famous five. Number one, what's your favorite business book?
Darshan Kaler
13:23Don't Make Me Think. So that's the basis of everything that we do.
Nathan Latka
13:29That's good.
13:30Number two, is there a CEO you're following or studying right now?
Darshan Kaler
13:35Bill Gates has always been another individual I like to follow,
Nathan Latka
13:35Number three,
Darshan Kaler
13:35but he's no
Nathan Latka
13:41what's your favorite online tool for building a business?
Darshan Kaler
13:44The best online tool for building a business, believe it or not, is Google Suite products.
Nathan Latka
13:50Yep. Number number four, Darshan. How many hours of sleep are you getting every night?
Darshan Kaler
13:56If I'm lucky, five.
Nathan Latka
13:57And what's your situation? Married, single, you have kids?
Darshan Kaler
14:00I have kids and married.
Nathan Latka
14:01How many kids?
Darshan Kaler
14:03I have three kids.
Nathan Latka
14:04Wow, three, okay, how old are you?
Darshan Kaler
14:06I am now 48.
Nathan Latka
14:0748, okay.
14:08Last question, what do you wish your 20 year old self knew?
Darshan Kaler
14:12Let's see, the fact that by the time you reach 40, you get old very fast.
14:20Make sure you're good with your body in your 20s.
Nathan Latka
14:25Start early, be good with your body, from Darshan. Launched his company back in 2011. Now it's 17 people based in Vancouver, helping events more effectively manage and fill their events and remarket to fans to keep them engaged over the long term, serving about two fifty customers paying a grand ish per month. So $250,000 per month right now on a revenue, that's about 80% pure SaaS. And then about 20% is some ad spend fees there, less than
14:525% gross churn annually. That's on a revenue basis, paying about $3,000 to $5,000 to acquire a customer, getting that back in under six months. Darshan, thank you for taking us to the top.
Darshan Kaler
15:02All right, thank you.