How Tydy Tripled to $1.5M ARR and 17 Enterprise Customers on Under $1M Raised (Interview with CEO Kiran Menon)

Introduction and Company Overview

Nathan Latka

00:00Tydy was launched back in 2017. They sold 17.5% of the company and raised 400 k to get going. Now they've hit $1,500,000 in ARR, up from $500k in ARR just a year ago, having raised under a million bucks. They raised another 600k last year. So they've been, I'd say, very capital efficient. Team at 27, they're trying to help you onboard your new employees faster. They're doing the enterprise space, big companies, onboarding one

00:22to 2,000 new employees per month, and that's how they price base fee $80,000 per year, then utility based fee on top of that based off the volume of new onboards you're completing each month. Hey, folks. My guest today is Kiran Menon. He's the cofounder and CEO of Tydy, t y d y, the employee data and onboarding platform. Started He Tydy after seventeen years of sales and consulting experience and previously ran sales for Opera Software, the browser

00:44and advertising company. Kiran, you ready to take us to the top?

Kiran Menon

00:48>> I am, Nathan. Let's do it.

Nathan Latka

00:50Alright. So did Opera do, like, terrible a job onboarding you, and you said I'm gonna leave and launch my own onboarding company?

Kiran Menon

00:56>> Actually, no. I mean, I always kind of admired the culture at Opera. And so kind of looked at a lot of the other companies I've worked at before and said, you know, there was a lot of lacking in those processes. And so, yeah, that's when the journey started.

Nathan Latka

01:12It's amazing. So what year was that? When'd you launch?

Kiran Menon

01:15>> We we actually started Tydy at about in about 2017.

Nathan Latka

01:19K. 2017. And who's we? Are you a single co founder or multiple on the team or what?

Kiran Menon

01:24>> No. We're three co founders. Three of us have known each other since when we were in school. Kinda went our separate ways and then, you know, got back together to start Tydy.

Nathan Latka

01:33And since you're all friends, you just split equity evenly, 33% each?

Kiran Menon

01:38>> Pretty much. Yeah.

Nathan Latka

01:39That's amazing. Alright. Before we get too deep into that, the backstory here, tell us give us example of a customer using Tydy today and how they use you.

How Enterprise Customers Use Tydy

Kiran Menon

01:47>> Yeah. Sure. So we work with large enterprises, you know, companies with 2,000 to 5,000 plus employees. And what we fundamentally do is we work with a company like Genpact or Unilever or AB InBev, and we kind of bring together the HR data and IT systems so that people teams now have a single place to go to to kind of orchestrate their processes, onboard people faster, smarter, and also retain them longer. So fundamentally, you know, problem statement

02:23>> that we went after is multiple apps, complexity across various processes. You have HR, IT, admin, ops, bring all of that together and just create one single place to kinda manage it.

Nathan Latka

02:36Very interesting. And so for this technology, for your technology, what are customers paying on average per month or per year?

Pricing Model: Platform Fee Plus Per-User Top-Up

Kiran Menon

02:44>> So it's traditionally a yearly contract, and we usually do three year contracts with enterprises. That's one good thing working with enterprises, you know, it's long term. And today, we do on average, our ACV is about $80,000

Nathan Latka

02:58And if I'm paying you $80,000 a year, how many employees am I likely managing with Tydy?

Kiran Menon

03:05>> So the average company is doing between about 2,000 to 5,000 people every month.

Nathan Latka

03:10And and and sorry. What does that mean? 2,000 to 5,000 interviews per month?

Kiran Menon

03:14>> No. Onboarding. So people being added onto the system.

Nathan Latka

03:18Okay. So that's how you charge. It's number of people you onboard per month?

Kiran Menon

03:22>> Yeah. Yeah.

Nathan Latka

03:23Interesting. So how do you know what to charge in year three? You you make them project how many they think they're gonna be onboarding three years from now, they pay for that or sign up today?

Kiran Menon

03:31>> Yeah. So we kind of do a split between our pricing. One is in a platform subscription per year, which is based on the total number of employees in the organization. And then there's the top up, which is a per user fee on top of that, which is for every new user that's added. You know, a company with a 100,000 employees would already have about 50,000 of them on Tydy by the end of year one.

Nathan Latka

03:57Oh, 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

04:20your 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

04:45get 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

05:06not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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

05:32going 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. All right. We're gonna go back to the YouTube video here in a second, but

05:54if you 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

06:20the interview. Okay. So if I'm paying you though a base fee of 80 k just to sign up, how many employees do I likely already have?

Kiran Menon

06:29>> Probably about forty to fifty thousand.

Nathan Latka

06:31Wow. Okay. Got it. So 50 base, and then I'm saying, hey. Listen, Kiran. I'm gonna onboard 2 to 5,000 per month for the next two or three years. And you're saying, okay. The extra fee for that is why?

Kiran Menon

06:42>> Right. Exactly. It's a couple of dollars on top of that.

Nathan Latka

06:45I see. Interesting. Okay. So base fee is about 50 employees if I'm paying you $80,000 a year or something like that. Cool. Alright. And then, I guess, give me more of the more of the backstory here. So you launched 2017 with three cofounders. How did you guys get your first customer?

Kiran Menon

07:02>> It was actually, you know, given the kind of time we'd spent in the market, we kind of had a lot of networks that we reached out to and went out and kind of spoke to a lot of people. So it's not that we woke up one day and came up with this solution. We actually did go out and talk to a lot of executives, and then we realized, you know, the whole workplace tech was kind of

07:25>> exploding. But when you kind of looked at right at the beginning, the onboarding piece, there was a huge vacuum in 2017, 2018, but it was still nice to have. It wasn't a need.

Early Growth: POCs with Unilever and Fidelity

Kiran Menon

07:41>> And so very candidly, our growth has happened in the last two years since the pandemic. For the first two or three years, we were kind of building the product with a couple of POC customers like Unilever and Fidelity Investments. And then in the last couple of years, it has pretty much taken off for us fundamentally.

Nathan Latka

07:59Just to be clear, so you were pre you had, like, no SaaS revenue back in '20 between 2017 and 2020. You were just doing POCs?

Kiran Menon

08:07>> Yeah.

Nathan Latka

08:08Okay. So no SaaS revenue, POCs only?

Kiran Menon

08:11>> We were doing probably about a $100,000.

Nathan Latka

08:14Oh, you did have SaaS revenue?

Kiran Menon

08:16>> Yeah. We did.

Nathan Latka

08:17Oh, okay. So I guess what year did you have your first dollar of SaaS revenue? 2019?

Kiran Menon

08:22>> Twenty eighteen end, 2019 beginning. Yeah.

Nathan Latka

08:25Ah, okay. So so got it. So how did you there's a lot of people listening around launching companies going, I wanna get a POC with Unilever and then, you know, make them pay $50,000 for that and then convert them to a 10,000 a month plan. Right? How did you do that? What was the POC not with them specifically, but on average recharging for POCs, how'd you move someone from a POC to a paid plan?

Charging for POCs and Moving to SaaS Contracts

Kiran Menon

08:44>> Yeah. We were. We we kind of made one thing very clear is that we'll kind of co design the solution, but we're not doing it for free. So if we want to do a POC, it's still going to be a paid for POC. And I think, you know, my seventeen years of sales in consulting kind of helped me in that. And so we basically started by just charging a per user fee, which was $5 per user.

09:07>> And there was no platform subscription, none of that. Hindsight, that was a terrible move because, you know, the revenue was fluctuating all over the place. Then we couldn't kind of keep track of what would our budgets be, cash flow be, any of that, which is when we kind of move the pricing more to a platform subscription plus a top up on a per user.

Nathan Latka

09:28So when a company like Unilever, you say, hey, listen, you're gonna pay $5 per user to do a POC. We're gonna co design a solution together. They say, okay. We wanna design this for a 100 users, so we're gonna pay you, what, $500 to build or $5,000 to build the POC, something like that?

Kiran Menon

09:40>> Yeah. Yeah. Pretty much. And we started with one geography. So it was much easier to kind of create the value, show the value in about six months'time. And then we went from a single geography to actually speaking to global procurement and saying, hey, you know, what if we made this available for the entire kind of organization? And whoever wanted it could kinda pick it up and get started.

Nathan Latka

10:05Got it. Okay. So then you move those POCs into pure SaaS play. You said, well, you did a $100,000 in total revenue in 2020?

Kiran Menon

10:12>> Mhmm. In Yep. 2019. Yeah.

Nathan Latka

10:15Okay. So 2019, you were doing, like you finished with, like, $10 a month in MRR, which is a $120,000 AR. Is that right?

Kiran Menon

10:21>> Correct.

Nathan Latka

10:22I see. Very interesting. Okay. Fast forward to today. How many customers are you serving?

Current Customer Count and ARR

Kiran Menon

10:28>> Today, have 17 enterprise customers across

Nathan Latka

10:31Seven zero or one seven?

Kiran Menon

10:34>> One seven. One seven. Okay. 17 enterprise customers across 25 countries, and we're doing about a million and 0.5 in ARR.

Nathan Latka

10:42I Yeah. Was gonna say 17 at $80,000 a year is about 1.5 in ARR. Now if you're doing 1.5 in ARR today, that is about a $120,000 a month this month. Where were you exactly one year ago?

Kiran Menon

10:54>> We were about 500 k ARR.

Nathan Latka

10:58So sick of doing okay. So you you've about doubled. Oh, no. You more than doubled year over year. Right?

Kiran Menon

11:03>> So yeah.

Nathan Latka

11:04Yeah. Yeah. Yeah. Well, yes. Well, so if you're you're doing about $50,000 a month a year ago, now you're at a 120, $130,000 a month. So still have a couple days left in the year where you can get that full 300% year over year growth.

Kiran Menon

11:15>> Yeah. Exactly. That's what we're hoping for.

Nathan Latka

11:18Yeah. What drove that growth? Was it expanding historical accounts, more seats across 17 customers, or is it adding brand new customers altogether?

Kiran Menon

11:26>> Actually, it was the significant addition of new customers. I think at the end of last year, we still only had about eight or nine customers. And then, you know, we've been showing value for at least a year with those guys. And so the kind of brand started spreading from a referral perspective as well. And the good thing with the enterprise is if you're able to show value very quickly, the other enterprises want to kind of latch

Doubling ACV from $40K to $80K

Kiran Menon

11:52>> on as well and try and actually, you know, bring in the same solution because the problems are very similar. And so last year, my ACV was not $80,000 My ACV was probably closer to about $40,000 And so what I was able to do in the last twelve months was actually double my ACV and be more confident of the fact that I can actually charge more and still have companies coming in and buying Tydy.

Nathan Latka

12:17Yep. Yep. Very that makes tons of sense. And then I guess the only year we haven't talked about is 2020. So if you finish 2019 at a 120,000 run what was 2020 finishing?

Kiran Menon

12:26>> At about $2.75.

12:29>> Yeah. 275. So 01/20 to 275 to 600 to 1,500,000.

Nathan Latka

12:32That's that's big growth.

Kiran Menon

12:33>> Yep. Have you bootstrapped or raised?

Total Funding Raised and Capital Efficiency

Kiran Menon

12:36>> We've raised about a million dollars till now, and that's about it.

Nathan Latka

12:39Ah, okay. I would say so that's pretty anyone that's raised less than their ARR, I say, is capital efficient.

Kiran Menon

12:45>> So so that's good.

Pre-Seed Rounds and Dilution

Nathan Latka

12:46When did you raise that money?

Kiran Menon

12:48>> So we actually did it over a couple of rounds. So the first one was obviously in 2017 with a couple of angels kinda coming in and, you know, not couple, but a few angels coming in and putting in about 400 k. And then last year, we raised the rest, which was about 200.

Nathan Latka

13:03Interesting. So that round on 2017, I imagine that was probably pretty dilutive. What do you sell, like, 20% of the company?

Kiran Menon

13:10>> We we 17 and a half.

Nathan Latka

13:12Okay. Okay. Not terrible. Most people sell 20% in their seed round. So you sold 17.5 for pre seed, I would say. Yeah. Okay. Yeah. Interesting. And then you said you raised, what, another 600 k last year?

Kiran Menon

13:24>> Mhmm. Yeah.

Nathan Latka

13:26And what would you call that? I mean, is that a seed or is that a seed extension? Or

Kiran Menon

13:30>> I think it was a pre seed extension. It really wasn't even a seed. I mean, in today's world, seed is probably a few million dollars, right, that you're that you're raising. But, yeah, it's probably precede extension.

Nathan Latka

13:42Yeah. Yeah. Interesting. And what did you also sell 17% then?

Kiran Menon

13:49>> About yes. About 18 and a half.

Nathan Latka

13:5118 and a half. Okay. And why did you need that money? What makes this expense company expensive to build? Why couldn't you bootstrap?

Kiran Menon

13:57>> I think we needed resources to kind of, you know, go out and deliver the projects the way it works with enterprises. They're very happy giving you the money upfront, but upfront means on deployment. And on average, our deployments take about three to four months. So from a cash flow perspective, there's that little bit of a dip that happens during contract signing to deployment. And during that deployment, you need to kind of bring in additional resources. So

14:25>> that's primarily kind of the bridge that we wanted to cross. And so that's why we kind of brought in the money.

Nathan Latka

14:31Why wouldn't they give you though? I mean, if you were you're growing fast. Right? You had 600 k in ARR last year, but you basically if you sold 18.5%, you raised the 600k at roughly a 3,240,000 post money, which is not I mean, it's an okay multiple on 600 of ARR, but it's not, you know, 10 x. It's only like five x. Why couldn't you get a ten, twenty x multiple there and save yourself dilution?

Why Enterprise Sales Creates VC Hesitation

Kiran Menon

14:54>> Yeah. I think what I've realized is we're not traditional SaaS, which sells to SMB. So we're enterprise sales. And traditionally, I think enterprise sales always kind of suffers from a lot more questions and a lot more kind of VC, I would say, being unsure. So being completely candid, that's one of the main reasons. Right? We we're very sure we wanna go after enterprise, and we wanna build an enterprise product, not an SMB product. And so I

15:26>> think that kind of creates a few questions.

Nathan Latka

15:29That makes a ton of sense. Talk to me about how you built the team. How many folks full time today?

Team Structure: 27 People, 19 Engineers in Bangalore

Kiran Menon

15:35>> So so we actually have about 27 people. The advantage for us is that, you know, we're US headquartered. Most of our customers are US, but our entire engineering and delivery team is based out of India.

Nathan Latka

15:52Ah, which did you use the outsourcing company or do you find someone local then build around them?

Kiran Menon

15:58>> No. So so my CTO and cofounder, he kind of based out of Bangalore, and so he kind of just goes out and get people.

Nathan Latka

16:08That's well, it's getting harder and harder there. Ain't been in Bangalore, Chennai, Pune, there's so many big companies moving there. I mean, are guys paying right now for a senior front end engineer?

Kiran Menon

16:17>> Oh, it's it's I don't know how I would convert that. But in Indian rupees, it would probably be about, you know, 2,000,000.

Nathan Latka

16:27Interesting. So $22,000,000 per year?

Kiran Menon

16:28>> Yeah. Interesting.

Nathan Latka

16:29Yeah. So that's like well, I mean, it's only, like, 30,000 US dollars. That's not too expensive.

Kiran Menon

16:35>> Yeah. It's not too expensive. No. It's not. But if you want really good, you know, seasoned professionals with, like, seven years of experience, you suddenly kinda just double that up.

Nathan Latka

16:45But still, I mean, that's 60 that you'd pay, what, $200,000 a year in The US.

Kiran Menon

16:49>> Right? Yeah. Yeah. Yeah. Interesting.

Nathan Latka

16:53So do you plan to keep scaling your engineering team over there in Bangalore?

Kiran Menon

16:56>> We do. What we're trying to do now, though, is build our GTM team out of The US more. So, you know, having more SDRs, AEs, kind of account management. Account management is a big thing for us because we're also kind of a lot of opportunity to upsell within the enterprise. Yeah. So so that's kind of my focus for the next year.

Nathan Latka

17:17Yeah. That makes a lot of sense. Okay. So it's 27 on the team. How many are engineers?

Kiran Menon

17:22>> 19.

Nathan Latka

17:2319. Oh, wow. Okay. And how many do you have any sales reps that carry a quota besides you?

Kiran Menon

17:28>> Yep. Yeah. Yeah. Yeah. There is so I have two. I have two.

Nathan Latka

17:32Ah, okay. So how do I mean, there's people listening right now trying to set up their first sales reps. And like, so what quota do you give your first rep?

Sales Rep Quota and Commission Structure

Kiran Menon

17:39>> So it's the first one that kinda came in, came in about four years ago, so he's been with us through the entire journey and kind of came in pretty fresh. And so just shadowed me and kind of learned from that perspective. So till about last year, I was doing majority of the sales or all of the sales. This year is when he's gotten a quota and he's actually started closing deals and 6 figure deals with that.

Nathan Latka

18:06So What's his quota? Like, $100 a new ARR or a million new?

Kiran Menon

18:10>> It is it's actually 700 k.

Nathan Latka

18:14Okay. And if he hits or she hits $700,000 in quota, you're then gonna you obviously pay him a base. And then is the commission double the base?

Kiran Menon

18:23>> Commission is actually 10% of whatever he brings in.

Nathan Latka

18:27Ah, okay. So let's say that he brings in $700k. He would make 70 k extra on top of his base. Is his base also about 70? So together, it's $140k?

Kiran Menon

18:35>> Yep. Yep.

Nathan Latka

18:36Ah, okay. So very standard playbook there then.

Kiran Menon

18:39>> It is. It is.

Nathan Latka

18:40Yeah. Yeah. Interesting. Any plans to hire more? I mean, you said your go to market motion, you're building it in The States. Any plans to hire more sales reps in The States this year or next year?

Kiran Menon

18:47>> Yeah. So AEs and SDRs for sure within the next quarter, we're gonna kind of build up the team with one more AE and one more SDR in The US, but also kind of bring in an account management team in The US because I think it's really important apart from the sales process to kind of really invest in the relationship and also in the upsell process.

Nathan Latka

19:07Yeah. Yeah. This makes sense. That's who do you see as your biggest competitors?

Competitive Landscape: Rippling, ServiceNow, Internal Teams

Kiran Menon

19:13>> One of the companies we kind of just signed with, I think the CHRO over there was like, you know, Kiran, if you competed with ServiceNow, I would have brought your price down significantly because I wouldn't kind of play one against the other. But you're in a very unique niche space today as far as the employee experience is concerned, so I can't really pitch you against anyone. But but I would say, you know,

Nathan Latka

19:39the biggest competitor What about like Remote.com or Deel?

Kiran Menon

19:43>> Yeah. So so I would say the biggest competitor for us is the internal teams today, you know, because what we're doing is we're integrating these fifteen, sixteen different systems that exist within the organization. So, you know, your Workday with ServiceNow, with ADP, with Okta, with, you know, background verification vendors. So there are so many different moving parts that we're bringing together and creating a holistic kind of data set from an employee perspective. So if I were

20:13>> to say, who are the closest kind of,

20:17>> not competitors, but the company that closes, it's probably Rippling. But Rippling does it more from an SMB perspective, and we're doing it more from an enterprise perspective.

Famous Five Rapid-Fire Questions

Nathan Latka

20:25Yeah. Yeah. That makes a lot of sense. Alright. On that note, Kiran, let's wrap up here with the famous five. Number one, favorite book.

Kiran Menon

20:32>> Oh, I I I actually love The Monk Who Sold His Ferrari. It was one of my first kind of self teaching books. Yeah.

20:40>> That's a good one.

Nathan Latka

20:41Number two, is there a CEO you're following or studying?

Kiran Menon

20:44>> Sorry. Say that again, Ian?

Nathan Latka

20:46Is there a CEO that you're following or studying?

Kiran Menon

20:50>> Oh, yeah. I I have been a big fan of Richard Branson from from when I was in college. So

Nathan Latka

20:56Number three, what's your favorite online tool for building Tydy?

Kiran Menon

21:02>> I actually love using Slack. It's just so easy to kinda communicate with the team when needed and very quick. So yeah.

Nathan Latka

21:12Number four, how many hours of sleep do get every night?

Kiran Menon

21:15>> I have two kids and a startup. One of my kids is two years old, so I get about six hours on a good day.

Nathan Latka

21:23Okay. Fair enough. So so married with two kids?

Kiran Menon

21:26>> Yep.

Nathan Latka

21:26And how old are you?

Kiran Menon

21:29>> I'm 40.

21:30>> 40.

Nathan Latka

21:31Last question. Something you wish you knew when you were 20.

Kiran Menon

21:36>> That Tydy was a possibility.

Nathan Latka

21:38Now what was?

Kiran Menon

21:39>> Oh, that Tydy.

21:40>> That Tydy was a possibility. Yeah.

Closing Summary and Wrap-Up

Nathan Latka

21:43Guys, there you have it. Tydy was launched back in 2017. They sold 17.5% of the company and raised 400 k to get going. Now they've hit $1,500,000 in ARR, up from $500k in ARR just a year ago, having raised under $1,000,000. They raised another 600k last year. So they've been, I'd say, very capital efficient. Team at 27, they're trying to help you onboard your new employees faster. They're doing the enterprise space, big

22:05companies, onboarding 2,000 to 5,000 new employees per month, and that's how they price base fee $80,000 per year, then utility based fee on top of that based off the volume of new onboards you're completing each month. Kiran, thanks for taking us to the top.

Kiran Menon

22:17>> Thanks, Nathan. Pleasure.

Nathan Latka

22:20One 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

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23:29that 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. 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 got

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Kiran Menon

23:55>> See you.