How Workforce Next Reached $180K ARR and 50 Customers While Staying Bootstrapped and 70% Profitable (Interview with Co-Founder Gaurav Seth)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Gaurav Seth. He is building a work from home platform to reduce OpEx and enhance productivity called workforcenext.in, and he's an entrepreneur and people manager working in this area for the past sixteen years trying to solve the problems at their root. Alright. Gaurav, you ready to take us to the top?

Gaurav Seth

00:17>> Yeah. Hi.

Customer Example and Product Explanation

Nathan Latka

00:19It's good to have you here. So tell me, give me an example of a customer that's paying for workforcenext.

Gaurav Seth

00:25>> So basically, India is the country where most of the people offering the services

00:36>> in order to run any business or in order to make things done. So there are a lot of problems in this sector and there are a lot of hurdles to manage things online or using telephone. So what we do, we made WFM platform to managing those business and specifically for managing the labor or the workforce they are having. So they can manage all the workforce using a single platform

01:12>> and name is Workforce Next.

Nathan Latka

01:14And and what are they paying you on average per month to use the technology? So

Gaurav Seth

01:21>> that's it.

01:25>> Yeah. Sorry about that. I think I

Nathan Latka

01:27can What's a range? What's a range? Right? So what are customers paying you per month to use the tool?

Gaurav Seth

01:32>> Okay. So that's a that's a quite nominal charges on the that's the SaaS platform, and we we charge only for 3 to $4 per user per month in order to use that platform.

Nathan Latka

01:48And so how when a company signs up, how many how many seats are they paying for usually?

Pricing and Average Revenue Per Customer

Gaurav Seth

01:53>> So there are a number of companies and large enterprises are using this platform. I can I can have some names into that, like LG is using our platform and there are some production houses?

Nathan Latka

02:09My my question my question is when a company signs up

Gaurav Seth

02:13>> Yeah.

02:13What are they paying total per month to use the tool? So I understand that's per user per per seat, but I don't know

02:20>> how many users signed per month. So so that's a number of user depend it depend on number of user they are

Nathan Latka

02:25So how many users do they usually sign up with?

Gaurav Seth

02:28>> So our target customers are specifically from 30 users. They they are having 30 workforce in their team to 500 workforce in their team.

Nathan Latka

02:40Okay. So it's fair to say thirty thirty people at $3 each is about $90 per month. Yeah. Okay. And is that what most of your customers pay today on average $90 per month?

Gaurav Seth

02:53>> Yeah. Average customer the average size of company we are handling is people are having 90 to 100 employee in their organization.

Nathan Latka

03:03Okay. So a 100 employees at $3 per user per month, right, is something it's like $300 per month?

Gaurav Seth

03:09>> $300 per month.

Nathan Latka

03:11I see. Okay. When did you launch the company? What year?

Company Founding Timeline

Gaurav Seth

03:14>> We started product development in 2019, December 2019, and started selling in June 2020, and incorporated the company as a private limited entity in December 2020.

Nathan Latka

03:33Okay. And have you bootstrapped the business, or did you decide to raise capital?

Bootstrapped Business Model

Gaurav Seth

03:37>> Yeah. That's a bootstrapped business.

Nathan Latka

03:40I love that. Congratulations.

Gaurav Seth

03:41>> So that's a quite sustainable, and we are running in that that into the lean mode. So now we are trying to scale that up. So

Nathan Latka

03:53we can How many customer? How many customers do you have today?

Customer Count and Revenue

Gaurav Seth

03:58>> Right now, we have approximate 50 companies who are using Five zero? Yeah. Five zero customers.

Nathan Latka

04:05Okay. And can we do 50 times 300? You're doing about $15,000 per month in revenue?

Gaurav Seth

04:11>> Yeah.

Nathan Latka

04:13Oh, 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

04:36your 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

05:00get 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

05:22not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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

05:48going 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. Alright. We're gonna go back to the YouTube video here in a second, but if

06:10you 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 the

06:36interview. That's great. And where were you exactly a year ago if you're doing 15 per month now?

Gaurav Seth

06:43>> So in this in this financial year, we are expecting to double it down. So approximately, we will have a 100 customer in this financial year.

Nathan Latka

06:52So, Gaurav, this month, you're doing 15,000 a month in revenue. How much revenue did you do did you do last year in May?

Gaurav Seth

07:01>> Last year, that was we are scaling that up. I mean, we are having the customer on the twice rate of every year. I mean, for example, if we have

Nathan Latka

07:15No, Gaurav, sorry, I think this is getting too complex. I'm just asking you, what was your revenue in one month, May of last year?

Gaurav Seth

07:23>> May of May.

Nathan Latka

07:26One year ago?

Gaurav Seth

07:27>> Yeah. The the half of that. You can say approximate 2,000 to 2,500 USD.

Nathan Latka

07:36$2,000 to $2,500?

Gaurav Seth

07:37>> Yeah. $2,000, $2,500.

Nathan Latka

07:40So you grew from 2,500 a month in revenue to $15,000 a month today?

Gaurav Seth

07:45>> Yeah.

Nathan Latka

07:46That's great. Congratulations on the growth.

Gaurav Seth

07:48>> Yeah. Thanks.

Customer Acquisition Channels

Nathan Latka

07:49And so how are you getting you have 50 customers. How are you getting these customers?

Gaurav Seth

07:53>> So most of the customers are coming

07:58>> either from advertisement or we are some of the larger enterprises. We are out teaching them.

Nathan Latka

08:06How much do you spend on ads each month?

Gaurav Seth

08:11>> I didn't have an exact figure right now. So sorry about range? Yeah.

08:18>> Approximate, if I can tell you Indian rupees, will that work?

Nathan Latka

08:23Sure.

Ad Spend and Marketing Budget

Gaurav Seth

08:25>> Okay. So approximate, we are spending approximate 1 to 2 lakh rupees per month on reaching the the those people.

Nathan Latka

08:332,000,000 rupees per month?

Gaurav Seth

08:36>> No. Not 2,000,000 rupees. That's a 2 lakh is sort of 200,000 rupees. 200,000.

Nathan Latka

08:47200,000 rupees? Yeah. Okay. Got it. So 200,000 rupees. You're spending like 2,000 or 3,000 United States dollars per month on ads? Yeah.

Gaurav Seth

08:54>> Yeah.

Nathan Latka

08:55And where are you spending that money?

Gaurav Seth

08:57>> LinkedIn, Facebook, Google, somewhere else?

09:00>> Most most of the time, the money is spending on either on Google or LinkedIn and some some time on the outreach the outreaching them people.

Nathan Latka

09:10Mhmm.

09:10>> So we we we have the team of people who outreach the enterprise and chase them over the call, over the email marketing, so on that thing.

Team Size and Structure

Nathan Latka

09:21And, Gaurav, how many folks are on your team today?

Gaurav Seth

09:24>> Right now, we have four people in our team for the sales only.

Nathan Latka

09:29Are you the well, how many how many total on the team?

Gaurav Seth

09:33>> Total number of people we have right now, 10 to 11 people.

Nathan Latka

09:38Okay. How many engineers?

Gaurav Seth

09:40>> There are four engineers.

Nathan Latka

09:42Four. And are you the only co founder?

Gaurav Seth

09:44>> Yeah. I have a co founder. That's the CTO of our company. I mean, the main technical guy. So he take care of everything.

Nathan Latka

09:52So did you guys just split equity fifty-fifty at the start?

Gaurav Seth

09:57>> Yeah, sort of. But till that, we didn't raise any kind of funding, so we didn't split the equity as of now. But as soon we'll raise some fund or we will try to raise some fund, then we will decide that how many equity he will have and how many equity I will have.

Nathan Latka

10:15My question is when you started, how did you split the equity?

Equity and Co-Founder Arrangement

Gaurav Seth

10:21>> As soon we'll start raising the fund. So we'll start it.

Nathan Latka

10:26Right now, Gaurav, if you sold the company, how what percent of the money do you get?

Gaurav Seth

10:32>> If I sold the company

Nathan Latka

10:35How much equity do you current how much equity do you currently own in the business?

Gaurav Seth

10:40>> Right right now, I have 100% of equity.

Nathan Latka

10:42So okay. So that's my question. How did you motivate a technical co founder to join you, a startup very risky and to get no equity?

Gaurav Seth

10:50>> Yeah. So, my thing is that we didn't split the equity as company didn't have any work initially. Right? So, yeah, but we have the equal salary model. So whatever we are earning, are splitting that in equal amount.

Nathan Latka

11:08So you own 100% equity, but you're splitting profits fifty fifty?

Gaurav Seth

11:12>> Yeah.

Nathan Latka

11:13I see. Does your co founder make any fixed salary or no? He's just doing profit sharing with you?

Gaurav Seth

11:18>> He he he is having fixed salary as well.

Nathan Latka

11:21Okay. I see. Got it. So he didn't take any equity because you gave him a fixed salary, and then he also gets 50% of profits.

Gaurav Seth

11:27>> But but we we have plan. I mean, I have particular plan that as soon we'll start raising the fund, I will offer him some equity as well.

Nathan Latka

11:36I see. See.

11:36>> We are doing some good things.

11:38That makes sense. Okay. Tell me more about the product. What are you building next? Where do you see sort of workforce management going?

Gaurav Seth

11:45>> So thing is the field employees to manage the field employee and forecasting them and how many people we have to put in campus staff. So these kind of problems every day any specific industry are facing in India specifically. So they are quite hard to manage this things or they are not even digitalized these processes as of now. So we are trying to digitalize those things.

Nathan Latka

12:16And are you profitable today?

Product Roadmap and Market Opportunity

Gaurav Seth

12:18>> Yeah.

Nathan Latka

12:19How much?

Gaurav Seth

12:22>> So

12:25>> in in term of profit, our profit,

12:29>> right Well,

Nathan Latka

12:30>> yeah, it's in this is you're the interview.

12:32No. Who else is profit?

Profitability Discussion

Gaurav Seth

12:34>> No. No. No. I I I thought you are asking for if if they are having some profit or if that tool is giving some profit to them as well. I mean, if I thought you are asking for ROI.

Nathan Latka

12:48No, Gaurav. I just I just wanna know the answer to the question. Are you guys you're profitable. How much?

Gaurav Seth

12:54>> Yeah. Approximately, we have 70% profit in our total income.

Nathan Latka

13:00Okay. So of 15,000 top line, you're you're taking about 10,000 in profit per month?

Gaurav Seth

13:07>> Yeah.

Nathan Latka

13:08So you're able to pay a team of 10 people using just $5,000 per month?

Gaurav Seth

13:14>> Yes. Sort of.

Nathan Latka

13:16What do mean sort of?

Gaurav Seth

13:23>> See, nothing. Sorry about that. But, yeah, I I I don't have exact figure in my mind right now.

Nathan Latka

13:29That's fine. A range is fine, but you just told me 15,000 of monthly revenue and 10,000 of profits mean you only spend $5,000 a month, and you told me there's a team of 10.

Gaurav Seth

13:40>> Yeah. So here in India, the cost is quite low, nominal. So we we are managing into that thing.

Nathan Latka

13:49I see. I see. Okay. That makes sense. And then talk to me about churn. Are you seeing customers churn? And if so, what percent?

Churn Rate

Gaurav Seth

13:57>> So we have quite low churn rate right now. So since we started, we have one or two customer only drop.

Nathan Latka

14:06Oh, that's great. Congratulations. Sounds very sticky.

Gaurav Seth

14:08>> Yeah. Thanks.

Famous Five Rapid Fire

Nathan Latka

14:09Alright, Gaurav. We're rooting for you, man. In the meantime, though, let's wrap up here with the famous five. Number one, what's your favorite book?

Gaurav Seth

14:18>> I I I didn't read much of books, so I cannot.

Nathan Latka

14:22We'll skip it.

14:23>> Number two, is there a founder you're following or studying?

Gaurav Seth

14:28>> The founder, I'm follow mainly the Vijay Shekhar Sharma from Paytm.

Nathan Latka

14:35Paytm CEO?

Gaurav Seth

14:37>> Yeah. The Paytm CEO Vijay Shekhar Sharma.

Nathan Latka

14:39Number three. What's your favorite online tool for building workforce?

Gaurav Seth

14:47>> My favorite online tool. I generally most of the time I use Adobe XD to create some graphics or some more

Nathan Latka

14:55What is it again? Sorry? What's the tool?

Gaurav Seth

15:00>> Tool is Adobe XD.

Nathan Latka

15:02Adobe XD?

Gaurav Seth

15:03>> Yeah. Adobe XD.

Nathan Latka

15:05Alright. Number four. How many hours of sleep do get every night?

Gaurav Seth

15:09>> Sorry. I didn't get the question.

Nathan Latka

15:10How much sleep hours?

Gaurav Seth

15:13>> Yeah. Sleep hours. I generally take six six hours in sleep.

Nathan Latka

15:17And what's your situation? Married? Single? Kids?

Gaurav Seth

15:20>> Yeah. I'm I'm I'm married. I'm married.

Nathan Latka

15:23Any kids?

Gaurav Seth

15:24>> Yeah. I have two kids. And luckily, when I started the company, I got a new I got a kid at the time.

Nathan Latka

15:33All right, two kids and a startup. And how old are you?

Gaurav Seth

15:36>> I'm 40.

Nathan Latka

15:37>> 40. Last question, Gaurav.

15:40What is something you wish you knew when you were 20 years old?

Gaurav Seth

15:47>> When I was 20 years old, right?

Nathan Latka

15:51Yes. Something you wish you knew.

Gaurav Seth

15:53>> Yeah.

15:59>> Maybe business

16:03>> psychology or the people management things I know at that time. I wish I know at that time, so maybe I could do a lot of difference.

Nathan Latka

16:15Guys, employee time tracking tool and workforce management tool, workforcenext.in, just broke $15,000 a month in revenue, up from 2,500 just a year ago. Team of 10, Gaurav launched it back in 2019. Totally bootstrapped today. Four engineers, four sales reps as they look to scale. They've only lost two customers, currently serving 50 customers that pay on average $300 per month. That that's $3 per user per month or per seat. Alright, Gaurav. Thanks for taking us to

16:42the top.

Gaurav Seth

16:43>> Yeah. Thanks. Thanks, Nathan. Thanks for the time.

Closing Summary

Nathan Latka

16:48One 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 one

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17:56are saying. Sign up for that 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 and 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

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