How Zylotech CEO Abhi Yadav grew Zylotech to $1.5M revenue and 15 customers in 2018.

hello everyone my guest today is Abbi Yadav he's the CEO at silo tech a technology entrepreneur and customer analytics expert he's got experience of many stages of the lifecycle firm starts to bootstrap - venture funding M&A and all sorts of other experience as an earlier as an early customer 360 category pioneer he's worked with numerous enterprise brands across the retail technology and financial industries over the past decade he's an engineer who holds an MBA from MIT Sloan School of Management Abby are you ready to take it to the top you know absolutely really excited to be here thanks for having me you bet alright silo tech what's the company do and how do you make money ya know so we we're an enterprise software we help brands communicate with their customers in a more contextual relevant manner in a seamless way without worrying about data quality or metrics or finding patterns and things like that if we call this as more of a bottom-up customer analytics in action so you would know you know if brain wants to know who this customer is and how relevant D is or what is what's my next best offer we kind of keep it very contextual dynamic ok and SS platform we were a subscription as a service and and I know you probably have a bunch of customer cohorts but on average what's the customer pay for a month oh so these are enterprise customer in six figures you're kind of a contract so that way were it's it's it's pretty good that way and you know just because we help them at the same time impact millions and millions of dollar impact with the extra customer revenue they get so just to be clear mean is it fair to say they'd be a hundred thousand bucks per year is a good average yeah yeah okay very good put this on a timeline for me when she launched the company so we started in 2014 span out of MIT as an sort of project and we actually were coded build a platform bootstrapped the company tested on few clients and eventually the formal launch of the platform happened as recent as 2016 and 2017 and how did you find yourself for those first three years yeah no great question so we said this is my second startup I kept sort of bootstrap this one a little bit we did initially we were trying to hunt for the right customer so any product on machine learning it acquires not just in a team but a little bit of real customer real data situation so we we we we we took some projects and you know we build our stack over the period of time so it kind of kind of a little bit of good strapped there before we raised some seed money okay how much have you raised to date so so we have raised till date about six million dollar okay and was that any of that convertible note or all equity so initially was convertible note but we we just concluded our you know instead of a wrench around or recently in fact our announcement is due in next few days oh that's great that's ooh the money's already been wired it's closed yeah yeah it's closed it's all up and ready great week you know I like to say congrats but only if you got a great deal and you didn't get diluted like like nobody's business so maybe congratulations okay no thank you the deal we're excited about our partners we and it's a little bit in embargo but you'll see some of our press and everything pretty soon so we're excited very good you listened to the show you get early funding announcement that's how it works sorry 2014 you launched and what have you scaled to today in terms of total customers so we we have dozens of enterprise customer and we're sort of doubling them you know hopefully by the end of this year so yeah I mean as dozens I mean I were talking like 24 ish I would say anywhere between 15 20 okay 15 and 20 fair enough now if I take that 15 times that a CV you just gave me that would put you like around 120 grand a month ish right now is that kind of in the range yeah you around that okay and what does growth look like if you go back to October last year what were you doing in that month so a growth is about 250% absolutely so we are indeed doing really well from a growth perspective I think we have a solid product and as with this round and that's kind of adding some more muscles and sales and marketing we can definitely we have some great integration just announced we got some real good partners so we were you know the gas pedal is on the gas that's good so just to be clear you know 120 grand a day per month go back a year 200 percent year-over-year growth that means you're doing what maybe 30 40 grand a month in yeah yeah right around there good tell us more about tell us more about the growth obviously any sass coming when you're growing churn is critical to make sure you keep driving growth what is your what is your turn today and how do you manage that so I mean with enterprise and the kind of product you build with a lot of integration just because we're an AI product and a lot of customer ADA is being integrated into it it's kind of hard for us to have the kind of chun you normally expect in some of the marketing applications and like plug and play apps it's an enterprise solution takes it does has the pain area is some sort of long sale cycle but once you're in it's kind of hard for that kind of Chum so we haven't seen any Jun as yet so no you know no revenue churn either no dollar lost no not not as yet not as yet we're as you can imagine we we it's not we're not too old in the market at the same time but we I think most of our customers really excited what we're doing and we haven't really seen any Chinese yet but I mean you're too cheap wills not cheap but we've been very selected and the kind of customers who working and trying to work around we're not just trying to do like hey you know what we need you know more customer more customer so let's go for these hundred ones and even if we were not ready there with a product and you know 80% would like losing them doesn't matter we're not using that strategy we went on the other approach to let's work with some delight them and then probably you know go go more faster going more vertical door and more sort of sort of a more land and expand very good what is expansion look like today from year 1 to year 2 typically so we are we are hoping now that with this round in place and you know putting some more focus on our sales and marketing and integrations and partnership we are hoping to you know go up for the 4 X 5 X sort of a growth rate so sorry just to be clear I'm talking like so let's talk just currently historical data if someone paid you a hundred grand in a year one about a year ago when you were nude last month what are you typically able to expand that one to okay so for existing customer we started with some of our customers for an anal contract which about 50% of them has you know renewed it now for three years and from an upselling revenue like some of these Enterprise has different pockets you know in you know we can expand into increasing our revenue so we've kind of you know with some of them we have sort of doubled with some of them we have been able to grow for at least 30 40 percent of the revenue so it's uh I mean it's a small base but and we had a lean team in our sales and marketing but I think we are definitely instead of under utilizing some of these connects and you know existing customers and what's your team size today so in total we are now about 35 people but you know everyone in Boston yeah Boston and then we have somebody out of you know virtual people and then we also have team back in India but yeah and largest number is it's just in Boston and talk to me about how you're acquiring customers so if you what would you what are you willing to spend to acquire customer that ensigns $100,000 first year contract yeah so we are sort of CAC is you know and like I said we've been more surgical in catching customers so our approach is usually being you know focused on kind of thought leadership margin and that led to like you know direct sales and you know talking to them also doing our own curated events to acquire customer referrals is working pretty good with us yeah BC when you add up like all the humans you have dedicated those initiatives plus direct paid spend what's your fully weighted calculi k-- so it's it's about anywhere from twenty to thirty k it's not it's not alive at the same time okay so that would put your payback what at about kind of four or five months yeah like six seven months yeah six seven very good that's great um and you just closed this round of funding did you did you i'm here's what the funding environment was like since you just went through it did you raise mostly in new england you go to the valley or what yeah so our lead is definitely from the new england area you know could we see and probably some point of time I'll talk about that but and it's it's an embargo announcement is coming in so but we also have you know two other sort of investor actually three other investor and one is from New York one is from Texas and one is from the valley oh yeah pretty good coverage there alright I mean let's let's wrap up here with the famous five number one what's your favorite business book oh it's good to great number two...