How Netcore Cloud Bootstrapped to $100M Cash in the Bank and 35B Emails Per Month (Interview with Founder Rajesh Jain)

Introduction and Rajesh Jain's Background

Nathan Latka

00:00The future of email marketing is and I said, no way. And he said, no. It is. And I said, prove it. And then he showed me some some things. And I said, you have to show that on stage. On that note, please tell me, welcome to the stage Rajesh Jain from Net Core. How that's

00:17how happens. That's how that happens. Take a seat. So this guy is if you go to India and you ask around and you say, who is, like, the first big sort of or Internet entrepreneur in India? Many people will say Rajesh Jain because you launched India World in '98?

IndiaWorld: Launch in 1995 and $115M Exit in 1999

Rajesh Jain

00:34>> Launched it in '95.

Nathan Latka

00:35'95.

Rajesh Jain

00:36>> Sold it in '99.

Nathan Latka

00:37This is sorry for doing this. How many of you were born after 1995?

00:43There you go. The front row. There we go. Alright. You sold it then for, what, a 116,000,000 in '99? Yeah.

Rajesh Jain

00:47>> 115.

Nathan Latka

00:48115,000,099. You then took all that money. Did you plow a bunch of that right into Netcore immediately?

Netcore's Early Years and First $1M Revenue Around 2008

Rajesh Jain

00:54>> No. Netcore, actually, I didn't put in too much money because first ten years, you were too small, not growing, and then we did something right. We basically started email and SMS marketing in India, and those just turned out cash. So it's just perfect. I didn't have to put much money in.

Nathan Latka

01:09This was so we're looking at your revenue graph right now. 2003, you get going. Was 2008, was that like your first million dollar year maybe?

Rajesh Jain

01:15>> Yeah. Around that time.

Nathan Latka

01:16Around that time. What started working really well in like 2013? 2018, we're going to '15?

Rajesh Jain

01:20>> So '2 things happened. Twenty thirteen

01:24>> two thousand and eight to '13, basically the email SMS revenue started growing very rapidly. Until 2008, are doing some random stuff which wasn't making us any money.

01:35>> When you sell a company, you think you're like God's gift to the world. So you think anything, everything will work. It didn't happen.

Nathan Latka

01:42And when your wife reminded you of that. Right?

Rajesh Jain

01:44>> Absolutely. Yeah. You got that on video somewhere.

Revenue Growth from 2008 to 2013 via Email and SMS

Nathan Latka

01:48I do. I do have that on 2018,

Rajesh Jain

01:51>> we also did around that time, did two things. First is to the email SMS, and we sell to b to c companies, mid to large sized companies. We added marketing automation, the customer engagement piece, and then we also started growing internationally.

Nathan Latka

02:07So

Rajesh Jain

02:08>> we started expanding from India to Southeast Asia, Middle East, not yet The US at that time, but that helped us essentially diversify both the product side and the geo side.

Nathan Latka

02:19Spend a minute talking about your product strategy, the Netcore Marketing Cloud.

2018 Expansion: Marketing Automation and International Growth

Rajesh Jain

02:22>> So actually, if you think about it, the the real problem that businesses have is and if you ask, why are b to c businesses not more profitable? And the real answer is that most of those profits or some of those profits are basically on the balance sheets of big ad tech, Google and Meta. I mean, many cases, they're in a cat trap where the cost of customer acquisition is going up much faster than their revenues. So

02:50>> where Netcore comes in is basically saying that, look, we can help you do more with your existing customers. So it's a full stack where we have the communication channels, email, SMS, WhatsApp, RCS and all of that. And then you also have the marketing automation piece, the customer engagement. Mhmm. So the journeys, etcetera, the personalization bit. And then we added search and product discovery to it through an acquisition.

Nathan Latka

03:15Mhmm. So full stack. Hopefully, you guys are sort of grounded now on what Rajesh is building, netcore.com if you wanna follow along on your laptops. We tried to map this full space. Right? So I started off by just saying, let me just do the bottom left of what you see on the screen here. But then when I posted it on LinkedIn, people said, no. No. No. You can't just talk about newsletters. You talk about email marketing.

03:31You talk about CPaaS and omnichannel. Walk me through are you are these the right buckets? How do you think about email marketing in general?

Netcore Marketing Cloud Product Strategy

Rajesh Jain

03:37>> See, email marketing has been around for twenty, twenty five years. Now there are different types. There is the API based email marketing.

Nathan Latka

03:45Mhmm. Call that c c pass bottom left.

Rajesh Jain

03:47>> C pass. Just use the API and send things out. Yep. Newsletters use so Substack, etcetera, they will send out. Anyone running a blog will have newsletters going out.

Nathan Latka

03:57Upper right, right, campaign monitor clearly Then

Rajesh Jain

04:01>> you have for SMBs,

04:04>> basically the sort of integrated marketing stack like Mailchimp, essentially for the small, mid sized businesses. Then you have the omnichannel, which is where sort of Netcode plays. Yep. Mid to large sized companies, so Braze, sort of Klaviyo

Nathan Latka

04:22MessageBird, Cinch.

Rajesh Jain

04:23>> All of them are there.

04:26>> And then you have sort of the omnichannel and the CRM bit where email fits in as part of a multichannel communication strategy because the customers are on different channels.

Nathan Latka

04:35This is the bottom right Bottom right. Image here. These are the big guys. Right? These are the m and a players in the space.

Rajesh Jain

04:39>> Yeah. But they are all legacy. You know, so Oracle, etcetera, they had bought these email ESPs about ten years ago. Mhmm. So you have now a new age of companies. And there's a lot of interesting stuff happening in email, of course, we'll talk about, which I showed you. Yep. Which I think can be transferred because in The US for ecommerce companies, 20 to 40% revenue is coming from email. So the push messages that we get, that's

05:03>> the only way for pretty much the only way for them other than maybe SMS to bring customers back to their website or app where they do the transactions, and that world is about to change.

Nathan Latka

05:12Mhmm. And the reason SassOpen is beautiful is that statement directly contradicts what Arena from Hootsuite kicked us off saying, Gen z is not looking at emails. They ignore push notifications. Right? It just tells you there's a way to do there's different ways to do everything and different things work for different people. But this is working for ecommerce brands. It's working for you so much so that you said, wow. Over the first Yeah. I guess fifteen years,

Email Marketing Landscape and Where Netcore Competes

Nathan Latka

05:32how much how much did your bank balance? Like cash in your bank did you build up to?

Rajesh Jain

05:36>> So we built it up to about a 100,000,000 in by 2020.

Nathan Latka

05:40And no outside capital didn't raise

05:42>> No outside.

05:42Profits?

05:43>> Profits.

05:43Okay. So you're sitting there looking, you know, I'm Rajesh. I'm refreshing my Chase account. You're like, woah. That's a lot of digits. You say, what do I do with all this money? And you say, you know what? Let's bet it all. Let's spend a $100,000,000 cash to go acquire Unbox. Why'd you do this deal?

Rajesh Jain

05:59>> So couple of reasons. One is we wanted to look at adjacencies. We wanna first, we wanna do a large deal. We've done a couple of small tuck ins where you sort of add on to the tech, but that's not as exciting as a larger deal which can do which did two things for us. Number one is gave us a complementary product which we can sell into the same marketing department. So Unboxed does search and product discovery.

06:24>> So competitors include Algolia, Bloomreach, Constructor, so you can sort of place them there. And it also gave us a presence in The US market. For a company like ours, primarily India, Southeast Asia, emerging markets, it's very hard building an organic presence,

06:41>> organic base and organic growth in The US and that's where Unboxed came in. So at one shot, we got about 200 plus customers whom we could potentially cross sell our products too.

Nathan Latka

06:52Mhmm. Now people can see your m and a strategy going on the left side of the screen. You're not just buying companies like Unbox. You just bought a MarTech services agency. Why would a SaaS company buy a service?

Rajesh Jain

07:00>> These are some of them are just investments.

Nathan Latka

07:02Ah, okay.

Rajesh Jain

07:03>> What happens is when we go to our customers in fact, this is I think very important in SaaS setting, I'm seeing this coming up again and again. What at least mid to large sized companies are saying is we just don't want the platform. Add a thin services layer. So your platform becomes better and better every day. It's what I call sort of Kaizen, almost like the Japanese word, continuous improvement. Now as SaaS companies, most SaaS companies

07:27>> are told not to get into services. But the services layer actually can add a lot of stickiness. So think of it as 80% SaaS, 20% services. That thin layer I think can make accounts much more stickier, especially when you're going to the mid to large sized businesses.

Nathan Latka

07:42You're getting paid for it.

Rajesh Jain

07:43>> And you're getting paid for it.

07:44This is a good

07:44>> trade And you also learn because customers are more willing to now tell you what are their problems, when they want them solved, and they don't necessarily have the internal teams. I mean, look at what is our typical adoption of most SaaS platforms? 40%.

Nathan Latka

07:57Topical what? Adoption? Adoption of feature adoption. Yeah. 40%.

Rajesh Jain

08:01>> 40%. So that's the big challenge that I think an investment in a services company helps us solve, that they can basically take over. Well, the DNA is different.

Nathan Latka

08:10Mhmm.

Rajesh Jain

08:11>> They can help with services.

Nathan Latka

08:12Revenue keeps growing. You know, I get you on the phone. You say, okay, Nathan. Your six buckets look good for email marketing. Your team was very nice. And then it was supposed to be a fifteen minute call. It turns into an hour long call of you going, this AMP is the future. AMP is the future. I'm going, Rajesh, I don't know what the hell AMP is. I'm pretty good in SaaS. What is AMP, and why is

08:28this the future of email marketing? So

Rajesh Jain

08:30>> AMP is

Nathan Latka

08:31Let me just hold on so I don't feel stupid. Raise your hand if you have no idea what AMP is. Please, somebody. Okay. Alright. Now teach us. So

Rajesh Jain

08:38>> probably many of you all know AMP for mobile pages. This is AMP for email. Now what AMP does so, basically, it's a Google tech. Google and Yahoo both support it with with Gmail.

Nathan Latka

08:50I'm gonna give the visual first. Right? This is this is what if you see this in your inbox, it's being driven by AMP.

$100M Cash Built Bootstrapped by 2020

Rajesh Jain

08:55>> So the idea is that you can do all the actions inside the email. And I think that's a game changer for b to c. Not as much for b to b because it right now works on Gmail IDs and Yahoo IDs. But if you're selling if your customers are selling to b to c, that removal of the friction of the click through to a website or app. I mean we have seen five times, 10 times increases

The Unbxd Acquisition and US Market Entry

Rajesh Jain

09:18>> in actions. And just look at our own behavior, when you see an email you go to click through, how many times do we do it? But if you can now collect first party data etc all inside the mail, you can do gamification inside the mail, ask questions, do run surveys and newsletters right inside the mail and show the results in place. You see the spin the wheel etc. All of these, I think, become great foundations for

09:45>> what I call sort of channels two dot o, the push channels which are there. So email is just email is changing with AMP, and then there's WhatsApp coming in.

Nathan Latka

09:55Well, hold on. Before we move on from that, if these folks just wanna get, a crash course in, like, how do I use AMP in my email marketing, what should they go search on Google?

Rajesh Jain

10:02>> Okay. So amp.dev is a good starting site, but it's a bit outdated. If you go to netcorecloud.com/amp, we have a

Nathan Latka

10:08lot of use cases out /amp.amp.netcorecloud.com/amp.

Rajesh Jain

10:14>> Or just email me, and I'll send you a lot of

Nathan Latka

10:17When you first showed me this, what I thought is if I got something like this in my email inbox Yeah. It feels gimmicky, and I don't know if I would engage. But, look, you're showing these results, and you're showing the engagement is there. And and I'm also thinking, will this actually render on my phone in Gmail? How do you handle all these issues?

Rajesh Jain

10:32>> So the good news is that there is no downside. That in case so it it works in the Gmail app, it will not work on the iOS native app. The native email app that's there. So it works on Android, works on iOS, and works on the browser. So I'd say about 70% of customers typically would be able to see the AMP interactivity, number one. Second is there's no downside because in case the AMP doesn't show up,

11:01>> the fallback mail does. I see. You're typically sending two emails, the fallback mail, the regular email, and the AMP mail. And the mail client, Gmail or Yahoo, will decide which one basically to show.

Nathan Latka

11:11Mhmm. Now Now you're just to just to talk more about because I don't want people to see us and think this is gimmicky. It's not the future. I thought the same thing on our call, and so I asked you some questions. How many emails are being sent via Netcore monthly today?

Rajesh Jain

11:22>> So we send out about 35,000,000,000 emails a month.

Nathan Latka

11:26A a month. A month. It's a monthly number. What percent of India's total email is that?

Rajesh Jain

11:32>> That's a small percentage.

Nathan Latka

11:33Okay.

Rajesh Jain

11:34>> My guess is you have probably two or 3% of the emails going on.

Nathan Latka

11:37It's it's a big number.

Rajesh Jain

11:38>> Oh, yeah. Massive.

Nathan Latka

11:39Big number. So it's it's

Services Layer Strategy: 80 Percent SaaS, 20 Percent Services

Rajesh Jain

11:40>> I mean, you think about it, there are about four, five billion email IDs in the world. Each one's getting roughly 20 or five to 10 emails a day. It's almost a trillion marketing emails going out. Marketing transactional all kinds.

Nathan Latka

11:52Insane. So the the look. India, I would say, is probably ahead of us in terms of ecommerce, in terms of the states of of using things like this. So how do we translate these ecommerce use cases to SaaS founders? Right? How could they use a spin the wheel or a, you know, a tell us what you like.

Rajesh Jain

12:06>> Yeah. For SaaS founders, if you're sending to b to b, that's a problem.

12:11Mhmm.

12:11>> And there's an alternative to AMP which works in in Apple email called CSS. So it's not the the sort of full functionality, but you can I can I think the best place to use it is form fills? Mhmm. So some of the activities which you're doing on the landing page can actually be brought inside.

Nathan Latka

12:27We're seeing here is actually a good example. You could do this for your SaaS business.

Rajesh Jain

12:30>> Yeah. So you can do it. The thing is that once you do the submit, it'll take you to a landing page on CSS, will capture the data. But the user, customer has entered the data right in the email without the friction of the click through. And in AMP, you don't even have to go to the landing page. The landing page inside the email. So if you have customers who are B2C customers, no for shopping, for searching

12:51>> inside email, even collecting payments. I mean we have companies in India for mutual funds collecting those what they call SIP in India, systematic monthly payments for funds. All of that's now happening inside email. And the the game changer really is that this whole the click through friction which always hindered email CTRs. Now that goes away. Imagine if CTRs go up five x 10 x, what does that do for brands? Mhmm. Mhmm. That really helps them build

13:24>> deeper, better hotlines for for with their own customers. Get more first more zero party data, more do better personalization.

AMP for Email Explained

Nathan Latka

13:31So just to give you guys an example how we're gonna test this. Right? We're specifically gonna do a use case just like this for Founder Path. If you guys anyone been on a Founder Path webinar before or seen one? Raise your hand high. Okay. So we usually have to send an email out teasing the content. Then you have to go to a landing page, put your stuff, and we're gonna test effectively signing up people to join

13:47our webinars inside the email address so you never have to leave and see if we get more people doing it versus sending them all to a landing page,

Rajesh Jain

13:52>> which fact, webinar registration is a great use case.

Nathan Latka

13:54Yes. Which we should. Well, and then we then will take all the well, basically, all these input fields at the top, we will then let's say AJ does it. Right? And AJ says, I'm doing a million of revenue. His birth date is this date. He's male. He's 37 years old. We will then selectively use those merge fields, and we'll say, like, on the webinar, start time date, two hours before start time, we'll say, hey. There's a

14:14120 other 37 year olds with a software company joining in two hours. Do you wanna join? So it's like subtle merge tags where it doesn't feel like we're just blasting merge tag fields out to get a click through, but it feels like you're talking to somebody.

Rajesh Jain

14:25>> And in fact, even in newsletters that you send out, imagine doing surveys, polls right inside the newsletter. Mhmm. And then you if if if you're using AMP, then you can see the results right in place.

Nathan Latka

14:35So amp.dev or netcorecloud.com?

Rajesh Jain

14:39>> Netcorecloud.com/amp.amp. Amp.dev is the Google site, but it's a little outdated. They don't update it. Who

AMP Results: 5x to 10x Increases in In-Email Actions

Nathan Latka

14:46who who's who's who's thinking they might try a test? Are you just gonna explore when you get home? It's interesting. Right? Who knows if it's the future or not? We'll see. We're also doing a bunch. I mean, our I'll just full transparency to everybody here. We are really having trying to figure out how do you stand out and just email in general. It's so busy. We've just started collecting mobile phone numbers, and our mobile list like,

15:06our whole focus internally is growing our mobile list, our SMS list.

15:10>> Yep.

15:10You're also playing in this space briefly.

Rajesh Jain

15:12>> So what's very interesting now is that our interactions on mobile are also changing. So SMS largely one way. Mhmm. Now two innovations there. WhatsApp. You know, how many how many people use WhatsApp in the room? Okay. There you go. It's about almost half. A 100,000,000 plus users in The US on WhatsApp. Mhmm. That's probably about 3040% of the adult population. You can do so you can do WhatsApp shops. You can do all kinds of things inside

15:39>> WhatsApp. The next big upgrade is coming on SMS.

Nathan Latka

15:42Well, hold on. Before we move on from WhatsApp, one thing I'll say too, when I interview founders in India and I say, how did you get your big wait list? How do you get your community together? They all say a a WhatsApp Oh, yeah. I asked an American founder the same thing. They say Slack. So, like, what I will tell you is you you are seeing incredibly fast growing India companies that are building WhatsApp groups for

16:02their SaaS businesses, growing much faster than their US counterparts trying to drive everyone into a Slack channel. Yeah. I mean,

Rajesh Jain

16:08>> anyone's got even a small international connect, they'll all be on WhatsApp.

16:12Yeah.

16:12>> Now what's also interesting is SMS is getting upgraded with RCS. Again RCS is from Google, but it's being rolled out through operators essentially on Android and Apple's gonna support it. So if you think about it, email, WhatsApp, and RCS, they are transforming the one way push channels into basically becoming two way endpoints for conversion.

Nathan Latka

16:37Yep. I'm fired up. Mean, this is the o g of software in India, a $116,000,000 exit, goes all in on net core, you know, fools around for a little bit, doesn't work, and then 2013 starts to hit it. He now believes the future of email marketing truly is sort of these these embedded opt in forms inside of email to increase conversion rates, 35,000,000,000 emails per month in India growing quickly, bootstrapped to $110,000,000 of revenue, making big

16:58bets. We'll see more big bets in the future. Check out his book, Prophicore, and please help me thank Rajesh Jain from Netcore. Rajesh. Thank you

Rajesh Jain

17:05>> very much, man.

Nathan Latka

17:06Thank you so much. Thank you.