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The community monetization playbook | Sachin Gupta @ HackerEarth
359 Plays2 years ago
HackerEarth is a platform powering the hiring of remote tech teams. Sachin talks about his rollercoaster journey, which started when he became a founder pretty much straight after passing out of IIT Rorkee, the years he spent bootstrapping HackerEarth, the journey of going global and his take on building a great organisation.
Read more about HackerEarth:-
1.Tech Talent Demands Transparency And Unbiased Hiring Practices: HackerEarth Study
2. HackerEarth CEO: How to recruit talent for Web3
3.How Tech Companies Can Reassess Their Hiring Strategy In Times Of Economic Uncertainty
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Transcript
Introduction and Startup Success
00:00:00
Speaker
Hey, guys. Morning. It's Sachin from Hacker Earth. I'm the founder and CEO.
00:00:17
Speaker
After seeing so many well-funded startups implode recently, one thing is very clear. The success of a startup depends more on people rather than funds. And if your goal is to hire the best people for your organization, then this episode of the Founder Thesis Podcast is a must listen.
00:00:34
Speaker
Your host Akshay Dutt talks with Sachin Gupta, the founder of the HR tech startup HackerEarth, which is a platform powering the hiring of remote tech teams. In this fascinating conversation, Sachin talks about his roller coaster journey which started when he became a founder pretty much straight after passing out of IIT Roorkee. The years he spent bootstrapping HackerEarth, the journey of going global and his take on building a great organization.
Founder's Background
00:00:59
Speaker
Stay tuned and subscribe to the Foundry Thesis podcast on any audio streaming app to learn how to build great organizations that change the world.
00:01:16
Speaker
So I grew up in a small town called Sarinpur. It's in Western UP, very near to Dharadu. Both my parents are doctors. My elder brother is also a doctor. His wife is also a doctor. So we truly are a family of doctors and my wife is a doctor in philosophy or computer science.
00:01:35
Speaker
I think what kind of discouraged me was the fact that you got to study like 10 years before, you know, you can start doing something. And I just didn't have that patience. Sarinpur doesn't have a very rich coaching center culture. And prior to that, I'd gone to Delhi DPS in a boarding school and I ran out of that place.
00:01:54
Speaker
So I did my IEP subsequently from Roorkee. So I did a bunch of things, first year at Roorkee. I started preparing for civil services in second year, did it diligently because this Roorkee had that culture of IES. Then, you know, spoke with an IES officer in Saharanpur and he told me what the stock reality is. And he said that, like, one of the things he told me was, even though you want to do well or you want to do good, you got to operate in the framework of the society. You know, you end up doing some of the other kind of corruption.
00:02:23
Speaker
Even if you're not doing it, you'll be a part of it, right? So that disillusioned
Origin of Hacker Earth
00:02:27
Speaker
me. So I stopped that, did some research in third year, published a couple of papers. And then I think when we were in a pre-final year, I thought, okay, let's go. So we didn't have a clue what building a startup really means, but our education system is, well, at least at that point, designed in such a way that people would get theoretical knowledge.
00:02:47
Speaker
But I had no low TA website. I had a simple idea, what is Gmail or what is Google when you log on to a URL. And I just felt, yeah, something is off. I understand the compilers, but you should also understand how the web works. So I said, okay, let's build something. And it's a hobby project. And we'll also get to learn how to build. So one of my friends at that time didn't get through a Googling. And that was a phone interview at that point. And he was pretty smart. So he was like, yeah,
00:03:16
Speaker
because he didn't know what to do. We created something we called at that time, MyCareerStack, which was a precursor to hackers. It was just an interview preparation booklet. Coincidentally, I was also preparing for my campus placements, which happened six months before our graduation. It was December of 2011. I was preparing for this and at the same time, we were also working on the website.
00:03:42
Speaker
And it so happened that I, because I saw so many interview questions, I actually even got selected in Google. But in that process, it also created this platform or portal where people could come in and go through interview questions. We used to take more telephonic interviews, which is very interesting. And they thought this is some website somebody expert is taking into the interview, but we were taking more interviews. So this was like a content platform.
00:04:11
Speaker
like a, let's say, a Quora kind of a thing or something like that. Yeah. Yeah. And not even crowdsource. We were putting interview questions and more like a blog. Okay. So
Early Milestones and Growth Challenges
00:04:23
Speaker
how did this become hacker? So we launched this platform, like I told you, writing towards a hobby project.
00:04:29
Speaker
So I learned a lot. We learned a lot in that process. I remember very clearly, this was winter of 11, so college, and we were like eight minutes. So we decided. So the whole of December, starting December, we worked on this. And February 14th is when we launched a re-done version of my career stack.
00:04:53
Speaker
So it was a project only, but we posted it on Y Combinator. So we posted it and we forgot it like we didn't expect. You posted it meaning you applied at Y Combinator and this was... No, at that point Y Combinator had just started their startup school. So we didn't even know about it.
00:05:19
Speaker
But Y Combinator, many may not know, there is something called as news.ycominator.com. Product hadn't, kind of a, which is like link site. But getting featured on news.ycominator.com is extremely difficult because imagine all over the world, people are posting links and they have a very stringent algorithm.
00:05:38
Speaker
We were surprised to see we were on line 16 and it just shows 30 and we were blown away. So I think that was, there've been a few life-changing moments over the years. I think that was one. And then I remember we tracked it for almost 20 hours. We didn't sleep.
00:05:54
Speaker
And we were taking snapshots. So from, I think, 16, 8, 9 to 13, that came down. And for the first time, we had like 100 people live on our site. And like, there is some value in it. And that's when he said, okay, explore. Why do you think it became so popular? Was it because like Google, Microsoft are like global, globally aspirational companies to work for?
00:06:17
Speaker
Like that's fine. And you were helping solve that how to crack a Google interview. I think because we had genuinely good content and there was a need for something like this. People don't know what happens behind these tech interviews now. So there is a lot of content back then. There wasn't. So it just like people related to it. Yeah. Yeah. This makes sense. I mean, I will see something like this and use something like this. So maybe there is some value in what we are doing. So then we started speaking with people in the industry.
00:06:48
Speaker
I'm forgetting the name of the media publication. Ashish Sinha, I think now he's a journalist. Yeah, he had his own tech publication at that time. He was a Roorkee, next big word. Yes, next big word. And Dandit Mangal from Common Floor. So these guys had come to Roorkee and given a talk. And you're like, okay, these are the industry solvers, right? We spoke with a bunch of them. They guided us. And then one of my seniors at Roorkee. And realize the interview prep is not a big market.
00:07:16
Speaker
But everybody that we spoke with was struggling with hiring software developers. They found it hard. And because my friend had gone through this journey of applying for a role, not getting through, but still being afraid, we saw that the process is broken. Both sides, right? Developer side may be whatever I switch. Hiring side may be people's struggle.
00:07:36
Speaker
And I think that's what is the hope. And we being engineers, we're like, yeah, this cannot be an outside problem. And that's how we kind of took the leap. February is when we launched this and we saw traction, but we graduated in July. So we didn't start off right away. I actually took a Google job and I came to Bangalore, worked here for three months and this is all the time. So we always knew, so it was never a question of if it was more of a vein.
00:08:00
Speaker
So while I was at Google, one of my co-conders was in college and we were working together, building out the tech. So the best thing that I did at that time was I met tons of people. Almost every other day, I would meet somebody here. And that's how I got into GIS App Accelerator. So they had just started the patch at that time.
00:08:15
Speaker
And this was very short. They had closed out their batch. We just happened to meet Rajesh. I happened to meet Rajesh last minute. So I met him on, I think, the 10th of October. He said, sounds good. Kaulia in Kofonda, his name is Vivek. 12th Vivek came down from Roorkee in a train, met them. 14th, we were in the accelerator program. In a matter of four days, we got this opportunity.
00:08:36
Speaker
At that point, I think it was like, yeah, we've been working on this. We are passionate about this problem. We're getting an opportunity of being into an accelerator program. So since then, this has been my kind of life philosophy, which is like, no regrets.
00:08:54
Speaker
I met a lot of people in Bangalore in just those three months who I like to call living zombies of sorts. All of these guys had these aspirations. They would complain, I want to do something, but I can't, I have a family.
00:09:09
Speaker
And I was like, boss, you are living a life that you are not happy with, right? Why are you doing that? And I didn't want to be living zombie, right? 10 years old. And also because what are the stakes to be lost or what, right? I think that was our personal decision. Google,
Strategic Career Moves and Business Model Evolution
00:09:24
Speaker
leaving Google, I've been quizzed about so many times because, you know, look at it from a new grad perspective. You get into a job where you have a cab, you have food. And nowadays these things are given in any startup. I'm talking about 2012.
00:09:37
Speaker
It was a luxury. I paid for Microsoft. So getting free meals a day and being fattened up like ampered was unheard of. I think the decision was only hard on the day I had to leave. So I thought about it. But then I think before that and after that, I was like, let's jump in. My family, when I saw it, I said lucky.
00:10:01
Speaker
is because my family have been like extremely lucky. I told them, and you can't, you won't believe it. A lot of people don't believe it. My father said, fine. I mean, that's it. A single line, right? And I asked him a few months. He was running his own practice. So that mindset of doing your own thing was there in him.
00:10:18
Speaker
When I asked him a few months later, he said, Baba, you were so proud. I got into Google and I was the only one in our college who got into Google at that time. So what happened? He said, I trust you. And that's why I said, if you want to do this, then you must be taking the right decision. Did a GSF accelerator also?
00:10:39
Speaker
give a check like what was the model. So this is for just setting up the entity. So GSF would only be able to put in money after we set up the entity. So the ROC requires you to like put in a lakh of rupees, but GSFs funded us with 15 lakh. I can't imagine. I mean, you know what the funding says today. It must have seemed like a lot, but at that time for a bunch of like fresh graduates getting 15 lakhs, those things attached almost like would have felt amazing.
00:11:12
Speaker
So you started building it out from the perspective of helping employers and like you knew employers will pay for it or like what was the business model?
00:11:22
Speaker
never picked a site. So even today, Hacker Earth has a B2C site, which is focusing on developers. And then it has a B2B site, which is focusing on employers. So in fact, the only product was very user-focused. So we would build this place where people could come in and solve voting questions, participate in competitions. And slowly we started getting employers. By the way, this wasn't with foresight. It was just, we chose that. But I think it was a very good thing because it helped us build that credibility.
00:11:48
Speaker
I remember our first major customer who posted a public contest was Adobe. And at that time, we got Adobe. And since we're just starting off, nobody has hacked it. So that kind of helped us. But we were all so very clear from day one. We are
00:12:05
Speaker
We knew how nowadays developers are very different when they graduate. But being in Roorkee and growing through that, we knew we won't charge developers. Hence, we wanted to figure out a model where we would charge the employers. Which we discovered a year later. We didn't do it right. What did you do once you entered GSF? Tell me that Journey, till Adobe, the first paying customer came in. What was that 0 to 1 journey?
00:12:30
Speaker
So luckily, because we had worked on the product from that year 2012 up until October, when we officially started, we weren't starting from zero. We already had a product of sorts. What was the product like? You had like a blog with interview advice. What was the next version of the product?
00:12:48
Speaker
Yeah, so the next version of that was, but now if somebody wants to solve a problem, a coding question, what do they do? That's where we built out a browser-based ID. The browser may use the right code there, and the code would be automatically evaluated. That way, you could read and practice in real-time. A browser-based ID.
00:13:11
Speaker
What is IDE? IDE is where you write code. Typically, people write code in their system and the development environment, I guess IDE stands for that. Yes, integrated development environment. Yeah, development environment in the browser. Again, it was mainly revolutionary at that time because a lot of things happened on the cloud. Back then, it wasn't the case. Build that piece of technology and what we built out was this platform where we started conducting online coding contests.
00:13:40
Speaker
So we'd be coming from Roorkee and being from college, right? We had that network. So we reached out to various IPs and we said, hey, we are posting this contest, would you participate? And we did like a hackathon basically, like hackathons, correct. And we became this place where top developers would come in and show off and win these contests and we had lead a board and they would show off. So this was our community side of the product that we were building out.
00:14:06
Speaker
In GSF, we figured out what would be our monetization strategy. It was very clear it has to be on the employer side. Two things came out. One was this technology that we had built, which we're conducting these hackathons. This can be used in a way by a company to screen candidates. Imagine if a hackathon is an open contest, right? Now you do it in a closed environment where you're sending a test to a candidate and they take up the test.
00:14:33
Speaker
Actually, those tests used to happen during our days as well. But they were happening on pen and paper, or they were happening over, like you would send an exercise, people would take it out. So we wanted to automate that process because it was a very bad experience for both the candidates as well as for the employers.
00:14:49
Speaker
So that's the B2B product that we started building and the core technology was the same, but building out an interface for a recruiter, building out an interface for the hiring manager. So I remember we took about a year and in hindsight, again, we were very slow these days. Companies raised a lot more and are very quick in building it out, but we had just.
00:15:09
Speaker
Two interns and one was my co-founder Vivek and I, four of us coding on the platform from 2012 October to I think September 2013. So built it out in a few pilots, those pilots, and then eventually launched it in that month.
00:15:26
Speaker
And so there, then you are not just providing the IDE as a technology, but then you're also providing outreach, right? Because you need to make sure that there are enough good quality people who give the... So how did you do that at scale? I mean, doing it for a one-off project, I can understand you would have used your network.
00:15:47
Speaker
How did you make that as a scalable asset for the business like that? Talent pool, high-quality talent pool. We did a lot of things in the first three, four years. We would conduct these inter-IT contests. We started putting out practice content on the website, started reaching out to student talent. It was very natural for us to get the student talent because we were very familiar with the psychology of what a student goes through.
00:16:13
Speaker
We started this series called Code Monk, where we curated content. If you go through these 10 things, then you're prepared for your interview. We would conduct, obviously, contests with employers, so running Adobe Amazon were huge, and they got us a lot of validation.
00:16:30
Speaker
But I think a combination of conducting these hackathons in different forums, like I said, the other thing that we did was we gave our platform free of cost to students and said, go conduct your own thing. You know, you have a coding club, go conduct a coding contest. Seniors will teach juniors. A lot of colleges have technical tests, right? So in technical sense, there would always be a coding competition.
00:16:53
Speaker
which was earlier happening on their own machines and their own systems, we helped them take it online. But I want to put it out for other listeners out there and anybody who's trying to build out a community, you do so many things which don't scale in the early days. And it only over a period of time, you see things stacking up. The point in case being in the last three years, we added about
00:17:14
Speaker
three and a half to 4 million users. In the first six years of the company, we added about less than 300. So it took us six, seven years to add three, but only three years to double that. And yeah, because all of those small things that we did in the early days kind of started stacking.
00:17:31
Speaker
Did students get like cash prizes or was it like a badge of honor that you can put it on your CV that you have won some hackathon? What was the book for them? Yeah, so it was both. But we were obviously being so poor of stock, we couldn't give out cash prizes of our own.
00:17:51
Speaker
So whenever it was company-sponsored, we didn't charge the company. We only had one condition, that you were to give out something to the winners. But we also did our own stuff where there were no companies. There it was more about badge of honor and we had a leaderboard. So we introduced a ranking system where depending upon how frequently you were participating and how well you were doing, you would get a rank.
00:18:13
Speaker
And there is this one thing that we did, which nowadays is very common, but it caught on like that time. We would give out t-shirts to the winners, top three. And we designed the t-shirt in such a way that it was aspirational. So only a few people would get it. And then we launched this campaign, which we said, you solve a hundred questions on. And you know, when I say launch this campaign, I'm exaggerating. I answered a question on Quora. One student asked, how do I get a hacker t-shirt? I said,
00:18:38
Speaker
solve one question and we'll send you a t-shirt. And you would not believe that caught on. We would get t-shirt requests every day, two, three. So we then had to officially launch a program in formalization. So tell me about this training product. How does that work? Is it like you choose the language for which you are hiring and it already has some pre-built assignments or challenges that they need to solve? How does it work? So we've taken a
00:19:04
Speaker
A skin-based approach and obviously the product has matured significantly over the years. But basically you could come in and say, I want to hire people with these skills. It could be say Python, SQL, databases, whatever, right? We have almost 300 skills on our platform now. Every skill has questions which are tagged to it. So we have the largest content library in this space, about 16,000 plus questions.
00:19:27
Speaker
So when you come in and you select these scales and you select let's say an experience level for which you are creating this assessment and that experience level is generally a proxy for the difficulty level, the system will automatically pick questions which are asked to these skills in that difficulty level and generate an assessment for you. So when you say questions, are these like multiple choice questions or are these like you talked about how you created a browser-based IDE
00:19:51
Speaker
It's the coding assignment. I mean, we have multiple choice positions as well, but the core IP of the product is that there are coding assignments. So people actually have to write code, which is then evaluated in real time. And then we not only check for correctness of the code, but we also check for efficiency and how accurate on how well it is. How do you do all that? Like efficiency and so on.
00:20:11
Speaker
So there is a concept in software development called unit testing, where you test a piece of code. Basically, let's say if you want to write a piece of code that is supposed to sort numbers. Okay. Now, what's the way that you would test it? You would give it input of numbers and see whether the output is correct, right? And you would give different types of input. So let's say sometimes you'll give negative numbers, sometimes numbers are the same, right? And you will try out this content.
00:20:36
Speaker
December numbers, some of the, so what on condition that handles. And so that's how you check for logical correctness. And the same in the same testing unit testing concept, you can also test for scale. So what you could do is you could need like a million numbers, right? And see how the code responds, whether it is able to handle that scale. So we took that same concept and every question in that has a set of test cases, which check for both logical correctness as well as for scale or efficiency.
00:21:03
Speaker
We have business sophisticated technology where as soon as somebody writes code in the browser and hit submit, that code is taken to a server where we compile the code first, then we run the code, then we feed in one by one different inputs to these codes. For any question, we have test cases. We try the response for each test case, then aggregate the score across all those test cases. That's how the whole evaluation comes together.
00:21:29
Speaker
So tell me how the revenue journey was going. For the first two years, let's say in 2012, you started. So let's say in 2015, what kind of top-line were you doing at the annualized level? We hit our first million in 2018. So 2018 is when 2017 or 2018 is when we hit our first million. So it's in that sense a very slow journey.
00:21:53
Speaker
Because for the first four years to be a candidate, we were not focusing on revenue at all. Our focus was to build out the community. And while we had the assessment product, we never looked at ourselves as a B2B business. We were just looking at ourselves as a B2C company, which was building out a developer community.
00:22:11
Speaker
It is only in 2016 when we consciously took a decision to say, okay, we, and there's been a video since I'm candid to share that at that point in time, we do not, we will not have enough money to just continue building out the community business unless we have a clear monetization focus. So we kind of.
00:22:31
Speaker
We went to a B2B model where we started shutting down on, like we literally put on, like support our community activities.
Scaling and International Expansion
00:22:38
Speaker
And it is very interesting that at that time, we were probably less than a million users. I think 2016 is when we touched upon that. Right. And now we are like 7 million users. So we added 6 million, but we'd already shut down active engineering effort. That's because.
00:22:52
Speaker
a lot of things had already been built. And then we started focusing on the B2B side of business. Then we grew, I think, I think 17, 18 years when we did a million, then we went to three, then we went to six, and then now we are at about 10 million plus revenues. Wow. So like, how were you finding it so far? Like when you took that call that, okay, we need to focus on B2B till then, was it funded through the accrues or did you raise more rounds after the GSF actually gave you that 15 lakhs?
00:23:18
Speaker
Oh yeah. Because we obviously wouldn't have been able to support. So we needed capital. So after our GSA accelerated, so we actually got $150,000 at the end of the, so the GSA program was structured in such a way that I think 20 companies were selected, all got 15 lakhs. And at the end, five got 150K. But then after that, we got introduced to, this is 2014 jam. I was at a, I think Nazcom event. I met Sheepati there and Sheepati is from Prime Mentors.
00:23:48
Speaker
These guys were just starting out their fund and I think we had like even our GSF journey, even this was like, I met them on Monday. They met Vivek on Wednesday. By Saturday, they said, okay, we want to fund you. And the next week we had a term sheet that we're looking at is that fast and we're not raising money at that time.
00:24:04
Speaker
But we raised the seed round from them. Then we went on to raise Series A, which was $4.5 million, I think, in 2016. And then we raised Series B, which was $6.5 million, which was in 2018. That was our last round of funding. Since then, we've been break-even. So both $21 million, as well as $20 million, and even $22 million, we will be break-even, have continued to grow aggressively. Okay. So by the time you hit that $1 million number of community, this was primarily India-focused, or were you also
00:24:34
Speaker
building community outside India. So we always had global aspirations. So we never really did something which was at the product level, we never really did something. It was just India-focused. But all our outreach efforts, all our community efforts that we were doing in the beginning were obviously India-focused. So we actually got a lot of India users. But since the beginning, we have had users outside, developers trying to find interesting things on their own.
00:24:59
Speaker
So even today, about 20% of our user base, or actually 25% of our user base is outside India. That is when we, other than US, we haven't really put a lot of marketing efforts outside. Okay.
00:25:12
Speaker
That pivot from focusing on building developer community to focusing on monetizing businesses is not an easy pivot to make. How did you pull that off? Like talk to me about that journey. Absolutely. So the thing about these changes, when we look at them in hindsight, they obviously look like a point in time, but never in life now, never really something is like that. It all builds up. So 14 is when we, 14, 15 is when I hired my first two sales clients, one for US and another for India.
00:25:41
Speaker
U.S. guy was also in India doing U.S. hours and selling through inside sales. And they must have been selling the streaming solution in the U.S. because you wouldn't have had a big enough community. So I think 14, 15, even like 200K. Then how did you figure out the pricing and all like what you will...
00:26:00
Speaker
I would say still haven't really heard the pricing to be completely candid. What I learned over the years is don't be afraid to increase your prices. Just throw something out there and see what sticks. It was a discovery process. We went out, I still remember, and we changed the pricing model. So earlier we used to price for assessment.
00:26:18
Speaker
Like there was no concept of license and you just sell on an assess per assessment cost or calculate assess. Correct. Correct. And our first price point was I think about $100 and it was arbitrary. That's the first three digit number that you kind of run into. I think also dollar was about, I think about 16, 65. So like $2 sounds like a good number.
00:26:37
Speaker
The US was about $2 and the US was $100. And then we just slowly increased prices over the time. And we also changed the model. So today we also have the concept of licenses. You can't just buy an assessment. You also have to buy hiring manager and recruiter licenses. And the unit price in India has gone up to almost like $300. The unit price in the US has gone up to $10. So why bring in friction of license fees? Like you would want a company to
00:27:07
Speaker
have a lot of assessments happening through it. So why charge them for each person who comes on? Maybe a company should be able to add every team manager to the platform and tell them you have assessments for people that you're interviewing. So why bring that in the list? That's a great question and my sales team badgers me on that every other month. But the thing is, if the pricing is just pegged to an assessment, then I think the pricing is very reductive.
00:27:32
Speaker
right? Then it means I'm just valuing the assessment that I conduct. What about the collaboration that comes together for a hiring manager and a recruiter? Like we have a proper workflow, you come in, you create those assessments, you can send it to hiring managers, they can review it, they can give feedback, they can then review the reports. There is a journey of candidate history that gets created over time. This is how the course came. And these are the different tests that they took, the reviews that they
00:27:55
Speaker
Okay. Providing your data insights. This is your skill. You'll be the kind of skills you are assessing for the skills you get these kind of leads for, right? So does that not mean anything? That's one second also from a business point of view. And one may do what the customer wants, not what you want, but there is variability when, if you're just pegged to per assessment, right? Like this year, I may have less number of candidates tomorrow. I may have higher. So for us revenue productivity becomes an issue, but your recruiting team and hiring team doesn't lecture that.
00:28:25
Speaker
Right. So obviously price would still reduce if my usage goes a little, but I have a baseline. So I think those two reasons is why we moved to the model. Got it. Okay. Okay. So is this like an ATS in a way? Like you can search through all your candidate pool and invite them or like run a campaign if you want to, if you have a new opening, then run a campaign with your existing pool and stuff like that. Like what you can do with an ATS product?
00:28:50
Speaker
No. So in APS, we go and integrate with an APS. So we are a step in the applicant tracking system. When I said we give data and insights, it's basically around your technical recruiting is where we would be giving you all these insights. Like these are skills you're hiring for. These are the kind of candidates that are coming in your system, but we don't intend.
00:29:08
Speaker
We have a basic applicant management system. So you could move a candidate from top of the funnel to shortlisted and then you can conduct multiple rounds of interviews. But we don't do, you know, sourcing and we don't do like onboarding and stuff. That's not our focus. But you have this community. So why not do sourcing? I mean, why not make it the way you have a job board like LinkedIn, et cetera. But so this could be like the developer focused job board because you have six, seven million community of developers. So that is a monetizable asset.
00:29:37
Speaker
Oh, yeah, absolutely. Again, you hit the nail on the head. This is something that as a strategy we've been talking about for many years, I think one of our biggest apprehension was that people come on to hacker today, not just for dogs. There are donors who are building their bragging rights and there are people who just love coming to the platform because this is where they can solve interesting problems. A lot of people in their upskilling journey are coming in and we're safe space where nobody's judging you. You come in, you go through these assessments and you know how good you are.
00:30:05
Speaker
I mean, if there's an apprehension, we may be completely wrong, but if it has become job-focused, then we might push away or steer away some of the other people who are not here to do the job. And then it also becomes family of sorts. Like if you open up a recruiter access, of course, they'll do people and get them, which is their job.
00:30:22
Speaker
I think it's a matter of prioritization because our assessment business and the HACWAN business has been growing and there's enough to go there. We haven't yet focused on it. But why I said you hit the nail on the head is because this is the next big thing that's on our mind. How do we create that balance of not pissing off people who are not coming here for jobs, but then create this experience for those who are looking for jobs?
00:30:43
Speaker
So right now the only way for a company to source is by sponsoring a hackathon, basically. Absolutely correct. Yes. Okay. Okay. What is the pricing for that? Like, so we charge in India, we charge about $5,000 for an SMB about $10,000 for an enterprise.
00:31:00
Speaker
The same pricing in the US. So while we don't do talent sourcing, we do talent engagement in the US because we can help a company in conducting a hackathon where they can easily get like, I would say anything between a hundred to 500 people coming in and kind of engaging there. So there we charge a price starting price point is $25,000 goes up to about $50,000, $56,000.
00:31:24
Speaker
I'm not clear on the difference between India and the US. So you said in the US, you don't do talent sourcing, but in India, you do talent sourcing. What is the difference? In a sense, the outcome of the hackathon is that you actually get a qualified applicant who you can hire. But the outcome of hackathon that we conduct in the US is typically people who are just engaging with your brand. We don't commit on hiring because we haven't really built out the job-seeking community yet. So right now, all our hackathons in the US are talent engagement groups.
00:31:54
Speaker
Okay, so the company gets the data of people who are good developers, then their recruiters could call them up and pitch an opportunity. They could do whatever they want to do. Sometimes companies also want to evangelize the technology, like here's my API build on top of it, those kind of things. So we don't really care what you do with the talent, but we don't commit that they will be job seekers. Right, okay, got it there.
00:32:16
Speaker
And in India, when there's a hacker found that there's very clearly a job attached to it. Like, like everyone participating in the hack knows that if I do well, I'll get a job offer. That's right. Sometimes it's like branding in front of college students. So like we work with multiple, large enterprises who conduct these kinds of regular cadence. And this is how they take their message, their brand to the universities. Like employee branding kind of initiative. That's correct.
00:32:40
Speaker
Sir, in India, hackathons, you have some sort of a success fee model also. Like if they get a qualified lead, like qualified lead means somebody who they can offer or somebody who accepts the offer. Like what is? So qualified lead is somebody who has cleared the assessment and demonstrated that they have the skill and they have expressed interest in that opportunity. Now, whether they get an offer or they accept an offer is not something that we can control. We don't want to go down that path. Absolutely. There's too much risk in that.
00:33:11
Speaker
And then we can't control it, right? Otherwise then have an army of recruiters in Hackathon. How do you market the Hackathons? Is it only like you publish on your landing page and so on or you do email campaigns or do you also publish on other sites like say LinkedIn or whatever?
00:33:30
Speaker
So hacker.com slash challenge is where all the hackathons are listed. Obviously everything goes there and we have our user base. So we do email based targeting, but we were just going through the data the other day. More than half of the users that end up participating come in organically. Organically meaning they know about that we have these things by our hacker. So they would come in and check it out. We also leverage different social platforms.
00:33:55
Speaker
for some reason, Facebook Twitter team has tried Reddit and Snapchat as well, but mostly Facebook is what gives us that benefit. We don't do a lot of paid spends there. For certain skills, we have a lot of people. For certain skills, we don't. So wherever we see less skilled people for that particular technology, we will leverage these social channels a little bit more than what we would do otherwise.
00:34:16
Speaker
But the goal is always to acquire users from external sources in a way that those users can be reused. So we would not do a campaign. We would leverage a campaign, but the idea is to get these users otherwise for other activities. Yeah. Okay. Okay. Tell me about the organization today. So now today you're like a $10 million a year company. How big is your headcount? How many people do sales? How many product and so on? And like what were your learnings of building up the organization?
00:34:44
Speaker
180 people and then I think 20, 25 odd interns. And that's the culture that we've had from day one. Like interns push a lot of things, move a lot of needle at Hacker. So about 30 odd interns at any given point in the last two, three years. Engineering team is about 50 people.
00:35:01
Speaker
India sales is about 30. US sales, which includes our inside sales, is another 30. But quota carrying reps are only five. So we've been very efficient in our quota carrying reps. The rest is on marketing demand gen, like emails and cold calling. And then marketing is about 20 split between B2B marketing and B2C marketing. Then the other functions and the rest. So I think
00:35:27
Speaker
team building. You asked me about team building. What has worked or what I've learned over the years is, and I think this is something that everybody would say, hiring the right people at the top level is like managers and your senior managers and managers. Getting that right is very critical. Very critical. And while we all in startup spoke about building out a flat hierarchy and things, I'm of the school of thought they can't be a completely flat hierarchy.
00:35:55
Speaker
because people early in their career don't know everything, right? They got to be mentored, they got to be naturally leads to some kind of hierarchy and I don't associate hierarchy with power struggle, right? Let's keep that aside for a moment. So getting the top level management is very right. You know, when we were 30, even 50 and then even 100, I found it
00:36:14
Speaker
easier to propagate my vision as the CEO. This is what the company is after. This is what we are doing. All hands would have 100% attendance. Now, what would also contribute to it? We are now remote. It's become harder. So your second level management becomes the amplifiers.
Organizational Growth and Hiring Strategies
00:36:33
Speaker
If they emulate your core value, there's a company below them kind of emulate it as well. And it's a trickle-down effect.
00:36:38
Speaker
So getting those people is very, those, your VP is right is important. And how do you get that right? Like, I mean, you have to get it right, but tell me how to get it right. That's more valuable. Yeah. Absolutely. So there is again, no rocket science to it. So first is to accept that you will never learn a perfect fit.
00:36:56
Speaker
I haven't been in a situation where in the leadership role, I've got the perfect candidate. Everybody has their strengths and their weaknesses, and you need to figure out as a manager, and this is very personal. Some people are great at micromanaging, not male micromanaging is the wrong word. Some people are great at getting down to the exact small little things and with attention to detail, getting it done. I'll accept I'm not good. I hate it when I have to do it.
00:37:20
Speaker
So I'm not the kind of guy who can meet someone who needs that kind of attention to detail for sustained periods. So first, I need to understand what am I good. And then I need to match that to the person who's coming in. Now, mind you, it is very difficult to get that in one, two, or even five hours of interviews.
00:37:38
Speaker
So, I think what has worked for me is getting value alignment in the interview. If I have been a founder CEO, it's very aggressive. Like I'm just making it up. And I don't see the same aggression kind of panning it out in the other person, then there's no value alignment.
00:37:58
Speaker
Another thing that I look out for is we build the culture of the company. I'm very proud of it. In a way, we are very respectful of everybody who's in the company. It doesn't matter which level you are. And you'll see it. Some people have grown the ranks in an organization where they're very used to power authority and power, which they would not get here. So if I sensed that, I would not go in with the person because I know they would come in and fail.
00:38:22
Speaker
So in the first two rounds of interviews, a conversation, if you could do that value alignment, then that takes care of the software aspects. And then you kind of figure out what are the strengths of this person. And like I said, if I can compliment them, that's when I would make the decision. If I can't compliment them, then I would not go ahead with them. I know it's still a little vague if you want, I can dive into more details, but that's the broader framework that I use.
00:38:45
Speaker
When you say you can compliment them, what does that mean? Like, just help me understand. Yeah. So, let's say I'm hiring VP of sales. Okay. And I'm not a sales guy. I'm a product guy. Okay. Now, if I, so the, and you tell me what the difference is.
00:39:00
Speaker
If you tell me go sell and the customer on the other hand, on the other side is excited about learning the product, I can talk about it for hours. I can talk about my product. I can solution it for them. I can give you the perfect thing, how we're going to put in. But if this is about building the relationship, winding and dining with the other person, using them to get another stakeholder to come in and you know, like that kind of you is using your sales job. I suck at it.
00:39:28
Speaker
Now, my VP of Sales has to be someone who can do that, who understands the sales regard and the sales process better than me. But I can be the person who can supplement them with the product, how to sell. But what to do in the sales process is what you need to do. Another thing is, again, because I'm not a sales guy, I don't know what is the sales process. And there's a science to it. It's not some parts of this art, but top of the funnel demand,
00:39:55
Speaker
How do you progress from level one to level two? How do negotiation happen? How do you navigate through vendor onboarding? So, if I can compliment this person, then it's a good fit. If both of us are solution selling guys, it is doomed to be a failure. So, that's what I meant by it. Okay. So, zooming out, you said one of the things to get right is hiring your leadership team well. What else is there? With respect to team? Yeah. I mean, with respect to org building.
00:40:19
Speaker
Yeah. I think the other thing is to very clearly call out what is acceptable in the organization, not rather acceptable, what is not acceptable and what is celebrated. So as a new person coming in, if I have clarity on these two things, then most of my behaviors or large set of my behaviors are taken care of.
00:40:38
Speaker
So one of our core values is, don't be an asshole. And it is in the face for a lot of people. There have been instances where someone read this and they're like, like, that's, it's not a nice language, no? And there are some people who look at it and say, boss, I like it, right? I get it. It's so clear.
00:40:56
Speaker
So that's the value alignment I'm talking about. It's my VP. I feel uncomfortable because my values don't be an asshole. So very clearly we are saying that if you are an asshole, you will be called out. Now this can empower some people or it can scare some people because somebody can say, boss, I can make my people shine because now I have this complete alignment with the org. Some people are like, boss, I can't play politics here.
00:41:22
Speaker
So what is not right is very clearly called out. And then what is celebrated, and I mean, there are other values as well, like one is disagree, but disagree and commit. So, and it's, I'm not saying we invented these things, it's out there, right? We just adopted what is good, but it tells people that moving forward is more important than getting what is right.
00:41:41
Speaker
But also calling out what is celebrated. So we tend to focus too much on the end results, which I also come from a school of art. After a point in time, effort doesn't count. It is what you deliver. But there are other things that you can celebrate, which is, are people collaborating well together?
00:41:57
Speaker
If someone is a good person who's there to help you out, are you calling it out? And when you systematically celebrate these things, people see it. And that's where they realize, okay, this is what the organization is. So I think that's the other thing is very important. What is not acceptable and what is celebrated, calling those two out is important. Yeah. How does the celebration happen? Tell me about that. Like how you execute that. Like you have like your HR team, which is like,
00:42:22
Speaker
keeping an eye out and sending an announcement. How does that happen? So we were very unstructured in that and it kind of worked when we were up in 50 people. So an example of this would be somebody won a deal and this was a feature, let's say it was because of a feature that an engineer built.
00:42:39
Speaker
the sales guy naturally would come in and say, hey, I want to share, we want this deal. Thanks to Vero, Vero was one of us. Believe me, people still remember these things. I'm talking about six years back. It happened naturally, but we decided to codify it as much as we can, because once you're a certain scale, once you get one, I think a founder has to let go of nostalgia and agree that the systems will scale and not your personal connection with everybody.
00:43:07
Speaker
So now we made it a process where there is like body appreciation. We have spot awards. We actually nudge people to call it out. I just had a conversation with my leadership team. Like everybody's empowered to give a spot award to somebody else. That's great. Yeah. And then you have a regular
00:43:23
Speaker
cadence on it. So every quarter, there has to be some awards that go out. If there is under utilization of a quota, then the team won't call out. So what's happening is your team not doing well, right? Because not giving a word was also a matter of concern, right? And then we have a greatest of all time go toward, right? So now everybody knows what I need to emulate this behavior, and then I can be a go. Yeah. And you use some SAS backfill for managing the rewards or like is it in-house built or what? Like it's all except.
00:43:49
Speaker
We have OKRs and we have clear definitions of what constitutes an award for someone to win an award. It's typically a combination of subjective feedback from the manager and objective data points in terms of performance and OKR achievement.
00:44:06
Speaker
And, you know, while we may want to codify and objectify a lot of these things, you know, you can't take out the subjective element, right? Because at 180 people, there are a lot of things that happen, which may not be completely visible. So you got to trust your managers and allow that subjectivity to be part of the process.
00:44:23
Speaker
So why did you invest in implementing OKR? I believe that's not a very easy thing to implement. You need to put in a lot of effort as a founder, like your personal time and effort to really implement that. So just talk to me about that. What made you feel the need for it? And how has the journey been so far?
00:44:40
Speaker
I'll answer the lack of words. The journey has been, I would say, good. I would say good to very good. I won't say it has been excellent because I, and also keep bearing in mind when we did this OKR, it's not all the rage. Just give a quick red line explanation of OKR for people who don't know what is this stuff.
00:44:56
Speaker
Yeah, so objectives and key results. What one does is, and we follow quarterly cadence, you can follow an annual cadence or a monthly cadence. Where at the start of the quarter, an individual would, and from an individual to a team, everybody would define what are their objectives and what are the key results by which you can measure whether the objective is being fulfilled or not. And then at the end of the quarter, we
00:45:19
Speaker
We do mid-quarter reviews and then we do end-of-the-quarter reviews where you quantify what your progress has been. So, two reasons why we did it. One was we did have some framework in place earlier where everybody would have tasks, then we would see how well they have done their tasks. But the problem was that there was no standardization and sometimes business as usual activities, what you call as BAUs.
00:45:41
Speaker
the measure by which somebody was being measured, which is fine for roles which are too operational, like my SDR, where the person has to do X number of emails, Y number of calls, right? But it takes away the aspirational aspect out of it, right? Now, even an SDR can have an OPR of saying, I will crack
00:46:01
Speaker
10 enterprise meetings, which would generate wide amount of revenue, whatever it is, right? Now what it does is instead of tracking activities, now you're tracking objectives, which directly contribute to the bottom line or top line of the business. So there is an immediate value alignment or goal alignment rather for an individual with the organization. That's one. Second is transparency. All are okay. We don't use any tool, but all of our, okay, other published in a single folder, I can go in and did whoever's okay. I want to do.
00:46:29
Speaker
Third is it kind of facilitates collaboration and I do a very poor job of it collaborating as an organization. I think we can do a lot more, but at the very least as a salesperson, I'll have a comprehensive and marketing is always fighting, right? Every organization for marketing is not doing that. They're not doing it. Become very simple. You know, go look at the road. Is it in the road? Yeah. What is the progress?
00:46:49
Speaker
And if it is there, then you are not informed. And if it is not there, we'll challenge them. So I think those are the reasons why we kind of introduced, okay, as a framework, you're right. As a founder, it is time consuming and you can't, it cannot be done bottoms up. So I started writing my OPRs first. We only introduced it for my staff team. So my, all my VPs will constitute the staff team next quarter. So first quarter, it was me and my staff team.
00:47:11
Speaker
Next quarter was staff team and the leadership team, which is the second layer of managers. Just tell me also how he translated to your VPs, like some examples of like, this is my OPR and this is for my VP marketing, his OPR and VP sales, his OPR and so on.
00:47:26
Speaker
Yeah, so my OKRs are generally wise. I initially started off by taking up organizational OKRs. I realized pretty soon that as the CEO, I am accountable for at the end of the day, everything. So it doesn't make sense to put in all the OKRs because those are essentially my VP OKRs. Like I can take a revenue route OKR, but then what will my VP take?
00:47:47
Speaker
Now, I only take those OKRs where I'm actually directly doing work. Like, for example, we don't have a VT partnerships. So, partnerships are something that I'd write. So, I will have an OKR saying establish two partnerships, which will result in XYZ. But what we have introduced is a hacker or Tokyo.
00:48:04
Speaker
So all my VPs, their OKRs would roll up into Hacker Earth OKR. It's an abridged version. And this is what the company is going off. Earlier, what I was doing was my OKR was actually Hacker Earth OKR, which kind of sounded narcissistic. Like, Sachit is not doing all of that. It's Hacker Earth what's doing it. So this has helped a lot because I start my quarterly online by saying, this is what we're going to do. And I end by saying, this is what we have done. Everybody knows what's happening. And there is very clear alignment.
00:48:30
Speaker
So my VP of sales will have an OPR like, obviously, revenue target, but then we dive deeper and say, I need to generate X amount of opportunity for next quarter. Another example could be, let's say you're trying to change our deal structure. We want to do more of enterprise than just making it up. So we will have a goal specifically for that. When we launch a new product, we will not have a revenue goal, but adoption goal, saying, I will open up X customers in this use.
00:48:54
Speaker
And we have even added things like training. So if somebody has to institute a training program, we will add that as an OPR in their sheet. Okay. So a couple of things I want to kind of zoom in based on what you've been speaking so far. Just go one by one. So you said you have about 30 interns. My personal experience of working with interns has been a little active. They're there for a very short duration. How do you make that a success? And it's been a hit and miss even in terms of
00:49:24
Speaker
finally coveted people. Like, you know, out of every five people, maybe two are committed to you or not. Like, that's what I have seen. Yeah. So we've been successful in interning in two departments, engineering and sales and marketing. Others, we haven't, but it's very transactional. So in sales, we do six months interns as much as possible. We don't do three months interns. And there's a process machinery that we set up.
00:49:48
Speaker
You come in. This is what you do. This is what you're expected to deliver. This is your ramp period. And I'm being honest, if you don't meet those goals, then internships don't last six months. So it is a very rigid process. And at the end of those six months, you get converted to fold. So the thing for people is that it's not a one-time thing.
00:50:03
Speaker
It is something that I'm working towards for eventually getting a role. And for us, it's a soft landing in engineering. And these would be MBAs or what kind of filters for sales? All over the place. We've seen people come from MBA, engineering, CA, BCA. Only thing we have not done is arts. We would have people from arts also, but very few, but all over the place.
00:50:26
Speaker
So for the sales team, instead of hiring experienced sales people, you hire returns and they paid six months with you getting experience and then they get absorbed. Therefore, that gives you a much more engaged sales force rather than having somebody who's a mercenary who's coming just because you're offering a 20% hike over his last salary. That becomes my pipeline.
00:50:48
Speaker
And they are an input for the lowest round. So you become a DGE, Demand Generation Specialist. From there, you'll become an SDR. From an SDR, you'll become an AE, and then you'll become a manager. And the beauty of this is when you give people that kind of career growth, they are extremely committed.
00:51:05
Speaker
My best performing folks are the ones who've grown at Hacker and they're thankful for that opportunity. It requires work and it is effort, but if you're able to crack it, it just works. How do you screen the interns? We have a fairly light streaming process, so we obviously use our own assessment product. You've got to go through that assessment. We even do it for non-technical, even though our product is.
00:51:27
Speaker
Your assessment? Yes. Okay. They do a tech assessment. No, they do a non-tech assessment. So we'll have grammar questions, reading and writing comprehension, those kinds of things. And then we do an interview and we give them an assignment. So while our assessments are what the whole assessment is a philosophy and it's less if the philosophy comes from the perspective that I very strongly believe interviews are a hit or a miss.
00:51:52
Speaker
I mean, I've had bad deals, right? Where I have interviewed someone and said, boss, he will not work out. And I've been proven wrong in a couple of times. And I've been proven right off. There's very little science to it. But when you have an assignment objective, and which is very, the chances of going wrong reduce. So in a sales assignment, we'll actually ask them to do a research, populate, let's say, a list of X number of companies, Y number of employees, sorry, contact names, and craft an email that you will send out.
00:52:18
Speaker
That shows you that we are sharp from the very quickly. This is for your sales intensive program. What about on the tech side? The tech side, what has worked for us is carving out. So the interns in tech come in for basically profile building. So for them, the motivation is if I can say I went to Hacker Earth and this is the project that I did, then their internship experience will add to their employability.
00:52:43
Speaker
So our goal, so what is their goal is credentialing. Now, how do we align to that, right? We always try to carve out a short enough project for the person that they can do it in two to three months. So unlike sales, this is not like you do six months and then you get converted. It is your third year, fourth year and third year.
00:53:00
Speaker
But we always at the end of that internship, they have a takeaway saying, I built this entire thing and whether they're able to integrate it or not, that's up. I mean, that's separate, but we make sure that the POC is working and that again creates very good alignment. We pick up projects that are part of a roadmap. So they're not doing something on the fringes and they have a measurable outcome at the end of their internship. So they don't slack because they want to go back saying, I completed the project.
00:53:27
Speaker
Which also actually helps you move on your roadmap faster because you have these relatively lower costs, resources, working on smaller projects and overall improving the product faster than if you were to build out all of this talent in-house by hiring them. And we tend to give them projects which sometimes it's okay if they're a little experimental in nature, right? Because you also need to take those bets. Now, that bet is more costly with a full-time employee.
00:53:51
Speaker
Because they will come with the baggage, they will say, it's not a bad thing, it's a bad thing. In turn, it's a good project. So either it's an experiment or it is something that we're very confident of, but it's outside the core. You'll find there's a learning curve, one of those things, it slows them down. So keep them on the fringe a little bit and it works. Okay. Amazing. Amazing.
00:54:12
Speaker
So it seems like you have one of your core values as Frugality. Like a lot of things that you've told me like this internship program is evidence of Frugality. You have a very lean sales team. I think you don't spend so much money on customer acquisition, which is again another evidence of Frugality.
00:54:28
Speaker
Tell me about what is the goal that you're building towards? Do you want to eventually do an IPO kind of a thing and therefore you want profitability or do you want to get a unicorn status? What is the goal that you're building towards?
00:54:45
Speaker
So I've never personally changed. Again, I'm not being, I would say, dismissive. I would just say a unicorn status really means very little other than the fact that your company valuation is a billion plus. And in almost all those cases, it's because of the funding that you receive, right? Like the handful of companies who can define that status just based on revenues.
00:55:07
Speaker
So not really changed a metric like this over the years. I think for us, we grew as a company very organically. We were also frugal because truth be told, we didn't raise a lot of capital land in nature.
Financial Strategies and Profitability
00:55:19
Speaker
It's partly the response to the ecosystem as well. And from day one for us, it was.
00:55:24
Speaker
Like you said, it's not in your nature to do sales and like raising capital is like doing sales only, so that's why you didn't really like chase funding. Well, to be honest, it's not like I haven't pitched. I have pitched to every VC in the Indian ecosystem given also that it's a small ecosystem.
00:55:41
Speaker
But I think one of the things we won when we came in is that it was not an industry, right? So we were not very successful in raising from traditional investors in India. That's why our Series A was led by a strategic in the US and Series B was from a Japanese investor. So you would know of Teru Sato. Teru Sato will be next, right? He is one of our investors and he brought on a bunch of Japanese investors. And I think by the time we were 2018 and we were generating money, revenue,
00:56:08
Speaker
Freedom of having control on what you're doing is addictive of sorts, right? So today I have a very friendly board, which is aligned to me and I'm aligned to my team. So we're all working as one single organization. It's not like my investors are pushing me to change a certain other goal and the company wants to do something else.
00:56:24
Speaker
And I think since 2018, since we've been net positive and growing, we're like, why do we need it? Also because we're trying to build a strong business. I don't know whether the market in which we exist, there can be an IPO. Maybe things change. Maybe we diversify a couple of years out and it becomes a much larger play.
00:56:44
Speaker
But I do know that there is a problem that we're solving. My goal is set on how do we go from 10 to 20 to 40 to 60 and or maybe 40 to 70 or 80. And from then at that point in time, we'll see what opportunity comes. I'm being very candid. I haven't put a goal of an IPO in 2026 or an acquisition in 2027. Ever building honest to God, good business, solving customer problem.
00:57:05
Speaker
sustainably growing. I'm very proud of the fact we have not had a single layoff in the last 10 years, not a single instance. That's because we've been very conscious about how we build, how we grow. So I think these are values. It's just a different way of building business. I don't come a lot, a lot of companies like this, but you know, I have peers who have walked through their journey and we enjoy doing it.
00:57:25
Speaker
When do you think you'll cross 50 million ARR mark? Last year, we grew about 100% and the market was obviously right now. This year, the macroeconomics are slightly different. But I think my hope is that things would change about six to nine months, about two to three quarters.
00:57:42
Speaker
post that, I feel friendly and even then we would have grown at least 30, 40, 50%. So if we are at 15 by then, I feel confident of growing 80 to 100% for the next two years, two to three years. So say 15 to 30 and 30 to 50. So that's about three years out, we could look at being at a 50 million kind of country. Amazing. And this would be like a high margin business, right? Because your input costs don't increase correspondingly, right? I mean,
00:58:11
Speaker
So even right now, operating margins are like 89%. But obviously, we blow back all our revenue generated into growth. But I was just talking to my VP engineering CTO rather a few weeks back. So we can achieve our 10X on our engineering cost. So if we are spending 2 million on its engineering, we can generate 20 million of revenue. That's the kind of scalability we have in the system from an engineering point of view. Amazing.
00:58:41
Speaker
And how do you make such a lean sales team work? You know, a lot of companies in the enterprise space, like you're an enterprise solution, right? So enterprise solutions typically companies have like fairly large sales teams and so on. How do you make it work? Like, do you have like a growth hack through which you're able to get adoption faster or like say, for example, Slack had that famous growth hack that people would use it individually and then they would advocate it to their organizations.
00:59:09
Speaker
But do you have something similar to say? Yeah, not really a growth hack per se, but what we've been able to do is be very conscious of the quota carrying labs. So conscious of making sure that they are working on the right opportunities. So one way to do that is to have an SDR team and it's something that we just kind of cracked. So SDR reduces. So SDR is a cheaper resource. It allows me to have a leaner sales team. Advantage of a leaner sales team is you better control. You have better visibility.
00:59:38
Speaker
But what is the difference between SDR and the KotaKaring resource? KotaKaring resource is called what? Account Executive? Account Executive or Account Manager. They are adding a revenue code. But in SDR, and what does the SDR do? It's a Qualifier Smash Demand Generation role. So the SDR will qualify a meeting and say, this is what your time go after this opportunity. When they also generate opportunity. The second thing is, A is the dollar operator.
01:00:08
Speaker
They make money, if they make money, they grow and they are very motivated. So, we've consciously taken an approach of saying, let's increase quota rather than adding more revenue. The benefit of that is, I would still be able to do more revenue, my costs will not increase linearly, and my reps will be more sticky because now they're making more revenue.
01:00:28
Speaker
Right, right. Their coefficients would go up, like what they take home. Exactly. Having said that, we are not like extremely successful as well. The problem of a lean team is one low performing resource and it puts added pressure on others. People leave, backfilling those positions become harder. So now we are trying to add a buffer of about 15-20%. So if I need 10 reps, I'll have probably 12.
01:00:51
Speaker
The other thing is my VPO sales are very hands-on. So both of them actually get on calls to close some high value deals. I get on calls to close high value deals. I do know, I mean, we'll always do this, but I think as we scale, we'll probably have to be more selective in what we're doing. But I believe in this model of have demand gen people get them to be SDRs, get them to be AIs, have a continuous pipeline and, you know, increase quota per rep and other increasing reps. Yes.
01:01:23
Speaker
Basically, build it internally instead of trying to buy talent, to build talent internally. And give more learning opportunity, growth opportunity to every person. Do you have product features? There's this concept of product-led growth which also companies use to drive more sales. Do you have any such product features which help you to drive sales?
01:01:42
Speaker
So our model has PLG works when you have an open sign up and come in sign up like a premium. And we do have a premium model, but that contributes to about less than 2% of our revenue. So most of my sales today is most of my businesses through sales team. And that's just how we've grown and how this industry is as well.
01:02:03
Speaker
because there is typically a month-long pilot which is associated with the wholesale process. We've got so many capabilities in the product. The PLG comes in from expansion. Once we have an account, then we do push them different capabilities and that leads to expansion. One of the ways in which we expand is we initially started off with an assessment slash screening product. Today, we have an interviewing product as well.
01:02:28
Speaker
So you can come in and conduct like real-time pay programming interviews with the interviewer and the interviewee. And that we are driving through product-led growth. So CSMs will give a free pilot, you know, we are even saying, okay, give six months unlimited usage, let them use it, and then we can go through it. Tell me about the suite of products you have today. So what is the screening assessment, which is checking your technical skills or a few not technical skills like English and math and so on?
01:02:55
Speaker
And then you have an interview product, which is like a video interview with a screen share with whatever they're quoting you can see here. Okay. Okay. What else? Correct. Correct. So this comes as a bundle. Then obviously Hackathon is for sourcing with the top of the funnel. We are now introduced assessments from an upskilling perspective. So a lot of companies introduce these upskilling courses or program, right? But the problem where they fall in slack is they rarely have a baseline of skills for their employees.
01:03:24
Speaker
And even if they know this person is a beginner, when they take up a course, it's rarely a reflection of their progress. Just course completion means nothing. So you don't have to know how the person is performing. And by the time they apply it on the job and you see it, it's a very long cycle to close.
01:03:40
Speaker
So, we are now helping companies in pre- and post-assessments for their employees as they go through an up-skilling journey. Obviously, it has greater applicability in early to mid-career. So, a large, I would say, big-port consulting firm has a goal of one of our customers, a goal of 5,000 fresh grads. But they are willing to hire people who are raw, and they want to put them through training. So that's where assessments from an up-skill come in. And
01:04:06
Speaker
Very recently, we've introduced a new solution. So now we are at a stage where we are slowly branching out into adjacencies and expanding the pool of offerings where we are providing interview and service. So you use our assessments, which is completely automated, but you still want to do interviews. A lot of growing companies don't have enough bandwidth to do interviews. So we leverage our own community, identify SMEs or subject matter experts and get them to interview for you in a standardized and scalable way.
01:04:33
Speaker
Okay, this would be a technical interview. Like how would an external party do like a soft skills or a culture fit those? We don't do soft skills. It's all technical interview. The beauty of tech roles is if you have five interviews like Google in my time, only one was an HR round and that was a formality.
01:04:51
Speaker
because you have to do that your soft skills can be discovered in the tech interview itself. You need certain soft skills, like if you're stuck when you speak up, how do you collaborate, right? So you can figure these things out. So in this outsourced interview model, you are also sending back some scores on soft skills in addition to the scores on tech skills.
01:05:12
Speaker
Like problem solving skills from a point of view, are they able to break down a large problem into small problems? Do they have clarifying questions when stuck with something? Do they communicate in the sense people tend to have solution in their mind and they start working on things like that. But in software engineering, extremely important to talk about the architecture, talk about why, how you want to do it. Because, you know, if you're wrong, somebody else can kind of, or if you're doing it in an efficient manner, somebody can find out. So those can be tracked in an interview. Okay. And you have a playbook for the interviews that this is how you do it.
01:05:43
Speaker
So typically it would be problem-solving skills, then low-level design and high-level design has to be covered in an hour. And we even tell the other kind of questions that you should be asking, but obviously we let interviewers come with their own creativity. Okay. And what budget do you get of this, this interview? This is a low-margin business because obviously you want service. Yeah.
01:06:05
Speaker
So I think we're still really very early days for us. So we're still kind of figuring it. I think we can, our margin, I wouldn't say our gross margins can be about 30 to 40% in the whole thing. And we'll have, you know, what's the state's cost to really see, I mean, that's the operating margin. If we include certain margin, while the time it could be low.
01:06:24
Speaker
But we are looking at it as a way for us to drive more strictness in the business and also give a whole suite of solutions. At scale, it could be a high market. I want to zoom out more and understand the landscape.
01:06:39
Speaker
For a customer, who and other people competing for a smaller, I'll give you some names that I think would be that said, tell me what to think of them. Like there are these assessment platforms, like say your metal, Ipocca, these are two names I know of. Then you have job boards, LinkedIn, Dockery, et cetera, and so on. And then maybe GitHub also I believe has like a job posting functionality in it. So just tell me like what you see as your competitors. Yeah.
01:07:04
Speaker
We rarely compete with a pure sourcing platform like LinkedIn or Naughty or whoever else, because it's a very large landscape and we are only taking away a piece of their wallet. I won't say never, but I don't think we'll replace an Okri, not just take it as other thing as well.
01:07:24
Speaker
And GitHub is not really a competitor. GitHub has jobs. But then again, like I said, we don't worry about sourcing platforms. Our biggest creditor in the space is actually the hacker rank because they are similar to what we do. They also are larger because they moved to the US earlier. They have a bigger UX presence. But they also started in India early. They started, but they very quickly moved. So I think they were good enough and they got into Y company.
01:07:54
Speaker
And we also pay for that, but then Vice doesn't take competing companies, you know, in short position. So, and you know, the margin of three, six months, whatever. So, they moved to the U.S. far early, and there are a lot of businesses in the U.S. But we, in this space, there are like three, four players, or there's another called community, and then there's hacker rank. And like I said, you know, product is very strong. So, that's in the talk. When then, and market is big enough for a couple of different kind of co-exists.
01:08:23
Speaker
So my last question to you, what is your advice for aspiring founders who have not yet taken the plans but want to? So not just one thing, but you know, multiple things. One is understand that it is, so what has happened is the recent growth in funding and all the news it's made, which is good actually, which has made entrepreneurship very lucrative. But at the end of the day, entrepreneurship is very, very hard and there is no overnight success. Even though we read those stories and even if there is an overnight success, that's an anomaly.
01:08:52
Speaker
The rule is this log, he would work hard.
Advice for Aspiring Entrepreneurs
01:08:55
Speaker
And one needs to understand that while there's a lot of glamour, there's a lot of pride in being the CEO and a founder, there's a lot of grind. So you've got to really understand that people with Christians in hard work character are the ones who would succeed. So keep that in mind. The second thing is very important to understand. There are two ways to build a business. One is venture led. The other is lifestyle business.
01:09:16
Speaker
So know what you are going in for. Don't start a lifestyle business and then aspire for venture earning or build a venture based on the capital and then struggle because you have this pressure. So that you should not get into that odd place.
01:09:32
Speaker
And the difference between these two would be the market size you are chasing. I think there are lifestyle businesses and large market sales, for the point being turbo. But, you know, those growth there happens over a period of time, right? And retail is hard, right? Particularly competing against venture-funded companies.
01:09:50
Speaker
So I think now we've reached a point where you cannot afford to grow in five years, right? If it's a big market, because somebody will raise that land and just go after it. So maybe a point is that the market is big enough for you to succeed when you got today's money. So know that, right? And if you want to build a venture one company, which is you, if that is what you want to do, go after a big market. Do not go after a small market and expect VC money.
01:10:14
Speaker
culture of the company that you build is extremely important.
Company Culture and Market Impact
01:10:17
Speaker
And it's kind of funny that a good culture does not mean a successful company. Like I've seen companies with bad culture also succeeding and big culture that's not succeeding. So there are almost like two tracks. So don't forget that as a founder and CEO.
Listener Engagement and Feedback
01:10:32
Speaker
And that brings us to the end of this conversation.
01:10:34
Speaker
I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad at t h e p o d i u m dot in.