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The offline call to action platform | Sharat Potharaju @ Beaconstac
240 Plays1 year ago
Uniqode (formerly Beaconstac) is revolutionizing e-commerce engagement with its unique, smart QR code platform. Sharat talks about their long journey of making pivots, finding product-market fit and building a truly global SaaS business out of India. This episode is a must-listen for learning how to scale up a SaaS business globally without burning a ton of cash.
Read the text version of the episode here.
Read more about Beaconstac:-
1.Facilitating Connections Through QR Codes
2.QR codes and the future of marketing
3.How Beaconstac’s founders failed for a decade before they clicked
4.Beaconstac leads the way to a contactless world
5.The Future Of ECommerce Engagement In An Increasingly Phygital World
Recommended
Transcript
Beacon Stack's Decade-Long Journey
00:00:00
Speaker
Hi, my name is Shalit Potaraju. I'm the co-founder and CEO of Beek and Stack.
00:00:17
Speaker
I have always believed that overnight success takes a decade to achieve. Take the case of Beacon Stack, which burst into everyone's radar in 2023 after raising a massive $24 million in the middle of a funding winter and hitting a $10 million annualised revenue run rate.
Found a Thesis Podcast Highlights
00:00:34
Speaker
But the fact is that Sharath and his co-founder Ravi had started up way back in 2009 and they struggled for a decade to raise funds and find the big idea. It was a very special episode of the Found a thesis podcast. Your host Akshay Dad tops to Sharath Potharaju, the founder of Beacon Stack about their long journey of making pivots, finding product market fit and building a truly global SaaS business out of India.
00:00:58
Speaker
This episode is a must listen for all you SaaS fans as Sharad shares in learnings on how to scale up a SaaS business globally without burning a ton of cash. Stay tuned and subscribe to the family thesis podcast and any audio streaming platform to learn how to scale up your startup from the best in the business.
Building a Business Foundation
00:01:24
Speaker
Entrepreneurship was always at the back of my mind, but I also learned very quickly that if you want to build some really strong foundation in business, etc., the best way to do that is to go to consulting or in banking.
00:01:42
Speaker
Meryl Goldman, Morgan Lehman, Lehman was there at that time. Or you join Bain, DCG, McKinsey in consulting. These are the things that really stood out. It gave you a brand, it gave you the network, it gave you more importantly, quantitative thinking capabilities which really were much needed.
00:02:00
Speaker
And what really happened for me was, so I went from IIT, went to Duke where I did my master's and I focused a lot on getting into banking and consulting and I had a few offers and I took Merrill Lynch, which was a Merrill Lynch investment banking role, which obviously gave me a tremendous amount of learning. I loved every part of working on Wall Street. But I think the intent there was always do that for a couple of years and then move back to India to start up
00:02:31
Speaker
I think what really happened for me there was I came. It also coincided with after I worked for four years, it coincided with the beginning of the financial crisis. So it was a much easier decision in many ways because I realized that either I go back and pursue my dream.
00:02:53
Speaker
all wait here and hope that I don't get laid off, which was happening in Mars in New York. And I think that's really kind of game.
00:03:04
Speaker
gave me the impetus and conviction and that along with obviously the fact that Ravi was my co-founder. Ravi also was in the US. He was also looking to move back and that's where we collaborated and said you know you both have always jumped up this why not we do it together and that's how you know our company came along.
Origins of Mobstack
00:03:24
Speaker
What did you start like you and Ravi at that time when you came back to India?
00:03:29
Speaker
So we started a company called Mobstack. It was basically, I mean, it was a journey of 10 years where, you know, we built some multiple products on none of the really great products, which had spectacular failures. But I think our original intent was,
00:03:48
Speaker
was, you know, iPhone had just come out. The mobile revolution was just unfolding itself in 2009, 2010. We were going around and I think I should take a step back. I should basically also share the site that Ravi and I have been pretty foolishly romantic about building a global product company out of India. We always dreamt of building a global product company out of India. We felt like the
00:04:14
Speaker
The whole idea of services in India was big but the next wave is going to be product and we wanted to do that sitting in India. So we both basically decided to come back to India. When we came back to India, our larger thesis at that time was
00:04:33
Speaker
which is true, which is that mobile is very critical. iPhone had just released in 2007, so two or three years ago, it was unleashing a new economy which people were not familiar with. And most importantly, it became the primary internet device in a country like India, where there was not really that much internet penetration.
Challenges in Monetization
00:04:54
Speaker
So fundamental assumption was there's going to be a paradigm shift in the way content is being consumed. Web is not going to be the way the first time a person discovers reading content on news or anything else. They will start reading for the first time on mobile, and mobile becomes a primary inter-device. Now, in 2023, it seems extremely obvious, but in 2009, 2010, it seemed like people were like, what are you talking about? I mean, we're still trying to figure out how to build a website.
00:05:22
Speaker
We're not really worried about our mobile strategy. So I think what we did is our first product was our mobile content management system that essentially enabled
00:05:33
Speaker
publishers, et cetera, or content donors to basically plug it into their CMS and have the ability to create mobile sites and mobile apps in a very, very seamless manner. So if you go back a decade back and the first advantage of mobile sites for any top Indian publishing sites in the rural business line, they can have some of the Times properties, et cetera, were all powered by Mobstack. And in some ways, I'm like,
00:06:01
Speaker
I tried myself that we kind of helped unleash some of the mobile revolution in India in a very small way. But as you would expect with many entrepreneurial journeys, that was exciting to a lot of fraction, but not necessarily translating into money for several reasons. Publishing itself was bleeding, which I'm sure you relate to. There's not really that much money.
00:06:25
Speaker
They were all still trying to figure out their strategy. And the fact that, you know, the whole, our old and entire genesis was that there's a lot of fragmentation, a lot of devices essentially had to be catered to. All that kind of, that fragmentation really died. Nokia died, Blackberry died. So there is just iOS and Android. So you don't really need any sophisticated solutions.
00:06:47
Speaker
So I think a couple of market movements which really prevented us from scaling the way we thought we will.
Technical Insights into Mobstack
00:06:53
Speaker
And yeah, so that did really go well. I want to kind of do a little bit of a deep dive on this part of the journey. So what you built was something like a rendering engine, which would render the content in a way that's mobile friendly. That's correct.
00:07:15
Speaker
OK. How does it work? I'm not a techie, so you'll have to dumb it down for me. Sure. So it was basically what you call a dynamic content adaptation platform. We actually got patents on that too. But the way it essentially does is it plugs into the content management system. And when you plug into the content in my CMS,
00:07:40
Speaker
It pulls content from the CMS, and on the flight, it puts a page together depending on the screen resolution. So if the page request is coming from an iPhone, it puts the page together in that way. If you're putting a page together from a Blackberry to optimize it for a Blackberry, et cetera, et cetera.
00:08:03
Speaker
And so, it would get activated only when it detected that it's mobile traffic. Correct. It was always activated. No, it is only when it comes in. So, when it is from that, it would redirect to the M dot whatever the Hindu dot com. Okay, okay, okay, okay. So, and it... The mobile side, right. Correct, correct, correct. And then it redirects it to that.
00:08:27
Speaker
Okay, got it. So the m.tanksofindia.cos was essentially that we can start with mopstack. Correct. If you scroll down at the bottom, you would always see that powered by mopstack. It would say that. But that's back in the day. And how were you pricing it?
00:08:46
Speaker
It was all thrice basically, I mean, some of those challenges site, we didn't really know how to price it. So we basically said it will be a certain number of page use and we tried multiple things. It just like some flat monthly pricing like we tried multiple different things. But
00:09:05
Speaker
We didn't really have a good, I would say, in retrospect, a very value-based pricing. It was more like, okay, it costs us X to serve, so maybe Y is what, or X plus five is what we should essentially charge, and that's kind of how we started pricing it.
00:09:24
Speaker
And did you need funds to build this? I mean, you were not a programmer, right? Was Ravi a programmer? Yes, he was. He's a brilliant product mind and he's basically the architect of the product. Yes, we did raise some angel funding. We put our own money into the company. We raised some angel funding. But 10 years back, the money was not as easily available as it is now.
00:09:53
Speaker
I think we raised them 30 lakhs and you know, we ran the company for about two years, then it is about four, five crores from Axel and Mumbai Angels, etc, and Bloom, etc. And then continue pursuing that idea.
Sustaining Operations
00:10:07
Speaker
And did that.
00:10:09
Speaker
did that for about, yeah, almost a decade, where we ran through multiple ideas, multiple products, didn't really see them scale, but we were very frugal, which is what really helped us, which is we kept our head down, kept trying ideas, started generating some basic amount of cash. And some total, we had raised a little over 2 million, sorry, $3 million. And with that $3 million, we ran the company for about a decade.
00:10:40
Speaker
Wow. When did your product go live? 2009 you started, right? Correct. I think it's just two avatars, like 2009 to 2019 has been basically we ran Mobstack and then kind of we've kind of chanced upon what we call beacon stack right now, which is really scaled. But yes, 2009 to 2019 was Mobstack and
00:11:06
Speaker
We go to market, et cetera happened in nine, it took you a year or two before you started. I would say it took about 18 months, sorry, about 12 months to basically, you know, get the product in place, et cetera. Then we thought we'll start.
00:11:28
Speaker
hitting the large publishers. We started hitting the publishers. And you were reading sales. Correct. It's all through friends and family. You basically
Scaling Challenges
00:11:39
Speaker
reach out to home. You can try to reach out to a very unstructured way to start getting original sales, etc. Obviously, one of the things, learnings you also have right at the beginning is that it is
00:11:55
Speaker
When you ask people, do you like this product? Everybody in the original feedback will say, yeah, yeah, that's awesome. But if you don't ask very specific questions about, will you pay for it? How much will you actually pay for it? Which are things we never asked. You realize the hard way that, you know,
00:12:14
Speaker
people might like it, but they might not necessarily pay for it or might not necessarily pay as much as you think it is. So those are all lessons that we learned very early on. And we realized that, you know,
00:12:26
Speaker
Publishers were a bleeding lot. They were struggling. They were very highly disrupted by VEP itself. They were still figuring that out. So now thinking about mobile, et cetera, is a lot harder. And so the target industry that we were chasing was itself a pretty bad industry to begin with. And that's kind of a larger realization more than anything else.
Industry Realizations
00:12:50
Speaker
OK. So this product of powering the mobile sites, this was your primary product for the entire decade of 9 to 19? Or what other experiments did you run then? I think we did that for about six years or so, or six, seven years. And what was the peak revenue you were getting from that product?
00:13:19
Speaker
I think he basically, I think we had a peak revenue of maybe a few crores, single digit rows. Yeah, that's it. Maybe four or five crores, I would say, not really more than that. And that's kind of where we kind of plateaued. We didn't really kind of grow beyond that.
00:13:44
Speaker
And we also realized it was very hard. It's also really important to understand that when you start building a SaaS product or a software service product, there has to be a certain amount of productization in that, in the sense that if it was basically being what we realize apart from the industry that we're catering to,
00:14:11
Speaker
The challenge we also had is everybody needed some element of customization for it, which is not a box product that can be really sold out of the box. And if that was the case, then...
00:14:21
Speaker
you start drawing a line where this becomes literally like a services. And when the service is there, the cost of delivering that will get even more expensive and then it just doesn't justify the amount of money that you are essentially getting paid. So those are all what I call learnings as you kind of mature as an entrepreneur.
00:14:43
Speaker
And so we kind of moved out of population a lot.
From Mobile to Beacon Stack
00:14:48
Speaker
Then the question that we asked ourselves is basically the question we asked ourselves at that time was,
00:14:58
Speaker
Look, this mobile content consumption is happening. I mean, people are trying to do it in their own way. Clearly, it looks like that trend is working fine, but it's not really something that we can generate a lot of revenue. So what is the next larger
00:15:19
Speaker
trend that we are seeing that we can capitalize on. Both Ravi and I are very passionate about mobile and the fact that mobile can be very disruptive. So what we essentially realized is that if you just take the progress of how web worked and how mobile will evolve, people are consuming content and they were essentially consuming commerce. And the next natural part we believed was how does mobile engage with the physical world around you.
00:15:48
Speaker
That's really how it started. So we said, OK, the mobile device has to play when it essentially becomes the center of your physical world. It's not just a primary internet device, but it becomes the center of the physical world. If that is the case, then how do you basically help brands and businesses engage with the physical world around you with the consumer?
00:16:08
Speaker
That's kind of the problem statement we kind of defined. Started that down that path, and that's where we started with Bluetooth beacons,
Engagement and Data Collection
00:16:18
Speaker
et cetera. Tried a bunch of different products. Again, tried using Wi-Fi as another technology. Because what we essentially said is, on the mobile device, there are multiple technologies available, Bluetooth, Wi-Fi, geofencing, et cetera, et cetera. And that enabled you to be able to connect to the physical world.
00:16:38
Speaker
which of these technologies would make sense. So we went down one technology after the other. And long story short, that's kind of how we eventually down the line, we basically came down with a product like Beacon Stack, which kind of started showing traction and we can do the product from there. What was the use case you were solving it for? So I mean, you have this broad
00:17:06
Speaker
take that mobile will be used more in the physical world as well. But was there a specific use case? What was the problem you were solving through the Bluetooth and the Wi-Fi thingies which you were experimenting with? I think two, three things. One is to realize that brands love the
00:17:26
Speaker
Brands love the idea of connecting the physical world and digital world. There's a handoff that has to happen. That handoff doesn't really happen right now. So this whole concept of omni-channel, which everybody has beaten to death over the last 20 years, the truth is it is not as opti-channel as they expected. There is a lot of challenges around it.
00:17:46
Speaker
That's why the second thing is I think in terms of marketing spends also in the offline world or in the physical world, when you spend money, you don't have clear ROI just like you have in the digital world, right? Because in the digital world, what happens is that you spend $100, everybody knows you're driven this much traffic. In the physical world, you don't know. So is there a better way in which you can drive better attribution when the spends in the physical world? That's the second reason.
00:18:15
Speaker
And I think third, broadly speaking, I think there's a whole player on data, which I think is and was very exciting even five years ago. The whole data is going to make a big difference. How do I help you collect data? There's so much data collection that happens in the digital world, in the physical world, really, there is very limited understanding, et cetera. So can we enable using some of these technologies help brands and businesses?
00:18:41
Speaker
And by that extension, consumers learn more about their preferences, et cetera. So I think we are kind of marrying all these things in a way and trying to figure out the right product market fit that can help us scale. And what's an example of this, like collecting data, the handoff from digital to physical? An example of how it would actually help a brand?
00:19:04
Speaker
So I think, so I can give an example of how Beacon Stack works right now, right? Beacon Stack is, helps with, like right now we essentially use QR codes, but the truth is you can use any kind of technology to be able to trigger that. So, for example, if you have a Nestle water bottle, and adding
00:19:27
Speaker
or a Starbucks coffee or whatever and there's a QR code on that and you take your mobile device and scan the QR code and it'll essentially open up depending on what they want to do. Either they'll say there's an offer here or they'll say something about how amazing this coffee is or this water bottle is or may this water or this factor, this plastic or recycle, it could be multiple things.
00:19:52
Speaker
Now, what really happens there is you won't know that this is a structure. You won't know that this is a product that this device belongs to a structure. But I know that this is a device that really has interacted with the Starbucks QR code or with our Nestle water bottle QR code.
00:20:11
Speaker
When you open that page, you can essentially access, you can drop cookies, you can drop and essentially retarget those same cookies using the same cookies online. Technically, if you want, you can see a Starbucks ad or a Nestle ad on Facebook or Google, et cetera. That is basically how you build what I call digital cohorts based on interactions in the physical world.
00:20:38
Speaker
So that's how you can pass the interaction and the transfer of what you're doing in the real world is being transferred to a digital identity online. OK, fascinating. I'm assuming the conversion rate would be pretty low, right? Like if there is 100 Starbucks cups which have QR code printed on it, maybe 5 or 10 people would actually go ahead and scan.
00:21:07
Speaker
Yeah, I mean, yes, but broadly speaking, that's one of the use cases that I basically explained. But I think it all depends on essentially what the use case is. That's one. Two also, I think with any
00:21:30
Speaker
advertising medium, that is usually the case. If you have a pretty large holding on the busiest road, there are only a few people who are trying but are going to see it. It's not like everybody's going to see it. So I think there is fractional value attached to any ad impression, etc. But it also depends on what the contextuality is and what you're really trying to do there.
QR Code Innovations
00:21:54
Speaker
Okay, so when use cases, you create an engagement layer on a physical experience and that gives you data which allows you to retarget that customer with more customized advertisement. What are the other use cases?
00:22:10
Speaker
So I think if you look at what we do at Beacon Stack, I think they can come into three dot strokes. One is driving engagement, like I just explained. The second is around simply data collection in different ways. I mean, whatever your primary purpose is, you can drive data in different ways.
00:22:32
Speaker
The third bucket which is growing for us and which is where the total addressful market is very huge is that in many ways QR codes are replacing the physicality of paper. Wherever there is physical paper available, menu cards are replaced by QR codes. Business cards are being replaced by QR code enabled digital business cards.
00:22:56
Speaker
documentation and marketing collateral is being replaced by QR codes and vaccine certificates are being replaced by QR codes. So wherever you can, the physicality of paper being replaced by a QR code and that
00:23:12
Speaker
That is not only highly beneficial to brands and businesses because it makes it very seamless. It actually saves a tremendous amount of cost in printing material, paper, etc. And third and most importantly,
00:23:28
Speaker
it making the world a little more environmentally sustainable because you're saving our trees. I think those are the broad strokes. I think the power of what we're really trying to do is that QR codes are very pervasive in the sense that every day people are discovering new use cases. Even now, every day we listen to calls, customer demos, and I'm fascinated by the use cases that people are coming up with.
00:23:54
Speaker
And those are all things that they are discovering themselves. And it's a little bit like email marketing. Fundamentally, it started as a communication tool, peer-to-peer. Then you have very robust platforms like MailChimp and Zengrid essentially come along and democratize email marketing and convert that into a very powerful communication or engagement platform for businesses.
00:24:21
Speaker
That's exactly what we're doing. QR code was just a point thing which enabled and captured information that could be shared. From there, now a platform like ours helps transit businesses convert that into something very substantial and meaningful. We're doing that at scale and focused on large businesses. Okay. Give me an example of the second use case, data collection.
00:24:46
Speaker
Data collection is two ways. One is personal items, fiber information. And the other is just cookie data, first party data as it's called, which is first party data is like what I already mentioned, you know, I drop a cookie every time you open essentially a page, not re-talented, etc. That's first party data.
00:25:04
Speaker
PIA is more like identifiable information. You basically scan a QR code on a box of cookies that you bought from some bespoke store that you really liked and that person says, did you enjoy the cookies? Can this QR code join our newsletter? Do this and I'll talk another cookie, etc. You share the email address, you share your phone number. Or you put a QR code in the US, a lot of open houses, real estate, they put a QR code outside.
00:25:32
Speaker
And say, if you're interested in seeing this house, scan this code, fill this form, I'll reach contact you and do lead generation. So things like that, which basically, which could happen physically in the past would now happen digitally. Got it. Okay, interesting. And what about, so replacement of people, I understand like replacing a menu card.
00:25:57
Speaker
What does the beaconstack platform do? Would it host the ordering system also or would it just create a QR code which directs people to a link?
00:26:11
Speaker
And that's it. So I think a couple of different things. We're not focused only on restaurants. That's not a use case. We're a horizontal stack. So that means we have businesses of various sizes and shapes using this. We have industries across. We have SMB. We have real estate. We have financial services. We have CPG. We have pharma hospitals.
00:26:34
Speaker
And as you can see, because it's a QR code marketing and engagement platform, this is what we call a digital customer engagement platform, physical to digital, right? And digital customer engagement platform sky is the limit in terms of use cases and basically every industry vertical has some use case here.
00:26:51
Speaker
Right? So what we have essentially built is a robust platform which does three things. One is basically it helps you create and generate your codes and manage them at scale. If you have one QR code, that's one thing, but if you have a thousand QR codes, you have to be able to manage all these. The second thing is, this is not just what is, we also help you manage the end destination.
00:27:17
Speaker
You want to create a microsite, you want to create a form, you want to basically create a social media. Whatever the end result might be, all that can be, we have a robust content management system, so you can essentially create that inside the CMS itself. It's a very specific editor, so you don't need to be a developer to do it. You can, a marketer can essentially do it. An ops guide can really do it without the need of actually a developer to do it.
00:27:43
Speaker
So that's the second part. And the third part, I think, is just a lot of analytics on where the engagement is and what is really working, right? You put your codes in three different places on a packaging, in a physical location, and in somewhere else. You would be able to capture information and see where are scans happening, what time of the day are they happening, is there any merit to, you know,
00:28:11
Speaker
You will get a better sense for where is the actual engagement happening versus right now the whole physical is one and that is completely one channel. You don't have that clarity and nuanced understanding of what is working well.
00:28:28
Speaker
So like the data about where it's happening, et cetera, that comes from like device analytics when someone... Yeah, where the engagement happens, where the scan happens or the time happens. Yes, that's kind of where we...
00:28:44
Speaker
We basically decide that and we capture a lot of analytics in the background. Because these are all dynamic QR codes, even Austin's QR code has been created and pasted on a bottle or on a package. Even after that, depending on time of the day, the QR code can keep pointing to different destinations. That's what makes it very powerful.
00:29:08
Speaker
Okay, okay, okay. So it's like a programmable QR code. It doesn't need to have a static link. There can be a rule based engine, which tells you where to start. Absolutely. We do have a rule based engine right now.
00:29:25
Speaker
Amazing, amazing. At a simplistic level, I guess it could have started like say you have this URL shortening services which take a long URL shortening so that you can print it easily and distribute it and people can visit it easily. That would have been, I'm guessing, the first version of the product. Absolutely. In fact, it's interesting that we say that because our largest competitor is a company that got acquired by Bitly.
00:29:55
Speaker
Yes, okay. And that's exactly the same. And the way I explain that is, if you look at a URL or a bit.ly or a short URL, the short URL is basically the call to action in the digital world. And QR codes are essentially becoming the call to action in the physical world. And it's a good managed set. And so what we have a beacon stack of the goal is basically to become the call to action in the physical world, our ideas to drive engagement from all the physical products and places. Hmm.
00:30:25
Speaker
I'm wondering, when you did the mobile rendering engine for publishers, you eventually discovered that this was not enough value adding for you to monetize it. Well, I guess today, the native CMS platforms have that facility inbuilt. You don't need a separate facility.
00:30:51
Speaker
Could something similar happen here? For example, Google Forms allows you to create a QR code to share the form instead of a bar. All products, let's say Mailchimp allows you to create a QR code with your landing page and so on. All these marketing stack products can build it as a native feature and thereby remove the need for a beacon stack to exist. I think so.
00:31:18
Speaker
I mean, you can never say that you will be the most unique person in the market and there's nothing else. I've always learned the hard way that no competition usually meets no market. So it's good to have. That's a nice one. It's usually very healthy to have competition.
00:31:34
Speaker
And I think there is a need for competing products to exist. But we have a very unique proposition. And I think what we're also seeing right now is that the QR codes are very pervasive in the way that they're essentially being used. And our largest strategy right now is to basically see how we can use some of these use cases and productize them further and add a lot more value, which makes it a little irreplaceable.
00:32:01
Speaker
And what we are seeing right now is that there are specific, the industries that basically are using it are across the spectrum, right? That's one. And the two, the thing is even inside one specific industry, sorry, inside one specific company, the use cases are humongous across marketing, across operations, across sales, across tech, events, whatever.
00:32:29
Speaker
So instead of having each individual team or essentially run their own nuclear code marketing services, most large companies are moving in the direction of we want one company to essentially streamline this and manage this at scale. And that's really how we think we will continue to kind of drive and dominate this market because we'll essentially make kind of sort of
Consumer Adoption Challenges
00:32:53
Speaker
managing and becoming a central repository as a command center for all things QR, whether it's ops, whether it's admin, whether it's marketing, whether it's sales or something else. So why didn't the Bluetooth Wi-Fi experiments work? What made you realize QR is the way to do this?
00:33:19
Speaker
There's a lot of friction from a consumer adoption standpoint. I think the only one reason it fails is consumers don't like it.
00:33:28
Speaker
You can't push and shove and make them bad. The beauty of selling software unlike consumer products is that in consumer products, you can basically buy product market fit. You can just keep getting a lot of discounts and say, here is a new popcorn I've discovered, which is very tasty. Or you don't like it. Okay. I'll give it to you free of cost. I'll give it 10 rupees.
00:33:53
Speaker
I could offer my software free, of course, nobody's going to take it, right? Who's going to take it? The beauty of software is that you can't lie much or you can't fool yourself that too long. Eventually the reality will catch up with you.
00:34:10
Speaker
So the point I'm essentially making for is that there are multiple use cases on me kind of future. Keep yourself honest to those use cases. You will be able to kind of build a pretty sustainable business and that's really what we're doing. Okay, okay. Like how did the Wi-Fi and the Bluetooth thing work? Like there would be some... Yeah, so what happened in Bluetooth and Wi-Fi use case was that
00:34:33
Speaker
The friction to the consumer adoption was very hard. Like Bluetooth, you have to turn on the Bluetooth headset. Sorry, you have to turn on the Bluetooth on your phone. There's this general consensus that it will drain your battery, which maybe 10 years ago, the device, it really mattered. Now they don't. But there's that overarching feeling that that's what will happen. And for Bluetooth and Wi-Fi, they're called what are called
00:35:02
Speaker
pull technologies, which means you need to actually have an app on your device to be able to engage these technologies.
00:35:10
Speaker
As a brand, if a Starbucks has to engage, you will need to have a Starbucks app or an app that Starbucks has partnered with which enables you to basically do what needs to be done. Otherwise, it will not work. Whereas NFC and QR are what are called push, which means you expect the consumer to take action based on if they have interest. There's no sense of spamming.
00:35:35
Speaker
If Akshay wants to be able to tap or scan the QR code, tap an NFC tag to learn more about that specific product or location, he will do it. That's really how it was very obvious after a few years of experimentation that people don't really like that friction of having an app and driving it, etc. Whereas if you let the consumer decide if they want to tap and learn more, then that's so be it.
00:36:03
Speaker
And that's kind of what even the mobile device companies learned, right? That based on all these experiences, if you just enable people to just randomly send notifications just because they walked by a store, it's spam.
00:36:16
Speaker
brands won't like it, consumers won't like it. And that's how the operating systems, Apple and Android decided, okay, let's double your codes because they are the technologies which seems very seamless, frictionless, no cost because there's no new additional hardware, there's no spam.
00:36:36
Speaker
And you get enough data on everything and more that you essentially asked for. And that's the reason why what QR and WiSAR could not do, sorry, WiSAR Bluetooth could not do, QR was able to do.
00:36:49
Speaker
Yeah, okay. What was your go-to-market for this? Who were your first customers and tell me that journey? Oh, QR codes, Bekinstack?
Growth through SEO and Inbound Marketing
00:36:58
Speaker
Yeah, yeah, for Bekinstack, yeah. So, we've been a very involved and SEO-led company. That means we are very focused on looking at search results and looking at who is searching for what, etc. The reason for that is very simple. The cost to customer acquisition is very early on involved.
00:37:16
Speaker
So the first, we started this in 2019 and for the last four years, we've kind of built this.
00:37:23
Speaker
We, till we raised only, we raised EDS funding this, the beginning of this year. But despite that, in the last four years, we've basically been cashflow positive. And we've been able to do that because customer acquisition costs are very low. And the reason customer acquisition costs are very low is because we focused on inbound and product growth has very strong emotions.
00:37:49
Speaker
How do you make product line growth work and just tell me what were your learnings from this which would help other founders to replicate what you did here?
00:37:59
Speaker
I think product-led growth is basically, again, it might not necessarily work for every software start that you're really selling, but I do think there is some version of what you're selling that might be, if not the whole thing, actually the version of it that might be worthwhile. I think the intent of product-led growth, if you look at it, the philosophy fundamentally believes that in the past, in last 30 years of software existing, software has been sold top-down.
00:38:25
Speaker
You send to the CEO, you send to the CTO, you send to the chief product officer that he or she will basically decide and this just makes sense. I think when open source developers started kind of building and choosing and making a decision on what software has to be used,
00:38:42
Speaker
it kind of moved the power back to the bottom of the pyramid, right? So, product growth is basically the philosophy that you can put a sliver of the product, if not the whole robust product, which is a small part of the product in the hands of people who are maybe in entry-level roles, maybe in marketing, maybe in operations, maybe in engineering.
00:39:06
Speaker
where you tell them to get started with that product and once you get started with that product you can essentially continue to utilize the product in a small way and so that it takes a small amount of money so that eventually when it gets to it bubbles up all the way up.
00:39:26
Speaker
and then it becomes a much larger contract. So it's the reverse of how sales and software sales have been done in them. That's the philosophy of product-led growth. And I think there is strong merit in doing it. Obviously, there are cases in which it's not applicable depending on what you're selling. But I think in most cases, either as a go-to market to kind of drive visibility, or eventually to drive sales itself, product-led growth can work quite efficiently depending on what you're selling.
00:39:56
Speaker
Okay. So how did you implement it? Like you would give certain number of QR codes for free.
Product-Led Growth Strategy
00:40:02
Speaker
Correct. So there is something like what MailChimp would have done. Correct. Correct. So we've always been very strongly focused on product-led growth. We also have a very strong
00:40:14
Speaker
That is, we've always written high quality content around whatever the topic might be on various specific things that throw a lot of traffic to our site. Because they throw a lot of traffic to our site, we were able to say, do you want to try this 14 day trial or this product? And it compares as low as $5 a month to all the way up to $99 a month. And that's really how they started utilizing it.
00:40:38
Speaker
And because they started utilizing it, the customers basically, we started realizing that it's not just small and medium businesses that are using the small plants, even small teams of individuals inside large companies are using these policies because they have tactical use cases.
00:40:56
Speaker
But those are the use cases that you can essentially use to leverage to kind of move them up the value chain and make them pay more. And that's kind of the journey that you're on right now. Because you start with a small amount of money. That person is spending $500 a year with you. How do you get them to spend $5,000 a year with you? How do you get that person to spend $50,000 with you? How do you make that person spend $500,000 with you? That is a question of two things. One is actually building the depth to the product.
00:41:25
Speaker
that the value is commensurate with 5,000, 50,000, 500,000, and building mechanisms and instrumentation that allows people to be able to measure that value and push them in that direction, all in a very automated fashion. We have 50,000 paying customers. It's not like each person can be sent an email, or sorry, you called and told them, look, you have crossed that. You have to instrument all that. You have to automate all that.
00:41:54
Speaker
In this damage, everything can be automated. So that's the PLG motion. Amazing. You would create milestones and nudges and people who cross a certain milestone would receive a nudge and try out some additional features and so on and so forth.
00:42:12
Speaker
Absolutely. And I think, I also think it's really important to see once you start operating at scale, what happens is you can start looking at cohorts. You know, you can say these are the people who are in CPG brands or as it's called FMCG brands are doing these are the five things that they're doing on average. So when you have a FMCG brand join you with one specific use case in mind,
00:42:42
Speaker
then essentially you can tell them, hey, your peers are doing three other things or four other things. So helping them scale their use cases and as they scale their use cases, they will spend more money with us.
00:42:57
Speaker
Okay, amazing. So I guess you would be somewhere in like comparable to a Mailchimp in terms of the way in which you're selling this, like a pure inbound product and like a product which appeals to both a team of two people as well as a company which has let's say 20,000 people. Yeah.
00:43:21
Speaker
Yes, MailChimp is a very good example. I think MailChimp, so if you're in product like DOTH motion, I think it could be either.
00:43:31
Speaker
I mean, there's a lot of literature on how to build product-like growth motions. And I think if you're a SaaS founder, if you're just getting started, it's worthwhile reading more about product-like growth motion. I think there are different philosophies of how we let them try our product. There is freemium, there is free trial, there is reverse trial, et cetera, et cetera. All these different things will allow you to do it. So Mailchimp, for example, is freemium.
00:44:01
Speaker
Whereas, we can stack this free trial. That means for 14 days, you try the product and then you essentially, in those 14 days, you have to make a decision whether you want to buy it or not. As MailChimp will allow freemium, which means there is a free forever kind of a plan, which you can sit on for any long amount of time you want. But eventually, when your demand or your need increases, you will eventually start paying for MailChimp. What made you choose free trial over freemium?
00:44:32
Speaker
The beauty about that, mostly driven by cash. You're a bootster. We were running off for our own cash flows. And we had not raised any more funding. Like I said, for 10 years, you were just doing this on top of our own cash flow. So we said we will take all the money upfront. So we had only annual plans.
00:44:52
Speaker
And we basically said, we will focus only on free trial instead of freemium, which will push people in the direction of this one. That's one. The second thing also, I think it depends on how people are thinking about it. We are in early days of a new vertical. We are not building a product for which an existing vertical exists. So what I mean by that is
00:45:18
Speaker
CRM as a software that has existed for like 20 years right now, many people are building different kinds of CRM, but I think everybody understands what a CRM is. So if you are building a CRM, I think there is merit and there is a certain level of clarity that you have and how to build it. So to be a differentiator, you want to offer a premium solution.
00:45:43
Speaker
In our case, what's happening is it's a new vertical. People are just getting started in understanding it. And there is a tendency for, if you do not push them to start utilizing, there is a tendency not to use the product. But when you start paying for the product, the probability that you will use it is much higher. So how small the amount is?
00:46:13
Speaker
Like, if I give you a Netflix free of cost, I don't know how much you'll watch. Maybe bad analogy, but still run with it. But if you're paying some amount of it, non-zero, the value in your eyes goes up significantly. So you will start fidgeting with it, trying to figure out what's the best I can extract out of it. So there was some of that philosophy that we had implemented. Of course, it has its own downsides to it. I'm just highlighting the upsides. But yeah, it's worked quite well for us.
00:46:42
Speaker
That is such a counterintuitive philosophy that when you're creating a category, you need to not go freemium, but you need to push people to pay so that they use it. Amazing. You mentioned that you did not understand value-based pricing when you were doing the first product of the mobile rendering for publishers. How has your understanding of value-based pricing evolved?
Value-Based Pricing
00:47:08
Speaker
How do you do pricing now?
00:47:14
Speaker
I think it's still a learning curve. The reality is I'm still working hard to understand it. I think the important thing about pricing and packaging is that first, it's a dynamic piece. What worked for you six years or six months ago might not necessarily work for you today. So you have to understand the nature of the market and what people want.
00:47:39
Speaker
The second thing I think it's really important to understand is basically the atomic unit or the lever on what people are ready to pay you more for. For every product, there is an atomic unit based on which you will pay more. It's that number of logins, number of users, amount of content, catalog, whatever, like if you're playing with the Netflix example.
00:48:08
Speaker
And as you understand that lever and that atomic unit, you will basically be able to start focusing on how to build your product and how to build out value to your end user. So I think pricing is definitely a science.
00:48:27
Speaker
To begin with, it might be a little bit of an art, especially if you're building a new vertical, because you are flying blind, you don't know how much value you're adding. But as you start adding more and more customers, it can be distilled down into a value-based science. And that's really what we're doing right now, which is paying very close attention to what people are using, and then trying to evaluate whether
00:48:52
Speaker
Every few weeks, we got hydrate and say, okay, if you move this feature from this plan to that plan, we'll just go down with that go up. And so a lot of A-B testing. And that gives you a very clear indicator of what's working and what's not.
00:49:08
Speaker
give me some examples of like what's like an atomic unit for you is it number of qr codes generated or you know some more beacon stack examples on pricing it for us it's quite obvious like any of these use cases
00:49:24
Speaker
I mean, number of QR codes, number of users, number of scans, the number of kinds of QR codes that you can use. There are several different permutations and combinations that you've essentially used. We are also realizing that, obviously, the important thing to keep in mind is we are a horizontal stack. That means
00:49:49
Speaker
We have the downside and the upside of the fact that we have a very broad ICP. Small business users, large enterprises users, people in marketing users, people in operations users, executives users, entry level folks users. So the challenge with that is
00:50:10
Speaker
We are right now working hard on trying to identify what really works for us. So that's something that we're really working on. But it's not obviously answering your specific question because I think it's still a discovery phase for us. So it's very hard for me to say.
00:50:27
Speaker
This is exactly the way pricing works. I know that in the past, just a number of QR codes was the only determining step. But now, as people realize and as the market gets mature, that might not necessarily be the only atomic unit or the lever for driving growth for us.
00:50:49
Speaker
What are some of the other growth engineering you've done around, let's say, improving retention or improving the LTV for the long term value for users who have signed up? I think a lot of our entire acquisition strategy has been inbound. And for us to do inbound, we essentially do is we listen to every call, we listen to every demo.
00:51:19
Speaker
We use R&R. It's not just a sales team that uses to listen to a memo, even a marketing team does. And when a marketing team listens, they pay very close attention to the new words and the phrases that the prospective customers use to explain what their problem is. You take that content and then create content around it.
00:51:44
Speaker
And that essentially drives more and more traffic to us and more traffic means more people and more people means more content. And that's a positive reinforcing loop and that's worked extraordinarily well for us.
00:51:56
Speaker
Amazing. Amazing. Okay. And what about things like retention rate and stuff like
Low Churn and Customer Retention
00:52:01
Speaker
that? Like what kind of retention rate do you see? And are you doing some? So I've shown is all the lowest in for any SaaS benchmark. I mean, it's like half a percent, which is outrageously low. Wow. And there are several reasons for that. I think one of them is that we are a sticky product in general.
00:52:20
Speaker
Because of what we do, it's very hard to kind of pull when you replace particular codes and put stuck your codes on packaging on locations. Wherever the use case might be. There's a lot of interesting use cases. The second thing is, like I said, it's an emerging market.
00:52:38
Speaker
Every day people come up with new use cases. There's a lot of experimentation that's being done. I think we are doing a pretty good job in explaining to customers on, there are three things you have done and here are five more things you can do with it. So even though the person has originally come with one specific use case in mind that might or might not have worked, they're always excited in the prospect of working with this two or three or four or five use cases that we are teaching them. So there is this continuous work in progress which people are realizing and it's very horizontal like you can imagine.
00:53:07
Speaker
As I talk in your own head, you will think of, oh, maybe I should use your codes for this now. I've never thought of it, but this is how I can think out of it. And that's the power of what you do.
00:53:18
Speaker
Amazing. Why are there sales calls happening when you have a free trial? Is there a way in which you decide, okay, for certain type of businesses or customers, we will have a physical as in a human sales effort and for others it will be pure product-learned?
00:53:37
Speaker
So we have enterprise customers. So that means after self-service, beyond $9,000, we have enterprise plans, which are for our customer, mid-market and enterprise bank. So we essentially add those.
00:53:54
Speaker
At that level, basically, we have sales reps who basically call and talk to them. These are started at $10,000 to $100,000 ACVs. They pay us $10,000 to $100,000 per month for the earth. So for those people, we essentially call. They schedule demos, et cetera. And this also happens through some inbound, like they would first be some interest in them rather than trying to. It's all 100% inbound. We don't have an outbound option yet. It's something we haven't built, but we don't have anything right now.
00:54:25
Speaker
Okay. Okay. Who's your competition in this space? Like you mentioned, one of them was acquired by Bitly. I think that's the primary competitor. I mean, we have other small, small, small, small competitions, but I think the only competitor we have is Bitly.
00:54:43
Speaker
Okay. And how did you go global in terms of your
Focus on North American Market
00:54:49
Speaker
sales? Was there something specific you did or it's just that you weren't reliant on inbound and the inbound started coming from all over the world? And like right now, what's your split? Like how much of your revenue is from India? How much is from outside?
00:55:01
Speaker
India is negligible to non-existent. North of 9% comes to North America. As I've said in every interview I've done, it's better to own a dollar than a rupee. It's easier to not like that. But I've stolen that quote from someone else. I think I heard it somewhere. But that's the truth. Selling software in India is very hard. It's very, very hard in India. People don't understand the value of it.
00:55:28
Speaker
And it's not worth it. America is obviously much bigger, larger, etc. For all the obvious reasons, I think it's much easier to sell one. I think we also, Ravi and I have lived in the US, New York is like second home. So we've been very comfortable in the Andaraskan to sell in North America. But either way, if you are, and third and most important, I think is that
00:55:55
Speaker
Americans, I think because of the history of software, our earlier doctors, they are okay with the idea of experimenting and trying something new. You will not get that in other parts of the world that easily.
00:56:11
Speaker
So if you're trying to do something for the first time, it's always helpful to reach and try to sell that in North America. Of course, there are some fantastic examples of science companies being better of India, focusing on the Indian market and Southeast Asian market, et cetera, et cetera, and kudos to them for doing what they're doing. But I personally think selling to North America is efficient and the ROI on that is a lot more powerful, a lot more efficient, significant.
00:56:41
Speaker
When did you reach this conclusion because the previous version Mopstack was largely selling to Indian publishers, right? Correct. I think that's what I learnt.
00:56:51
Speaker
Okay, you tried sending to publishers abroad also, like in the US? No, I think twofold. One is basically it also depends on product DNA, sorry, founder DNA. One is, yes, there's understanding this differentiation between Indian and US, trying to send to Indian customers or US customers. I think over the last seven to eight years, I think since Freshworks and public, etc., there's obviously a
00:57:19
Speaker
a strong understanding of transport of SaaS and there's like a cottage industry of transport of SaaS companies emerging out of India. So there is enough literature and playbooks available which explains how you build in Indian SaaS company focusing on North American markets. So that's one. The second thing I think is the fact that I think when I talked about sounder DNA,
00:57:45
Speaker
If you're a very sales led more, if you're a, I think my co-founder is a very strong product guy and naturally I think product marketing comes to me a lot more naturally than sales. And I think when you think about a product and marketing sales, marketing led motion, which is the PLG motion, then essentially you're saying the web is where I'm going to sell it. And when you say web is the way that you're going to sell it,
00:58:14
Speaker
It doesn't matter whether the customer is in India or in the United States, they're essentially selling it to someone who's browsing on the net. So when you start looking at it from that standpoint, it just seems like US will have a much bigger advantage. Of course, if your DNA is not outstanding and you're a strong sales guy, you have the ability to kind of go pitch and make a sale in person to someone, then I can see why there is strong merits and advantages in selling to
00:58:43
Speaker
Indian companies, etc. And why some people start selling in the Indian market rather than the US market. Two is that you are built a product with all again,
00:58:56
Speaker
Now with all due respect, I don't mean it in a derogatory way. If you're trying to build a product for which already lots of similar players are there, you're just building a product which is cheaper and more competitively priced than an American product that already exists. There's a lot of competition in that side of the world for this. So you as well take that product, which might have a similar amount of value, but priced more competitively.
00:59:26
Speaker
You want to sell in India because Indians are very cost-conscious individuals, so they will take a cheaper product. That's all the reason to sell in India versus the US. Okay, got it. Interesting. Tell me about scaling the organization.
Company Culture and Team Building
00:59:43
Speaker
What's your headcount today and what are some of the things you learned about building an organization? That's still a work in focus. We're a little over 100 people right now.
00:59:55
Speaker
And we have an office in New York, and we have an office in Bangalore, product marketing, engineering, etc. India, eyeshadow, sales, customer success, finance strategy, all that sort of New York. And
01:00:15
Speaker
Yeah, I think I think it's hard to say that what has worked and what has not is still in early days. But I think we thrive on good company culture, like, and it's, I don't want to give you some lip service as a CEO does and how great our culture is. But if you if you if you look at Glassdoor reviews, you'll have a good idea why people enjoy working for us and why we are rated as we are rated there.
01:00:45
Speaker
Yeah, but what's the secret behind it? Why are you so highly related on blaster? Related very highly on blaster because you fundamentally believing hiring very good people and getting out of the way. We fundamentally are
01:01:03
Speaker
I basically say only two things when every employee joins and I say, I can assure you of two things here. The rest of it is up to you. One is you learn a lot and two, you'll meet incredibly nice people. And those are things which are not negotiable for me. Everything else is fine. So we're very high on will versus skill. We're very focused on
01:01:27
Speaker
looking at intent, that didn't what you know, it's about where you want to go with that, that that drives trajectory and that drives a belief system. I also think that life is too short to be surrounded by smart assets. So we don't hire people who might be really good, but might be painful to, but we talked to our culture.
01:01:51
Speaker
I also think finally, if there's one secret sauce, I think we have a very empowered interviewing process. We have four people meeting every, at least four people meeting every new hire. Each and those four people could be any designation, any level. We choose a team that hires them and each of them have one vote.
01:02:14
Speaker
It doesn't matter who they are. So there are many times I walked into an interview setting where I have voted for the person saying we should hire, but maybe someone who is much more junior, a junior might have said no, and then it's a no, it's a veto.
01:02:32
Speaker
That builds a very responsible culture. Everybody takes a tremendous amount of responsibility that he has brought or he has brought in that particular individual and they are voted for that person. They feel like they have a say in essentially increasing the size of the tribe and that brings a certain sense of commitment to the organization.
01:02:56
Speaker
If there's one thing that's worked for us in building a good culture, it's that I don't make top-down decisions on we should hire this person, we should fire this person. It's all very collectively done.
01:03:11
Speaker
So, is there a use case of AI in your product, you know, like that's like the flavor of the season when every company is incorporating the negative AI in their levels? Is there something which has a use case in your product? I'm sure there is. Is it high on my radar? Absolutely not.
01:03:33
Speaker
again it's it's I might be a minority and CEOs are saying no because everybody else seems looks like that's the only thing they seem to be doing on LinkedIn writing about how great AI is. I personally think that yes there is there is I think we are definitely in the midst of
01:03:53
Speaker
a transformative technology which will fundamentally change many businesses and many workflows around how product is built or how software is built. There's no doubt about it. There are many roles that we get really disrupted.
01:04:14
Speaker
But with respect to beacon stack, we're still in very initial phase of kind of doing a zero to one. There are some basic experiments that we're doing there on understanding that's a little more. I think it's too early for me to comment on. This is what we think will happen to the market, to industry or specifically with respect to the product itself. Okay. What's your A&R right now? Yeah.
01:04:45
Speaker
Amazing. So what do the next couple of years look like, both in terms of what you want to do on the product side and how you want to scale up your customer acquisition? I think we're continuing to grow despite the macro being pretty bad. I think as shown is very low, we continue to grow.
01:05:06
Speaker
I think there are a lot of positives in terms of how we grow, how we've been growing. I also think that we have a pretty healthy set of customers which has been helping us. Right now, I think the core focus is for us to zone in our product strategy and understand how we can add more value to a set of customers that we think will be very important.
01:05:36
Speaker
We're also paying a lot of attention to the kinds of use cases that are emerging on the horizon. I think the question that we have to ask ourselves is, what are products that we will build versus product which will open up the platform where we'll enable anyone else to come on top of us?
Platform Expansion and Innovation
01:05:59
Speaker
Because the use cases are so broad and so interesting that the question that we have to be able to answer is, what are things that we will be able to productize? How we will essentially be able to build more depth on? And similarly, as other people discovered new ideas, can we provide them the building blocks?
01:06:27
Speaker
that will help them come and build their own QR enabled or QR empowered strategy. And that's kind of what I'm putting pieces of that together right now. So like an app marketplace. So like Salesforce has like an app marketplace. Correct. Absolutely. OK. Amazing. OK.
Advice for Entrepreneurs
01:06:52
Speaker
So my last question to you, what's your advice for young aspiring founders?
01:06:57
Speaker
Oh, young aspiring founders. It's what I say to anyone, which is there's a Shakespearean quote, which is what's past is prologue. It essentially means that whatever you've done so far is setting you the setting up a stage for what you're going to do in the future. So don't worry so much about, you know,
01:07:24
Speaker
Don't give up so easily, actually. It takes a while to get to where you are. It takes a significant amount of effort to discover what's right. And so be persistent, that's one, which goes without saying. The second thing which I'll say, which I think the name might or might not agree, is that
01:07:53
Speaker
Entrepreneurs are overrated. There is obviously a lot of blood sweat and tears, and I have tremendous respect to my other peers, and I've been at this for a decade. So you cannot say I'm not persistent, so I am persistent. But that's not just enough. Never underestimate the power of market and timing. People are extraordinarily successful, are successful because they time the market very well.
01:08:22
Speaker
And that's like hindsight is 20-20, right? You have to be at the right place at the right time.
01:08:27
Speaker
Never underestimate that. There are phenomenally talented founders. I'm sure you're doing a phenomenal job of doing what you're doing. You've still not seen breakout success because your timing is off. Either you're ahead of the market, you're behind the market, et cetera, et cetera. Just keep doing what you're doing. If you're standing at the beach for long enough, eventually the wave will hit you. It takes 10 years to look like you have been at the right place at the right time.
01:08:55
Speaker
So don't worry so much about it. Just keep doing what you're doing
01:09:01
Speaker
And that brings us to the end of this conversation. 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 adatthepodium.in. That's adatthepodium.in.