SaaS Interviews with CEOs, Startups, Founders
1285 Bootstrapped Mumbai Based Social Listening Tool Breaks $1.2m in ARR, Up 100% YoY
30 Jan 2019
Chapter 1: How did Connect Insights begin its journey?
Connect Insight started coding in 2013, supported himself just through side projects in the financial industry for two years. And in 2015, signed up their first paying customer. Again, they now have 90 customers paying on average a grand or 1.2 grand per month. So doing about $100,000 per month right now. That is up. up from 40 grand per month back a year ago in July of 2017.
90% annual retention on a logo basis, which is obviously super healthy economics. They're not spending a ton on CAC, but they've got a 26-person team between Mumbai, Bangalore, and New Delhi. Again, helping folks ensure that they're doing social listening, capturing all mentions of them, and analyzing that all via their SaaS product.
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Samir Narkar.
He is the founder and chief software architect at a company called Connect Insights, a SaaS product that is widely used by many top brands and agencies. His core strengths are technology, marketing, and sales.
He started his career back in 2004 as a software programmer, and when he launched his first company in 2012, he started donning many caps, such as strategy, marketing, sales, and legal roles. He has experience of working on financial domain, and today he's a digital analytics expert. Samir, are you ready to take us to the top? Yes, yes. All right. A lot of buzzwords in that bio.
So get real with us here for a second. What's Connect Insights do and what's your role? Are you the founder, CEO or what? Okay. So Connect Insights is a social listening and analytics platform. We crawl millions of blogs, forums, mainstream news, social media, and give you insights based on all the conversations that are happening on the web in a very easy to use dashboard. Okay.
And walk me through the pricing model. Is it a pure SaaS business? Yes, it's a pure SaaS. It's a monthly subscription-based model. Okay, so give me a general idea of what people pay on average per month. So it differs. Based on the plan that you subscribe, there are various plans.
It could be as low as about $1,000 a month to someone like Sony, who is tracking the conversations around FIFA, would pay close to about $7.5K a month. Okay, but would you say a fair average would be about $1,000? our fair average would be about that. So if you leave aside four or five clients that pay to the extent of about 7.5K a month, the average is about one grand a month. Okay, that's fair.
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Chapter 2: What is the pricing model for Connect Insights?
Well, sure, but you're obviously spending money to feed them leads, right? So you're an analytics guy, you back into the math and you figure out what you got to pay to acquire a new customer, right? Okay. So if I, if you calculate with, with, in terms of, for the ad spend that we do, we do about a 60,000 to 80,000 rupees a month. Okay. That, that translates to about a thousand dollars.
Oh, a thousand US. So, so, okay. Not, not a lot. Okay. When you, you mentioned you have a sales team, what's your total team size today and how many of them are sales? So our total team strength is about 26 of which five are in the sales. The other guys are in pure software development. Okay. And walk me through the model that each of these five reps are on.
How many phone calls are they doing per month? How many, like what quota do you put them on? How do you structure that? So of the team of five, two of them purely work on outdoors. or they do phone calls and picks up meetings. They also do online demos for anyone who is subscribing through the leads. And the other three guys are purely focusing on demos and sales. Okay.
And how do they all work together? Does one come before the other or are they all independent kind of entities? So there are times when we have to together do a pitch. for the demos and be a part of the sales team. So the credit goes to one person, but sometimes it's a team effort. I see. Okay. So 26 people, about five doing sales related things.
Now, do you calculate a fully weighted CAC, including the salaries of those five people, or do you not look at that? See, I mean, we've been profitable right from the start, right? I mean, they have the salaries plus they have the commissions, okay? And the commission comes out to be about 1% of the total sales. Okay. Yeah.
But you, so in other words, if you have five salespeople and each month they're closing 10 deals, right. And, and, you know, each of those five people you're paying, I'm making this up five grand a month salary, plus an additional commission on top of that, you know, you're spending about 60 grand, sorry, five people at five grand a month, 25 grand a month, right. To close 10 leads.
So you can get a customer acquisition cost. Do you calculate a fully weighted CAC or no? You don't back into that. Okay. So when you hire, how do you know what's that quota at to make sure that it's profitable? Each salesperson is profitable. Uh, okay.
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Chapter 3: When did Connect Insights officially launch?
So I keep things very simple, right? So, uh, if, if, if the monthly cashflow is X amount, uh, we, we ensure that at least 30% is profitable and that's how it's been on the way. Got it. So you just won't hire, you just will pause kind of spend until you get back to the 30% to the bottom line, which is about $30,000 a month for you right now. Okay. And are you bootstrapped? Yeah, absolutely.
Okay, so totally bootstrapped. Why do you say absolutely? Did you get burned in the past? No, we were profitable right from the start. The profit margins were very less at that time, but we are bootstrapped now because we want to reach out to the international market and then probably reach out to the investors. Sorry, and what?
Uh, so, so right now we are bootstrapped is because we want to reach out to the international market first and then, then probably reach out to the investors. You want to expand international first and then go. Yeah. There's a bit different. Uh, I mean, it's the investors look at you in a different way compared to some of the other countries. Is your entire team based in Mumbai or are you remote?
Uh, no, we are based out of Mumbai. We are based out of Delhi and Bangalore. Okay. Mumbai, Bangalore. And what was the last one? Delhi. New Delhi. That's the capital. New Delhi. Yeah. Very good. Very good. And walk me through some other economics related to, again, your customer service. A churn is critical in a SaaS business. What's your churn? Okay. As in? As in what? Sorry, what?
I didn't get your question. Sorry.
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Chapter 4: How did the founder support himself before launching Connect Insights?
Yeah. Churn is critical in a SaaS business. What is your churn? Well, I don't get the question. Churn as in what exactly is it? Well, churn is an economic measure of how many customers you lose, a percentage, right? So you could, and there's revenue churn and logo churn. So on an average month or a year. What I've seen in the last two and a half years is that our retention rate is about 90%.
And that's on a logo basis or a revenue basis? No, that's on the customer basis. Okay, yeah, but the revenue the customers pay or the actual customer logo? So let's say if we have 10 customers, okay, we acquire 10 customers, we lose about one customer in a year. Okay, got it.
And is that customer typically one of your enterprise customers paying a lot of money or a smaller customer paying a little money? No, no, no. I mean, we have not lost the enterprise customer as yet. The smaller customers we do lose because there are different factors like, you know, out of our control. For example, the agency changes or someone who is managing our product leaves.
That could be the reason that we lose all that customer. Got it. Good. So about 90% annual logo retention, obviously healthy there. Let's wrap up here with the famous five. Good stuff here. Number one, Samir, what is your favorite business book? Well, I'm reading the book that's, you know, They Ask, You Answer from Marcus Shannon. I just love that book. Sorry, what's it called?
They Ask, You Answer. They Ask, You Answer? Yeah, by Marcus Shannon. Okay, They Ask, You Answer. Number two, is there a CEO you're following or studying right now? Well, I follow Narayan Murthy from India. I'm also fascinated by Slack founder. Stuart, right? Yeah, Stuart. Number three, what's your favorite online tool for building your business? Well, I like Agile CRM. Agile CRM.
Number four, how many hours of sleep do you get every night? I sleep close to eight to nine hours. That's good. So eight and a half, nine hours. And what's your situation? Married, single, do you have kids? I'm married with a kid. Married one kid. How old is the kid? The kid is six months. Oh my gosh.
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Chapter 5: What are the current customer metrics for Connect Insights?
How are you getting, every parent right now is jealous of you. How are you getting nine hours of sleep with a newborn? I have a disclaimer. So now I sleep about eight to nine hours. Two months back, it was less than five hours. Got it. Okay. And how old are you? I'm 13. Okay. Last question. What do you wish your 20 year old self knew? If I were 20 year old.
What do you wish your 20 year old self knew? Well, I would have started early. Started earlier. By the age of 25. Well, I started at the age of 32. Guys, there you have it. Start earlier coming from Sameer. Connect Insights started coding in 2013. Supported himself just through side projects in the financial industry for two years. And in 2015, signed up their first paying customer.
Again, they now have 90 customers paying on average a grand or 1.2 grand per month. So doing about $100,000 per month right now. That is up from 40 grand per month back a year ago in July of 2017. 90% annual retention on a logo basis, which is obviously super healthy economics. They're not spending a ton on CAC, but they've got a 26-person team between Mumbai, Bangalore, and New Delhi.
Again, helping folks ensure... that they're doing social listening, capturing all mentions of them and analyzing that all via their SaaS products. Samir, thank you so much for taking us to the top. My pleasure. Thank you so much.