SaaS Interviews with CEOs, Startups, Founders
Ideally Students Pay $20/mo To Learn From Robots, $1,000,000 In Revenue in 2015, EP 263: Aditya Singhal
06 Jun 2016
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
And I'm your host, Nathan Latka. Top Tribe, you know I don't have a lot of time to waste. That's why I use FreshBooks to send out invoices and make sure I'm collecting my money. To get your free month, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Okay, Top Tribe, this week's winner of the $100 is Zach Ferron.
He's a 22-year-old Apple employee, and he's listening to the show and loving it. For your chance to win $100 every Monday, simply subscribe to the podcast on iTunes now, and then text the word NATHAN to 33444 to prove that you did it to enter. Good morning, Talk Tribe. You are listening to episode 263 of The Top. And coming up tomorrow morning, you'll hear from Gil Alush.
He's the technical co-founder, and they're doing $35,000 per month in MRR already. But I asked him if he'd sell for $10 million, and his answer will surprise you.
Chapter 2: How does Aditya's AI teaching assistant work?
Top Tribe, good morning. You're going to enjoy our guest this morning. His name is Aditya Singhal, and he is a serial education technology entrepreneur. He's trying to democratize education and make it available for all at a low cost. He also feels that really breaking down barriers and connecting with people is super, super important. Aditya, are you ready to take us to the top? Yeah.
Let's do this. So first things first, I think, where are you joining us from today? I am from 500 Startups office in San Francisco. Very good. So you're part of what, batch 16? That's right. Awesome. So tell us what the business is that you're focused on and how you make money.
Oh, so our business is kind of interesting. So there are about 21 million college students in the United States. And these students, when they get a homework or assignment or a quiz, they make about 2 billion searches on Google every month. That's a big number, 2 billion searches every month on Google. And these students are looking for help to get the answers solved.
Now, TransTutors is basically an artificially intelligent teaching assistant which helps students do their homework faster and get better grades. And how do you guys make money? Okay, so this is a subscription model. So we don't provide any answers for free. We don't provide any help for free. A student needs to subscribe for $20 a month.
And there are about 30,000 students who have subscribed us for $20 a month, and they gave us revenue.
So just to be clear, you currently have 30,000 paying customers. Is that right? That's right. And would you consider this like a software-as-a-service business model?
No. Uh, it's, it's not because it's, it's direct B2C. So we, we most, it's a consumer internet.
But just the reason I'm asking, I mean, this is pure artificial intelligence. In other words, people pay you 20 bucks a month and there are, there are, there's code on the other end answering these questions, not humans.
No, no, no, no. This is, this is a human assisted by code. Oh, I see. So, yeah. Okay. Yeah.
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Chapter 3: What subscription model does TransTutors use?
Because, uh, to, to make something which their own, code answers the question will take a lot of time. Nobody has figured out as yet. You're going to figure it out.
Yeah, of course. So you've got 30,000 customers who pay you $20 a month. So it's fair to say that in February of 2016, you did $600,000 in revenue. Is that correct?
So, okay. So now, uh, the, uh, Not all these 30,000 are monthly customers. So there are some daily customers also. And these 30,000 customers have been acquired over the last one year. So typically we do about $60,000 to $80,000 of revenue per month.
Okay, $60,000 to $80,000 per month. And what year was the business founded in?
This was 2014, August.
Okay. And how much total revenue did you do in 2015? In 2015? 2015, we did a little more than a million dollars. Okay, so a million. And what is your goal, Aditya, for 2016? Probably around $2.5 million. And is this your baby? Have you self-funded it completely?
Yes, still now self-funded completely, but we are raising a small round from 500 startups and a couple of other investors, so probably a half a million round.
Okay, you'll do half a million, and you're going to do that on a convertible note, or are you going to do equity?
Yeah, convertible note.
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Chapter 4: What are the revenue figures for TransTutors?
Pardon? I said, do you want to know a secret? Yeah. I bet you're smarter than half those people in the Valley anyway.
thank you for saying that I guess I'm not I think yeah I think it's you're humble so you would never say this but I gotta tell you I launched and sold my software business from the mountains of Southwest Virginia and I just think a lot of these tech kind of hubs they're just they're really overrated it's a lot of work to find quality people and many times you know more than all of them anyway so I appreciate that you're looking to explore and learn but I if I was a betting man I would make a bet that you know way more about what you're doing than anybody else
Yeah, yeah, absolutely right.
I agree with you. So good. So you're raising capital now. Help us understand the people that are paying you monthly. How many are paying monthly customers?
So out of these 30,000, about... 40% are paying monthly, so about 12,000 are paying monthly, and rest of them are day pass. So they come for a day and then they go.
And of those 12,000 paying monthly, what are they paying per month on average? Yeah, so monthly is fixed. It's $20 a month. Okay, I'm missing something in the math because you told me you typically do between $60,000 and $80,000 per month. But if I take 12,000 customers times $20 each, that should be $240,000 per month. What am I missing?
So, okay. Now, as I said, these $30,000 are not per month. They have been acquired over the last one and a half years. Okay, paying customers.
In February.
In a month. Okay. In February of... 2016, as I said, we did about 60 grants a month, and this includes about 3,000 paid customers, that's it, 3,000 paid customers, because it's a subscription, so people come and go, it's a rolling model.
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Chapter 5: Why does Aditya believe Silicon Valley is overrated?
Till now, we have experienced about $110 from a monthly customer. And for a daily customer, it's about $20. Great. And what is your team size? Is it just you? No, no. So there are about 10 of us. Me and my co-founder are here in the program. And there are about eight more people in India. So four of them are engineers and one customer service, one accounts, one HR, like that.
What is the average salary of an engineer in India? It's becoming expensive now.
Really? Yeah, absolutely. I mean, in India, you can find so many engineers, but... Good engineers, they start with about four to five years of experience.
about $30,000 a month. Oh, wow. Okay, so it's getting up there. Yeah, it's getting up there. Wait, you said $13,000 per month?
No, no, no, no, no. Sorry, I said, I'm sorry. It's $30,000 a year. Yeah, okay, that makes more sense. Yeah, so that's a good engineer salary at a starting point with three to four years of experience. But as you move higher up the ladder, with seven, eight years of experience, you have to pay about $80,000 to $90,000 a year. Yeah.
Now, what is your ultimate goal, Aditya, with this? Actually, let me ask first, how old are you right now? I am 30 years. Okay. And so what's your ultimate goal with the business? Is it to take it public? Is it to go back to India and build a big business? Is it to sell it? Okay.
I want to have a system which teaches students day in, day out, 24 by 7 automatically. It doesn't need a human tutor. That's my main goal.
And so with that being said, if somebody came to you, let's say Amazon or Facebook came to you and offered you $10 million for the business today, would you take it?
Not today, because I am not completely there. But yeah, once I've built it, then probably I'd look for a little higher value. And yeah, go ahead with that. Because I feel that with Facebook, they're doing so much in artificial intelligence, my system kind of fit them really well.
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Chapter 6: How does the team structure at TransTutors look?
As of now, yes. Okay. And are you split 50-50? Pardon? Have you guys split the equity 50-50? Yes, 50-50 as of now. Awesome. Well, we're going to link to all of this in the show notes so people can follow you and track your success at nathanlatka.com forward slash the top 263. Again, forward slash the top 263.
So guys, if you're listening on SoundCloud or somewhere else besides iTunes, make sure you go to iTunes, subscribe, and download all 262 episodes by just searching Nathan Latka, the top in your iTunes app. Aditya, if people want to follow your journey as you're building your business, where can they connect with you personally online?
Follow us?
You mean?
Yeah, where can they connect with you? On my email ID, on my Twitter, on my Facebook. What are those? Okay, so my email ID is aditya.singhal at trans tutors dot com. So it's T-R-A-N-S-T-U-T-O-R-S dot com. And my Twitter is Okay, Top Tribe, as many of you know, I sold Hayo and everyone is always asking me what my expenses were when I was building Hayo.
Well, a big expense was that I spent over three grand per month on financial services to keep me out of trouble in terms of taxes. You know, my mom would always harbor me, You got to keep all your receipts and put them in a freaking box or something to make sure you don't get an audit or things like this. I'm like, mom, I'm a millennial. You think I'm going to keep all these receipts?
I now use FreshBooks. I use their mobile app to take a picture of receipts and it makes taxes a cinch. Additionally, I don't have to hire a $3,000 per month person to manage all my finances. It's like saving so much money and my mom's happy. Additionally, I don't waste a I use their templates and I can avoid using Word templates or Excel files.
I just use FreshBooks to quickly send out invoices and it works like a charm. To get your free first month, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Again, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section.
Okay, top tribe, I have to tell you, many people go, Nathan, you came out of nowhere. Your website's growing so fast. How'd you do it? The answer is simple. So I use HostGator. I don't know if you guys know that, but I use HostGator. And the reason I do, they have like about 4,500 free templates I can use because I don't code. They've got a great e-commerce plugin.
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Chapter 7: What is Aditya's ultimate goal with his business?
Go to hostgator.com forward slash Nathan to grab that now. Perfect. And again, top drive. We'll link to those in the show notes at Nathan Latka.com forward slash the top two, six, three. Okay. Yeah. People know how to connect with you. Now we're getting about to get into my favorite part of the show. Do you know what time it is? Yeah. What time? It's five 21. It's time for the famous five.
Are you ready? Okay. All right. Number one, number one. What's your favorite business book? um growth marketing growth marketing okay great number two is there a ceo that you're following or studying right now yeah it's elon musk elon musk okay number three is their favorite online tool you have like fresh books um i love um i mean i love twitter for various reasons
okay great Twitter number number three or the fourth question here and it did you remind me to your you said you're 30 years old so are you married single do you have kids yes I am married I have a seven month old kid oh congratulations very good so here's the question yes or no do you get eight hours of sleep every night no I don't you wish right yeah I wish all right last question it did you take us back ten years what do you wish your 20 year old self knew
What do you wish your 20-year-old self knew? I wish I knew how to get growth hacking faster. I mean, growth hacking is something that I really wanted to know back then because it took me a lot of time to figure that out.
Awesome. Well, Top Tribe, there you have it. Steady up on growth hacking. You learned today from Aditya, who's building a great business, did over a million dollars in revenue in 2015, is now doing between 60 and 80 grand per month with the goal of teaching students with no humans on the back end. Aditya, thank you for taking us to the top. Thank you so much.
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Chapter 8: What advice does Aditya have for his younger self?
Get the free $100 from Google right when you sign up with my website host provider, HostGator. Go sign up now to get your free money. HostGator.com forward slash Nathan. Again, that's HostGator.com forward slash Nathan. Okay, Top Tribe, I'll see you bright and early tomorrow morning.
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