SaaS Interviews with CEOs, Startups, Founders
ProfitBooks Hit $1m Revenue 2019, COVID Keeps Them Flat This Year
06 Aug 2020
Chapter 1: What challenges did ProfitBooks face during COVID-19?
I don't know because three months were very, very bad for us. Literally, I mean, a lot of, we saw huge, like I told you, we saw huge drop in traffic, huge drop in customer signups. So we don't know, but let's say, I mean, even if we, you know, hit the same target of $1 million, we'll be happy.
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There, you'll find a private RSS feed that you can add to your favorite podcast listening tool, along with other subscriber-only content. Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello, everyone. My guest today is Harshal Khatre.
He is building a company called ProfitBooks.net. He'd worked with MNCs like HSBC, Big Bank, obviously, and Barclays for over nine years and helped them implement banking solutions before starting this company. He started ProfitBooks in 2012 and since then acquired 75,000 users on the platform. It's India's most popular accounting software today. All right, Harshal, you ready to take us to the top?
Yes. Okay. So what would Girish say at the Freshworks crew? Would they say, yeah, Profitbooks has taken our lunch. They're the most popular accounting tool in India.
Actually, Freshworks, they don't, I mean, at least until this point, they don't have an accounting software. So we are kind of safe. But yes, I mean, we have a lot of competition from various players like Zorro, which is also homegrown. And obviously Intuit also there in India. So we have quite a bit of competition here in India.
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Chapter 2: How did ProfitBooks achieve $1 million in revenue?
They started covering us. So through that, we got our first bunch of 100 customers.
Okay, and how many customers today?
Right now, we have just crossed 75,000 customers.
Oh, you said users in the bio. They're all actually paying customers.
These are companies. The actual count of users is much larger. These are actually the companies, 75,000 companies that are using the application right now. It's a mix of both free and paid. We also have a free edition right now.
Well, how many are actual customers, paying customers?
Actually, we don't disclose the actual data of paid customers.
Okay. Usually in your funnel, like when someone comes in and tries a thing for free, like in a given month, about what percent will you convert to paid typically?
It's around, I've seen the, it's around five to 7%.
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Chapter 3: What is the unique selling proposition of ProfitBooks?
They work with these accountants that white label your software and sell it through to their end customers. Right, right. I see. You're looking at me like I'm confused or there's something on my forehead. What are you thinking?
No, actually, you just blurred for a minute. So that's why I was looking.
Got it. Got it. OK, so bootstrap the company. Twenty one people on the team. No real quota carrying sort of sales reps. So full no touch model. How are you getting customers today? What's the distribution channel?
100% inbound. So we write a lot of articles. We generate a lot of content. We have a very good traffic on our website. So it's 100% inbound right now. We don't spend anything on paid ads.
According to Ahrefs, your big search terms that bring you the most organic clicks per month are invoice terms and conditions, which you rank number one for, and depreciation and what is depreciation. Was that intentional?
Yes. Invoicing is obvious, okay, because people who want to create an invoice and, you know, want to get more into that. So invoicing is pretty much obvious. So depreciation is more towards the accounting part of it.
So the people who are specifically business owners, they get confused about these terms, like what is depreciation, you know, what is, you know, accrual, what is cash and all those stuff, right? How do I record my own contribution in the business and things like that? So they search for these kinds of terms. So that is where we rank the most.
How have you grown? You have over 9,000 backlinks. How have you grown your backlinks?
To be very honest, we have not put in a lot of efforts or in, you know, reaching out individually to people and, you know, getting these backlinks. Like I said, we write a lot of in-depth articles and there is a, tax in India, it's called GST. So we wrote a lot of content around GST. And during that time, we gathered all these backlinks.
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Chapter 4: Who are the primary customers of ProfitBooks?
Right, right.
Interesting. OK, before we wrap up, tell me a bit about what a month looks like today. So in a given month, how many new trials will you sign up to the platform?
In any given month, it varies, actually, because I mean, last three months have been very tough for us. OK, we I mean, we saw a huge drop in the sign up. But then again, I think after May 15th, things started to look up well. In a month, typically, we get around 3,000 to 3,500 new signups.
3,000 sort of trials?
Yeah. It includes both trials and the free edition users.
Okay. And then you said about 5% of those will convert to paid, typically?
Yes, typically.
So that's about 150 new customers per month, something like that?
Yeah, you can say that. But like I said, we have another vertical as well. So we get paid customers from those verticals.
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Chapter 5: What pricing model does ProfitBooks use for its services?
I mean, what is that? $40,000, $50,000 a month in revenue right there, right? Yeah. When do you guys pass a million-dollar run rate?
When did we pass the million-dollar run rate?
Yeah, it's a big moment, right?
Yeah, it's a big moment. Actually, we passed it last year itself.
Okay. And do you think you can double this year even with COVID or is it going to be tough to get 2 million?
I don't know because three months were very, very bad for us. Literally, I mean, a lot of, we saw huge, like I told you, we saw a huge drop in traffic, huge drop in customer signups. So we don't know. But let's say, I mean, even if we, you know, hit the same target of $1 million, we'll be happy to be very honest.
Yeah. Okay. Fair enough. Now, are you profitable today or are you burning cash?
No, no, we are totally profitable.
That's a good place to be. Any plans to raise capital or you're going to stay bootstrapped?
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Chapter 6: How did ProfitBooks acquire its first 100 customers?
So one kid. And how old are you?
I'm 38.
38. Last question. What do you wish your 20 year old self knew?
Okay. I would say to invest more in personal growth.
Guys, there you have it. Profit Books, helping accountants manage their customers via a white label model. Also sell direct. They broke a million dollars in run rate last year, hoping to grow this year, but we'll be happy if they stay flat considering COVID. They've done this all bootstrapped. He's profitable, which we love. Harshal, thanks for taking us to the top.
Thank you so much, Nathan, for having me.
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