Starting Up Remote, Moonlighting to Scale and 10 Yrs of Inverting the SaaS Curve
Santosh Panda failed twice before starting up with Explara. He started up Explara remotely from London in moonlight mode and bootstrapped it with his earnings till it was sustainable. A DIY event management platform, Explara is for professional events that has inverted the SaaS revenue curve by being India First and World Next. With a down to earth attitude and unconventional hiring style, Santosh has built Explara quietly into successful at scale business. Listen to Santosh On starting up remote and 10 years of inverting the SaaS curve.
Santosh has a very earthy charming way of saying things.
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Here are some interesting quotes from the interview
Santosh Panda on People, Team and Scale
16:02 Because it’s not about just revenue, your customer care, your revenue, how do you worry about how to retain people how to walk with people, your frustrations on finding your satisfaction on customers, if there’s so many factors which make works, then you succeed
09:41 Because in startups, you don’t make money in the initial couple of years. So that’s alarming. I think, as part of understanding how that’s useful for any startups to find a co founder is that you need to be clear on understanding of how you want to address the market, how you go after the market, how long is the pain point is going to be and what we are not going to do also very important because a lot of people assume that I’ll join and then I’m going to send the course that doesn’t happen.
20:43 So your scale is to be calculated based upon the market that you operate plus, which are the other markets that you can go either might be local players and global players and all that we we will take that into account too.
Inspite of running Explara for over 10 years, Santosh brings the same passion. He has built with the same unconventional attitude that we have seen in the Movie Money Ball.
Here’s what the Word Cloud looks like for this episode.
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india, people, customers, product, industry, event, building, company, startup, early adopters, market, realized, large scale, scale, founder, grow, attracted, talk, years, story
Nida, Krishna Jonnakadla, Santosh
Krishna Jonnakadla 00:01
This is Maharajas of Scale, the podcast where we go behind the scenes and talk to founders who are demolishing the myths around building and scaling a big business in India. These are the stories that have shattered the assumptions around Indian consumers and are changing the game completely. I am Krishna Jonnakadla, serial entrepreneur, co-founder of FLIT, the Fashion Located In Town and startup mentor, bringing you these stories. Today we are going to cover a scale story. Unlike what we've done in the past, from the looks of it, Explara's office is in Koramangala, do not really scream scale. They actually scream, frugality and bootstrapping. But yet, in a few moments from now, you're going to hear from Santosh, who's the CEO of Explara, and the kind of impact they're having. Santosh, it's a pleasure to have you on the show. Welcome to Maharajas of Scale.
Thank you so much.
Krishna Jonnakadla 00:59
We are going to do this episode a little different from what we've done. We are going to jump right into numbers, because I think the numbers paint a different picture. And they can convey a story vastly different from what can be made from content. So in terms of impact, in terms of the scale that you're driving, talk to us a little bit about the impact that you're having.
Great. So we came into an industry way back in 2009 10. We can take the credit that we created the DIY, "do it yourself" , event registration or ticketing industry in India. They were pretty much using Excel spreadsheet and pay me at the door kind of concept. And we came to democratize that and get it organized using technology. If we fast forward to now we power 25 to 27 countries, customers, millions of buyers, close to 70,000 plus event organizers across the world and its impact has been seen in a scale when we talk about 2009 10, there were only one or two startup events in India. I think there are 200 or 300 now in a month, right? So India has scaled up huge and Explara has been fortunately, around and solving those millions of customers.
Krishna Jonnakadla 02:20
Fantastic. We don't get to hear Explara's story, Explara's name pop up as often as all the other names, but yet the numbers from what we can make of it seem to tell a slightly different story. Do you maintain a local presence? Is that why that actually happens?
Yeah, I think we have been low profile to be honest, we do generally good water mouth. And a lot of our growth has been due to passionate customer support to be frank, but we don't create a lot of noise in our talking about the company as such. We take the pride of saying we will be around and making sense and grow with the customers. So more of our stories about customers pain point, how do we address that? And how do we grow with retaining customers then talking about the numbers. So that's why you know, much of what we do generally not talked about, in a way.
Krishna Jonnakadla 03:23
I love what you said about having customer focus actually solving the problems for customers. So let's go back to those days, the 2009 2010 timeframes. Was Explara, a full blown venture that you started, or was it a side show or a moonlighting sort of a venture that point in time.
In fact, it started as a moonlighting site. So I was working in London, I had started this company in India, so bootstrapped for three years, you know, invested all my monthly daily incomes into it, two other startup had already failed before that both that I started, tried back in London. The founders and we couldn't agree, that's going to take longer, so it didn't work. So I decided that I'm going to run this side. So for some time till I get numbers, customers feedback driving me with a convincing that yes, I can jump in full time. So you know, three years, I ran it from London at a team, not in Bangalore, we were operating out of Pune, and many in India, during those time frame, they didn't even know that I was not operating out of India. So everything on Twitter, and create the buzz, reach out to the early adopters, bring them to platform, and then just really business absolutely remotely when the founder is not even with the team 24 by 7.
Krishna Jonnakadla 04:45
That's a very typical story that you get to hear remote teams, while they're all the rage and the quite well known, practically every startup today has a remote team. But your case is very different. You as a founder were in London, but the team was actually in Pune. And we are talking about building a product, that's going to change an industry because to paraphrase your words, it was a DIY solution that didn't exist before. So was it sheer necessity? Or what was the choice of doing remote? Was it cost management?
So I think doing remote, there are couple of factors right? So one is, even if you look at that time frame, India only woke up to angle ecosystem in twelve and thirteen. I do know a lot of angels back in London and even today I have a good connect there. I used to be part of eBay and BBC so I could get access to a lot of angles, even London wasn't ready with an angel ecosystem. If you map 2005, 2006, 2007, so I did make some of my best connects there. But they were not ready to fund a company, which seems to be operating from India and the boundaries here. Today that's possible. Today YC schools are all remote startups right in Bangalore, and the founders are in valley getting funded and coming back. That story was not happening in that time. Right. So I witnessed the world changing, right from dark to today, global investors happy to make fantastic entrepreneurs wherever you're operating out of. So I think that is the choice, then the world was operating in that frames, I couldn't come out of that. And how do you now not fail in your third startup is to continue running bootstrapping, you cannot just give up and say, Hey, I'll come back to India. And I'm going to somehow run it, you cannot sell, you're not an IT services company. And your product is there but your scale is not self sustainable. It's you know, these industry needs, couple of grows before you can make the margin the niche. Right? So it was out of all the complexities of starting pretty early, very early, before the trend picked up of the angel ecosystem and having the necessity to say, Hey, I have to run it, I cannot fail in this third one. So that's all made me to carry on from then till now.
Krishna Jonnakadla 07:08
Let's talk about the two failures of it. I think you briefly touched upon founder issues there. The two perspectives. One perspective is that you're either succeeding or you're learning, there's nothing called failure. And I'm sure there are lessons that you channeled from those two, and out of every 500 startups, for every one startup that succeeds, the other 499, they say are usually killed by founder conflicts and stuff like that, as opposed to the Facebook, or the fangs of the World. So talk to us about those two failures and what went into them.
Yeah. So those two failures, I'm still friends with my co founders. We continue to chat even today. But I think if you look back the startup ecosystem, as we speak today, which is in a fantastic movement across the world, back then in 2006, I tried creating one. And we realized that my co founder was not ready to believe that a software product is going to take a long time to monetize and people were coming from the concept of IT services, that you stand, you hire to people in India, or you make 20 lakhs 15 lakhs, you pick up projects from foreign countries, and you're done. Right? That's the mind frame. Now, when you go into product product is a very difficult task, you need to identify a segment, go after the customer, pitch them and get it right. By the time even when you do that six months gone. So we started, we registered the company. And then my co founder realized that No, no, this is going to take a long time. So I was very candid, I said don't get into this few not prepared to spend another two years in experimenting. And we have identified a market. Yes, there is a market but it's not going to just open it up just like that you have to work for it. And I did walked out. The second idea again failed, because you know, we were in remote, three founders in three different locations, we tried benchmarking one idea versus another idea. And we couldn't agree what the idea is all going to be picked up. And then the other founders figured out that they will have no money coming in because you are going to be running a startup, so you're going to invest and do not need to make money. Right? So we couldn't agree. Again, we said okay, no guys is not working. And, he was not prepared to let go the job and fully focused on this, that didn't work out. So I think fundamentally, I realized that look, it's good, if you have the clarity, and if you fail within three months, and six months, must be better than failing after four five or six years, because that's going to be very, very troublesome for everybody. Because in startups, you don't make money in the initial couple of years. So that's a learning. I think, as part of understanding how that's useful for any startups to find a co founder is that you need to be clear on understanding of how you want to address the market, how you want to go after the market, how long is the pain point going to be. And what we are not going to do is also very important because a lot of people assume that I'll join and then I'm going to send the course that doesn't happen. It will be around and trialing and, then not succeeding but still trying it out again. So I think those are the sort of learnings that I figured out in the past.
Krishna Jonnakadla 10:21
What were those two startups about? Were they predecessors to Explara or were they radically different ideas?
They were very radical, very different ideas. The first one, I was trying to democratize the way students speak higher studies abroad, right? So I always realized that students get into a lot of foreign universities just by researching, but can we assist them with an alumni connection and miuch much ahead. So if you are an engineering student, maybe in first year, or maybe in second year, you should be knowing what you are the other universities that might be working great in biotech, or in IoT, many many industries and and bringing the alumni Connect, bringing the inside information about a university to the students will help them to say, Yeah, looks like in our London Business School is much better if I were to do a PhD versus a MIT. So that's an idea that was way ahead of time and the cofounders didn't realize that's going to be happening in six months. So that didn't work. And the second idea was always around recruitment, and networking. Mainly I have been always playing great networking and helping companies wherever I was employed to hire people, mainly networking and helping other friends to be introduced to the company that I used to work out of the companies, my brain used to work and be very proud of. So I realized that the world is just not operating in a way of using again the ecosystem to verify and value skills vs an agency giving your doesn't show on CV right. And that was a bad year, and sort of in 2007 and 2008, and the recession was just hitting up, and the founders and all we could agree which ideas to be picked up. So that never got the green light. So we kind of gave it up there. Explara came when I had written down, doesn't have ideas in my notebook, where I'm saying, I'm going to now start at alone. And this is to be second or third thing that I written then I looked back in the London ecosystem where I was living, I realized that dozens of events happens not for entertainment, but for experiences, professional learnings, and all that. So I kind of felt that India is going to grow and our event is going to be a mainstream thing where people are going to come out and spend time, learn new things and collaborate with others. So that kind of motivated me to pick event and Explara. So Explara came pretty new with the system
Krishna Jonnakadla 12:57
In your list of ideas is an Explara was second or third. Why in 2011-2012, like you said the catchment area was small. The number of non entertainment events were themselves were low in number. So which means it was going to be a niche later, one could argue that it presents an interesting opportunity to start early and grow with the ecosystem. But for entrepreneur who had two first brushes with past ventures, you know, the third one where you didn't want to fail, must have felt like, I definitely want to do something big, I want to make an impact. But yet, your choice of Explara, you know, seems a little different. Why even management at that point in time? And what was it about this part that attracted you to start up?
So look, as an entrepreneur? I'm sure you know, Sachin Bansal would have three more ideas before starting Flipkart. A lot of times we get attracted by hip hop, sometimes the problem attracts you, and you can't just come out of it. Right. Everything, seems to not give value but the problem that attracts you, I think, for me, coming from a tech background going to tech events and even as part of nature to go out and meet people at work, I felt event is something that I can contribute. And it's an immediate problem that I could so I was a part of eBay, maybe I could have launched a second cell commerce market. And so this attracted me. When I look back today. And I think we already have done the course corrections or we have become a bigger market. And I realized, between the two failures are not happening things but within the Explara, that happened, I realized that you may get attracted to a industry which is very large, but you getting an entry and making an impact is going to be equally very challenging, there are existing players. So I picked the Explara because I realized that nobody there is doing it. And so I said, Okay, this is going to be startup and I am going to get in there. And I'm going to build my credibility and iterations as I go on. So it fit my bill at that point of time, where my attention was to play. my attention was to succeed at Digital point one level of my journey, and build it from there. And so when we branded and rebranded all, the name Explara was also picked up in the same mindset saying it's nothing event. Now we are launching sort of subscription commerce site with Explara bees, we're going to be launching Explara, giving crowdfunding somewhere around November, December, so I am happy to talk about it. But that's the foundation of thought is to launch 0.1 and start and I think I have the respect for Joewoahy and companies like that, where they start with a different route, but then, you know, change the path with one success. And all of us knowing the entrepreneurs world that succeeding in one thing is much more difficult. You know, I mean, you can do 10 other things once you succeed? But I think the most important thing is to succeed on that. Because it's not about just revenue, your customer care, your revenue, how do you way about ,how to retain people, how do to walk with people, your frustrations on finding, your satisfaction on customers, there's so many factors which make works, then you succeed. So my mind map, when we started this was to succeed to ensure that this venture comes out. If we do well, we will have the opportunity to go and make an impact in another one. So that's the kind of philosophical thought which has helped me to stay around, and also helped me to pick up a niche, maybe, you know, at some point of time, I reflect and say, maybe I should have picked up a bigger market thing. But again, we don't choose sometimes, sometimes the problem picks you. Why Elon Musk is doing specifics, there is some reasoning behind it. Right? Why is he attracted by that problem? So I think we all are attracted by the problem with the way we think the world. And then the immediate attention, it needs to. So that's the logic.
Krishna Jonnakadla 17:01
We go to the matching of students with the university use case just to discuss and approach, you said, if you have to pick a big idea, or a big industry and make an impact, it's usually challenging. But if I were to look at matching students with the right University, just possibly a summary of what that first idea was, I think it's got tremendous potential. But what starts happening is that as soon as you start solving the problem, you start realizing that people are solving the problem in bits and pieces, and the initial conclusion, sometimes maybe there is no problem to be solved. When you begin Explara, did some sort of similar realization happen, where you thought you spoke about Excel spreadsheets and tickets at the door? Because more often than not, what that does is it challenges the very notion if there is even a problem that has to be solved, yes, there is a problem. But the customer seems to be happy with the way he's solving it. And therefore, the hypothesis falls apart. Did that sort of a realization dawn?
Oh, not exactly. So what we realize is, so when you look at any problem, right? The part of offering a solution is to improve the customers life, are you they're improving their time, right? So they are getting more time to do what they can do, are you helping them to make more money, or you helping them to have a better experience of their offerings time. So two or three things, I realized that with Explara's we quickly realized that a small scale event organizers who couldn't guarantee or really know till the last minute how much money you are going to make, right? So if I'm doing an event, and it's going to cost me five lakhs, and I'm doing everything offline, those were the days I'm talking about 1999, then you kind of literally in a 90% risk, because you don't know how many people are going to turn up, how many people have paid you, check how many checks are going to bounce, how many people really tried to reach you and couldn't book. So there are so many unaccounted money, and you cannot run a business that is going to grow if you don't use technology. So I could realize that Yes, there it is. Absolutely if I look at an unit level, a customer has a pain point, can I multiply it out to thousand x saying such thousand customers would have been. Yes. How much of that is going to contribute 30% of the air in our revenue is going to increase? Okay, so that's my contribution. So that's the skill that we would operate. But yeah, if you look forward, and then say sometimes the industry doesn't grow, right. So in India, the entertainment industry didn't grow up for various reasons, cash and the lack of infra structures, venues were not there and even today, only some top venues are in couple of cities, and the city infrastructure is not even improved in to large extent, if you compare it with Singapore, who does a hundreds of large scale entertainment events, right? So this scale, the market might not give you a scale, but at some point of time you have to first figure out who's your customer. Does that customer similar ideal customer profile scale is existing or not. And then when you do that at a market, you also figure out and find out whether I can go to the other market by taking the product, right. So we realized that initially that yes, this is a pain point. And the ideal customer profile is nothing to do with India only. So you have the same customers in other countries. So if your problem solution is right, fit in another market, you can take into another market, and in a market where your existing and you creat it, is going to evolve as it evolves. So you're going to continue to generate good return from your customer word of mouth. And if you have been retaining, you're going to be leading in that market plus opening into other markets, right. So your scale is to be calculated based upon the market that you operate plus, which are the other markets that you can go either might be local players and global players and all that we will take that into account too. But does that even exist? That's the scale that I picked up here versus the other skill that we were talking in the first venturies? Yes, it's a global thing where students are going out and studying in bigger universities and millions every year. So there is definitely a measurable, organized industry while event was not organized industry. To be frank about it's a very difficult industry to get in because you didn't have data points and only in 2012, I think E and Y with Event Management Association of India did a market study. So three years before that I had arrived. So my suggestion to entrepreneurs is to always see whether you are getting an organized industry or an unorganized. Now there is a huge benefit in both sometime you will get in an unorganized industry where you can rapidly become the market leader and just take over the entire market that's happening right now in India's evolving scenario. If it's an organized industy, you have to find out a disruption so that you can quickly pull back. So that's the scale that has this kind of factors that you need to take into account before you arrive whether I'm going to spend time and money in this.
Krishna Jonnakadla 22:04
I love what you said about the getting visibility into the cash flow perfect. That's a piece of insight that only comes in once you start digging in. Because initially, what looks like a ticketing problem for the lack of technology eventually means that it's actually causing other problems down the line. So like you said, If somebody's spending five lakh rupees on an event, not getting advanced booking, advanced fee, and getting a sense of what the attendance is going to be like, is a huge impact. Right? So it's a huge piece of insight. That's, amazing. So let's talk about the evolution of the customer base, etc. Are there certain phases in the beginning, the kind of customers that actually attracted? What did that growth curve look like? When did growth happen in a way that you yourself could not control? because now you're powering thousands of UN managers across the world. And you also talked about word of mouth powering a lot of your product adoption. That means this is spreading wild. The speed can be anything. So talk to us about the nine year journey. How you've seen Explara?
Yeah, so the initial one year two year was all about building one to one communication, right? So you need to identify who are the early adopters, you literally have to build it to say, Hey, I'm building this product. Can I demo it, right? So if I go back to my 2008, this Twitter feed, I would see lot of such kind of initiatives say hey, this is a new product. And I saw that you were doing an event. Can I demo you what you're doing? Or can we call you? So the initial year is all about you know kind of benchmarking what you offering versus the real problem with the customers and seeing whether the customer appreciates what you're offering or is he or she is ok to delay the adoption, right. So you figure out that you earlier have to call and say okay, here are the 20 customers who were coming in. The kind of customer that we attracted in the initial two years were all enthusiastic. They were part of it BarCamps, they're part of a cyber security hacker communities, they were part of seminar organizations to talk about open source. That's the initial right. So they pulled it to one. But then when they started coming in, we saw somewhere in between big chunk of entertainment industry started coming in, because they said oh yeah, we have the same problem. But they were okay and not to use technology for the initial two year. They said, Oh, no, that's fine. That's fine, that's fine. And then suddenly, they realize No, we are not, 30% is still a loss, because we are not able to guarantee that we're going to make money out of it. So we got that spike. Then the bigger conference organizers started coming in, because the earlier the ones which were initially using, they had already migrated to host bigger conferences or bigger events or bigger communities, right, where they were able to pull out hundreds of events and educating startup conferences or tech conferences or media conferences. So that boom started coming in. When that started coming in, then the government agencies started looking it and saying oh, you got a platform, why don't we use that platform, and even the tech had matured the workflows and matured. So you're not just talking about a page to do your event. But you were talking about how do I bring invitation only registrations? How do I automate my confirmations? How do I validate that only certain set of workloads is available. So the larger scale companies have started coming, and that was around 13-14, when we started attracting those, and then it was so natural that you had a predictable model to say, yeah, we're growing 30% a year, you know, 40% year on year and all that. But we saw a huge spike within 12 to 13. Infact in 12 to 13 we grew over a year we grew 600%. And has documented as that in some of the media mentions, I because it was a big spike and then on it has been smooth on and it just looked like a hockey stick that's growing up, we would have to build another spike in the coming years, I think in another 2021 will have to have despite to go up. But I have witnessed the real way people talk about how do you go after a very early adopters and bring them into confidence. Bind them, make sure that you hear whatever they need and fulfill that and use them to take a call up. That's how we scaled over the years.
Krishna Jonnakadla 26:14
So you focused on an initial set of maybe 100-200 users and work very closely with them to identify what the product should do for them, you know, what are the bells and whistles that it should have should not have so that it generates the maximum amount of value? But it's typical playbook style, which is how it should be done. And I'm really intrigued about the part where you said some of these early adopters eventually became organizers of bigger conferences. So it sort of feels like the social networking era where initially teens start using the social network, and then they stay all the way for the next 10-15 years when they are trying to keep in touch with their network, a similar sort of effect we're seeing here.
Absolutely. So you know, some of my interactive friends, right? Early adopters becomes your friends. They like what you do, and you made an impact in daily life. So some of the early adopters who were doing cyber security hack hacker groups, right? Small, ethical hacking sessions that was happening in 2009-10. I'm talking about eventually, in 13, or 14, they were starting to do cyber security conferences, right. So they were bringing out global speakers, they were bringing our local speakers and hosting large scale conferences, which was attracting large scale sponsors, so they could do 700-600 people, and I'm talking about the earlier ones, hardly 50 people, right just to motivate people to know about ethical hacking and make it as part of their life. Right. So this thing did happen. And people who were employed initially to work with their entertainment companies, they somehow migrated. And you know, I kind of moved into a large scale conference set or event management company. So once you get in an industry and once you start working with the bit of professionals, you get that room, right? Because they say, Hey, we have already worked with these guys, they're pretty good. They're going to recommend you and to your event management company saying why are we not using the technology, why we are sort of not jumping ahead of the curve. So the initial base is very important for you to pick it up and. In fact, I think I always struggle if whenever I see a new idea, a new product to really map. Are you are you really on that initial choice of early adopters, because that can make a break. In fact, we had a discussion yesterday in our team, if we go back to the 90s era with Van and Amazon, right? Amazon picked up books to do such a nice choice, right? Everybody needed books, and you can study and you can just get it you don't have to go to bookstore, but when Van decided that they want to deliver grocery, which is only happening now. Right? So in a way, you're early adopters, those who are reading books, they could take you all the way too far. This is my way of thinking, who could you piggyback and they're going to take you on a scale.
Krishna Jonnakadla 29:05
When did you make a conscious choice to move from London to India? And when did you really jump in full time to only Explara?
Yeah, so that was around in 2012. I chose initially two three years I to work. Though I used to come out and stay here and work. But as part of living there, I always wanted to start a company, right? And it just that there was no cash flow, there are no sort of my own savings, right. So I had to be there to make some bit of money before I jump back to India. So that was always a clear cut mind. And even when I went out of India, the only reasoning was that I'm going to go get some money and make some money come back to Bangalore, mostly, and there was not that, initially I was in Pune though. But I was very, very clear headed to start a company talk.
Krishna Jonnakadla 29:58
Talk about the unit economics part of it. There's definitely a building phase for something like this. But the initial product may not have had a lot of bells and whistles, it may not even need that. So what was that initial product building cycle? How long did it take? And when did you get your first customer? And when did you turn profitable?
So the initial one was quick. The moment we realized that we can go after offering people a quick way to collect my, you know, for the event registrations and they themselves were not able to get payment gateways and all that. So we ensure that we could get that apart. Once that part is done. So we attack the event is the core part of the event registration, your payment is done. So we guarantee you that 30% is done. So you moved from. With that we could start the communication. And we had a map to say what are the other four things required. But we didn't know the six more things required. So when we started demonstrating, we had a one to one conversation, call people to demo or you work into demo, and you pitch you ensure that what you're offering they're liking this, I like it. But can you do this? So we wanted to hear what are those? Can you do this coming in time and digging? Right? In some cases, you experiment just to see whether this, can you do this is a repeatable problem that is being asked by five more customers. And then when we identified a core part and we understand how an event management function works, we started also sketching, we start out so looking at the offline world, we started looking at the global standards that's being done. And we kind of came up with a roadmap saying okay, this is how we will do it. So initially, it was very quick three to four months but the product got stable in all, it took at least 12 to 14 months to have a stability. And only after that we have retained the early adopters with ours, right? So you will just go by the brand like, we'll get into video up and running, or it's just not there, let's delay it a bit. I saw all that things were done. While we're rapidly building the product. And only after 12 to 14 months the word of mouth started coming even the word of mouth were getting generated right then when we were saying okay, we don't have this, we will do this. People were appreciating saying, hey, I spoke to these guys, they don't have this, I'm using the product, but they seems to be taking the feed back in right spirit, you know that itself is a great word of mouth. Because the other people who are watching from the side, they're going to say Oh, that is the open mindedness, I may take a chance right now you don't have to wait for 14 months for the product to come in, maybe I will be the early person who have a voice in the product. So that's the advantage to be honest, that we got in the initial days. And when after 14 months, when the product is ready, people are happy about it, addressing the bugs and issues that is coming in. And then the story is very simple to carry forward with, you know, your marketing messages, your customer support and relationship.
Krishna Jonnakadla 32:41
So when did the first paying customer from the time you launch the product? When did the first full paying customer happened?
Initially, I think within 90 days, we started getting money, when we decided that we want to get in there. Within 90 days, we started getting money.
Krishna Jonnakadla 32:57
And when do you turn profitable.
That took quite a bit of time. Because initially, when we were in a very small scale, it was we were touching. But then when we started adding more people adding more infrastructure, we again went into issues around profit and the tickets were also getting a lot more challenge by competitors coming in, right. So what we were demanding, we couldn't demand that more competition is coming in and then reduce the margin and tax rate. Right. So that was one of the biggest challenge in this industry. Because unlike other SaaS platforms where you can have a deck rate of 85%, on here hardly 10% should have the skill of doing, let's say 10 crores a month, and then you will start making it right. So that's the delay that we had to live by for many, many years. And kind of we did that with a growth mindset to go and go venture back to it. So we got a bit of funding to ensure that we are staying ahead because we created the market. Now if you're going to step back, then somebody else is going to take over. So we want to be around and then make more money and somewhere around 2014 15 we pulled out a large scale enterprise product out of that. So event ticketing is one, we have event management cloud which is required for large scale governments, event management companies which is SaaS somebody has to pay $6,000 per year to get it access. Similarly, membership management which is powering large scale associations like Tie and NASSCOM and all that. So that's again a couple of thousand dollars. When those kind of large chunk of SaaS came into play, our margin started shooting up and we were all operationally running unbreakable at all.
Krishna Jonnakadla 34:34
So the investing part of it, what was the investing journey like, when were there moments when you could not make payroll, you could not make a lot of things. And when did you truly started seeing ways at least to manage operations and talk to us about the investing journey
It has not been smooth. Again, you know being part of that ugly system right? You know, somebody starting in eight nine ten, you won't get investors, nobody was talking to you, whether in London or in India, if I write a book ever I would put this definitely there. Nobody was talking about angle ecosystem at all. All right. So you have to bootstrap, you have to do on your own. So I had to invest that initially two three years, I did run out of cash, because how much money you going to make out of your job that you're going to run your startup, your startup is going to have at least 3,4,5 people, right? So you run out. I did run out. And I was saved by two of my classmates, one in Chennai and one in US and that was one of the sort of almost a tragedy. And then again, when I came back in India 2004 and I ran out of money again, because I'm not having a job now. And the company was still in a fast paced growth mode. So the Chennai friend came, he did invest as the first angel, you know, that initial 50 lakh rupees, Ram das. And that helped us to go further for the several months, go on and then Rajan Anandan came in as the first Angel. And then we got Harvard Business School bloom and all of them, they came in as the first set of angel fund for us. But even the scale that we are talking today where people could go and raise a million money and its just an idea, that's not the case in 2012, right. Even if you have a business, u know, you won't be attracting that sort of investment, because India as a market was still big benchmarked and nobody knew how big the system ecosystem it's going to be. So we had to go through a lot of those grindings over the last two to three years. And you know, just drive the growth mainly from a customer's point of view, right, we went back to the industry to look after, where we can add value, what kind of customer segment we should go after, we retained at least 70% of customers in Explara for last six to seven years. So these are like long serving customers. And the long serving customers are very difficult and unless you make them win year on year and not break your product, too. So it has been a good constant battle to keep the pace of the growth and the potential while not having the right sort of investment. I think we have been absolutely fortunate from the trust that customers have. And the kind of word of mouth that the company has generated from people who have followed our journey for our last eight, nine years.
Krishna Jonnakadla 37:18
Decade long journey is not an easy one to take, especially if its entrepreneurial, if you're going to run out of cash, which you can foresee because it's not a surprise that is going to stare one fine day, you're not going to look at a checkbook or your passbook and say oh dear, I don't have money to make payroll. It's something that's there in the background, or in the rearview mirror, or even the forward all the time. And yet, ten years later, you're still here, you have scaled it, where these moments that you foresaw. Did you foresee a 10 year long journey when you actually started this?
I kept thinking about it and these 10 years right, you know, you always try to go to your past and say, Did you do realize that this is going to be a that long journey. To be honest when I started the company, or even today when I'm running the company, I think part of my passion is to build, out of my passion is to be a long serving journey. And I talked about in previous videos, interviews that I won't be adjusting in any industry, unless the customers are happy about it. Right? I'm not here for the sake of raising large scale fund and all that. It happens when it happens, it will happen when you make meaningful large scale it will happen. But I think as a personal choice, if I were given a choice to run the company for another 10 I wouldn't mind I have those sort of passion to continue to build, I would get utterly frustrated for not doing anything and just sitting on money. So I think I'm passionate about creation. And that has kept me alive. I didn't realize it's going to be 10. But I think now I'm realize it could be much, much longer now.
Krishna Jonnakadla 38:50
Let's talk about the users of it. We've talked enough but when did you decide to go global, outside of India?
So somewhere around 2014 we started getting customers coming out from the global markets, Philippines, South Africa. It was more organic. People saw it and then they reached out saying hey, we saw it, are interested to open it up here? Can we use your product? Like those kind of organic came in? And then we realized that Yeah, no, there is nothing that stops us to go global plus the product was already stable. And we had a fantastic benchmark against all the competitors people who were using global product they said hey, your product is good. Why is that I can't use it if I'm hosting an event outside right. So, it was a natural full organically for us to open up to other countries and continue to drive based upon word of mouth a bit of marketing too but yes organically.
Krishna Jonnakadla 39:47
So the global markets have always had a different character compared to the Indian market. Today some startups and certain products, most SAS products today that actually build for the world first and then India next. You actually have followed the opposite direction, who built it for India first, and then not out of sheer necessity to have currency translation drive profitability or cost management, it's more driven by the strength of the product and the choice from users standards gone global. So, what have you seen in terms of difference in markets? How is an average Indian user or an Indian event manager? And what was the rate of adoption between India and other countries?
So if you look at it from a India impact point of view, we are going to witness, so I am going to it answer this question in a slightly different way, we are going to witnessed a much larger adoption in the next 10 years in India for many, many products, many SaaS products. So to come back to your first example that you gave it, a lot of SaaS companies are built out of India sold globally, or they make 80% of their revenue globally, 20% here. Even the same could be told about Joewoahy which is huge billion company. That's the truth, because India as a ecosystem is still adopting new technologies. But in our case, because the market was locally there, and the customers were about to be graduating or we were educating them how to use technology. So we got access to them in 80% we are here and 20% outside India, like 30% to 40% outside India, mainly because of organic. But if you look at the value or the value in terms of revenue, if what you Make in India you may be making out of in a scale of one to 10 let's say if you make in India, three to four, you can make, you know, easily eight to nine or double, at least double or triple, outside India. So if you get a customer outside India, he going to pay with three x of what you can get in India, or even that a truth back then. And that's true even now, is it going to change in the next five years? I doubt to large extent I think we still as a country getting organized unless the entire ecosystem is designed that way, everything technologically has to be done whether invoicing or everything else, which is I think India is fast moving in that direction. So it could change. But you as a Indian SaaS company will definitely make more money if you have access to that mark. Now the question comes always accessing that market is a large scale investment proposition. So if you have that sort of proposition that you can put 2 million and get ourselves stable in US, you should go to US, you would make at least three x to four x shoot in your revenue and your growth and your global proposition versus just being in India. That's a realization and that's how market works.
Krishna Jonnakadla 42:36
In terms of various different ways in which your users have used your products. The market always surprises you make a product for, to do "A" and then you actually see them doing it for "X" "Z". All kinds of different different use cases. How have users surprised you in terms of how they have used your product.
So we created Explara for event, right? We realize that people are coming and processing payment, just processing payment, they don't have to do any event. That was an indication people came in and again, did fundraising. Right. We didn't create a platform to do that. People came in, certain events have come on, people have done the wedding given pays. No, it was not in wedding platform. So this is a very professional social platform in an industry, entertainment and business events. So that was a surprise. You know, someday people can do that. And people have used entries from remote places. Some people I'm talking about in 30 and 40 people have hosted startup event in Jammu and Kashmir. I started weekend event that happened there. So some people buzzed from there. We were surprised. BSF border security force in India, they hosted the event using this Explara, right. And so when you see and we were powering someone the large scale entertainment events in back in thirteen, we were sending courier of your ticket, and the tickets have gone all the way to Kanpur, if I remember Kochi, and a lot of remote places for a large scale, entertainment concert and where people were being sent their ticket as a courier. Right. So a lot of those kind of fun, where people have used Explara, just not the one, but in a many other cases where they've used.
Krishna Jonnakadla 44:17
So with your scale and success now comes a huge responsibility. So one is you proved the market. And you proved it from a different vantage point, you taken a decade you understand the market in and out. The users have also indeed showed you various different ways in which the product could grow. Somebody could argue that this is possibly the right time for competition to show up. Are you feeling any competitive pressures on the product side? Or on the investing side? What does competition look like to the show?
So in this market, we did have competitor. So if I have not addresed that in the interviewers conversation, so at least 11 to 12 companies have arrived and been dead in the last seven to eight years in this industry to be honest about them. And a lot of them had given fate to do it. As of today, we could be one of the company, which is to another two, who could be you know, surviving and growing even after long years without right sort of investment, large scale investment. Do you see competitors coming into this industry? Yes, we would. But fortunately, because we have build the product and scaled it, understood the key pain points, this industry is looking forward to, was in a much bigger inbound way we don't literally go to sell as of, now people come inbound much easier. So the cost of acquisitions and all going to be remain pretty low for us versus somebody who has to enter the industry by investing millions maybe to attract that attention. And because we were such a large scale customer retention, which gives you an added advantage to not outnumber us immediately within two, three months. That's one side of the competition. Second is as I give the examples of people who use Explara in various ways. We also as a company, because we are here in this journey to make sure that we are building the right sort of value for the stakeholders, can we take the company to a larger scale growth? You know, maybe I might sound ambitious, can we hit the company to an IPO at some point of time. Now all that means we are ready to take Explara in various directions. And we are now taking in, adjacent segments. So we are getting into crowdfunding with the product itself, we are getting into the online commerce or how people can use Explara to sell things digital, physical and subscription and all that is coming as Explarabeach.com whic is already getting beta launched and we're getting ready. Because we have the customers who have been long served and have indicated what are the ways they can do. And if we are fortunately, in a touch wood, we're going to be around then I'm sure we will make sense in adjacent products, not just for the same set of customers but yeah, with their word of mouth, a new set of customers or even existing customers. And we will grow this Explara to a much larger company serving in a couple of key in a product pain point, you know, stock market.
Krishna Jonnakadla 47:20
Yeah. So as of today, or as of now we have at least 68% to 70% retained customers. So yeah, naturally, you know, customer acquisition cost has gone, we make money out of them, I'm talking about at least more than five years. So it's so you know, in a way, you're getting fantastic. Now, because this is long serving customers. So those who are entering the market and looking to host events, they find it trustworthy, to say, Oh, this platform has been used for more than four or five years for this kind of competitors or customers in that segment, they naturally choose Explara, right. So your customer acquisition cost is absolutely negligible. And your net gain out of each customers is much higher. So we've been fortunately in that bucket. If you look at viz camp, and which is very popularly people refer to, they do the same thing, right. They don't have to spend on Google Ad, because there was such a good loyal customer base, and each generating forward referrals or word of mooth and so you literally sweet spot, sit down there and just identify that segment to do it. To be honest this doesn't happen across the segment. This is more in the business events and where we specialize. And those are the sort of customers who are professionals, who don't go to Google often to figure out what they want to do, right. And if you look at the tech products, even in Valley, lot of products are all driven by word of mouth. All to say, Hey, just go do it. You know, people are so vocal about it, you can't stop, everybody says just try this chat or try this Trello, try the other things. Here in India and for our global set of customers, we have been fortunate to reduce the cache based upon word of mouth. So we've been fortunate with this set of customers that we have, they are the early adopters continue to be there, they are the tech evangelist, they're going to talk about the product that they are going to like it. They're going to be very vocal, both things that they want to see and things that they like, which means that you don't have to depend upon ad spend, to bring them in to your ad spend could be in another market, but not in a local market that you've already been good about it. So those equations are things that has kept us kicking and growing over the years.
Krishna Jonnakadla 49:59
Really sounds like a dream story. Because you spend 12 to 14 months creating a product and then it's like an oil well that you dig, you take a little bit of effort to dig the well but then eventually start gushing while and then you start refining it and there's obviously expense with the refining part. That's fantastic. Let's talk about the team part of it. How's your internal culture? What sort of people did you recruit and what was the choice behind moving from Pune to Bangalore?
So on the people side, so, first to come to the internal culture because I started the company remotely. So the entire company today even, you know, earlier years is all based upon trust. I never followed or micromanaged my team to say what time you are coming in? What time you are going on? Because I was not around, they also trusted that the founder can trust us. So you know much that he doesn't have to change yours. So the work was very openly discussed on a Skype and agreed and send it to. So the culture is very open, the culture is definitely in a zero percentage micromanagement. We, in fact, as a part of company culture, there are team leaders and many other management team, we all say that, look, if I am coming back to you and asking three times about a report that means that something's broke, we have broken our culture, how is it possible that we asking for these three times, right. So it has to be proactively talked, proactively said and a greed doesn't chasing one after another one. So that's part of a little bit of culture there. And we also have taken a lot of kind of bit around people who might not have been proven. So we have Pankaj who does head of engineering and CTO now and he came way back when the company was getting started. He came in one fine day, he didn't have a job, a very small story. He didn't have his job, he came into the company to ask for the funding for an NGO that he was helping way back eight, nine, right, we got Pankaj onboard it. And he has been building engineering functions from then to hand it now, right? We've had people coming in doing our design where some of the companies that were working, they're not even getting five thousand rupees paid. We just recruited them, paid them market salary. And then they went out doing rock stars. There was somebody who used to be, head of the marketing, at some point of time, used to be doing PhD in IIC he gave a PhD, and came recommended from his friend to work with us. And in one year, he was so much performing, that I haven't seen a person like that. So we always been fortunately, finding people not in the usual way. But giving chances if somebody is willing to say, Oh, you know, I don't do this, but give me a chance, I'll explore it out. So that's another way we build our team. And internally, we have a mindset to say, I personally and I think that is gone to lot of our key team members that each of us are here, because we love the journey. We love each other's company, and absolutely to remain transparent. So if the company is doing well, we all know if the company is not doing well we all know about it. And then kind of mutual appreciation to keep pushing it we do take hotbeds we do talk all that usual team building, but that's the culture that we do with you.
Krishna Jonnakadla 53:26
It always never ceases to surprise me Santosh, when you talk about taking bets on people who possibly have not had a chance to prove themselves somewhere else. I don't know if you've seen Moneyball, the Brad Pitt movie, what Billy Beane does with the Oakland Raiders at that point, Oakland A's, which is a baseball team, and he assembles a series of people who all look like misfits, and they have not been given a chance somewhere else. And I see that story gets repeated time after time. I keep thinking should I ask the culture question or not. Because I don't want to get a canned response saying that, Yeah, we recruited, you know, we were all from x place and it all turned out for us. Because that feels like the story that everybody wants to tell you. But it never ceases to surprise me. Because this is exactly what real growth stories are made off. Of picking people, diamonds in the rough that nobody else will recognize saying that, hey, this person's got talent. And in most cases, I've done that personally. And I've seen the exact same results that you have seen here. So kudos to that.
Krishna Jonnakadla 54:37
So Santosh, it has been a pleasure chatting with you. We've covered a variety of topics. And I especially love your down to earth attitude, and your no hold sword, focus on your users. And also in ensuring that everybody has a fun time doing that. We can see where Explara gets all its fun from. I'm sure you're a big driving force behind that. We wish to see Explara in even more bigger scale on an even more bigger scale in other countries. And in closing, any comments you might want to say.
I think it has been a fantastic to you know sort of reflect the journey. Like you know, and in the moment of this kind of discussions, you always go back the past, you know, day in day out, you look forward. I think these are the sort of talks where you go back into past and look back your memory. I think it is really wonderful to talk to you and present all the thoughts that I had.
Krishna Jonnakadla 55:35
Thank you so much.
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