The Exchanges

Q Uh, your co-founder, uh, Sunil, moved to U.S. like quite early. Was it a strategic move to build the U.S. sales team and you build the U.S. base?

A Yeah, it was, uh, it was less for sales, I would say, but more for product thinking. Uh, so Sunil, prior to, uh, us starting Clevita was based out of the U.S. And, uh, when we started clever tap, you know, there was a decision that North America is going to be a very significant market for us. And the, and it's probably the most mature market there is in the world for not only SAS products, but everything to do with marketing, retention, customer acquisition, analytics, all of those things. Uh, and, uh, what we wanted to do is wanted to learn from that market. Uh, we always believe in, in learning from the best. So what was it that the market could teach us? So when it was time, like, you know, right after our seed funding, uh, we have one of us had to move to the U S and we decided it's going to be Sunil. Uh, and what Sunil did was, uh, of course he established a beachhead. Uh, he was there in the market very early, but he also kind of, uh, you know, spoke to a lot of entrepreneurs, spoke to a lot of businesses to gauge what is it? Uh, that they are missing in the current stack, and, you know, overwhelmingly we, we heard that, you know, hey, there's just too many tools. Uh, I'm sure you know this type stack, but, uh, there are probably more than 500 tools being used in anyone's growth stack, uh, which is we believe is like a lot of them, right? And then it is Data inconsistenc…

AI assessment note: “it was less for sales, I would say, but more for product thinking.”

Q is it required because this is a common theme, uh, Indian SaaS entrepreneurs after this scale to one million ARR, right? The constant feedback from investors, the senior entrepreneur is to move to US, right? Is it required, right? The SaaS entrepreneur when he starts to think of at some point of time, I have to move to US, right? To if, if I want to build a large company.

A Yeah. I mean, um, uh, I have a little different opinion from everyone else or everything that I've heard. Um, I don't think so. You have to move to the U S uh, and not because anyone else is telling you to move to the U S right now, you don't need to be in the U S to build a large company. We have seen the founders of Atlassian. They were based out of ANZ and they build extremely large company. There are so many other founders who are not even in the Bay area. They're like, you know, somewhere else in the U S or they are not even in the U S right. There's some other part of the world. Um, You have to be clear on why you want to move to the US, right? It is definitely not for sales. Uh, America is a market that does not want to see you in person, right? They're happy to buy products online, uh, through Zoom, through, you know, like they,, they're absolutely happy to swipe the credit card on a product that's available, you know, on online, right? They don't have to meet you or WhatsApp you or call you or whatever. Um, If the reason for you moving is to learn from a market, then by all means you have to move to the market, right? I know founders who have shifted to Southeast Asia. Some have moved to Berlin to learn from that respective markets, right? So depending upon where you think your majority of your customers are going to come from, you have to go learn from that market, no…

AI assessment note: “I don't think so. You have to move to the U S”

Q Anand, uh, uh, would you say that Southeast Asia pays better than, than India?

A I don't know. I mean, I'm not big on such comparisons. I think again, it's the quantum of the problem you solve for someone. If you're solving a big problem, uh, they'll pay you big. We have seen this happen across the world. So there is no India versus North America or Southeast Asia versus India, uh, comparison at all. Uh, it is the same product that you get no matter where you are in the world. Like CleverTap offers one product. Uh, and it's a fairly broad product, right? It, as I said, like it solves for retention. And you can't solve by retention by running marketing campaigns, right? Without data. Uh, and you cannot like, you know, uh, have data without it being actionable and being real time. Uh, and you cannot be all of that at high scale and high volume, right? For example, one of my customers sends me over two trillion data points every month. That is just one of my customers. So to solve it at that scale for them, You, they'll pay you right now. If that kind of a problem exists in Southeast Asia, they'll pay you better. If that problem exists in North America, they'll pay you better. So the quantum of the problem defines the amount of money you will make from a customer. Uh, thankfully we've been able to solve this and demonstrate very clear ROI to our customers. Uh, and that's, uh, you know, that's why the net retention, uh, revenue for us is extremely healthy on 20…

AI assessment note: “there is no India versus North America or Southeast Asia versus India, uh, comparison at all.”

Q One more question, uh, you know, on, on that, which I have is, uh, uh, accelerating, uh, the, the enterprise, uh, sales cycle, right? Uh, Have hiring senior folks who already did enterprise sales helped you doing that?

A Yeah, it definitely helps, right? They know how to navigate the system. In a lot of cases, the enterprise wants to buy your product, right? That is why they, they approached you, or they've had three meetings with you. In a lot of cases, it does not happen. The contract does not get signed because of bureaucracy, because of their natural Way of doing things, right? Uh, there is no clear decision maker that's identified. There is no, uh, promoter in the company. Like when I, I'm not company promoter, I meant, uh, someone who was proponent of your deal, uh, or someone who wants to buy or will actually end up using. So again, in a large enterprise, the buyer might be different from the user might be different from the budget and the person actually signs the contract, right? In a lot of cases, the financial guys will sign the contract, someone from, for, from procurement. But legal will negotiate this for like weeks on an end, right? They might want to redline the doc and all that. Uh, so these are two parties that are not even going to use the product. Then there is an L two or an L one, like, you know, who we call as a senior executive, they may want to use their product, but they are, they care about moving some big metric, right? Like, you know, Hey, can we solve, can we increase retention, customer retention by two percent or two X or whatever your goal might be, right? Uh, c…

AI assessment note: “Yeah, it definitely helps, right? They know how to navigate the system.”

Q know, you have been an entrepreneur in the, in the startup ecosystem for, for a while, right? Uh, is, is that your journey starts way back, I think, you know, around 2005, 2006, you have been vocal on Twitter around your learnings, right? So, so would like to tap into, you know, a summary of your journey, how your thought process behind it, and what led you to found Clevertap?

A Sure. Uh, thank you, Sudhar. Um, I think, uh, uh, I moved back from the U S in 2006, uh, and I ran a consumer startup, um, which was pre-Zomato. It was in the food, uh, you know, restaurant discovery, uh, space. Um, and after that, after that got acquired by network. I was with network it in for four years, running a lot of the consumer businesses. Uh, so think of yellow pages, think of money control, uh, the IBM. Uh, and so on and so forth, right? Uh, I think one thing that we noticed, uh, Running a consumer business that it's very hard to understand what your users truly want. And that is because you're not collecting enough data about the user. First party data, I mean, right? And even if you have access to the data, you don't know how to process all this in real time, how to make sense out of it. You have to convert data into information and then use it to serve your users better. So I think after having spent four years in networking, we decided to start Clevertap. With a simple objective of can we leverage data, can we leverage machine learning, can we leverage, uh, real time, uh, platform, uh, to engage users in real time, uh, so that you can retain them better such that it drives your long-term, uh, you know, LTV, uh, lifetime value of the customer and improve, uh, retention metrics.

AI assessment note: “after having spent four years in networking, we decided to start Clevertap.”

Q Uh, Indian enterprise, especially the family run enterprises have been, you know, uh, notoriously named for, you know, uh, uh, taking six months to one year or even more than that to, you know, negotiate contracts, uh, even before the first dollar is paid. Have you seen that, uh, reducing over the years and what helped you reduce that long sales cycle?

A Yeah. Uh, well, one, we work with a lot of, uh, family owned enterprises. Uh, so, um, and we work with a lot of startups. We work with a lot of other corporates, professionally run corporates and so and so forth. Right. Um, we've never had this problem to be honest. Right. Again, uh, in the early days, we chose not to go to the larger companies. Uh, right. Uh, or the more notorious ones, right? Like you said, like, you know, there might be reputation and you better stay clear of those. Uh, in the early days, you are looking to get validation of your product. You gotta, you gotta find customers that will use your product and will share their learnings with you, right? In the early days, it is all about learning, right? Direct learning. Uh, because you can action that into the product. Now, if you spend like eight months negotiating a contract, you're not learning anything. Uh, you're probably, the lawyer's learning a lot, maybe, or you're paying the lawyers a lot, but no, you're not learning on the product side, right? Um, you might, you don't have to find the, the hairiest customer, right? You have to find the one that's very receptive is okay to take a bet on you and try out your product. Um, So that's that, right? As you gain heft, as you grow bigger, uh, you, you know, you can enforce certain things, right? Uh, for example, uh, the product will not, or you will not be onboar…

AI assessment note: “we've never had this problem to be honest. Right. Again, in the early days”

Q And, uh, when you are seeing, right, the current bunch of SaaS entrepreneurs, right? How do you find that they're better than you when you started?

A I think they're a lot more ambitious. Uh, they have a lot more energy and, uh, they're willing to learn. I interact with a lot of early stage startup, uh, entrepreneurs, uh, sometimes, you know, it's through Sequoia or through Accel or generally people reach out to me on Twitter or on email. And, ah, you know, I, I gave some time to them. I, I think, I think they have more, they have, they have playbooks, right? They have access to playbooks, they have access to people like me, they have access to other entrepreneurs who have done it before, and they're eager to learn. Literally, when we started, there was no one around, like, you know, I mean, there's, what are you going to emulate? Uh, the building blocks have become easier too. Um, a lot of the, uh, VCs, they run these batches, like, you know, uh, early stage company badges in which they invite a lot of industry experts, et cetera, uh, where you can learn from. So I think they're a lot more, uh, flexible. They're a lot more innovative. They're a lot more, uh, You know, progressive and they're, so I'm very confident. I mean, I'm so optimistic about the, the newer batch of, uh, SaaS entrepreneurs, if you will. Uh, and there is no copy model, right? I mean, they're not trying to copy anyone. They're trying to figure out what are the innovative solutions, you know, what's, what's missing, et cetera. Um, and, uh, and built for th…

AI assessment note: “I think they're a lot more ambitious. Uh, they have a lot more energy”

Q So if you can share, right, from 2016, uh, to every year on year, how has the revenue compounded?

A Yeah. So we've grown at two, 50% plus CAGR, which is compounded annual growth rate. Uh, and we've been very lucky to find a very broad adoption in the India plus Southeast Asia market. Uh, that was the first market we went to, to sell the product. Uh, you know, this clever tap was founded in Mumbai, uh, and I'm still in Mumbai. Uh, one of the outliers, uh, from the rest of the ecosystem, but, uh, Uh, we, we had a, you know, we had a little thesis like that, uh, Indian startup ecosystem, the consumer side is going to blow up. Um, and they will require a product and what better to, you know, instead of going halfway across the globe, can we sell to Indian startups? Can we sell to the ones that might need the product like ours? Um, and, uh, in that we found some of the biggest brands, uh, that there are in India that today use us. Uh, so that led to a massive expansion of product capabilities, but also of revenue, uh, as they grew, we grew as well. So India, Southeast Asia, Latin America, Middle East, Europe, and North America continue to be our big markets, which pretty much covers, you know, outside of Japan, Korea, and China, which is pretty much everything. And we have, we have very, very good logos that work with us across these markets.

AI assessment note: “we've grown at two, 50% plus CAGR, which is compounded annual growth rate”

Q And what, what were some of the mistakes that you did, you know, during your journey from one to 10?

A Well, I could fill up, uh, you know, the rest of the, we could extend this podcast for like two, three more hours, but, uh, uh, I think we made plenty of mistakes, right? We, uh, for example, we did not know how to price the product from that all the way to, uh, we, we hired people who told us that, Hey, we will show you the way, uh, and. Uh, for example, uh, you know, North America is a dream market for everyone. It's also has the most depth in any market. And, uh, some of the mistakes we did on people, on culture, on probably growing too rapidly, uh, and advice I give to a lot of people like, you know, hey, uh, pace out your growth. Uh, so in 2019, there is two rounds of capital back to back of around B and C, uh, literally four or five months apart from each other. Uh, we are growing fantastically well, and we stepped on the pedal. Uh, we hired a lot of people and it was just very hard to scale culture, uh, across the world. This was not even North America versus India. This was like, you know, we had people in the Middle East, in Europe, in South America, in North America, Southeast Asia. So literally everywhere. And how do you scale this culture? How do you make sure that, uh, people understand what your startup stands for, the way you, you know, run things, the way you build products and so on and so forth. So I think that was, uh, if, if, If you would ask me what was you…

AI assessment note: “we did not know how to price the product from that all the way to”

Q in the same space, right? So, so does it worry you that, you know, suddenly you are in an extremely combative space, uh, right? And, uh, the, the multiples, uh, Uh, or, uh, for, for, from a VC funding, uh, you know, uh, can be low because of the competition as well as, you know, the customer has so many choices to make, right? How do you think about that?

A Correct. Uh, I think, uh, one having competition validates your space. Uh, you're not the only one building a solution, but, uh, you know, uh, More importantly, you know, how, what does the competitive landscape look like? So let's say you're running a consumer business, right? Uh, and you would have products like analytics in your stack. You might have an email service provider. You might have a WhatsApp provider. You might have push notifications. There might be a segmentation engine. There might be, uh, all sorts of various tools, right? Like, you know, recommendation engine and so on and so forth. Now, if you broadly look at what's out there, Uh, these are all point solutions, right? They solve for us one specific use case. For example, if you are using WhatsApp to reach out to the users, uh, you will have to buy WhatsApp from one of the providers, or if you have, uh, analytics, uh, from a particular, uh, provider, like, you know, that will solve for that particular thing, right? Uh, no one solves the problem or no one puts this data together holistically for you, the growth manager. Uh, what Clevertap does is, you know, we have, What we did in the first three years of our startup life is what we build this, uh, unified data layer, this one data layer through which you can accumulate data from multiple sources. So your contact center data, your, um, you know, uh, data that'…

AI assessment note: “having competition validates your space. Uh, you're not the only one building a solution”

Q know, uh, as we discussed in offline conversation, there are fewer than, you know, 10 companies which are above 50 mill ARR in India, pure SaaS businesses, right? What do you think will, will take, take us when, you know, we see, right, at least four to five Indian SaaS companies going IPO in US, what is required and how much time, ecosystem efforts are required to take us there?

A I will steal a line they say about innovation, right? That it's very slow and then it happens all of a sudden. So, uh, you know, if you look at the Indian SaaS industry, literally Girish, uh, started it. Uh, there were a few, very few other players, right? Uh, I can say Zoho was one of them. Uh, there was browser stack, maybe, you know, there are a couple of, a couple, three others, uh, uh, that, that literally started that, right? They, they said they had a hypothesis. They were not copying any idea. They were actually building original products. Uh, and then all of a sudden fast forward, like, you know, seven, eight years, and then you have so many startups. Uh, I think there are thousands of SaaS companies right now. A lot of them, you may not even have heard the name. Uh, they have access to capital. There are some extremely good investors in the domestic market, like in India. Uh, there is a lot of investors that are willing to invest in India from outside. Uh, we've seen this. We read the news. We know what I'm talking about. Uh, And then there is a talent depth, uh, which is being created as you speak. Uh, there was a dearth of talent, right? We had good product builders. We did not know how to market the product. Uh, we knew how to engineer it. We did not know how to build finance in the products, right? Uh, we are learning it. Uh, and we are learning it from the best p…

AI assessment note: “there is a talent depth, which is being created as you speak.”

Q Anand said that, uh, for Indian enterprises to pay, let's say, one million dollars annually is very hard to crack for a SaaS company, right? How, how did you build, you know, your education and pricing models for your customers so that you could reach and even cross that, as you said, right? Your, some of the customers are paying 2.5 mil, uh, in ACV right now.

A Yeah, I think, uh, you know, it is, and I've learned this, uh, customers pay you for the, for the size of the problem you solve for them, right? So they, you have to solve for a bigger problem, like, you know, a much more hairy problem for them, for them to pay you a few million dollars, right? Uh, it's not that they don't want to pay, you know, uh, Indian customers do pay, like, you know, they are running, if you look at the telecom operators, if you look at e-commerce companies, if you look at, Uh, grocery companies, food delivery, streaming apps, uh, financial applications, banks, they pay millions of dollars, right? They just don't pay to an Indian vendor, right? And some cases, I mean, they do now, uh, but, uh, so you have to, it, it is what your product does for them. If your product solves a much bigger problem for them, uh, makes them, you know, earn a lot of more money, uh, or retain better, like, you know, they will definitely pay you. Uh, if you're selling a, uh, Like a simpler solution, like, let's say you're selling a chat bot, like, you know, or a telephone. I mean, these things will not get you millions of dollars, right? Uh, so that's what we did. That's what we realized that we need to solve this problem holistically for us to be able to solve a bigger customer problem. We need to, You know, build out this platform fully. And that's what we told our investors t…

AI assessment note: “customers pay you for the, for the size of the problem you solve for them”