The Exchanges

Q So how did your idea of Better Place came to you? Like when, when you said you were doing market research, so what are different ideas were you considering before narrowing it down to Better Place?

A I was not considering any other idea, uh, Siddharth. I was very clear that this is what I wanted to do, and the reason I quit my job is to do this, right? Uh, so why this idea came at all? Um, my partner, uh, sort of, his father, uh, is Uday Singh. And he runs the largest security company in the country, uh, which is called SIS. It's a billion dollar plus company. They employ, uh, one and a half lakh plus employees. He has now taken retirement, uh, from their job. He was the group CEO of the company. We used to talk about, uh, blue collar and the challenges they face, uh, with all different respects, right? So there were challenges from the individual in terms of opportunity, jobs, access, living conditions, and so on, right? Uh, and this was alien to us, right? As a white collar employee, we always took it for granted, and all the software that we, we used to develop earlier, were designed towards, uh, the white collar, like the HRMAS, the access to benefits, and so on and so forth. And we said that we need to do something around this space, right? So we said, why don't we build an identity of an individual, uh, which they can carry anytime with them. Uh, and then there was an Aadhaar, right? Uh, so that identity, basic identity was solved with Aadhaar in principle. Then we said, what is missing on top of Aadhaar is a score of that individual, right? If I go to a, uh, insuranc…

AI assessment note: “I was not considering any other idea, uh, Siddharth. I was very clear”

Q And what would be the current growth year on year, if you can share that?

A We are growing more than a hundred percent year on year, uh, Siddharth right now. Um, we, we overall in last five years, we have grown, uh, uh, roughly 30 X, uh, not accounting the zero one, right? The beginning, uh, and we will continue to grow. I mean, if you look at our current projections, we'll be at 130, 140%, uh, from a growth point of view, uh, in a B to B you, it's very easy to predict the growth as well, because you know, the work orders, you have the contracts and so on. Uh, and I think, uh, uh, 120, 130 in an organic growth is very sound growth. What we are also doing is some inorganic, uh, opportunities we are looking at, and we are also in the, in the inorganic path. I think, uh, with that we might grow hundred, uh, 70 to 200%, uh, this year from a numbers perspective.

AI assessment note: “We are growing more than a hundred percent year on year”

Q Can you share in detail what are the different problems you solve via workforce management solution and also how you solve it?

A Sure. Uh, so we define, uh, workforce management solution from a blue column enterprise into five categories, right? The first problem is how do you source and onboard an individual, right? Uh, in blue collar, uh, this is a fragmented industry. It's very distributed as well. Uh, if you look at a company with, uh, let's say, 10,000 employees in a security guard company, they might be operating out of 150 different locations, right? So it's not a very centralized one or two workplace kind of thing, right? And attrition is very high. Attrition can go from hundred percent to 300% depending on the segments and the season and so on, right? So sourcing and onboarding becomes a perennial problem. Now, most of the sourcing happens through a manual process. You actually go source through an NGO, people on the street and going and getting people through different sources and so on, so forth. It is not scalable, right? And that's the challenge that every company is facing. And that challenge was actually, uh, became multifold In the given situation of COVID and Corona where people still want to hire, but they cannot reach out, right? So we convert that sourcing and onboarding through a digital program completely. You don't need any manual process. You don't need photocopies, Xerox copies of identity, address proof. You don't need physical forms. All you need is a mobile app, and then the w…

AI assessment note: “we define workforce management solution from a blue column enterprise into five categories”

Q And typically, how are the SaaS companies valued, like how, in your journey, how are you valued by investors? Was it based on ARR and this current climate, right, bull market, uh, in spite of pandemic, how are, you know, companies at ten million ARR building for India, for example, yourself, like valued in the market?

A Yeah. So, uh, in the, in the early days, it is not by ARR because that is not the right parameter to look into, right? That was more done based on the potential of the company. So seed fund is completely based on potential. You come up with a number. Is there real science behind it? Uh, honestly speaking, no, right? You just do it. Uh, series A, you bring some science behind it, but still there is a potential, right? Uh, series B onwards, you start looking at, uh, multiples, right? SaaS multiple could vary depending on the margin, the gross margin, and other things could vary between eight to 12, right? Uh, if, if you have, uh, exponential growth, then it could go up to 15 next as well. So it depends on, uh, it depends on your, uh, revenue. It depends on, uh, the gross margin and the growth, uh, yearly growth, right? And the variation could be between eight to 15. On average in the market that you will see, uh, where the companies are listed and so on, On ARR, it would be around six to eight. So anything between eight and above is a very good number to get as a multiple in a SaaS business.

AI assessment note: “Series B onwards, you start looking at, uh, multiples, right? SaaS multiple could vary”

Q So it seems like a quite an exhaustive solution which might have taken, you know, years and years of, uh, building. Uh, what was the first hook that got you started, right? You wouldn't have, I believe, waited to develop every module into the system in the workforce management. What was the first hook that you got started?

A That's absolutely right, uh, Siddharth. I mean, you cannot do, you cannot boil the ocean. Even now, while we talk about all the models, there are a lot of enhancements that we keep doing. We have a two years clear roadmap, what we will do. Uh, we looked at, uh, the lowest hanging, uh, opportunity and the biggest problem. So we identified two biggest problem in this space. Problem number one was, uh, onboarding was a big problem because there's a lot of manual activity. Check of credentials. They have to do the background check of that individual as well. And the second problem was attendance and payroll, right? Attendance and payroll is, uh, is a bigger solution to implement. It takes time to really understand every aspect of, uh, the customer need, and it is not as simple as it in white collar that you do any now. So we decided to go with onboarding solution integrated with background verification. So that's when we had started in, uh, we continued doing that for three and a half years before bringing in a new model. Uh, so we continued doing that. We wanted to be master of that. Today we are the largest in the country, uh, when it comes to onboarding and background verification. And once we were clear, we had customer engagement in hook, then only we started picking up the next model, right? So, uh, and the journey is still continued. So while all the components I mentioned, …

AI assessment note: “we decided to go with onboarding solution integrated with background verification”

Q Praveen, can you share the top three mistakes you made in building a better place that you could advise to, you know, your fellow entrepreneur not to commit first?

A There are many actually, uh, I don't know which ones to start with naming, but if I think if I have to redo everything from scratch, right, what are the things that I will do differently? Uh, the first thing I will do is that when we started building our team, uh, we thought, uh, sort of, and I can do large part of it and bring, uh, the senior executives at a later stage, right? Uh, if I have to do it again, I will actually bring some of the key talents at the very beginning of the company. Uh, and I think we were one and a half years, two years delayed in that path, right? I think that, uh, key talent gives you the bandwidth, gives you the, Uh, different views, different scales, different perspectives. So that's something I will, uh, definitely, uh, definitely do. The second thing, um, that if I have to do, uh, differently, uh, compared to what we are today, I will actually start looking at, uh, uh, our customers, uh, uh, deeper, and rather than going with 700 or 800 customers, I would have rather focused on A hundred customers and went deeper into those customers and then expanded to multiple customers, right? So sometimes it is more, I mean, it's a strategy discussion. You want to go to a hundred customers with the same solution, or you want to go to 10 customers with multiple solutions, right? So that's a starting discussion, but this is what I would do that I would build m…

AI assessment note: “if I have to do it again, I will actually bring some of the key talents”

Q I mean, ah, what, what do you see change in yourself as a leader from six years ago today? And first is the change. And second is, if you reflect, what are the things or habits in you that, you know, made that change happen?

A You're asking too many difficult questions. Uh, I think it's my team who can perhaps talk about, uh, more, uh, what has changed in me. Uh, but I think, uh, there's some, some positives that I see in myself. Uh, I have changed a lot in terms of listening capabilities. Uh, I don't like to give an opinion immediately that I used to do in past. Uh, and that has happened because I see that there are a lot of things that I don't know, and this is an area where I had no clue when we started. So we had to learn every day, and everybody comes with a new idea, and typically much better than my own idea, right? So I think I'm better than, uh, more, more, more, uh, I would say patient listener these days. Uh, second thing is that I have, uh, perhaps a bigger perspective than I used to think, right? Uh, when you are working, you are always having your, uh, three months, 12 months, uh, in your mind. You're not thinking about five years, 10 years. You're not thinking about changing the world every time, right? Uh, today I actually have a much deeper understanding of the industry. I, I, I believe that I can contribute towards blue collar. I have my own opinion. I want to build that category. I want to disrupt it and I get more knowledge around it, right? So I can add more value, uh, around this whole topic itself. Uh, third thing, uh, in my leadership style that, uh, I changed, uh, is that I u…

AI assessment note: “I have changed a lot in terms of listening capabilities.”

Q So the biggest point for me, you know, from your journey is you built a very unique company SaaS solution for India from India, a ten million SaaS, which is almost unheard of in other companies. Why you ask this question, like build SaaS for global, why are you building for India? And India isn't a deep market.

A Well, I, I think when we started, uh, I, so I always look at, uh, the business as an impact and the purpose, right? And we look at people. So there are 15 to 17 crore people, uh, and how can we help them, right? Uh, and then we looked at that, can it be a sustainable business, right? Then we looked at the numbers that the companies are spending today. That companies are spending roughly 20,000 rupees per person per year, right? Already spending. So we are not asking for the new money. This is the money being spent. So we went to the companies, some of these companies as part of our research and said, why are you spending 20,000? I will do this thing at 7010 thousand rupees or so, right? And you will save 10,000 rupees. So they said, why not? I mean, if you can give us a solution, we will be happy. So that's when we started doing it. So now you look at 15 crore people. And if you do, uh, 20,000 rupees per person, that's roughly thirty billion dollar of spend that is happening. We are talking about, even if you do one crore people in a year with thousand rupees of revenue per person per year, it's a thousand crore rupees of revenue, right? So opportunity wise, it's pretty large. The spend is already happening, right? So it was not a big challenge to do only for India from a science point of view. But yes, I was always asked this question that why India, why not, Uh, the countries…

AI assessment note: “So opportunity wise, it's pretty large. The spend is already happening”

Q And, and what are the other specific values that other investors brought in in the company?

A Yeah, everybody has their own strengths, right? When, when we work with investors, and I will not name who brought what, but you work with them, what do you, what do you need from them? One is that you are looking for a new capital, and they bring capital themselves, or they bring investors who can bring you capital. I think we were fortunate enough to have the right partners with us. They're always helping us to get new capital in the company. Uh, how to tell the story, what are the PPDs, how to reach out to, uh, investors, new investors, and so on. So that's very helpful. And each one of them has helped us in that, right? Second is that they have their own network of enterprises where we can, uh, uh, pitch our solution, right? So connection with the customers or the network of customers, that also helped us, right? So opening some doors which might be difficult or which might take longer otherwise, right? They helped us to open those doors, uh, in the early stage. So that was second thing very useful. They have a bigger perspective than we have, right, on various different aspects. Um, we work with only one company, right, and we have only one view. They, they have, uh, multiple companies in their portfolio. They understand the ups and downs, right? So they bring that experience. Let's say when the pandemic happened, we were going ahead with our plan, but they came back and s…

AI assessment note: “One is that you are looking for a new capital... Second is that they have their own network”

Q And did it help you to have like, you know, 18 years of experience in a leadership role at Saab, uh, building Better Place? Do you think Praveen in 1996 could have built Better Place?

A Very, very difficult, uh, question to answer. Uh, honestly speaking, I don't know. Um, Could I have done it, uh, 1015 years back? I think I could have done it. And I think I would have perhaps had, uh, uh, so, so, so it has its own, uh, positives and negatives, to be honest, Siddharth, right? When I look at some young entrepreneurs, like, uh, early, uh, early, uh, thirties or late, uh, twenties, I think, uh, perhaps they have some lesser obligations from their family point of view, right? Because that's the only thing that they're doing. Uh, and, and, uh, they can work 18 hours a day. I cannot do, perhaps I have my family obligations. I have to do various other, uh, aspects as well. Uh, but from the energy point of view, I think I carry the same energy like a young, uh, how I was, uh, 25 years back, right? Uh, the advantage, I think it gives you a more perspective, right? Uh, you don't take a small failure as a, as a, as a setback, right? You have more patience. You have, uh, better communication. Uh, better interaction. You have more personal, uh, interpersonal skills. So I think patience, uh, persistence, uh, there are a lot of, uh, uh, advantages that you get, uh, but there are, of course, some disadvantages, uh, as well. Uh, if, if I have a choice, uh, I would always suggest people to do it, perhaps in mid-thirties, uh, and not, uh, later than that, because that's where Uh,…

AI assessment note: “Could I have done it, uh, 1015 years back? I think I could have done it.”

Q And, uh, can you tell us about, you know, uh, your current, uh, metrics and milestones so that audience can understand the context? What's the revenue? What are the employee numbers? And who would be the top 10 organizations as your clients?

A Sure, Sudha. Uh, today we work with roughly 1400, uh, different customers in, uh, multiple different segments, uh, out of which some of them are using our freemium model. So we also provide some services, uh, Uh, roughly half of them are using our paid model. Uh, we manage, uh, roughly 20 lakh people through our platform year on year right now, uh, for our customers, right? Uh, and, and, uh, they use different models. So not necessarily that every customer is using all the models. Uh, and we do a revenue of roughly ten million in ARR today. Uh, and, and, uh, uh, that's one part of the solution, right? On the other hand, uh, we also have job seekers in our platform, uh, who are looking for a new job. We have roughly one point, uh, two eight crore job seekers in our platform today, uh, who are applying for different jobs, uh, on a, on a daily basis, right? Uh, for our customer requirements. So that's largely where we stand, uh, today from, uh, uh, key metrics. Uh, so number of customers, revenue, number of people that we manage and, uh, Services that we distribute to our individuals. These are the four key matrices that we measure on.

AI assessment note: “we do a revenue of roughly ten million in ARR today”

Q But don't you think that's unfair for Indian companies to be valued at that, whereas peers in US are getting valued at 50 X, hundred X in SaaS?

A No, there are no companies. It depends on, uh, there is, I'm not aware of any company that is valued at hundred X, right? But that might be on the, on the gross margin then, or it might be on the net, uh, EBITDA, right? Uh, hundred X is, uh, definitely not the case. It is only done when, uh, you, like I said, in the initial stage, you don't value on the revenue, but you value on the potential and you put in money. Then they are not using revenue as the multiple. They're only using potential as a multiple, and then people pump in money, right? But if, once you start in the revenue segment, ah, of course it's, it's, it's, it's a multiple. But yes, I mean, there are some times in US you get a higher multiple. Um, the second thing is that, uh, the revenue per person is also higher there, right? Because just the, so if I work with 20 lakh people, and if I do the same thing in US with 20 lakh people, I will be valued more than a billion dollars already, right? Because the size of the company and the multiple that you can get, right? Here it will be lesser. So, I mean, yeah, I mean, sometimes it is what it is, right? I mean, you can't change that.

AI assessment note: “So, I mean, yeah, I mean, sometimes it is what it is, right?”