Gaurav Sharma, Founder @ SaaS Labs, Comprehensive Conversation!

Peace, patience and perseverance! When a person is motivated with these three unchallenged values of life, it is hard to find failure. Gaurav Sharma, founder of SaaS Labs, is one such human who cultivated these values early in his life. 

Maintaining the fine balance between thinking big and staying grounded at the same time, he is someone worth listening to. 

Let us read through his captivating journey…

YC – Welcome to Yellow Chapter

We would like to hear your journey from the very beginning, can you talk about your childhood memories and why engineering?

Gaurav – I was born in Ambala. My dad was in the Air Force, so I have stayed at multiple places. I was an above average student and stood among the top students throughout. I was into a lot of sports quite early on, thanks to the great airforce campus. I played a lot of cricket and wanted to be a cricket player! 

At one point in time, I wanted to join the Navy for some reason. That white dress fascinated me a lot. But my family was not very keen so I did not. I had a natural bent toward Maths and Physics.

My dad was quite chill however I performed. My mom, on the other hand, wanted me to raise my bar every time, she believed and still believes in me a lot.

Engineering

2003! Post retirement, my dad took a job as a principal in one of the schools. I got access to the computer, quite early on. I used to spend hours in the computer lab. I learned the basics and started writing code as well, quite early on. I even started earning a few dollars through blogging. I still remember I used to get cheques in my mom’s name.

Maths + Physics + Computers =  Engineering

After a drop year, (I still remember even in my drop year I played a lot of online games, quite professionally + some studies) I got into NIT – Warangal @ B.Tech, Chemical Engineering.

YC – How was NIT? 

Gaurav – I was a big-time introvert, I think the biggest gift college gave me was “I became more comfortable, talking to people and presenting my thoughts”. I made some very good like-minded friends and started building things, quite early on. 

The Accidental Entrepreneur

In the second year of our college, we had to participate in the annual tech fest and from my college, I participated. We built a virtual stock exchange based on NSE and NYSC, something like Zerodha but virtual. It became pretty big, we had around 1,00,000 students using it on a daily basis. We gave it to all the IITs, IIMs, Singapore University, and some of the universities in Germany and Colombia as well. I used to sell banners on the website through Google chat. Though it was accidental, I started my company in the second year itself. I made a decent amount of money in my third and fourth years of college itself.

I was big-time into tech blogging. I was making a decent 30k-40k a month. This was inspirational for many juniors around. I started giving talks on blogging, what can best be done in student life etc.  

I was the Head of the Innovation and Entrepreneurship Club and ran the same for two years as well. I made sure all my summer and winter breaks I did internships. I did internships at IIT Roorkee, in Microfinance, Advertising agency, Google etc. Quite early on I understood the importance of learning and exploring new things.

Suggestions

Reading & Internships!

Read a lot and be aware of what is happening around. The issue is that most of the students come up with ideas which are very much addressing the local issues like note sharing, laundry etc. This is a clear indication that they are not aware of problems and opportunities globally. I started reading TechCrunch, Hacker News, and Reddit quite early on, believe me, they were such big eye-openers then.

YC – Can we talk about your professional journey, learnings and experiences?

Gaurav – 2010! Sure, my first and last job was as the Financial Analyst at the UBS Investment Bank. It was a short stint of 3 months, I was doing my job and was also running the virtual stock exchange. I was slogging for around 16-18 hours a day at my job, and had to shut down the stock exchange as well. 

I have this itch for working on new ideas so after office hours, I started working on an ad model for Twitter as there was none. I built this first contextual advertising network for Twitter. I still remember one morning my phone alarm clock was buzzing and I saw $500 credited into my account from some Australian guy for the platform I was building.  

I did a rough calculation, if I get $500 every month (around 20k), 8000 for rent, 12K would be good. I was confident I would be able to get more customers in the next 3-4 months and would comfortably cover my salary. I knew I sorted for around a year and decided to quit.

Learnings from USB :

  1. Presentation – Investment banking is a lot about visual presentation. It involves a lot of writing – emails, presentations, and content. I learned presentation skills. During fundraising this skill comes in quite handy.

YC – Can we talk about your Enterpernaul journey and learnings?

Gaurav – 2010! Sure sure. After putting down my papers I shifted from Hyderabad to Bangalore. This one year was bad and tough for me. I slogged big time.

I renamed the Contextual Advertisement Network for Twitter – Zuvvu. Unfortunately, it didn’t work out. I wanted to build something big, I did everything I could but could not pull through. Zuvvu had over 60,000 Publishers and 1000+ advertisers on its network.

Reason for failure :

  1. Typical Indian entrepreneur problem, I did not charge enough for the product. Zuvvu had the scale but I could not monetise well as I was charging less for the product.

Learning :

  1. Charge well for your product. Do your Math and charge well enough.

Post Zuvvu I wanted to go to the US, I started evaluating the options for the same – MS or MBA. I started applying for B-Schools, but at the same time I was building a tool for Pinterest – Pinpuff. A platform to measure your popularity, influence and reach on Pinterest or “Klout for Pinterest”.

2012! Pinpuff went viral within a week. I had around 1,00,000 users. Within three months Pinpuff was acquired by Science.Inc in June 2012. 

I moved to Santa Monica, LA, US. 

2012! I started HelloSociety – a Media marketing and technology firm. HelloSociety was built on top of Pinpuff. We signed the top 300 influencers on Pinterest and started a marketing agency. We had Louis Vuitton to Prada on our platform. It was a natural extension of what we had already built.

I worked really hard here as well. We scaled it up to $15 million in revenue. I was taking care of the tech and developed the complete tech infrastructure. I also had great co-founders – Kyla Brennan and Jess Phillips

HelloSociety was acquired by New York Times in March 2016.

Learnings during US stay:

  1. People in the US actually pay for software.
  2. The software can make small businesses look really good. I myself never used any automation in my previous gigs but in the US during HelloSociety we did for finance, marketing, sales all of it.
  3. Charge well for your product. 

2015! I came back to India – The learning of selling software was a liberating movement in my life. Also, I was deeply touched by the song ‘Yeh Jo Des Hai Tera’ and wanted to come back to India. It was a Swades moment!

I realised I can code from anywhere in the world and earn well. I knew my parents would never come to Santa Monica. My wife was a doctor in Delhi so it would be difficult for her as well to settle in the US. So I thought, “why not India?”

I decided to work from India, run an experiment for a year and then take the call for a final settlement.

I started to build again, made a couple of small tools and started selling globally from India. I did not want to use my so far build networks, so I created a fake identity named Alex. I (Alex) was able to scale this company to half a million dollars annually. 

Not leveraging my contacts and starting fresh gave me the confidence to build from India. I knew if Alex can do it, I can 200% do it.

YC – Why SaaS labs?

Gaurav – This time I was very sure, I will not build and sell in three years as I have done in the past. This time I knew I had to build a huge business and eventually retire from it. This time it has to be a long play and not a short stint.

Two things:

1. TAM – There are 25 million sales and support agents in the world, it is a huge market. In my playbook, the market has to be really really big so that the early zero to one is easier. Also in a huge market, multiple players can easily sustain and make $1billion each. 

2. Knowledge – I have done a lot of sales for all my products and have a deep understanding of how the process works and where the process lags.

To build a $10 billion, $100 billion business you have to be a champion of a job profile. For example – Adobe is a champion of design, and Atlassian is a product manager champion. Similarly, at SaaS Labs, we are creating a champion of Sales and Support.

We had to start somewhere, so we picked up the most hated part of the stack. We had a word with many people in sales who realised that what customers hate the most is the VoIP system they are currently using. So we decided to start with JustCall – Ease to use, easy to implement, and a highly flexible phone system for which you do not even need an IT team to set it up.

Secondly, calling is the basic infrastructure of the company and these conversations are very data-rich. I knew once I start capturing the data, I can analyse it and build products on top of it.

@ Early Team SaaS Labs

YC – We have talked about product market fit, can we now talk about sales and marketing? What worked for SaaS Labs and what would you suggest to fellow founders?

Gaurav – 

Must Do’s before starting with sales and marketing: 

1. Founder let sales – Initial sales cannot be outsourced. I got the first 100 customers for JustCall. Early sales will help you find the right positioning and pitch. 

2. Find at least one good distribution channel for your product. I am a big fan of the Netflix series Narcos. The protagonist Pablo Escobar built a tunnel from Mexico to the USA. Once you have the tunnel, you can send anything from it. My point is to find your tunnel. 

For us, our tunnel was integration with other products. We even got listed on their marketplaces. So people used to sign up for other products and find us as well. Even today 80% of our new customers come through these channels. We are adding millions of dollars to our AAR through our distribution channel basically free of cost.

3. SEO – For Helpwise.io we started SEO 3 months before we actually launched. So on the day of the launch, we ranked one for our main keyword. A lot of content, a lot of optimisation on your landing page, link building etc., is quite important and useful.

Next is sales and marketing:

At SaaS labs we used: 

1. Content platforms a lot: 

  1. Quora- I use to answer all possible questions there.
  2. Reddit – I used to write a lot on Reddit.
  3. Hacker News – I wrote blog posts on Hacker news as well.

We got our first 10-15 customers through Quora and Reddit.

2. Cold emailing 

3. Cold LinkedIn messaging.

Now as we are 5years+ we are spending around half a million dollars on marketing, running ads. Whenever we launch a new product we run multiple campaigns to find the best CTR. Right positioning is the key. When the question is which is a better campaign – “ Best sales training software” OR “Train your sales agents faster,” a better CTR will answer it the best.

Saas Labs

@ SaaS Labs

YC – Can we talk about some numbers? ARR, number of paying customers, MRR, competition etc?

Gaurav – We are north of $17million ARR. We have four products right now, we have recently acquired two companies – CallPage (callback automation tool for sales teams), a Poland-based startup and France-based Atolia (a productivity and collaboration tool.) 

Talking about JustCall we have a very healthy 4:1 LTV to CAC ratio so CAC should be around @1500. NRR is north of 110 % overall  and 150% above for our bigger customers. This is driving a lot of growth for us. We grew more than 120% last year and will be doing more than 100% this year as well.

We have around 6000+ customer for JustCall | 250+ customers HelpWise | 800+ customers for CallPage and 200+ customers for Atolia. All these products are standalone products as well as integrated at the same time.

We have customers who are paying $1000 to half a million dollars annually. An ideal customer for SaaS Labs would be a 5+ member team using some sort of software. This would be the right time to land a customer and go above. $3000 annually is the ticket size we look at and it goes above. 

Each product has its own competitors. For JustCall, we have RingCentral & Talkdesk. HelpWise has Front and Help Scout. CallPage has LiveCall. So on the point solution we have competitors but we start winning when the platform starts coming in. However, it’s a long play and we have a lot to do, let’s see how it goes.

YC – You are an angel investor as well, so what is your investment philosophy?

GauravI just try to match my playbook with the founder’s playbook. If I find some similarities  I feel more comfortable OR if I find the founder better than me, then also I invest. My checklist is simple:

  1. Conviction to build something big, a well grounded person and the numbers making sense.
  2. Great energy levels, like college folks.
  3. The addressable market should be big. I know 90% of my investment will eventually fail so I am looking at 100x growth in one of the startups, so the market should be really really big.
  4. I invest in SaaS, Fintech, and Adtech startups, because I understand the space. D2C is not my cup of tea so I do not invest in those.

Some of my recent investments:

BiteSpeed – Drive 10% of your Shopify revenue from Whatsapp & FB Messenger | StoryXpress – The only video tool your team will ever need | Yulu – Dockless bike-sharing | STAGE – World’s first OTT platform in local dialects | Economize.cloud – Your cloud infrastructure costs, demystified | Hansel.io (Exited) – Mobile bug tracking & fixing platform, and a couple more.

YC – Suggestions or some tips for fellow founders, how can they avoid mistakes which you did or how can they be better prepared for surprises?

Gaurav – I would like to share some fundamental principles:

  1. Start sharing your idea – I have seen many potential founders not sharing their idea at all. I would suggest they start sharing their ideas and talk to as many people as possible. This will help in understanding the problem better and deeper. They will be able to understand why people are using solutions and what are the gaps that need to be filled. They will get critical feedback as well as red flags which are again quite important to avoid later surprises.
  2. Pay yourself a salary – I strongly believe this. A lot of founders do not give themselves a salary for a long time. I think one should aim for the same at the earliest.
  3. Market sizing – Start a niche but make sure the expansion of the niche is significantly big. 
  4. Think global
  5. Think about distribution – This is especially for coder founders – They think it is 95% product and 5% sales, it is actually the other way around. 95% is product positioning, marketing and sales and 5% is the product, tech and innovation.
  6. Bootstrap –Don’t look for funding to start. Try and build bootstrapped. I bootstrapped my business to $6-7 million ARR and then raised funds. If given a chance, I might go back and delay the fundraising. I raised funds because I was getting a lot of acquisition offers, so the best way to marry the business was to raise capital.

YC – Little philosophical question, what keeps you going in tough times? Any book/blog you would like to recommend?

Gaurav – Two things, one is my own and one is my dad’s:

  1. Optimism – I always tell myself and my team that we are just an email away from good news. Be very optimistic.
  2. 3 P’s – When I was struggling initially as an entrepreneur, my father told me about the 3 P’s – peace, patience and perseverance. I think it is a great formula to remain on the path.

One book which I recommend is Built to Sell: Creating a Business That Can Thrive Without You Book by John Warrillow. A very good book on how a founder can scale a fast growing business. It tells a founder should work ‘on’ the business rather than ‘in’ the business.

YC – Lastly, people you want to acknowledge in your journey so far.

Gaurav – My parents obviously, my wife Dr. Nimisha Arora, my sister Amrita Sharma, my friend Nilesh Tripathi & early SaaS Labs team members Prateek, Santa & Prabhat

It was a great conversation, and indeed inspiring. Your aptitude and professionalism are worth imitating, and Yellow Chapter wishes you all the very best for your future journey. 

Thank You!

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