The offline call to action platform | Uniqode (formerly Beaconstac)

In the startup world, overnight success often takes a decade of dedication. Meet Uniqode (formerly known as Beaconstac), a company that hit the big leagues in 2023 after years of hard work and perseverance.

Uniqode is revolutionizing e-commerce engagement in our increasingly digital-physical world with its unique, smart QR code platform. It's the secret sauce for businesses looking to expand their customer base through smartphone QR code communication.

Used by diverse businesses in 40+ countries, Uniqode makes the real world smarter, just like the internet works online. It leverages smartphones to boost foot traffic, attract new customers, retain loyal ones, and gather valuable feedback.

Uniqode burst into everyone’s radar in 2023 after raising a massive 25 million dollars in the middle of a funding winter and hitting a 10 mn dollar Annualised Revenue Run Rate.

But here's the inspiring part: Sharat and his co-founder embarked on this journey way back in 2009, facing a decade-long struggle to secure funding and discover their winning idea.

From years of obscurity to becoming a major player in 2023, Uniqode's story is a reminder that success is a marathon, not a sprint.

In this episode, Sharat talks about his long journey of making pivots, finding the product-market fit and building a truly global SaaS business out of India.

If you're interested in learning how to scale a SaaS business globally without burning a ton of cash, you should listen to this episode!

Other Ways to Listen:

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Watch the full episode on YouTube

Additional readings:-

1.Facilitating Connections Through QR Codes

2.QR codes and the future of marketing

3.How Beaconstac’s founders failed for a decade before they clicked

4.Beaconstac leads the way to a contactless world

5.The Future Of ECommerce Engagement In An Increasingly Phygital World

Read the text version of the episode below:-

Sharat: Hi, my name is Sharat Potharaju. I'm the co-founder and CEO of Beaconstac. Entrepreneurship was always at the back of my mind, but I also learned very quickly that if you want to build some really strong foundation in business, the best way to do that is either do consulting or in banking. You join Meryl Goldman or you join Bain, BCG, McKinsey in consulting. 

These are the things that really stood out. It gave you a brand, it gave you the network, it gave you more importantly quantitative thinking capabilities which really were much needed. What really happened for me was from IIT, I went to Duke where I did my master's and I focused a lot on getting into banking and consulting. I had a few offers and I took Merrill Lynch, which was a Merrill Lynch investment banking role which obviously gave me a tremendous amount of learning.

I loved every part of working on Wall Street. But I think the intent that was always there was to do that for a couple of years and then move back to India to startup. What really happened for me there was after doing work for 4 years, it coincided with the beginning of the financial crisis.

So it was a much easier decision in many ways because I realized that either I go back and pursue my dream or wait here and hope that I don't get laid off, which was happening in mass in New York. And I think that really gave me the impetus and conviction. That along with the fact that Ravi was my co-founder. Ravi also was in the U.S. He was also looking to move back. That's where we collaborated and said, you both have always dreamt of this, why not we do this together. And that's how the company came along. 

Akshay: What did you start, you and Ravi at that time when you came back to India?

Sharat: We started a company called MobStac. It was a journey of 10 years where we built some multiple products, none of them released. Great products, which had spectacular failures. iPhone had just come out. The mobile revolution was just unfolding itself in 2009, 2010.

We were going around. I should also share the fact that Ravi and I have been pretty foolishly romantic about building a global product company out of India. We always dreamt of building a global product company out of India. We felt like the whole idea of services in India was big, but the next wave is going to be product and we wanted to do that sitting in India. 

We both basically decided to come back to India. When we came back to India, our larger thesis at that time was, that mobile is very critical. iPhone had just released in 2007 so 2,3 years ago it was unleashing a new economy which people were not familiar with and most importantly, it became the primary internet device in a country like India where there was not really that much internet penetration.

So fundamental assumption was that there's going to be a paradigm shift in the way content is being consumed. Web is not going to be the way the first time a person discovers reading content on or news or anything else. They will start reading for the first time on mobile and mobile becomes a primary device.

Now in 2023 it seems extremely obvious but in 2009, 2010 people were like, what are you talking about? We're still trying to figure out how to build a website. We're not really worried about our mobile strategy. What we did is- our 1st product was mobile content management system.

It essentially enabled publishers or content owners to basically plug it into their CMS and have the ability to create mobile sites and mobile apps in a very seamless manner. So if you go a decade back and the first vintage of mobile sites for any top Indian publishing sites in the business line, that can have some of the times properties, et cetera, were all powered by MobStac.

In some ways, I pride myself that we helped unleash some of the mobile revolution in India in a very small way. But as you would expect in many entrepreneurial journeys, that was exciting to a lot of traction, but not necessarily translating into money for several reasons.

Publishing itself was bleeding, which I'm sure you relate to. There was not really that much money. They were all still trying to figure out their strategy. Our old and entire genesis was- there's a lot of fragmentation, a lot of devices essentially had to be catered to. That fragmentation really died.

Nokia died, Blackberry died. There is just iOS and Android. So you don't really need sophisticated solutions. I think a couple of market movements which really prevented us from scaling the way we thought we will. That didn't really go well. 

Akshay: I want to do a little bit of a deep dive on this part of the journey. So what you built was something like a rendering engine, which would render the content in a way that's mobile friendly.

How does it work? I'm not a techie, so you'll have to dumb it down for me. 

Sharat: It was basically what we call a dynamic content adaptation platform. We got patents on that too, but the way it essentially does is, it plugs into the content management system and when you plug into the content CMS, it pulls content from the CMS and on the flight puts a page together, depending on the screen resolution. So if the page request is coming from iPhone, it puts the page together in that way.

If you're putting a page together from a BlackBerry, it optimizes for a BlackBerry, et cetera. 

Akshay: So it would get activated only when it detected that it's mobile traffic or it was always activated?

Sharat: No, it is only when it comes in. So when it is from that, it would redirect to the m. whatever, thehindu.com and then it redirected to that. 

Akshay: So the m.timesofIndia.com was essentially MobStac. 

Sharat: Correct. If you scroll down at the bottom, you would always see there 'powered by MobStac'. It would say that. But that's back in the day.

Akshay: And how were you pricing it? 

Sharat: Basically some of those challenges. We didn't really know how to price it. So we said it will be as a number of page use and we tried multiple things. Just like some flat monthly pricing. We tried multiple different things.

But we didn't really have a good, I would say in retrospect, a very value-based pricing. It was more like, okay, it costs us X to serve so maybe Y or X+5 is what we should essentially charge. And that's how we started pricing it.

Akshay: Did you need funds to build this? You were not a programmer, right? Was Ravi a programmer? 

Sharat: Yes, he was. He has a brilliant product mind and he is basically the architect of the product.

Yes, we did raise some Angel funding. We put our own money into the company. But 10 years back the money was not as easily available as it is now.

I think we raised some 30 lakhs and we ran the company for about 2 years. Then we raised about 4-5 crores from Accel, Mumbai Angels and Bloom, et cetera. And then continue pursuing that idea. Did that sort about, almost a decade where we ran through multiple ideas, multiple products, didn't really see them scale, but we were very frugal which is what really helped us, we kept our head down, kept trying ideas, started generating some basic amount of cash and sum total we had raised a little over $3 million and with that $3 million, we ran the company for about a decade. 

Akshay: When did your product go live? 2009 you started? 

Sharat: Correct. I think there's two avatars. Like 2009 to 2019 is when basically we ran MobStac and then when we chanced upon what we call BeaconStac right now, which is really scaled. 

Akshay: Your go to market happened in 2009 itself or it took you a year or two before you started? 

Sharat: I would say we took about 12 months to basically get the product in place. Then we thought we'll start hitting the large publishers.

We started hitting the publishers. It's all through friends and family. You basically reach out to whoever you can, try to reach out in a very unstructured way, start getting original sales, et cetera. Obviously, one of the learnings you also have right at the beginning is that- it is when you ask people do you like this product?

Everybody in usual original feedback will say 'yeah, that's awesome'. But if you don't ask very specific questions about; will you pay for it, how much will you actually pay for it, which are things we never asked, you realize the hard way that people might like it but they might not necessarily pay for it or might not necessarily pay as much as you think it as.

So those are all lessons that we learned very early on and we realized that publishers were bleeding a lot, like they were struggling, they were very highly disrupted by Web itself, they were still figuring that out. Now thinking about mobile, et cetera, is a lot harder.

The target industry that we were chasing was itself a pretty bad industry to begin with and that's a larger realization, more than anything else. 

Akshay: This product of powering the mobile sites was your primary product for the entire decade of 9 to 19? What other experiments did you run then?

Sharat: We did that for about 6 years or so. 

Akshay: And what was the peak revenue you were getting from that product?

Sharat: I think we had a peak revenue of maybe a few crores- single digit. Maybe 4, 5 crores I would say not really more than that.

And that's where we plateaued. We didn't really grow beyond that. We also realized it was really hard. It's also really important to understand that when you start building a SaaS product or a software service product, there has to be a certain amount of productization in that, in the sense that if it was apart from the industry that we're catering to.

The challenge we also had is; everybody needed some element of customization for it, which is not a bought product that can be really sold out of the box. If that was the case, then you start drawing a line where this becomes literally like a services. And when there's services then the cost of delivering that gets even more expensive, then it just doesn't justify the amount of money that you're essentially getting paid. So those are all what I call learnings as you mature as an entrepreneur.

 So we moved out of publishing. The question we asked ourselves at that time was; look, this mobile content consumption is happening, people are trying to do it in their own way. Clearly, it looks like that trend is working fine, but it's not really something that we can generate a lot of revenue. So what is the next larger trend that we are seeing that we can capitalize on. 

Both Ravi and I are very passionate about mobile and the fact that mobile can be very disruptive. What we essentially realized is that, if you just take the progress of how web worked and how mobile will evolve, people are consuming content and they were essentially consuming commerce and the next natural part we believed was how does a mobile engage with the physical world around you?

That's really how it started. We said, the mobile device will essentially become the centre of your physical world. It's not just a primary internet device, but it becomes the centre of the physical world. If that is the case, then how do you basically help brands and businesses engage with the physical world around you with the consumer?

That's the problem statement we defined. Started down that path and that's where we started with Bluetooth Beacons, et cetera, tried a bunch of different products. Tried using Wi-Fi as another technology, because what we essentially said is, on the mobile device there are multiple technologies available Wi-Fi, geo-fencing, et cetera and that enabled you to be able to connect to the physical world- which of these technologies would make sense? So we went down one technology after the other. And long story short, that's how we came down with a product like Beaconstac, which kind of started showing traction and we grew the product from there.

Akshay: What was the use case you were solving it for? You have this broad take that mobile will be used more in the physical world as well, but was there a specific use case? What was the problem you were solving through the Bluetooth and the Wi-Fi which you were experimenting with? 

Sharat: I think 2,3 things. One is we realized that the brands love the idea of connecting the physical world and digital world. There's a handoff that has to happen. That handoff doesn't really happen right now. So this whole concept of omnichannel which everybody is beaten to death over the last 20 years, the truth is it's not as omnichannel as they expected. There is a lot of challenges around it. That's why.

The second thing is; in terms of marketing spends also in the offline world or in the physical world when you spend money, you don't have clear ROI just like you have in the digital world, because in the digital world what happens is that you spend hundred dollars, everybody knows you've driven this much traffic. In the physical world, you don't know. So is there a better way in which you can drive better attribution than the spends in the physical world. That's the second reason. 

Third, broadly speaking I think there's a whole play around data, which I think is and was very exciting even five years ago. The whole data is going to make a big difference. How do I help you collect data? There's so much data collection that happens in the digital world. In the physical world there is very limited understanding. So can we using some of these technologies help brands and businesses? And by that extension consumers learn more about their preferences.

I think we are marrying all these things in a way and trying to figure out the right product market fit that can help us scale. 

Akshay: What's an example of this? Collecting data, the handoff from digital to physical, an example of how it would actually help a brand. 

Sharat: I can give an example of how Beaconstac works right now. 

Beaconstac, like right now we essentially use QR codes but the truth is you can use any kind of technology to be able to trigger that. For example, if you have a Nestle water bottle or a Starbucks coffee, and there's a QR code on that and you take your mobile device and scan the QR code and it'll open up depending on what they want to do.

Either they'll say there's an offer here or they'll say something about how amazing this coffee is or this water bottle is or where this water or this plastic was recycled. It could create multiple things. Now what really happens there is, you won't know that this device belongs to Akshay, but I know that this is a device that really has interacted with a Starbucks QR code or with a Nestle water bottle QR code.

When you open that page, you can essentially access, you can drop cookies, you can drop and retarget using the same cookies online. So technically if you want, you could see a Starbucks ad or a Nestle ad on Facebook or Google, et cetera. That is basically how you build what I call digital cohorts, based on interactions in the physical world.

That's how you pass the interaction and what you're doing in the real world is being transferred to a digital identity online. 

Akshay: I'm assuming the conversion rate would be pretty low. If there is 100 Starbucks cups which have QR code printed on it, maybe 5 or 10 people would actually go ahead and scan.

Sharat: Yes, but broadly speaking that's one of the use cases that I explained. I think it all depends on what the use case is; that's one. Two; with any advertising medium that is usually the case, if you have a pretty large hoarding on the busiest road, there are only a few people who are driving by the street. It's not like everybody is going to see it. There is a fractional value attached to any ad impression. It also depends on what the contextuality is and what we really are trying to do there. 

Akshay: So one use case is; you create an engagement layer on a physical experience and that gives you data which allows you to retarget that customer with more customized advertisement.

What are the other use cases?

Sharat: If you look at what we do at Beaconstac, they can come into a few dot strokes. 1 is driving engagement. The 2nd is simply data collection in different ways. Whatever your primary purpose is you can drive data in different ways.

The 3rd part of the bucket which is growing for us and which is where the total addressable market is very huge is that, in many ways QR codes are replacing the physicality of paper wherever there is physical paper available. Menu cards are replaced by QR codes, business cards are being replaced by QR code enabled digital business cards.

Documentation and marketing collateral is being replaced by QR codes and vaccine certificates are being replaced by QR codes. Wherever you can, the physicality of paper is being replaced by a QR code and that is highly beneficial to brands and businesses because it makes it very seamless.

It actually saves a tremendous amount of cost in printing material, paper, et cetera. 3rd and most importantly, it making the world a little more environmentally sustainable because you're saving a lot of trees. Those are the broad strokes. 

The par of what we're really trying to do is that- QR codes are very pervasive in the sense that everyday people are discovering new use cases. Even now, every day we listen to calls, customer demos and I'm fascinated by the use cases that people are coming up with. Those are all things that they are discovering themselves.

And it's a little bit like email marketing. Email fundamentally started as a communication tool, peer to peer. Then you had very robust platforms like Mailchimp and SendGrid essentially come along and democratize email marketing and convert that into a very powerful communication or engagement platform for businesses.

That's exactly what we're doing. QR code was just a point thing which enabled and captured information that could be shared. From there now, a platform like ours helps transit businesses convert that into something very substantial and meaningful and we're doing that at scale and focused on large businesses.

Akshay: Give me an example of the second use case, data collection. 

Sharat: Data collection is two ways. One is personal item fiber information and the other is just cookie data, first party data as it is called. First party data is like what I already mentioned. I drop a cookie every time you open a page then retarget, et cetera. That's first party data.

PIA is more like identifiable information. You basically scan a QR code on a box of cookies that you bought from some bespoke store that you really liked and the person says, did you enjoy the cookies? Scan this QR code, join our newsletter or do this and I'll drop another code here, et cetera.

You share an email address, you share your phone number. In the U.S. a lot of open house real estate, they put a QR code outside and say, if you're interested in seeing this house, scan this QR code and fill this form, I'll contact you to lead generation. So things like that which could happen physically in the past would now happen digitally.

Akshay: So replacement of paper, I understand like replacing a menu card. What does the BeaconStac platform do? Would it host the ordering system also or would it just create a QR code which directs people to a link and that's it?

Sharat: A couple of different things. We're not focused only on restaurants. That's not a use case. We are a horizontal stack. That means we have businesses of various sizes and shapes. Using this, we have FMB, we have real estate, we have financial services, we have CPG, we have pharma, hospitals, et cetera. And as you can see because it's a QR code marketing and engagement platform, this is what we call a phygital customer engagement platform- physical to digital.

Phygital customer engagement platform- sky is the limit in terms of use cases. Basically every industry vertical has some use case here. So what we have essentially built is a robust platform, which does three things. One is: it helps you create, generate QR codes and manage them at scale. If you have one QR code, that's one thing but if you have 1000 QR codes, you have to be able to manage all these.

The second thing is: we also help you manage the end destination. You want to create a microsite, you want to create a form, you want to basically create a social media- whatever the end result might be. We have a robust content management system, so you can create that inside the CMS itself. It's a very basic editor so you don't need to be a developer to do it. A marketer can essentially do it, an ops guy can really do it without the need of a developer doing it. So that's the second part. 

And the third part is just a lot of analytics on where the engagement is and what is really working. You put QR codes in three different places on a packaging in a physical location and somewhere else. You will be able to capture information and see where are scans happening. What time of the day are they happening, you will get a better sense for where is the actual engagement happening. Right now the whole physical is completely 1 channel, you don't have better clarity and nuanced understanding of what is working well. 

Akshay: The data about where it's happening, et cetera, that comes from device analytics. 

Sharat: Where the engagement happens, where the scan happens, when the tap happens. That's where we basically decide that and we capture a lot of analytics in the background. And because these are all dynamic QR codes, even after the QR code has been created and pasted on a bottle or on a package, depending on time of the day of the week, the QR code can keep pointing to different destinations and that's what makes it very powerful. 

Akshay: It's like a programmable QR code. It doesn't need to have a static link. There can be a rule-based engine. 

Sharat: Absolutely. We do have a rule-based engine. 

Akshay: So at a simplistic level, I guess it could have started say- you have this URL shortening services which takes a long URL, shorten it so that you can print it easily and distribute it and people can visit it easily. That would have been, I'm guessing the first version of the product.

Sharat: Absolutely. In fact it's interesting when we say that because our largest competitors is a company that got acquired by Bitly and that's exactly the same. 

The way I explain that is, if you look at Bitly or a short URL, the short URL is basically the call to action in the digital world and QR codes are essentially becoming the call to action in the physical world. So there is a good manage here. 

So at the Beaconstac, the goal is basically to become the call to action in the physical world. Our idea is to drive engagement from all the physical products and places. 

Akshay: I'm wondering, when you did the mobile rendering engine for publishers, you eventually discovered that this was not a enough value adding for you to monetize it well. I guess today, the native CMS platforms have that facility in built. You don't need a separate facility.

Could something similar happen here? For example Google Forms allows you to create a QR code to share the form. Let's say, Mailchimp allows you to create a QR code with your landing page and so on. All these marketing stack products can build it as a native feature and thereby remove the need for a Beaconstac to exist.

Sharat: I think so. You can never say that you will be the most unique person in the market and there's nothing else. I've always learned the hard way that no competition usually means no market.

It's usually very healthy to have competition. There is a need for competing products to exist. But we have a very unique proposition and what we're also seeing right now is that the QR codes are very pervasive in the way that they're essentially being used and our largest strategy right now is to basically see how we can use some of these use cases of product, test them further and add a lot more value which makes it irreplaceable.

And what we're seeing right now is that there are specific industries that basically are using it across the spectrum. That's one. The thing is, even inside one specific company, the use cases are humongous across marketing, across operations, across sales, across tech, events whatever.

So instead of having each individual team run their own QR code marketing services, most large companies are moving in the direction of- we want one company to streamline this and manage this at scale. That's really how we think we'll continue to drive and dominate this market because we'll essentially be managing and becoming a central repository or the command centre for all things QR, whether it's ops, whether it's admin, whether it's marketing, whether it's sales or something else.

Akshay: Why didn't the Bluetooth Wi-Fi experiments work? What made you realize QR is the way to do this? 

Sharat: There's a lot of friction from a consumer adoption standpoint. I think the only one reason anything fails is- consumers don't like it. You can't push and shove and make them pay for it. The beauty about selling software, unlike consumer products is that in consumer products you can basically buy product market fit. You can just keep giving a lot of discounts and say there is a new popcorn I've discovered, which is very tasty or you don't like it I'll give it to you free of cost. I'll give you 10 rupees and burn a lot of capital money. I could offer a software free of cost and nobody's going to take it.

The beauty of software is that you can't lie much. You can't fool yourself too long. Eventually, the reality will catch up with you. So the point I'm essentially making for is that there are multiple use cases and you should keep yourself honest to those use cases. You'll be able to build a pretty sustainable business and that's really what we're doing. 

Akshay: How did the Wi-Fi and the Bluetooth thing work? 

Sharat: What happened in the Bluetooth and Wi-Fi use case was that the consumer adoption was very hard.

 You had to turn on the Bluetooth on your phone. There's this general consensus that we drain our battery, which maybe 10 years ago it really mattered. Now they don't. But there's that overarching feeling that's what will happen.

And for Bluetooth and Wi-Fi they're called pull technologies, which means you need to actually have an app on your device to be able to engage these technologies. As a brand, if a Starbucks has to engage, you'll need to have a Starbucks app or an app that Starbucks has partnered with, which enables you to do what needs to be done.

Otherwise it'll not work. Whereas NFC and QR are what are called 'Push', which means you expect the consumer to take action based on if they have interest so there's no sense of spamming. If Akshay wants to be able to tap or scan a QR code, tap an NFC tag to learn more about that specific product or location, he will do it.

It was very obvious after a few years of experimentation that people don't really like that friction of having an app and driving it. Whereas if you let the consumer decide if they want to tap and learn more so be it. That's what even the mobile device companies learned that based on all these experiences if you just enable people to randomly send notifications because they walked by a store, it's spam. Brands won't like it, consumers won't like it. And that's how the operating systems, Apple and Android decided let's double down QR codes because they are the technologies which seems very seamless, frictionless, no cost because there's no new additional hardware, there's no spam and you get enough data on everything and more than you essentially ask for. And that's the reason what Wi-Fi and Bluetooth could not do, QR was able to do. 

Akshay: What was your go to market for this? Who were your first customers? Just tell me that journey. 

Sharat: We've been a very inbound and SEO led company. That means we are very focused on looking at search results and looking at who is searching for what.

The reason for that is very simple. The cost to customer acquisition is very low in inbound. We started this in 2019 and for the last four years we've built this. We raised CTA funding at the beginning of this year. But despite that, in the last four years we've been cashflow positive and we were able to do that because customer acquisition costs are very low and the reason customer acquisition costs are very low is because we focused on inbound and product led growth as very strong emotions.

Akshay: How do you make product led growth work? What were your learnings from this which would help other founders to replicate what you did here?

Sharat: Product led growth again, it might not necessarily work for every software stack that you're selling, but I do think there is some version of what you're selling that might be, if not the whole thing, at least a version of it that might be worthwhile.

The intent of product led growth, the philosophy fundamentally believes that in the past, in the last 30 years of software existing, software has been top down. You sell to the CEO, you sell to the CTO, you sell to the chief product officer that he or she will basically decide, and this just makes sense.

When open-source developers started building and choosing and making a decision on what software has to be used, it moved the power back to the bottom of the pyramid. So product led growth is basically the philosophy that you can put a sliver of the product, if not the whole robust product, at least a small part of the product in the hands of people who are maybe in entry level roles, maybe in marketing, maybe in operations, maybe in engineering, where you tell them to get started with that product and once you get started with that product, you can essentially continue to utilize the product in a small way and I take a small amount of money so that eventually when it bubbles up all the way up and then it becomes a much larger contract. 

 It's the reverse of how sales and software sales has been done in the past. That's the philosophy of product led growth. And I think there is strong merit in doing that. Obviously, there are cases in which it's not applicable depending on what you're selling but in most cases, either as a go to market to drive visibility or eventually to drive sales itself, product led growth can work quite efficiently depending on what you're selling.

Akshay: How did you implement it? You would give a certain number of QR codes for free, something like what Mailchimp could have done. 

Sharat: We've always been very strongly focused on product growth. We also have a very strong inbound motion, that is- we've always written high quality content around whatever the topic might be on various specific things that throw a lot of traffic to our site. 

Because they throw a lot of traffic to our site, we were able to say, do you want to try this 14 day trial on this product and you can pay as low as $5 a month or all the way up to $1,900 a month and that's really how they started utilizing it. And because they started utilizing it, we started realizing that it's not just small and medium businesses that are using this small plans, even small teams of individuals inside large companies are using these because they have tactical use cases. But those are use cases that you can essentially use to leverage to move them up the value chain and make them pay more. That's the journey that you're on right now, because you start with a small amount of money.

That person is spending $500 a year with you, how do you get them to spend $5000 a year with you? How do you get that person to spend $50,000 with you? How do you make that person spend $500,000 with you? That is a question of two things. One is actually building the depth of the product where the value commensurate with 5,000, 50,000, 500,000 and building mechanisms and instrumentation that allows people to be able to measure that value and push them in that direction, all in a very automated fashion. We have 50, 000 paying customers. It's not like each person can be sent an email, you called and told them look, you have crossed that. 

You have to instrument all that. You have to automate all that. And in this age, everything can be automated. So that's the PLG motion. 

Akshay: Like you would create milestones and nudges and people who cross a certain milestone would receive a nudge and try out some additional feature so on and so forth. 

Sharat: Absolutely. See once you start operating at scale, what happens is you can start looking at cohorts. You can say these are the people who are in CPG brand or FMCG brands. These are the five things that they're doing on average.

When you have a FMCG brand join you with one specific use case in mind, then you can tell them; hey, your peers are doing three other things or four other things. So helping them scale their use cases and as they scale their use cases, they will spend more money with us. 

Akshay: So I guess you would be somewhere in comparable to Mailchimp in terms of the way in which you're selling this like a pure inbound product and like a product which appeals to both a team of two people as well as a company which has, let's say, 20,000 people. 

Sharat: Yes, Mailchimp is a very good example. If you're in product led growth motion, there's a lot of literature on how to build product led growth motions. And if you're a SaaS founder, if you're just getting started it's worthwhile reading more about product led growth motion.

There are different philosophies of how you let them try a product. There is freemium, there is free trial, there is robust trial, et cetera. All these different things will allow you to do it. So Mailchimp, for example, is freemium. Whereas BeaconStac is a free trial. That means for 14 days, you try the product and then in those 14 days, you have to make a decision whether you want to buy or not. 

Mailchimp will allow freemium, which means there is a free forever plan which you can sit on for any long amount of time you want, but eventually when your demand or your need increases, you will eventually start paying for Mailchimp.

Akshay: What made you choose free trial over freemium? 

Sharat: The beauty about that, mostly driven by cash. We bootstrapped, we were very frugal, we were running off our own cash flows, and we had not raised any more funding. Like I said, for 10 years we were just doing this on top of our own cash flow. We said, we will take all the money up front. So we had only annual plans. And we basically said, we will focus only on free trial instead of freemium, which will push people in the direction of this one. That's one. 

The second thing also I think it depends on how people are thinking about it. We are in early days of a new vertical. We are not building a product for which a vertical exists. What I mean by that is CRM as a software has existed for 20 years right now. Many people are building different kinds of CRM, but I think everybody understands what a CRM is. So if you are building a CRM, there is merit and there is a certain level of clarity that you have and how to build it. So to be a differentiator, you want to offer a freemium solution. 

In our case what's happening is, it's a new vertical. People are just getting started in understanding it. If you do not push them to start utilizing, there's a tendency not to use the product. But when you start paying for the product, the probability that you will use it is much higher however small the amount is.

If I give you Netflix free of cost, I don't know how much you'll watch. Maybe it's a bad analogy, but still run with it. But if you're paying some amount of it, non-zero, the value in your eyes goes up significantly. You will start fidgeting with it, trying to figure out what's the best I can extract out of it.

So there was some of that philosophy that we had implemented. Of course, it has its own downsides to it. I am just highlighting the upsides. But it has worked quite well for us. 

Akshay: That is such a counterintuitive philosophy that when you're creating a category, you need to not go freemium, but you need to push people to pay so that they use it.

You mentioned that you did not understand value-based pricing when you were doing the first product of the mobile rendering for publishers. How has your understanding of value-based pricing evolved? How do you do pricing now?

Sharat: I think it's still a learning curve. The reality is I'm still working hard to understand it.

The important thing about pricing and packaging is that- first, it's a dynamic piece. What worked for you 6 years, 6 months ago might not necessarily work for you today. You have to understand the nature of the market and what people want. The second thing; I think it's really important to understand the atomic unit or the lever on what people are ready to pay you more for.

For every product, there is an atomic unit based on which you will pay more. Is that number of logins, number of users, amount of content, catalogue, if you're playing with the Netflix example. You understand that lever and that atomic unit, you will basically be able to start focusing on how to build a product and how to build value to the end user.

I think pricing is definitely a science to begin with. It might be a little bit of an art, especially if you're building a new vertical because you are flying blind, you don't know how much value you're adding. But as you start adding more and more customers, it very quickly can be distilled down into a value-based science and that's really what we're doing right now- which is paying very close attention to what people are using and then every few weeks we iterate and see, okay, if you move this feature from this plan to that plan, will this go down, will that go up. So a lot of AB testing and that gives you very clear indicators of what's working and what's not.

Akshay: Give me some examples of what's like an atomic unit for you. Is it number of QR codes generated or some more Beaconstac examples on pricing. 

Sharat: For us, it's quite obvious, like any of these use cases- number of QR codes, number of users, number of scans, the number of kinds of QR codes that you can use. There are several different permutations and combinations that we've essentially used. 

Obviously, the important thing to keep in mind is, we are a horizontal stack. That means we have the downside and the upside of the fact that we have a very broad ICP- like small business users, large enterprise users, people in marketing users, people in operations users, executive users, entry level folks users.

So the challenge with that is, we are right now working hard on trying to identify what really works for us. That's something that we are really working on. But it's not obviously answering your specific question because I think it's still a discovery phase for us. So it's very hard for me to say this is exactly the way pricing works.

I know that in the past, just number of QR codes was the only determining step. But now, as people realize and as the market gets mature, that might not necessarily be the only atomic unit or the lever for driving growth for us. 

Akshay: What are some of the other growth engineering you've done around, let's say, improving retention or improving the LTV for the long-term value for users who have signed up?

Sharat: I think a lot of our entire acquisition strategy has been inbound and for us to do inbound, we listen to every call, we listen to every demo. It's not just a sales team that listens to demo, marketing team does. And when a marketing team listens, they pay very close attention to the words and the phrases that the prospective customers use to explain what their problem is, you take that content and then create content around it and that essentially drives more and more traffic to us. And more traffic means more people and more people means more content. That's a positive reinforcing loop. That has worked extraordinarily well for us. 

Akshay: What about things like retention rate and stuff like that? What kind of retention rate do you see? 

Sharat: Our churn is our lowest for any SaaS benchmark. It's half a percent, which is outrageously low. There are several reasons for that. I think one of them is that we're a sticky product in general because of what we do. It's very hard to pull once you've put stuck QR codes on packaging on locations, wherever the use case might be. There's a lot of interesting use case.

The second thing is, like I said, it's an emerging market. Everyday people come up with new use cases. There's a lot of experimentation that's being done. We are doing a pretty good job in explaining to customers on, there are three things you have done and here are five more things you can do with it.

Even though that person has originally come with one specific use cases in mind that might or might not have worked, they're always excited in the prospect of working with this two or three or four or five use cases that we are teaching them. So there is this continuous work in progress, which people are realizing and it's very horizontal.

Like you can imagine, as I talk, in your own head you will think of, oh, maybe I should use QR codes for this now. I've never thought of it, but this is how I can take it out. And that's the part of what we do. 

Akshay: Why are there sales calls happening when you have a free trial? Is there a way in which you decide, for certain types of businesses or customers, we will have a physical as in a human sales effort and for others it'll be pure product led.

Sharat: We have enterprise customers that means after self-service beyond $99,000 we have enterprise plans which are for our customer, mid-market and enterprise bank. At that level we have sales reps who basically call and talk to them. These are starting at $10,000 to $100,000 A series.

They pay us $10,000-$100,000 per year. So for those people we essentially call or they schedule demos, et cetera. 

Akshay: This also happens through some inbound? Like there would first be some interest and then, 

Sharat: It's all 100% inbound. We don't have an outbound motion yet. 

Akshay: Who's your competition in this space? You mentioned one of them was acquired by Bitly. 

Sharat: I think that's the primary competitor. We have other small competitions, but I think the only competitor we have is Bitly.

Akshay: How did you go global in terms of your sales? Was there something specific you did or it's just that you were reliant on inbound and the inbound started coming from all over the world. Right now, what's your split? Like how much of your revenue is from India? How much is from outside?

Sharat: India is negligible to non-existent. 90% comes from North America. As I've said in an interview, it's better to earn a dollar than a rupee. Not my quote, I've stolen that quote from someone else. I think I heard it somewhere, but that's the truth. Selling software in India is very hard.

It's very hard. People don't understand the value of it and it's not worth it. America is obviously much bigger, larger. For all the obvious reasons, it's much easier to sell there. Ravi and I have lived in the U.S. New York is like a second home, so we have been very comfortable under our skin to sell in North America.

And third and most important is that Americans, because of the history of software, are early adopters. They are okay with the idea of experimenting and trying something new. You will not get that in other parts of the world that easily. So if you're trying to do something for the first time, it's always helpful to reach and try to sell that in North America.

Of course there are some fantastic examples of SaaS companies being better off India, focusing on the Indian market and Southeast Asian market and kudos to them for doing what they're doing. But I personally think selling to North America is efficient and the ROI on that is a lot more significant.

Akshay: When did you reach this conclusion? Because the previous version Mobstac was largely selling to Indian publishers. 

Sharat: Correct. I think that's where I learned. 

Akshay: You tried selling to publishers abroad also, like in the US? 

Sharat: I think twofold. It also depends on founder DNA. One is; there's understanding this differentiation between Indian and U.S, trying to sell to Indian customers, to the U.S customers. Over the last 7 to 8 years since fresh works went public, there's obviously a strong understanding of transport of SaaS and there's like a cottage industry of transport of SaaS companies emerging out of India. There is enough literature and playbooks available which explains how you build an Indian SaaS company focusing on North American markets. So that's one. 

The 2nd thing is the fact that when I talked about founder DNA. My co-founder is a very strong product guy and I think product marketing comes to me a lot more naturally than sales. When you think about a product and marketing led motion, which is the PLG motion, then essentially you're saying the web is where I'm going to sell it. And when you say web is the way you're going to sell it, it doesn't matter whether the customer is in India or in the United States.

They're essentially selling to someone who's browsing on the net. When you start looking at it from that standpoint, it just seems like U.S. has a much bigger advantage. Of course, if your DNA is that of selling and you're a strong sales guy, you have the ability to go pitch and make a sale in-person to someone, then I can see why there is strong merits and advantages in selling to Indian companies and why some people start selling in their Indian market, rather than the U.S. market. 

Two is; with all due respect, I don't mean it in a derivative way, if you're trying to build a product for which already lots of similar layers are there, you're just building a product which is cheaper and more competitive price than an American product that already exists- there's a lot of competition in that side of the world for this, so I as well take that product which might have similar amount of value but priced more competitively. You want to sell in India because Indians are very cost-conscious individuals, so they will take a cheaper product and that's how the reason to sell in India versus the U.S. 

Akshay: Tell me about scaling the organization. What's your head count today? What are some of the things you learned about building an organization? 

Sharat: That's still a work in progress. We're a little over 100 people right now. We have an office in New York and we have an office in Bangalore, product, marketing, engineering is out of India. I shuttle sales, customer success, finance strategy, all that sits out of New York.

 It's hard to say what has worked and what has not. We are still in early days. But I think we thrive on good company culture and I don't want to give you some lip service as the CEO does on how great our culture is. But if you look at Glassdoor reviews, you'll have a good idea why people enjoy working for us and why we are rated as we are rated there.

Akshay: But what's the secret behind it? Why are you so highly rated on Glassdoor? 

Sharat: Related very highly on Glassdoor because we fundamentally believe in hiring very good people and getting out of the way. I basically say only two things when every employee joins. I say, I can assure you of two things here. The rest of it is up to you. 

One is you'll learn a lot and two you'll meet incredibly nice people. And those are things which are not negotiable for me. Everything else is fine. So we are very high on will versus skill. We're very focused on looking at intent rather than what you know.

It's about where you want to go, that drives trajectory and that drives a belief system. I also think that life is too short to be surrounded by smart people, so we don't hire people who might be really good, but might be toxic to our culture. Finally, if there's one secret sauce- I think we have a very empowered interviewing process.

We have at least four people meeting every new hire. Those four people could be any designation, any level. We choose a team that hires them. And each of them have one vote. It doesn't matter who they are. There are many times I've walked into an interview setting where I have voted for the person saying we should hire, but maybe someone who was much more junior might have said no, and then it's a no. It's a Veto. 

That builds a very responsible culture. Everybody takes tremendous amount of responsibility that she has brought or he has brought in that particular individual and they have vote for that person. They feel like they have a say in essentially increasing the size of the tribe. And that brings a certain sense of commitment to the organization. 

If there's one thing that's worked for us in building a good culture, it's that. I don't make top-down decisions on we should hire this person, we should fire this person. It's all very collectively done.

Akshay: Is there a use case of AI in your product? That's like the flavour of the season and every company is incorporating generative AI. 

Sharat: I'm sure there is. Is it high on my radar? Absolutely not. 

Again, I might be a minority and CEO who is saying no, because looks like that's the only thing they seem to be doing on LinkedIn, writing about how great AI is. 

I personally think that yes, there is. We are definitely in the midst of a transformative technology which will fundamentally change many businesses and many workflows around how product is built or software is built. There's no doubt about it. There are many roles that will get really disrupted. With respect to Beaconstac, we are still in very initial phase of doing a zero to one. There are some basic experiments that we are doing around understanding that's a little more. I think it's too early for me to comment on.

This is what we think will happen to the market to industry or specifically with respect to the product itself.

Akshay: What's your ARR right now? 

Sharat: A Little over 10 million.

Akshay: What do the next couple of years look like both in terms of what you want to do on the product side, how you want to scale up your customer acquisition? 

Sharat: We're continuing to grow despite the macro being pretty bad. Our churn is very low. We continue to grow. There are a lot of positives in terms of how we grow, how we've been growing. And I also think that we have a pretty healthy set of customers which has been helping us. Right now, the core focus is for us to zone in our product strategy and kind of understand how we can add more value to a set of customers that we think will be very important.

We're also paying a lot of attention to the kinds of use cases that are emerging on the horizon. The question that we have to ask ourselves is, what are products that we will build versus product which will open up the platform where we'll enable anyone else to come and build on top of us.

Because the use cases are so broad and so interesting that the question that we have to be able to answer is- what are things that we will be able to productize? How we will essentially be able to build more depth on. And similarly, as other people discover new ideas, can we provide them the building blocks that will help them come and build their own QR enabled or QR empowered strategy. I'm putting pieces of that together right now. 

Akshay: Like Salesforce has an app marketplace. 

My last question to you: what's your advice for young aspiring founders? 

Sharat: It's what I say to anyone which is- there's a Shakespearean quote which is "What's past is prologue". It means that whatever you've done so far is setting up a stage for what you're going to do in the future. Don't give up so easily. It takes a while to get to where you are. It takes a significant amount of effort to discover what's right. So be persistent, that's one. 

The second thing which I will say, is that entrepreneurs are overrated. There is obviously a lot of blood, sweat and tears, and I have tremendous respect to my other peers. I've been at this for a decade so you cannot say I'm not persistent. I am persistent, but that's not just enough. Never underestimate the power of market and timing. People who are extraordinarily successful are successful because they time the market very well and that's like hindsight for us in 2020. You have to be at the right place at the right time. Never underestimate that. There are phenomenally talented founders. I'm sure you're doing a phenomenal job of doing what you're doing. You've still not seen breakout success because your timing is off. Either you're ahead of the market, you're behind the market. 

So just keep doing what you're doing. If you're standing at the beach for long enough, eventually the wave will hit you. It takes 10 years to look like you have been at the right place at the right time. So don't worry so much about it. Just keep doing what you're doing.

Before you go……the analytics only tell me so much, I want to hear what you feel and think about the conversations.

Mail me at ad@thepodium.in with your comments & feedback or if you just want to hear my comments on your startup idea - I love getting your emails!

Until the next founder's thesis📕,

Your host, AD