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Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 6)

Posted on Saturday, Apr 22nd 2017

Sramana Mitra: When did you start the Gusto partnership?

Ashik Ahmed: That was between late 2013 and early 2014.

Sramana Mitra: How much did you do in 2014? How would you attribute that to Xero, Gusto, and your direct selling efforts?

Ashik Ahmed: The challenge with partnerships is that, at the start, you get a very good escalator. But then you reach an altitude where you can’t go any higher because you’ve have milked every customer from that partnership. At that stage, we were definitely getting the bulk of our revenue from referrals. Direct was still happening. We actually said, “These hourly paid workers quit every nine months and go get another job.” You talk about employee retention, but every nine months they’re leaving.

As they go from one job to another, they actually take Deputy with them. They have to take a photo on the wall for their schedule. They’re like, “Really? I have to go take a photo? Why don’t you use Deputy?” That’s where we started a viral effect. We incentivized the employees. If you refer Deputy to your new employer, you get $100. That started working.

I remember our first Irish customer used to be a backpacker in Sydney. He opened his own coffee shop in Dublin. He just signed into Deputy and started using it. There was nobody in Deputy that he ever spoke with.

Sramana Mitra: This behavior started happening when?

Ashik Ahmed: It was happening slowly.

Sramana Mitra: What part of the revenue comes from people moving around?

Ashik Ahmed: I would definitely about 60% to 70% was word of mouth sales.

Sramana Mitra: Are there any other strategic moves or anecdotal channels or stories that are worth discussing? The ones that you discussed are very interesting. Are there other levers like these that acted in helping you scale?

Ashik Ahmed: I speak with other founders as well. One of them said, “I’m at the two to three year mark, what advice do you have for me?” What I can say is your product is your go-to market strategy. In terms of how somebody will acquire your product and use it defines your go-to market strategy. For us, we were lucky in terms of having such awesome partners who helped us in terms of growing.

We have tried other partnerships as well that didn’t work. There are two kinds of partnerships – partnerships that are good for the customers and partnerships that are just lead referrals. The one that’s value-driven is 100x than the lead referrals. There’s a lot of payroll software in the world. If we can form a really good partnership with them, it can definitely add value to the customer and those payroll companies who maintain the relationships with the customer will definitely go and talk about Deputy to their customer.

Focusing on that, from the customer journey point of view, has been really important. We haven’t fully cracked any other channels as yet. There are two things that are working really well for us – this partnership as well as word of mouth. Both of them have to work because the product has to sell itself.

Sramana Mitra: You have not done any external financing. Is all this organically built?

Ashik Ahmed: That was true till 24th of December 2016, when we raised $25 million from Open View.

Sramana Mitra: What was your 2016 revenue level?

Ashik Ahmed: We’re approaching $10 million now.

This segment is part 6 in the series : Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy
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