Sramana Mitra: Can you talk a bit about your pricing model? How did you come up with that pricing model?
Anand Janefalkar: For a lot of companies in this sector, innovation is very rare. Their revenue models were based on trying to fit in one-time fees or maintenance fees and all of that to service that technical debt. We decided that we don’t have any of these hidden fees.
We wanted to have a very transparent and true pricing model. That’s what we established. We found out that a lot of companies have started to care about support coming from the mobile app as well as the web. These weren’t disconnected experiences. These are all handled by the same contact center, which is also taking the traditional phone calls.
The way we priced it isn’t to have a separate component if the call or chat is originating from the app or a separate component if it’s originating from the web. We just decided that a voice license gets them voice across every entry point. A chat license gets them chat capability across their customers and chat capability across every entry point.
I think that has been pretty successful. We are also pretty transparent in how we charge the product. I think that has led to our customers not only signing multi-year contracts with us, but also referring us to their ex-colleagues in different companies.
Sramana Mitra: Very interesting. Your deal size is average. You’re doing outbound direct selling. What kind of average deal sizes are you seeing in these 40 enterprise customers?
Anand Janefalkar: It’s all over the place, but these are in a very different ball park from like a freemium converted to a paid model.
Sramana Mitra: I understand that. So are we talking $50,000 a year run rate? Are we talking $100,000 a year run rate? I’m just trying to get a ballpark of what is the business that you’re building.
Anand Janefalkar: I’m understanding what you’re trying to get there. These aren’t the numbers we’re ready to share with you.
Sramana Mitra: Are you building an enterprise software company?
Anand Janefalkar: Yes. Isn’t that what the question is?
Sramana Mitra: What’s there not to share with? What is the business? What kind of denomination of deal sizes are you doing? Is that something you can’t share?
Anand Janefalkar: We have a lot of companies that we have contractual obligations with to not share.
Sramana Mitra: I am not asking for a specific deal number. I’m just trying to understand what the business we are talking about. A traditional enterprise SaaS business has numbers running $100,000 plus a year kind of revenue model. That’s all I’m trying to understand.
Anand Janefalkar: I think the deal size doesn’t dictate what that is. I think it’s the brand of these customers. Our deal sizes are all over the place. They could be multiple millions. If we believe a smaller company has the growth potential to become a mid-market or enterprise company, we will definitely make sure that they get the same services.
We’re not going to discriminate if the deal size is lesser than $100,000 or give special treatment to someone that has more than a million. We treat all our customers the same. We have a lot of small customers that really are big believers and are seeing savings in total cost ownership because they were used to being taken for a ride by other enterprise software companies that are like, “If you want to have enterprise-grade stuff, you have to pay 5x of what you’re paying.“
I think we have a very wide range, but we’re basically looking for quality, admirable brands to be on our customer list. We continually go after the target companies that we want to have as customers or partners.
Sramana Mitra: All right. Is there anything else you want to add?
Anand Janefalkar: I think we covered a lot.
Sramana Mitra: Thanks for your time.