1Mby1M Entrepreneur Bootstrapping an AI Deep Learning Venture to over $5M ARR: Bharath Gaddam, CEO of Data Poem (Part 5)

Sramana Mitra: One of the important points of bootstrapping is you can’t do a lot of stuff for free. You have to charge.

Bharath Gaddam: Yes. We very strongly believed that if the proposition is what they wanted, they’ll pay for it. We’ve seen enough takers for that belief system. Even the clients never asked us for a free pilot, because they could see the value. They’d ask, “What’s the cost?”

Sramana Mitra: How did you charge for the pilots?

Bharath Gaddam: We were charging by brand. So, for any brand, we were charging $20K per pilot. It’s good enough money for us to sustain a small team. We were a relatively very small team. We didn’t hire dramatically.

Sramana Mitra: How many pilots did you close in 2020?

Bharath Gaddam: Nothing in 2020.

Sramana Mitra: Nothing? It all came in 2021?

Bharath Gaddam: No, in 2020, we did two pilots before COVID, and the momentum was building. Then the enterprises shut 2020 down and said they’re not taking on any new vendors. I can understand.

Sramana Mitra: Yes, it was an uncertainty guard.

Bharath Gaddam: It was a life and death situation. So, we went back and started building on the product. In 2021, we started with three or four pilots for very large organizations like the world’s top three spenders in CPG, auto, and QSR.

So, we got those pilots. We realized that there is value for these enterprises in this proposition. That’s the big validation that we got.

Sramana Mitra: How long did it take you to show that value with the $20K pilot? How long is the pilot?

Bharath Gaddam: The other thing that we learned in the pilot is the data systems were siloed and not ready for the kind of measurement that we had to do. It took us time to first base model setup, and then show its agility, et cetera. It took us anywhere between 20 weeks to 24 weeks.

Our modeling time was still four weeks to value.

Sramana Mitra: You had to set up the data infrastructure?

Bharath Gaddam: Yes. Every time, the clients used to say that they’ve a great data lake. All they had was disjointed puddles created for what they call reporting framework or BI framework, which is monthly reporting on Tableau.

So, they had the data, which is of kind of no use for measurement, because measurement requires much granular data.

Sramana Mitra: So, you were not charging for setting up that data infrastructure?

Bharath Gaddam: No. The client always used to say that they’ve the data. Of course, we didn’t have the stature at that time to question that. Now, I question the premise and charge for it.

Honestly, we believed that the top three advertisers in the world would have it.

Sramana Mitra: You were just trying to get into the accounts; you didn’t have the luxury to question it.

Bharath Gaddam: Yes. But more than that, we believed that they will have it.

Sramana Mitra: You assumed that they had it.

Bharath Gaddam: Not assumed it, we believed that organizations spending $10 billion cannot not have a system. Of course, that belief was proved wrong.

So, the whole process was taking longer. It took 12 weeks to 16 weeks just for data setup.

Sramana Mitra: How many pilots were you able to get in 2021?

Bharath Gaddam: Only three. 2022 is when we really took off. We were easily doing 10 to 12 pilots.

Sramana Mitra: Till 2022, you survived. From 2019 to 2022, that’s two and a half of Survival.

Bharath Gaddam: Correct. Our survival was backed by an enterprise account that we got in the beginning. It had nothing on this proposition of agility. It just happened because there was an RFP where we pitched together with one of the partners, and we got a long-term account with them, which they can’t exit immediately. Even in COVID, they couldn’t exit. So that account helped us survive for the first two years.

Sramana Mitra: You did some services work. You’re bootstrapping using services.

Bharath Gaddam: Yes. It’s a platform and a service. The client would use our platform for very basic reporting and a basic level of planning. That’s not the real platform, but that helped us survive. We did that for two years, and then the pilot money helped us survive afterwards.

Looking back on the journey, it looks linear, but it wasn’t linear at that time.

Sramana Mitra: Yes, it was choppy, but that’s the reality of this kind of a startup.

Bharath Gaddam: Yes. The good thing is, we are very focused on this problem statement. We didn’t move.  

Sramana Mitra: It just got more specific on where you were going to add value.

This segment is part 5 in the series : 1Mby1M Entrepreneur Bootstrapping an AI Deep Learning Venture to over $5M ARR: Bharath Gaddam, CEO of Data Poem
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