1Mby1M Entrepreneur Bootstrapping an AI Deep Learning Venture to over $5M ARR: Bharath Gaddam, CEO of Data Poem (Part 6)

Sramana Mitra: So now, let’s get specific. In 2022, these pilots started coming in and starting to convert. You have six months, let’s say, to make sure that the pilot is working. Tell me when you started getting the real deals after the pilots.

Bharath Gaddam: Yes. The real deals happened from the pilots in 2022.

Sramana Mitra: So, 2022 was when you got your first real deal.

Bharath Gaddam: Yes.

Sramana Mitra: What was the size of the deal?

Bharath Gaddam: You’ll be surprised at the size of the deal. It is close to $2 million.

Sramana Mitra: $2 million. That’s what I was hoping you were going to say, because if you have a six-month pilot cycle, it better be a very large deal after that.

Bharath Gaddam: Absolutely. It’s not worth spending $20,000 for a six month pilot.

Sramana Mitra: It’s not profitable.

Bharath Gaddam: It was not $20K alone. I was saying it’s $20K for one brand. They’re big portfolio brands. So, we’d do three brands. While we’re doing one pilot, it was for three brands – large, medium, and small brands in different formats.

Sramana Mitra: So, $2 million deal is per brand, right?

Bharath Gaddam: No, the $2 million was for the entire portfolio.

Sramana Mitra: For the entire portfolio. Okay, got it. So, you got a large portfolio of brands to work with, but it was a $2 million deal from one customer relationship.

Bharath Gaddam: Yes.One customer relationship. So, we converted every pilot that we did.  

Sramana Mitra: Wonderful. What were the payment terms of the $2 million deal?

Bharath Gaddam: Monthly license fee.

Sramana Mitra: So, you were getting paid on a monthly basis. It was a steady cash flow, and it was enough to support your small team.

Bharath Gaddam: They understood the value that we’re bringing in, and they help us with the initial setup. These organizations tried everything else, and everyone in the world said it’s not possible. So, they understood that we are the only ones who are doing it.

 Of course, they didn’t tell us, but we know that we are the only ones who are doing it. Even today, after five years, while others can just claim a tick mark that they’ll do it, no one can do it.

Sramana Mitra: So, what were they paying for setup?

Bharath Gaddam: A good 10 % of the license value.

Sramana Mitra: Okay, so $200K for a $2million contract.

Bharath Gaddam: A little more than that perhaps. I don’t know the exact number. They did pay a good 10% or above.

Sramana Mitra: So, in 2022, you got your first $2 million deal. And what else did you get that year?

Bharath Gaddam: That year we also got one auto deal, one QSR deal, …

Sramana Mitra: Those are all Portfolio deals?

Bharath Gaddam: They’re full deals, but they’re not portfolio deals that we expected. There were three brand deals and one business line deal.

Then we scaled a lot, literally 15x from where we were. We’re landing at every level in terms of scale of brands, scale of data and revenue. We shot up 10x to 15 x.

Sramana Mitra: It was an inflection point.

Bharath Gaddam: Then we thought you won’t get into this space every day. So, we decided to implement this properly. That’s the other conscious choice we did. We didn’t go after growth again. We’d already got to 15x. Next, if you don’t do it right, we’ll fall into the pit.

We decided not do any marketing or reach out anywhere. Let the word of mouth spread, we’ll only work on incoming inbounds.

In 2023, we’re handling 30 brands in one go. When we say agile, it is not just agile as a system, it is agile as a company too. You are kind of transforming the way every brand will operate. It’s not easy. People go through a transformation journey through us, because they’re all used to these one-year and half yearly planning cycles.

Sramana Mitra: Their workflow is changing because of what you’re delivering.

Bharath Gaddam: Yes. So, you have to go through that too. It took us six-seven months to set up all these 30 brands in different stages.

In hindsight, we took the right decision not to go for marketing and growth. Otherwise, we’d have been crushed.

Sramana Mitra: Consolidated.

Bharath Gaddam: Yes, we consolidated great feedback from all the existing clients. Everyone increased the portfolio with us. It gave us a second spurt of growth without even marketing, and that helped.

At that time, we knew what we wanted to build—even back in 2020. We didn’t have the exact words for it then, but we were calling it a “metamodel”—something that could understand the category, how it works, and what’s happening within it.

We didn’t have the resources yet, so we started with what we called a small causal architecture. But we knew we eventually needed to build large causal architectures to realize that vision.

So, in parallel, we began developing the large causal architecture to bring that early vision to life.

Throughout 2023, we continued to grow—mostly through organic inbound. But for us, that was good growth; in fact, we nearly doubled during that period.

This segment is part 6 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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