Episode 150 / January 2, 2022
Avlesh Singh on Building WebEngage, a 100 CR Revenue Company
# 5M+ Shopping Moments Personalized
#400M+ Monthly Active Users Engaged
#30B+ Messages Sent Monthly
#$10B+ Additional Revenue Delivered
These are some of the metrics driven by WebEngage, which caters to 400+ global brands as a robust customer data platform, personalization engine, omnichannel campaign manager, and an analytics engine.
In today’s episode we have Avlesh Singh, WebEngage’s, CEO & Co-founder, sharing insights on how they’ve built a seamless full-stack Retention OS.
During the episode, Avlesh talks about how companies can reach out to their own users, reducing churn and increasing retention, instead of reaching out to third-party ad platforms, and much more.
01:45 – Intro to Webengage
05:06 – “Marketing will only put a certain amount of value to the software, only if we are able to bring more users back to the platform.”
13:20 – Current scale in terms of revenue & customers
36:51 – Learnings from his experience as a founder
Read the full transcript here:
Siddhartha Ahluwalia 00:02
Hi, this is Siddhartha Ahluwalia, welcome to the 100x entrepreneur podcast. Today, I have with me a dear friend Avlesh Singh co-founder and CEO of webengage. webengage is a full stack marketing automation suit that drives growth of consumer businesses by enabling them to engage users. There are multiple channels like push in app, SMS, on site notifications, webpush email, Facebook, Instagram and WhatsApp. webengage has carved a niche for itself in user attention, and helping large brands build a user retention strategy. Welcome Avlesh to 100x entrepreneur podcast.
Avlesh Singh 00:41
really privileged to be here, thank you, thanks for having me. And I’m hoping that this will be useful for other budding entrepreneurs, and there’ll be insights and lessons learned from our journey that will be of value to them. Thank you, thank you for everything
Siddhartha Ahluwalia 00:56
looking forward for our conversation Avlesh, in one of your Twitter posts, while celebrating the 10th year anniversary of webengage, you said after two paths pivots, five near death situations and three buyout offers later, webengage is a decade young today, would love to know about these key events, that made webengage and the resilient company it is today.
Avlesh Singh 01:24
Siddhartha Ahluwalia 13:19
And current revenues of the company, which are public figures, it says more than 100 crores.
Avlesh Singh 13:26
That’s right. So we were doing more than $15 million of ARR, we are growing 100% year on year. And, as I mentioned, because we never had the luxury of having capital. So, cash flows has been always sort of a very key point to our existence. And we have always had a focus there, which also means that, we have done these things very profitably over the last three, four years. And that’s primarily the DNA of the company. Now we are investing a little bit in growth. But that’s just a course of the journey. So yes, $15 million of ARR, more than 400 customers globally, almost half the businesses in India, the other half is in other emerging markets, but least Latin America, Southeast Asia, a little bit of Europe also. And very good signs of adoption, across the board, we’ve been able to find a sweetness, we’ve been able to position the product a little differently from what’s out there and build to our thesis for the customers that we are going after. So yeah.
Siddhartha Ahluwalia 14:31
In 2015 timeframe, when you pivoted, did the revenue hit zero because of that?
Avlesh Singh 14:39
Yeah, we almost got to zero. So I told you right at peak, we were about two and a half million dollars. And then when we pivoted, we lost one of our biggest customers because they didn’t like us pivoting and you know shelving the previous product, so this just churned and that led to a series of churn. Initially we were a reluctant because we were, you know, we wanted money to survive. But once we had some traction on the current product, we forcefully turned all the previous customers on the previous stack. So that got to zero in about a year and a half period from the time we pivoted. And today, it’s all the new stack that we said.
Siddhartha Ahluwalia 15:20
Easy choice at that point of time would have been to keep the old product also in being live with the new product? And upsell the new product then, correct?
Avlesh Singh 15:33
So, in all candidness and honestly, we did try that. We did try that. Because, that’s what as an entrepreneur, that’s what you want to do. You don’t want to lose customers that you have acquired. But the lesson there has been said that, there’s a lot of talk about finding the right product for a right product fit is a lot about right finding the right persona of it. Right? Who are you building this for? And there was a huge difference, change in terms of who was the buyer earlier versus who was the buyer now, and in SAAS, anything b2b, that’s very complex, to be able to, you know, sell to a buyer, who is not the real beneficiary of the product, if a buyer earlier buyer used to be more people from the customer experience teams, with smaller budgets, my new buyer is invariably always invariably the CMO with much higher budgets, right? And that changes a lot of things. Because these are two different buyers with two different problems. What appeals one doesn’t appeal to this one, because the problems are very different. Trying to make it work finding ways from this guy to this guy. it’s all very complex and very difficult. Not that it can’t be done, but very hard. If you have to start from zero, you shouldn’t even attempted. We did, we had a few successes. So limited, because we had good relationships we could go in. But yeah, you know, all this is invariably very hard. And if you’re starting from scratch, we didn’t try anything of that sort. But we did get a few conversions. But yeah, most in most cases, it was just disappointment. We had to let them go. And we managed to sell to the same companies, but in a very new way of finding the new person doing a new pitch, doing a new demo, doing new sort of integrations and then sell it. And of course servicing and pricing, etc. But it was an altogether new process. The access that we had initially we couldn’t make it work. through that access.
Siddhartha Ahluwalia 17:39
It was almost selling to a new company, which could help you complete the process faster.
Avlesh Singh 17:45
Well, we had some success in few cases. But yeah, exceptions, mostly.
Siddhartha Ahluwalia 17:50
It was not repeatable for you though.
Avlesh Singh 17:52
No, We tried but we coudn’t
Siddhartha Ahluwalia 17:56
And how did you find your price point? Right, because $3,000 and $40,000 are very different.
Avlesh Singh 18:06
Evolutionary also. Yeah, I don’t think we have revised much in the last two, three years, early days was a lot of discovery. So when we launched in 16, July, there was, we had absolutely no idea. So a lot of it was driven by what the American companies were doing at that point of time, in terms of their pricing, and mid market, enterprise size, you know, pricing is always, you know, iit’s not transparent, it’s not out there for you to you know, decide, it’s always a custom, you know, depending on your volume, data, etc. So there are many pieces in mid market pricing. And we discovered that during the course. But over over the period of time it became very clear to us that the only way we are going to make money on this tool is when we position it as a revenue making tool as compared to just yet another marketing tool. Because there’s no dearth of those right, there are just so many of them out there, each claiming to do a great job, improving your metrics and numbers, etc. So the way we discovered ours was, what was the real revenue impact we were bringing into these customers. Most of our customers are in the business of doing online commerce, online travel, education tech, FinTech, there is direct. This is almost these four categories are almost 80% of our customers. And in each of these cases, there is direct impact on revenue when you use a tool like Webengage. A tool like webengage, basically helps you get more conversions on your existing user base on your existing installed base in your app, on the existing traffic that you get on a website. So it helps you do that. And then it also helps you get more repeats from the same existing customers that you have, right. And these are very clearly demonstrated in the product, very clearly attribute to the webengage. Our pricing discovery, a lot of it happened backwards when we discovered those numbers. And, very happy to share with you right that in almost all cases, our customers, they end up making 20 to 25% of their revenue from webengage. Right, in a more evolved state, it takes time for a customer to get their 6 to 12 months, usually, from the day they go live with weapon gauge, but in a more evolved state 20 to 25% of the revenue. Absolutely undisputed comes from webengage. And when that happens, then, we are able to price it in that manner, looking at us as a cost of small cost of revenue, as compared to just a tool that you bought. So yes, our discovery happened in that manner. Over a period of time, we have a lot of mid market customers, that’s what our bread and butter is, slowly gradually, we are also finding inroads into larger enterprises. You know, people like Unilever’s and Adani, etc, right? They are finding ways get into these kinds of customers since the last year, so our profile is going to dramatically change in a year or so. But that’s where we are currently. And the price discovery as I said, it happened over a period of time.
Siddhartha Ahluwalia 21:37
When did do discover your current positioning, right, and what helped you cemented because a lot of changes or flux was happening.
Avlesh Singh 21:52
this is a great learning from our journey, by the way, right for most entrepreneurs who are usually crunched for resources, right? Or who operate in crowded spaces, anything, which is a crowded space, right? The reason it is crowded is because the TAM is very large. If there are more companies doing good, right, in India, you have two three in our category doing doing okay. In America, you have about 10-12, Couple of Israeli companies, few in Middle East. Now, if there’s so many companies and doing well is always very subjective. you can always ask questions about what’s doing well, but overall, right, collectively, all these companies, they do close to $500-600 million of revenue. Right. And I’m talking about, you know, 10 to 15, companies, right. Now, all this space was created in the last five-six years. So what this tells you, this tells you that there’s a very large opportunity here, it tells you that this space is getting created, while the jargons are all the same. But this is a new emerging area, which is not the same or or doesn’t need to be compared with what the old economy marketing tech companies were. Because they were doing different things. Very hard to explain, that makes the category harder, because from a 30,000 feet view, everything looks the same, all of these companies will look exactly the same. And our journey, if anything, is essentially a case study for founders who find themselves stuck in that position. Because you have to see, you have to understand that when you are in a crowded space, you have to look different and you have to stand out, you have to be different, you have to find a niche. Otherwise, it’s extremely hard for you to grow in scale, especially if you’re crunched for resources. And our journey as I saying, as a case study in always finding that niche. We have continued to find that niche, that customer segment, that product needs that will stay true to instead of getting moved by what everybody else in the competition is doing. And to always and always find out ways to go deeper into that customer. Instead of staying shallow. You always try to go deep, because the problem that we’re solving is a deep one, right? If we if we end up making money for you, then you know there’s nothing better out there right if you take us seriously, we make more money for you. And the product thesis at webengage is largely driven by this philosophy is what more can this customer do with the data that we own for them? Can we create more value for them? And we took some cues from the large enterprises, right? I’m not sure if the audience would be familiar, all These large software providers, Adobe’s Salesforce, Oracle IBM’s, except for Microsoft, everybody’s in play. And they have what they call as marketing clouds, very large marketing clouds, decent chunk of their revenues, Adobe does close to a billion bucks on the marketing cloud annually. And in the last 15-20 years, they’re basically acquired a few companies. Companies that manage data, offer a data platform, companies that offer campaign management tool, companies that offer analytics tool, companies that offer web and web personalization tool, etc. And they bundled this, went to the CIO of, you know, big pharma, big airlines, big banks, big insurance, that’s the target segment, they go to these guys. It’s always a CIO cell. And they’ve sold his entire product stack, very old economy products, nothing great or fancy about them. But there’s a very thriving ecosystem of what’s known as system integrators around these products, whose job is to deploy and make money out of these products. This is an entire ecosystem, we knew there was an opportunity because this had to be disrupted at some time, this will get disrupted. No customer wants to spend million dollars in just putting a marketing stack out there, right? Nobody wants to do that. Today, they are doing it slowly, they realise they don’t have to, we see that as an opportunity. we see a a good sort of traction on us evolving into becoming this marketing cloud, which is DIY nature, a way strong, phenomenal DIY substitute to what these old economy marketing clouds are offering, and go after that segment and make it so DIY, that the midsize companies that we are catering to today, which are essentially buying different tools. You know, they buy tools for their analytics, they buy tools for their email marketing, they put tools on their mobile app, you know, and so on and so forth. Right? We’re building a very compelling one single dashboard, multi product for this category of companies. For a product, it just works out of the box, right? And going all the way to enterprise where we disrupt the large old economy, marketing clouds. To us, that’s the opportunity. If you zoom into what’s happening in in the rest of the category, what the others are doing, they’re going after the mobile first and mobile only businesses, right? Each of these products, they’re positioned as mobile growth stack tools. And I’m pretty sure that’s a phenomenally large opportunity to because all these names that I took in the in the America, some of the Indian companies, they’re all going after that as their opportunity. Now, when everybody was going after that opportunity, we had to carve a niche out and not chase the same, right? And we decided to focus on something else, right? The more unsexy omnichannel businesses, not the mobile only mobile first businesses but somebody who is doing their business across the board, multiple touchpoints more complex, we decided to focus on that and, you know, build for that segment of customers. So it’s a very conscious choice to build in position. But the reason I gave a longer answer to this is because there’s a lesson here for people who are in crowded spaces. For companies that are in crowded spaces don’t have the resources to fight it out. You have to find your niche. Because crowded spaces, they also bring very large TAMs, they also bring very large opportunities. You have to zoom in, find your niche, grow and scale. ours would be a phenomenal case study, when we get to that point of celebrating, which is a few years down the line. It’ll be a case study and I’m hoping it works out the way we envisioned it. We are continuously learning improvising. But staying different has been a part of the product strategy and the growth strategy.
Siddhartha Ahluwalia 29:03
you have been a founder who i would rank number in among 1 million entrepreneurs in resilience?
Avlesh Singh 29:14
Well, no, I won’t take that award. There are many others, deserving others. if at all you can give me like a consolation prize and survivor but yeah, thank you.
Siddhartha Ahluwalia 29:25
Because along with the challenges, in professionally, right, you face a lot of personal challenges during your journey. Right? That’s right. Investors doubted you. From the point of view and your team doubted you. And for an entrepreneur, family is the bedrock of support, right? And then that shakes up like the confidence, the clarity, everything goes away for a toss. How did you manage to hold yourself during that time And you bring back and emerge even stronger during that process.
Avlesh Singh 30:08
you’re right. Very difficult phase. Personally, for me, and for everybody around me, whether it’s in the family, my team, my shareholders, investors, very difficult times. And I won’t go in deep into the details of what happened, what transpired, but I had to be strong in all these moments of stress, the only way you’re going to survive is standing your ground and being strong about what you want to be. I have never thanked my team enough, my co founder enough for being my pillar of support during that period. They were the only ones I could fall back on. And it took me a lot of time Rajan, Karthik, all these guys on the on the cap table, they were very helpful and supportive during that journey at least had a listening ear, right, in terms of helping out what really had happened and how to course correct, what to fix. But the point being is, I’ll go back to the point of staying strong, I tell you what I did, right, that one year period was probably very difficult. I don’t even want to go back and reminisce any of that period, because it took a toll on me and my health. Everybody that I met after that potential hires, potential investors, potential customers, not like the average customer doesn’t care, but you know, large enterprises, they do care. They’re having all these meetings, customers are talking to my sales folks, my pre sales folks, my sales, engineering teams, etc. Investors are talking to me, my the founder, and some of my senior team members, prospective hires, they’re talking to their hiring managers, you know, people applying to marketing, sales, etc, right. I used to wherever required, in most cases, in fact, back in the day, almost 100% cases, I used to go into those calls, those meetings, and I used to tell them that I know you have heard of this, I know, you’re you’re it’s all in your head. I know you haven’t brought this up. But here’s me telling you what it is. And what we have done. And here is why you don’t need to worry. I used to go proactively do this over and over with every single person concerned. All the women hires in my team during that period, no matter who they were. The hiring wasn’t complete, until I had spoken. And clearly told them that this is what it is. This is what it actually was, this is what we did. And here is why you don’t need to worry about it. We know what we’re doing. It’s unfortunate that all of that happened. And we were seen in certain light, I was seen in certain light, but it’s not what it was. And you need to know the truth, you need to know the story, you need to know what we did as a company, what I did as an individual, I used to lay this bear for every single person that we used to interact with. Imagine how tough that is. Imagine how tough that is for an individual who has to do. So what seemingly seems easy. We survived yesterday, it wasn’t easy. I had to do things to make sure that the remains of past don’t affect our present and future. We continue to be very headstrong as a company, we continue to be very focused on growth, very least distracted by everything else. That’s not supposed to distract you at all. And at the same time, right, build solid foundations around building a very large company, right? And none of that is easy. You have to it’s not just about building product and finding customers, there’s so many things around that you need to sort of build, my lessons and my learnings from from those have been very positive. While all of it took a lot of toll on me and my team and my entire cap table. But we’ve come out very strong, knowing exactly what not to do. Right and those are some very precious lessons learned the hard way, unfortunately. But yeah, you know, none of it happened without me and my team sort of taking the problem head on. You cannot run away from it. That’s the summary of the lesson. unfortunately, you have to you have to go through that stressful phase. You can’t run away from it. You have to take the problem head on and solve As an individual, right, you want to forget the past. But what been the situation you were in a new arena, right? You had to relive that tell that story. Everyday in day out again, I can’t imagine how, how tough it would have. It never goes away. It never goes away, very unfortunate. I feel very saddened by people who got impacted because of this. Everybody around me, everybody in the company, otherwise, I feel bad, I feel terribly bad for everybody who got impacted, because of it. I can’t go back and undo. But if me as a person, have to bear the brunt of it and take the toll to ensure that everything else is safeguarded. And moving forward, I have learned to live with it. And I know that this is nothing, this is not something that will ever go away. But it’s okay. It’s fine. I’ve learned to live with it. And mentally, I’ve become a lot more headstrong about all of these things around business and my own personal life, personal choices that I make it only you know, what doesn’t kill you makes you stronger, right? So I’ve lived that journey. And hopefully, all of it will be put to good use as we build this. And as we go along. This is lessons learned the hard way, not only for myself, but for my entire team, everybody has been privy to, what we really went through and collectively makes us a very strong resilient team, all of these.
Siddhartha Ahluwalia 36:37
in your evolution as a founder, what are the the things that held you right, during the past journey? And what is helping you right now, build for the future?
Avlesh Singh 36:52
I tell you, and it’s very funny, because I’m not able to explain this very well to prospective investors also, but 10 years into this space, right. And I would want to believe that the team’s pretty smart. They may not be great pedigree. But they spent these years with me on the ground in the battlefield with the customers, fighting out, with overfunded competition, fighting out with old economy companies, winning deals day by day night, building a product that everybody was, laughing about five years ago. Now, everybody, from a hygiene perspective, everybody has the same stack, right? They all built it out. When we build journeys, everybody’s like what is this? Who needs this in the very first place? And customers demanded journeys from them because the experience would experience with open gates. Now everybody has it right? To me. I think, it’s very underrated in the startup ecosystem, the amount of knowledge that you acquire, by being close to your customers by being close to the pain point that they have. it’s phenomenally valuable insight, which, of course, you need to translate into product and your go to market and your sales, marketing everything else. These 10 years for us, while we have not too many things to show for the journey has just started hopefully will be worth something in some time. But the amount of insight that we have about customer behaviour the whole landscape in general is unprecedented. To me, it’s very valuable. How we put it to use, time will tell right, whether whether we are smart enough to put it to use, I will tell but I would want to believe that it’s a very strong structural mode to have in b2b businesses, knowing the pain, and where your categories headed. Knowing what customers are going to do five years from now. It’s as I said, it’s a structural moat. Very hard to express, very hard to prove in this world. But I find that incredibly valuable. And me and my team, we spent years doing this building this thesis out right and very battle hardened people, very battle heavy have we had absolutely nothing to fight with. We still fought the fight right. And, came however far we have come. All of that is incredibly valuable to me as a founder. I cherish it. And believe me I it’s one of my assets. I can’t put it on my balance sheet. I can’t show it everywhere else, but it’s an asset and will definitely build value on top of it, I am 100% confident that we will
Siddhartha Ahluwalia 40:05
here coming towards the conclusion of the podcast and very interested to know that you can go public as a company in India right now. 100 crores revenue on the balance sheet is amazing for a SaaS company to have, Latentview Analytics went public at 300 crores of revenue, and Great company took 15 years in making and it’s like a services company at the heart of it, what valued when they were going public at 3600 crores which is almost 10x the revenue. And on the day right? When they debut. The price went up by 2.5 to 3X became a unicorn. So many VC jargons or VC lingos Got their, you know, that the first kind of create value that delivers value
Avlesh Singh 40:59
That’s great, enormous amount of value.
Siddhartha Ahluwalia 41:02
So how do you think out? Maybe webengage going public? Because now you’re away from the VC noise, The traditional VC noise.
Avlesh Singh 41:14
No, you know, and congratulations to all the company. We have had a whole bunch of IPOs this year. I know few are coming. Some of these are very close friends. And I’m very happy that all this has turned out so well for for most Indian startups. And it’s a great sign. It’s a great sign that there is there is appetite in retail investors, right for for these kinds of New Age companies. And it’s great to see right, three, four years ago, this wasn’t even a possibility. And I know there are naysayers even now, the word always will have naysayers, right? So it’s absolutely okay. People do what they do at that point in time, and everybody learns and grows. Stories like Latin, right? Or, or, for that matter, you know, other b2b companies, which has gone public in the last year or thereabouts. There is appetite for b2b stocks in Indian market that’s clearly visible now, a very small sample, you know, a lot of it has to happen. For this to, you know, to pan out in the way we want to, as far as webengage is concerned said, we’ll definitely go that path. That’s very clear. But I don’t think for the next few years, we are even thinking about it. 100 crores while you know, it’s sounds 100 crores, it’s very small number. We think there’s a there’s a there’s a very large opportunity to build 1000 Crore revenue company focusing on these emerging markets, right. And I think we can make it happen. It takes us a little time. And for the story to pan out, see retention, I will tell you the reason why it took us longer, and we want more time is because it’s a very evolving space. Everybody is learning what this is. Nobody knows what this is, our comparisons of what this could be, is all with companies that don’t directly compare. And it’s very nuanced. But it is what it is. And this will change in the next few years. The awareness of a retention skill, right? If I had to tell you it’s not common wisdom, I told you, right? Webengage makes money for its customers, right to the tune of 30 45% in a more evolved state. That’s not common wisdom for the CMO. if you go around and talk to CMOS, it’s not common wisdom. They’ll continue to spend their marketing budgets on Google and Facebook. It’s more proven. It just works. It’s costly. Everybody knows it. But you know, they’ve been doing this for donkey’s years. Compared to giving your mindshare to something, which is untested, they don’t know it yet. They don’t have the conviction yet. They haven’t gone through the cycle yet. Will it happen? I am 100% confident, right? I bet my 10 years on this, I’ll bet my my entire life on this right? I know it will happen. It just needs time. So for what we’re doing is, it’s not it’s not related to what webengage is or it could be. It’s also related to the markets maturity, of growing to a point when they actually start investing in these tools. That’s when the kaboom happens. We’re waiting for that moment. It’s not very far. It’s just, it’s it’s not around the corner, but it’s not very far either. And it’s a few years of education, investing in growth, investing in markets, investing in skill building, etc. And, companies like us, we’re doing fair bit of our share right with whatever little resources we have. We’re trying others or others are trying to. We’re all collectively educating the market, that this is where you need to invest. Everything that has happened in you must have heard about, you know, data tracking privacy. Google taking back some of some of their products, Facebook launching some some other other variants, what occurred. Third party targeting tracking marketing is going to suffer setbacks more and more. Each or each country is coming up with its own data policy regulations, they’ll make it more and more complex, of course, Google and Facebook and find ways to survive, and they’ll do more. But that creates opportunities for companies like us. Everything about your users is with you. You know, you don’t have to necessarily go back to an Ad Exchange to get your user back. You know, you forgot the fact that they were your users in the very first place. Right? if somebody is best placed to get them back as you it’s not Google or Facebook, right, so first party CRM marketing will become more commonplace. It’s more complex in in a b2c setup. Companies have very complex touch points, you build an app, you have your hybrid apps, a lot of your audience comes on your mobile side, then you have a desktop sites, somebody like a lending cart operates, you know, call centres also. And back in offices also right to engage with customers. All of this basically makes the customer journey very complex for a b2c company. And tools like us, we are actually solving for it. They’re very complex, the CMOS will warm up. They started to in the last two or three years, it will become mainstream in under two, three. And that’s when the real explosion of opportunity happens for companies like us. And we’re waiting for that time. We’re doing our bit in the meanwhile, the IPO route surely very visible, very clear. We’ll definitely go down that path. I’m pretty confident our investor group also feels very confident. But we also are cognizant that we just to way too small to think about it. The next two three years, will will continue to invest in growth and education.
Siddhartha Ahluwalia 47:01
Thank you so much. I can’t tell you how much valuable this conversation, is a masterclass in resilience and company building.
Avlesh Singh 47:08
I’m glad you find this useful. I’m hoping others will find too, but it’s been a pleasure talking to you
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