Siddhartha Ahluwalia 1:06
Hi, this is Siddhartha Ahluwalia, your host at Neon Show and Managing Partner at Neon Fund, a fund that invests in the best of enterprise AI companies between US-India corridor like Atomicwork, CloudSEK, SpotDraft. Today, I have a good friend with me who has built a $5 billion company in the recent times, Viral Bajaria, co-founder of 6sense. Viral, welcome on the Neon Show.

So excited to do it in the Bay Area.

Viral Bajaria 1:32
Thank you. Thank you for having me.

Siddhartha Ahluwalia 1:33
We have been planning to do it between Bangalore here, there, but finally, you know, able to make it happen.

Viral Bajaria 1:38
Yes, yes. I remember you said, come to Bangalore, we’ll record this in the studio. But yeah, here we are.

Siddhartha Ahluwalia 1:44
We made the studio for you in the Bay Area, you were not coming to Bangalore.

Viral Bajaria 1:48
That’s that’s the dream, right?
Like now you now you can say I shoot in the I have shot in like the best place in the world, Silicon Valley.

Siddhartha Ahluwalia 1:55
Right. Yeah. So, Viral, excited to share your journey with the audience, you know, and you have a unique journey as an entrepreneur.

You came to US in 2006 to do your master’s, right, then worked for five years after your master’s and then started the company with Premal in 2013. Is that right?

Viral Bajaria 2:13
Yeah.

Siddhartha Ahluwalia 2:14
And you were part of one of the earliest YC batches.

Viral Bajaria 2:16
Yes. So I’ll give you about my journey and tell you about my YC story. That’s also very interesting.

So got here two years did my master’s, then I went to a very small company and I went there. It was not called Hulu at that point, it became Hulu. Now we all use Hulu is like the thing and it’s like the hot stuff that you are used to in India is what Hulu was here.

So we were this group of people building something. And many times we didn’t know what we were doing. And we probably didn’t have any business to be there as young people doing these things.

But we learned a lot of things and that’s what gave us this idea, hey, we were doing big data. I remember our CEO came in and said, Hulu was owned by Fox and Fox was doing Superbowl. And they gave us a Superbowl ad slot saying like, as part of this thing, you can run an ad on Superbowl.

And we were like, oh, that’s amazing. Everybody was like high fiving and everything. And then we realized that all our systems will melt because Superbowl gives you a surge of traffic.

Siddhartha Ahluwalia 3:18
Yeah.

Viral Bajaria 3:18
And you can’t go down. So that’s when we started doing and that’s what gave me I took over the reporting data and all the analytic systems. And that’s what gave me my exposure to big data.

We tried to build it ourselves. We were on SQL Server before. And that thing would never run with the data that was coming in.

And we tried to build it ourselves, failed. And then Hadoop came out. And we’re like, hey, why don’t we build on Hadoop?

So that’s what gave me the thing about like Hadoop, big data. I had never done machine learning in my life as a student, not like learning anything. But at Hulu, when we started doing big data, then they go collecting all this data.

Let’s do some analytics. Let’s do some machine learning. So it’s all on the job.

And so I feel like I owe it to that, to what we did afterwards. And it was 2012 when I was thinking, OK, now let’s do something like we were. This was always the spirit.

Even in India, I tried to start a bunch of companies, but always left it somewhere. You know, like you have this itch to do it, but you don’t commit to it. And so we were always trying on these things.

Siddhartha Ahluwalia 4:20
How old were you in 2012?

Viral Bajaria 4:23
Wow, you want to age me now. I have to remember how old I was. But I was just 30.

Siddhartha Ahluwalia 4:29
Unmarried?

Viral Bajaria 4:30
No, I was married. So 2012, we decided, OK, let’s try to do something.

So Premal, who was co-founded with me, we both did undergrad together. He came over. I was in LA.

He was in the Bay Area. He came down and we were like, hey, let’s, we have been doing this thing, thinking, thinking, thinking, let’s go for it. Then I convinced two of my colleagues at Hulu, Dustin and Shane, to join me and say, like, let’s all do this thing together.

So we came up to the Bay to meet my ex-CTO, OK, hey, we are thinking, guide us. He was a partner at Kleiner. So he said, guide us what to do and everything.

And we are sitting in his backyard. And he says, oh, yeah, this is cool. Big data is a thing right now.

ML is a thing right now. You guys should totally do this thing. And then he says, like, have you applied to YC?

And we all knew YC as only hacker news at that point. And I didn’t know that it was a big thing, because I was not following that much as, like, YC, you should apply. So he says, like, oh, he pulls up his laptop, he goes, oh, it is, the deadline is this weekend.

So this is on, we met him on Friday. The deadline was that weekend. And so he’s like, why don’t you guys just apply?

So we’re like, firstly, now we have to figure out what do we write in that application, right? And so we wrote things down. We came up with our idea.

Siddhartha Ahluwalia 5:48
The four of you?

Viral Bajaria 5:49
Yeah, recorded the video. Actually, it was that time, it was just three of us, because the fourth guy had not committed yet.

So we went through it. We submitted. And with the idea that we are not going to get a call, because they’re like, this is like, we thought we were just a bunch of nobodies who were trying to record something.

Siddhartha Ahluwalia 6:05
And you had quit your job?

Viral Bajaria 6:06
We had not yet. Right.

And so we recorded something. And the funny part was, we thought we’ll not get in. So we said, like, let’s just do it done.

And then we’ll figure it out. So we started working on that idea that we wrote down and we started thinking, how will we do it? When will we tell our company?

We had to even figure out my status, because I was the only one in that group that was on an H1B. Okay, how do we do all these things? So we had to figure out all the legalities and everything.

And then we went through and we got an invite for an interview. And so in that invite, they give you slots to pick dates, right? And so we were like, we can’t pick the earliest one, because we don’t know what we are doing.

So we picked the last one, last one on that day, and we said, like, let’s go that day. So we went in there, it was still three of us, we interviewed. And that interview went complete sideways.

We don’t know what we were saying. We don’t know what was going on.

Siddhartha Ahluwalia 6:59
Who was interviewing you?

Viral Bajaria 7:00
It was Sam Altman.

Siddhartha Ahluwalia 7:01
Wow.

Viral Bajaria 7:02
It was also Garry Tan was in it.

There was…

Siddhartha Ahluwalia 7:07
Paul Graham.

Viral Bajaria 7:08
Paul Graham was not in the group that we were in. But it was the there was another group for it.

And so I remember Sam Altman was trying to say like, oh, you’re doing all this big data stuff. You’re going to move all this data. Redshift was announced just one day before that we went in.

So I think when he said that, hey, you should just move all this data to Redshift, and he said, yeah, that can be done. And I think that triggered for him saying, oh, I should maybe get this group in. But then, you know, this was the other funny part, because we had never heard in YC that after the interview, they came out and said, like, hey, we want you to interview with an expert.

So we had another interview right after that one. That was the first time they did it. So we thought, OK, maybe they just didn’t understand anything.

They’re not going to let us in. And so we interviewed with this new person. He asked us a lot of questions, went into the depths of big data and everything, and then got done.

And they said, we’ll call you later on to tell you whether you are in or not. And so we went away. We were like, whole day gone.

We were like, completely not sure. And actually, we had decided we are not getting in. So we went out to order a drink on Palo Alto University, and we were just chilling there.

And then actually, this was Mountain View on Castro, we were just saying. And then suddenly we get a call. It was Sam Altman calling.

And he said, like, hey, you guys are in. So I was on the phone and I paused and I said, hmm, we are in. So then he said, yeah, you guys are in.

So you start this Sunday, right? You come for the orientation, like the kickoff and everything. I said, I told Sam at that point, can I call you back?

He said, what does that mean? He said, I need to call you back because we need to decide, are we actually doing it? Because we have not quit our jobs.

Nothing was sure. We had not even formed the company and anything yet. So nothing.

So then after like an hour, I was like, OK, we should do this thing. So we called Sam and said, like..

Siddhartha Ahluwalia 8:57
Did you discuss it with your wife?

Viral Bajaria 8:59
So we had already discussed before that.

And that was another funny thing, because again, H1B was a big thing, right? How do you do this thing? And if we file for a visa, it will take some time.

But because the company doesn’t have a full entity and everything, it could get rejected. And so I remember my wife said, like, OK, you want to do this thing. You have always been saying this thing.

If it doesn’t work out, what will happen? So we might have to just pack our bags and go back to India and say, OK, we already have a life in India. We already have family in India.

We’ll go back to India. And so that was the thing that actually pushed me when she said that thing to me. And then so we had like, OK, fine, we are going for it.

And so we said, yeah, we are coming. Then we introduced the fourth guy to Sam on the phone, saying, hey, there is this fourth guy. Can we actually bring him on also?

And so Sam was like, these guys are a bunch of bulls. I’m pretty sure he must have thought that. Like, we are just figuring everything on the fly.

So but we went on Sunday. We went to the orientation and they were like, hey, you have to start on Jan 3rd. So this is till November, end of November.

So you have to start after one month. So we go back Monday to our jobs. Then we go and three of us, same manager, saying like, hey, we are all leaving.

So imagine like at that point. And it’s like, what happened? And then, you know, we’re going to start this company, I think.

And so they were very supportive of it eventually. And so we’re like, yeah. And so we started figuring out how to transition.

We had to move ourselves from Santa Monica to the Bay Area because three of us were in Santa Monica.

Siddhartha Ahluwalia 10:26
And you can tell our audience how far it is.

Viral Bajaria 10:28
Oh, it’s I mean, it’s like a six hour drive, one and a half hour flight, six hour drive. I actually packed my bags. We actually rented one big giant moving truck who went to three houses, picked up everything.

We rented a townhouse in Mountain View, which was close to YC. So all three of us, me with my wife, them with their girlfriends, we were all living in the same townhouse.

Siddhartha Ahluwalia 10:52
So Premal was not married?

Viral Bajaria 10:53
Premal was married, but he was living here, right? So he already had something. And so he stayed in his place.

But we got this townhouse and the middle part of the townhouse, we converted into our office. So that’s how we started. And we went through, we started writing our lines of code.

And in the beginning, we were still building out this big data analytics platform, which was designed for business users. Because that’s what we did at Hoodoo, right? We allowed our finance, content and advertising team to query the data without having to need ETL jobs behind the scene.

You could do it with a domain specific language. So we said we could build this thing for everybody. And so that’s what we started building.

And we got our initial customers. We got all those things. But then it became a challenge to scale it up because it was becoming more like consulting projects.

They didn’t want to put it in the cloud. We had to go to their systems, their own Amazon clouds and do it. And so we were like, oh, this is hard.

So this bunch of four technical people now trying to figure out how to do sales.

Siddhartha Ahluwalia 11:53
And all had quit jobs?

Viral Bajaria 11:55
We all quit jobs.

I mean, there was no option because there is no way we could have done this thing otherwise. And so we all quit jobs because you have to go three months of YC, full rigor. And so we decided, yeah, we are quitting our jobs.

And it was interesting. And then we realized YC, actually, the funny part, we got in. We thought we were completely no business there.

YC had decided our batch was the batch where YC decided to downsize.

Siddhartha Ahluwalia 12:21
OK, what do you mean?

Viral Bajaria 12:22
So, you know, YC was scaling up. And I think in our previous batch, they had almost like 130 companies. And in our batch, they went down to 47 companies.

And the reason they did that is because they found that their whole process was broken for that thing. So they decided to go down and said, like, hey, we want to figure this thing out. How do we scale YC?

And so we were the batch where they downsize. And we were like, wow, we are so lucky to get in this downsize batch.

Siddhartha Ahluwalia 12:48
And I believe it would be, you know, who was your weekly mentor at YC, Sam or somebody else?

Viral Bajaria 12:54
I think we were more with Garry Tan a lot, a lot more. And Sam and others and Paul Graham was still part of YC at that point.

Siddhartha Ahluwalia 13:05
Are you still in touch with anyone?

Viral Bajaria 13:07
I still talk. I mean, we still exchange. If you meet them, you can go for office hours and everything.

So you can do those things. I’m pretty sure Sam is very busy now. But they actually care a lot about YC founders.

And if you ping or reach, they will respond back to things.

Siddhartha Ahluwalia 13:25
And tell us, you know, this is amazing stories. But what happened after that? Because you merged with another company, right?

Viral Bajaria 13:31
Oh, yeah. So that is another part. So this is 2013.

We got the YC fund. It was initial funding.

Siddhartha Ahluwalia 13:38
25K?

Viral Bajaria 13:39
I think at that time, our time, it was maybe a little, it was 100K. 100 or 150K. And now you can’t legitimately, like you could say to them, like we have a company fund.

Now, I was running as the main founder CEO. But then you require an employer-employee relationship for H1B, right? So we had the board who employs the CEO.

So at least the board can fire the CEO. But then we only had 150K in bank, right? And so you had to figure out a way to raise more capital.

Otherwise, you would not get the H1B. So we had started raising some money. We had a bunch of like early seed and seed stage funds were invested in us.

So we had raised like maybe give or take just shy of a million. And then we were doing this thing. And as I said, like we realized that this is becoming a consulting business.

And our challenge was, we would go to the business side, and they’ll bring the engineering side into the room. And then the engineering side will say that I don’t want to have somebody else do my big data. I am going to build this thing ourselves.

Because again, everybody’s new into Hadoop, Cloudera, Hortonworks, everything is new. So we realized this is going to be hard, like there’s no way. So I was talking to a VC friend, who was originally evaluating us for investing in us and everything.

And he introduced me to this other person who became our co-founder, Amanda. And he introduced me to her.

Siddhartha Ahluwalia 15:06
Who? Only to Amanda or somebody else?

Viral Bajaria 15:08
Yeah, it was only her. So she was trying to raise money from the same VC with an idea she had, because she was running big data predictive analytics as a consulting business in large companies.

And she had found in Cisco and NetApp that, hey, if we can do all these things, and we can predict your next sale, is amazing. And so she was like doing it as consulting. And then she thought I should build this as a product company.

But then she was trying to raise money to build the product without a technical team. And so the VCs were not saying like, hey, we’ll invest in you. And so this VC said, why don’t you both meet?

And maybe if things click for both of you, and maybe you guys should just decide to do this thing together, and I’ll invest in you guys.

Siddhartha Ahluwalia 15:47
And your motivation was only investment, because you already had a CEO, which was you.

Viral Bajaria 15:52
Yeah. Our motivation was to find something which can actually scale up. Because the problem was, you can, as a founder, keep everything yourself.

And you can die a slow death, right? Because as founders, you don’t give up things. It’s very hard to give up.

It’s very hard to let go of things, right? That’s one thing I’ve learned over this 12 years of doing this thing, you have to learn to let go of some things. And so that time we realized, and we went to this thing, and we said, okay, is this a good thing?

Is this a bad thing? We went back to YC. Everybody advised us, don’t do it.

Siddhartha Ahluwalia 16:23
And what was their reasoning not to do it?

Viral Bajaria 16:26
So early stage company, both don’t have product market fit. And data says that these things fail.

And it has never succeeded before. So all those things were weighing on us saying like, should we do it? Should we not do it?

Siddhartha Ahluwalia 16:43
Because I’m still not able to understand what was your motivation besides the VC to get another co-founder?

Viral Bajaria 16:50
So one was, so we were trying to get, so we had never done B2B sales. And doing that B2B sales was hard, right? And so we were still trying to figure out how to, and then we wanted that vertical solution that we were.

And then when I met Amanda, I realized that there is a spark in general, like in terms of how we want to work together, I can be the technical person, she can be the GTM person, and she had the customer connects and knew the problem and done all the research and everything, And so that was the other part which she said like, hey, this seems better versus us trying to find a different way to do business, because the only other path we saw was, we saw that because we were doing this analytic stuff, the only thing we could have done is competed with mixed panel or competed with like heap and other people, right? But we felt like this place is too crowded. Why go and compete there?

You want to do something else. And our DNA was bringing a lot of data together and doing predictions, right? And so we thought that maybe that is better for us.

And that’s when we connected together, obviously, fundraising is to just get to the next stage.

Siddhartha Ahluwalia 17:59
And then Amanda joined that, you five became equal partners for what?

Viral Bajaria 18:02
So we merged the companies together, there was, she had a little bit more in the company because she already had that consulting revenue. So we merged everything together. And then eventually, we went out in to raise money, because we had some…

Siddhartha Ahluwalia 18:15
That VC backed out.

Viral Bajaria 18:17
Yes, that VC backed out. Well, they will never say they backed out, but we are still very good friends.

But what happened was, he could not get his partnership. His partnership said, hey, these companies are coming together, these things never work out. Exactly what YC told us, right?

So that’s why he could not get them over. But so we were, we still had money. Both of the companies had some money.

So we could build product out, we were building product out. Funny story in that one also was, the VC next door from this guy’s office, they were chasing us.

Siddhartha Ahluwalia 18:53
Okay.

Viral Bajaria 18:54
They were writing us an email saying, and then on at that point, even we still use Crunchbase, right? At that point, we saw on Crunchbase that, that VC was an investor in a pseudo competitor. And so we were not responding back to that person.

And then suddenly he sends this fourth email to us saying that, hey, if you are not responding to me because you think we are in that company, we are not in that company. We are already, it was a small thing we had already sold off. And we believe in this space.

So they, they believed in the space and they said like, why don’t you come see us? So we saw them. And then in one week, we had done the seed run.

Siddhartha Ahluwalia 19:29
Which was the VC?

Viral Bajaria 19:30
This was Battery Ventures. It was Nakul at Battery Ventures.

Siddhartha Ahluwalia 19:35
How big of a check that they put?

Viral Bajaria 19:36
That was our first round, seed round, kind of 3 million or 4 million was what we had raised. We didn’t raise a lot of money.

Siddhartha Ahluwalia 19:42
I think that time Battery would have been small.

Viral Bajaria 19:45
Yeah. Yeah. Well, they had a lot of money under management probably, but they were doing this small seed funds too.

Right. Again, this is 2013. 2013 were not big rounds.

Like it had started where people were raising like these 5, 10, 15 million seed rounds, but not, that was not common. That time seed rounds were small, A’s were like 15 or 20 maybe. And so we, we then eventually went to, I think we raised like 6 eventually for A.

And then that was our continuous growth and everything. But what happened was we came together. We rebuilt or restructured our product for B2B use case.

And we were still a data layer or an intelligence layer. Right. We would take all your data, we would connect everything together, we’d make a prediction and we’ll push everything back to you.

There was no UI. Right. There was the only UI we had was for just to demo as a sales tool.

That was our UI. But no customer in the beginning ever logged into our UI.

Siddhartha Ahluwalia 20:47
Okay.

Viral Bajaria 20:48
That was not even required. It was, it was, that’s what we built out first. It was a complete intelligence layer.

Siddhartha Ahluwalia 20:54
And tell us more about the subsequent pivots that you had to do.

Viral Bajaria 20:58
Yeah. So, so this happened, we were, we had initial good traction, a lot of large. So usually startups start with small companies.

We started with the biggest of the biggest logos, like at that time it was Cisco, NetApp.

Siddhartha Ahluwalia 21:12
But how did you get into these?

Viral Bajaria 21:13
So it was, Amanda had a lot of those consulting agreements also with many of them. And so we were getting like, even like Dell and all these, it was all these big logos at that time. These are like major companies.

You can’t get into them from a project. And let alone, you are a company who’s asking them to give their entire CRM to you. Imagine the amount of security scrutiny that you have to go through to get that data from them.

Right. So we went in there. We had this initial traction.

It worked great because these, and our pricing model kept on changing because we would like say like, oh, they are ready to pay 100,000, or they should pay 200,000, they should pay 250,000. So we were charging like a lot of money for these logos for their things. So it was working great.

But what we realized was that if you only sell to enterprise or large accounts, it was hard to get the repeatability going. It was like bespoke, many of them had different systems and everything. So repeatability was hard.

The second part we realized was implementation was even harder. Like sometimes you would sign a contract and they would not give us data for six months.

Siddhartha Ahluwalia 22:20
This is 2014.

Viral Bajaria 22:22
Yeah. Yeah. They would not give us data for six months.

And then you are in this thing where you’re like, hey, show us the value and you can’t show the value. But eventually you are the vendor. You are at fault.

Right. It doesn’t matter. Even if their IT team doesn’t give you.

So we were like, OK, we need to figure out a way to make this thing simple. And so we started building a simple product. So along that journey, we had realized, and actually I should have said this thing.

There were a lot of other startups that were doing this thing along with us, raised a lot more money than us. We did the hard job. We said, I don’t want to build a prediction model based on just how the company looks.

We have to look at behavioral data. So that’s why we were syncing everything. We got their web logs, we put a JavaScript tag on their site.

It was all the hard things that we had to do. But the reason we were able to continue and all those companies don’t exist. So there’s a Forrester way for this.

You can see B2B predictive lead scoring. It’s called, I think, B2B predictive lead scoring. You can see it.

There are a lot of logos on it. 6sense is the only company that still exists. And the reason was because we did a problem.

And if you probably follow all the things like, you know, Jeff Bezos had said this thing, which is, do not ask me what will change in 10 years. Ask me what will not change in 10 years. And then I can tell you what to build.

And if you go back right now, 10 years ago, people wanted to know which accounts are in market. Today, people want to know which accounts are in market. And 10 years from now, people will want to know which accounts are in market.

Siddhartha Ahluwalia 23:49
What do you mean by that in a simple language?

Viral Bajaria 23:51
In simple language, you are a product or a service that you have built out and you want to find accounts or companies that will buy from you. The world is your oyster. You can have like 6 million, 7 million companies that have buying power.

You can go to all of them. You can’t reach all of them.

Siddhartha Ahluwalia 24:09
So initially, you started with the company’s data, and then you started plugging into web sockets everywhere.

Viral Bajaria 24:16
Yeah. So that’s what we did. So the hard thing we did afterwards was you have to find which companies are in market for that unique behavioral data.

Siddhartha Ahluwalia 24:24
From where?

Viral Bajaria 24:25
So the first thing we went was website. And we realized that on B2B websites, they were all using B2C technologies.

Google Analytics was used the most. Adobe Analytics was used the most. Cookie-based stuff was used the most.

But B2B folks, only 3% of the people who visit your website actually give their information to you. They don’t even sign up. If you’re on an e-commerce platform or something, it’s different because people sign up to buy things and everything.

And then you can follow that journey. And B2B, they don’t do that.

Siddhartha Ahluwalia 24:57
Yeah.

Viral Bajaria 24:58
And so we were like, okay, so you have only 3% of your visitors that give you data. So we found like, okay, how do you make use of the 97%? So we built the technology out for that, which said like, how do I identify when a visitor comes to the site, when they’re anonymous, which company do they work for?

Siddhartha Ahluwalia 25:15
Okay. So you were able to build that technology.

Viral Bajaria 25:17
Yeah. So that is our biggest moat still. Till date, anybody who goes out there and they’ll know it.

And so we built that thing. But that moat allowed us to expand outside of the customer’s website. So Cisco, when somebody comes to their website, knows who is interested in routers because we can do this thing.

But what if they wanted to know who’s interested in some competitor routers? So we went out and worked with a bunch of publishers because there’s so much like content being generated, so many other things happening out there.

When somebody comes and reads content or consumes something, we put our JavaScript tag everywhere there, and we got that data. And then we could tell Cisco like, hey, company A is not only coming to your website, but they’re also researching this competitor. So that became the behavioral data.

We could say this company is in market because of the behaviors they’re doing. Exactly same what we used to do for B2C. So we brought basically what we had learned in B2C.

What are people watching? Why will they watch this thing? What are they shopping?

What are they researching? And then you target them. We exactly brought the same concept to B2B.

And that’s where we found the moat. And that’s where we started expanding further and further. The first pivot that we had to do was interesting because we found that as we went a little down market, not the big lowers, a little bit lower, they got very interested with the intelligence.

They’ll say, oh, lovely. I want to know which companies are in market. That is the default.

You ask anybody, do you want to know companies in market? They’ll say yes. But then they were like, but that is not enough for me.

I need you to activate this data. I don’t have a brand presence. Nobody comes to my website and other things.

And at that time, this was 2017 or 16 actually. 16 was when we faced a very tough time. Our sales, I think we had our first $0 sales quarter in a long time.

And the reason was because all these customers wanted some activation. And there was this other company called Terminus who had come into this space. Demand base was already there.

They were doing advertising and other things. And we were like, we already have this graph where we can identify and target and identify people. Why can’t we target them?

So we said, let’s take this technology and make it available for targeting. So we built our advertising platform, 2017. That was the entry of 6sense into ABM.

Because ABM at that point, or account based marketing, which is what ABM is, was known for advertising. So we were the last ABM platform. 2017 we entered.

We went into a Forrester wave, which was for ABM, first time ever. We were ranked the last in that one. And then it took us a while.

I think it was two years to become the leader in that one. And so ABM became our calling. 17, 18, 19, 20.

We just rode that wave of ABM. And everybody started getting interested in ABM. Everybody wanted to do ABM.

And so that’s how we pivoted from lead scoring to ABM and became a category leader in that.

Siddhartha Ahluwalia 28:22
So just to summarize, right. So the company till 2016 was a lead scoring company. What do you mean by lead scoring?

Viral Bajaria 28:29
So when you have somebody fill out a form on your site or somebody comes in from an event, webinar or like. So those are the leads that come in. And so we would score them saying like, are they good leads to follow up on?

Are they leads that you should just throw away?

Siddhartha Ahluwalia 28:43
Okay. And you would also tell customers, right? People were not filling out forms.

97% of the vendors.

Viral Bajaria 28:49
Correct.

Siddhartha Ahluwalia 28:49
Which company did they belong to?

Viral Bajaria 28:51
Belong to. Yeah. So that was company level scoring.

And this was lead level scoring. So we’ll do both.
Yeah.

Siddhartha Ahluwalia 28:56
And you’re saying that customers used to pay for it just that they were constantly asking for ROI.

Viral Bajaria 29:02
Yeah. Well, ROI and why should I pay you this much money? And what else are you doing for me?

That was always the question.

Siddhartha Ahluwalia 29:09
And still the same five founders, Amanda and the four.

Viral Bajaria 29:12
Yeah, we were all there.

And we had probably, we had grown the company like maybe 40 employees, 50 employees, maybe. That was the total team.

Siddhartha Ahluwalia 29:21
What changed in 2017 that you were telling about the account based marketing?

Viral Bajaria 29:26
So one was we launched that product. Second is we made onboarding very simple. So you can start using the product instantly and you can start running your ad campaign.

So the other challenge that we solved for, which was very unique in this space, no advertising platform, whether you take from Google to at that time it was AppNexus to trade anybody, right? Knew how to target accounts or companies. They did not know it.

So we would use our data to target them.

Siddhartha Ahluwalia 29:53
Can you tell it more simply like for our audience who don’t know what account based marketing is?

Viral Bajaria 29:57
So I’ll say about from an advertiser, in advertising you can go and say like, hey, I want to target male in India who are interested in shoes. That is possible.

Siddhartha Ahluwalia 30:07
On Facebook, Meta and everywhere.

Viral Bajaria 30:08
Everything is possible. Even on the regular programmatic advertising it is possible. But you can’t go and say I want to target employees at Neon.

Siddhartha Ahluwalia 30:16
Yeah.

Viral Bajaria 30:17
That is very hard to do. And that is what we call is account based marketing because you know that you want to sell to Neon or you know you want to sell to 6sense. You know that because that’s the companies that you want to go after.

But you can’t target them. Right. And so it’s very hard.

We figured that part out. But what we also did in that product launch was we said like, hey, what if we can take the campaign launch? Our customers are taking big companies.

Cisco and others are taking 90 days to launch a campaign. Because they would take the data.

They would go work with somebody else. They would work with BlueKai. They work with all these players.

And so it would take a lot of time. We said, what if we can short circuit it to minutes? You launch a campaign, you fill out the details, you hit submit and it launches.

So that’s what we did. And so that triggered the fast growth because even the competitors who were there in that space, they were not doing it that way.

Siddhartha Ahluwalia 31:07
Would you say you were the first in B2B account-based marketing?

Viral Bajaria 31:10
We were the last. Last in B2B account-based marketing. There were already companies doing this thing.

Siddhartha Ahluwalia 31:16
What was unique about you then?

Viral Bajaria 31:18
So our uniqueness came from that identification layer that we had built out to identify when people are coming to your website, which company they belong to. Taking that and making that targetable was the uniqueness that we had because now you could connect your targeting to the people that are coming to your site in an anonymous fashion.

So that completed the whole thing for them. So that was one thing. And the second thing was, we were always built for predictions, right?

So we took that data and we predicted, should your sales team be focusing on these accounts or not? So that end-to-end thing is what has always made 6sense unique for our customers in general.

Siddhartha Ahluwalia 32:01
And then 2017, why did you get a new CEO?

Viral Bajaria 32:05
Yeah, so 2016 was, as I said, was a little hard year. We also felt like we as founders were very good at like building technology, building relationships, doing a lot of like we had, Amanda was a great speaker. She could like open doors with any CMO at big companies also.

We found like we were very bad at process, right? And process meaning also managing people, right? We were so bad at managing people also in that thing.

In the sense like sales, our sales team had already turned over twice. And then large deals like these, they take time to build up. And then once you lose a salesperson, it’s a restart of the cycle.

And so because of that, we thought like, hey, we are not built for this thing. We need somebody who knows how to build a good GTM motion. I think I’ve realized this part, and I’ve seen a lot of IC companies also.

And especially when you are B2B enterprise or like selling into other companies, good products or okay products with great GTM can still win out. Great products with bad GTM can still lose out, right? So you have to have that right balance.

And I think we were missing that. And so when we decided in 2017, let’s get somebody who has done this thing before. So it took us a while to find the person.

And then Jason who joined us. And then he brought on a lot of other salespeople that he had worked with before.

Siddhartha Ahluwalia 33:26
How much you had raised till then before you can afford to bring a CEO?

Viral Bajaria 33:31
Well, we had still done only our series B. So I think we were like maybe sub 30 million raised. But yeah, it was not like we had infinite money.

Siddhartha Ahluwalia 33:41
And how much revenue were you at before?

Viral Bajaria 33:42
Sub 10 million. And so that was like very early days for a lot of things that were happening.

Siddhartha Ahluwalia 33:48
Now, this is very interesting. After 2017 till 2020, how much revenue did you jump in before COVID?

Viral Bajaria 33:55
Um, I think 17, I would call was a year where we had like a lot of changes and other things. I mean, it was kind of a reset year for us. 18, 19, 20.

We almost grew 100%, 100%, 100% back to back to back. So we had actually reached probably over 50 by then.

Siddhartha Ahluwalia 34:13
50 by 2020. And the company had not raised that much money, right? By then.

Viral Bajaria 34:19
No. In fact, our first major round after all these things happened right before COVID.

Siddhartha Ahluwalia 34:26
How much was that at what point?

Viral Bajaria 34:27
That was, I think we did it at a little over 300.

Siddhartha Ahluwalia 34:31
Not a larger revenue multiple.

Viral Bajaria 34:32
No, I mean, multiples were not higher. COVID, they were. And again, we were in a space which was still nascent.

Not a lot of breakouts had happened in that thing. We are still B2B focused. And it was hard to get to those things.

Once we did that raise, after that, it was again. We didn’t get the COVID wave. Sure.

Because we didn’t actually go from 100% growth to 500% growth. We were naturally growing 100%. I think we did almost four or five years straight 100% growth.

Siddhartha Ahluwalia 35:01
And what happened after the COVID years? Like from then till the time you raised the massive round at 5 billion?

Viral Bajaria 35:07
I think it was just keep on keep your head down. And so late 2020, we made our first major acquisition also. We acquired a company called Slintel.

And that was also interesting. So we were in this thing where we always gave out company level information. We identify which companies are coming to your site, which companies you should be selling into, who should your sales team prioritize.

The moment we started giving insights to salespeople, and we started building a sales UI, the first question we got from salespeople was, okay, I know IBM is in market. Who at IBM should I talk to?

Siddhartha Ahluwalia 35:44
Sure.

Viral Bajaria 35:45
IBM is so big. So we didn’t have that data. We had their data from their CRM.

But CRMs are so bad that they might still have your old job from 20 years ago in somebody’s CRM, right? So we’re like, okay, we can’t do this thing. So we started working with other vendors and other partners who would bring their data.

And we realized that this space, 2020 now, everybody’s trying to enter each other’s space. Money is like flowing through the system. Everybody wants to build every product.

And so we’re like, okay, our partners are either going to get bought off by our competitors, or they will start entering our space. So we decided to go out and acquire a company. That’s when we acquired Slintel, which was a sales data and a sales intelligence company.

And so we acquired them. So that became our second growth level. Because now we are in IBM, and we were also in SI.

Siddhartha Ahluwalia 36:38
What is SI?

Viral Bajaria 36:38
SI, sales intelligence. And so that became a growth level for us.

Siddhartha Ahluwalia 36:45
And the company now, I assume, was between 30 to 50. So what was the revenue in 2021?

Viral Bajaria 36:50
I think we were, so we were just growing 100%. So 21, 22, everything was again, a little over 100% growth always. So we had gotten over 100 or something at that point.

Siddhartha Ahluwalia 37:00
And by the time you raised your round in 2022, almost like 200 million and 5 billion. You were at like shy of just 200 million.

Viral Bajaria 37:10
So we raised a massive round. That was like probably the peak of the valuation bubble for everybody.

Siddhartha Ahluwalia 37:19
And right now, like today, right? Do you see the same kind of a wave in AI after three years?

Viral Bajaria 37:30
I laugh on this is because 2013, when we raised money, we raised on MLAI.

Siddhartha Ahluwalia 37:35
Yeah.

Viral Bajaria 37:36
But there was also big data that time. Now the wave is all still about AI, but now it’s generative AI, right? And very different thing.

It is actually that time, I would say it was still easier to start companies, but it was harder to build more. Like you have to spend a lot of money to build more. Data was hard to get to.

Now, I actually think AI has actually made it so simple with Gen AI, that you can actually build a lot of things like the simplest 2013 companies, what they were doing. You could probably build this today with one person company. And you can do it by crawling data easily.

LLMs crawl data for you now. You don’t even have to build crawling, right? And you can get all the public data is your data.

You can just write an agent to do it. So I feel like now AI has become this thing. I think there’s such every day I hear new companies that say like, we do what 6sense does.

We do what 6sense does. We do what 6sense does and not the baggage of 6sense. So it’s very interesting.

Siddhartha Ahluwalia 38:39
Recently, Clay came in an adjacent space. And there is that 3 billion and shy of 100 million ARR. What do you think is causing that kind of frenzy?

Viral Bajaria 38:51
Um, I think, again, playing on the AI wave, they talk about agents and everything. I think the second part is there is growth, right? When you are small numbers, the growth is there still, there is enough things to be had there still.

So it’s still all those things playing together. And I personally, I don’t know, I will I like, they are adjacent to us and we overlap very little bit. But I think they’re doing a good job.

Yeah.

Siddhartha Ahluwalia 39:18
And if you can tell us, Paul Park, what scale today is at 6sense?

Viral Bajaria 39:23
We will be very close to, we already announced a while ago that we were over 250 and I think so. So we are there, we are very high scale, but it’s the next chapter has to be coming from somewhere else probably.

Siddhartha Ahluwalia 39:40
And what are you doing? Naseem talked about JNI there. What are you doing in JNI?

What are you doing in agents?

Viral Bajaria 39:45
So we, because we have always done MLAI, we started expanding and by the way, this is probably a topic which I like, because if you build a company on LLMs and you just are building it, everybody will have it. You’re not.

Siddhartha Ahluwalia 40:00
There’s no data mode.

Viral Bajaria 40:01
There’s no data MOAT there. But if you sit on some data, which nobody can have access to very easily.

Siddhartha Ahluwalia 40:06
Which is your data.

Viral Bajaria 40:08
It’s a data MOAT, right? So what we started doing is we started doing RAG and other things on top of our data to bring that data to that LLM to help you get those insights quicker. So we started doing a bunch of those things.

We built a email agent out. So two years ago, we acquired another company and the thesis behind, this is actually not even two before. When did ChatGPT launch now?

Siddhartha Ahluwalia 40:33
2020. Was the first one in 2020?

Viral Bajaria 40:37
I forget now. No, the ChatGPT was 22, I think.

Siddhartha Ahluwalia 40:39
22 was 3.5. I think that was the monumental.

Viral Bajaria 40:41
So that was the GPT model. They were already out. But the ChatGPT, which changed the whole equation was even. So we acquired the company before ChatGPT came out with the idea because we had seen GPT.

And so I was thinking like, hey, our customers send out so many emails. But each of those emails are so bad. How many times we get emails where it’s like, they don’t even replace the, hi, first name it says.

Instead of saying, hi, Sid. I’m like, it is so bad. Can we not write the email with GPT?

So that was our thinking and say like, hey, what if we could do this? So we went out and we acquired this small team. So we do a lot of these acqui-hires also where we say like, hey, there’s a team that knows how to build it.

Let’s get them. Let’s get them to build it in our way and with our data. So we acquired them and we built a product called Email Agents, which we now call AI Email.

But the idea there was, with the 6sense data, we will tell you which companies are in market. We’ll tell you which, who are the people. And we will send the email for you.

So not only target them via ads, we’ll also send the email for you. But what we changed in this thing, which, because email writing is stable state, you go to every product, we’ll say we can write an email. What we have also built out is, when you respond back, that agent reads that email and determines what you’re looking at or asking for.

It’ll respond back without a human coming in the loop.

Siddhartha Ahluwalia 42:01
What if the agent responds wrongly?

Viral Bajaria 42:03
We put guardrails around it. I mean, it can respond wrongly. I actually have the most funniest example for you.

The agent was emailing somebody and the person didn’t respond back. So the agent has automation to say like, hey, send another email. And so that person eventually responds back to them saying, oh, sorry, I was out because I was grieving the loss of my cat or something.

Something about like a loss of death in the family. And the agent, instead of saying like, sorry, said like, oh, great, thank you for getting back to me. So it lost complete sense of.

Siddhartha Ahluwalia 42:40
This is recently?

Viral Bajaria 42:42
No, it was a while ago. But you have to start putting these guardrails then, right?

But who would have thought you have to put guardrails on bereavement? And like somebody like having death in their family and then in B2B context. But you have to because you can’t be because the person said like, I’m ready to take a meeting.

So the agent just goes and acts as if like, oh, great, you are amazing.

Siddhartha Ahluwalia 43:07
This is stuff where LinkedIn posts are made out of.

Viral Bajaria 43:10
Yeah, yeah, totally. Oh, I had another cool one for the LinkedIn. So our company is called 6sense.

I don’t know if you know the movie The Sixth Sense, M. Night Shyamalan, right? Where the guy says, I see dead people.

So very early on in our journey, a customer had sent us some leads to score. And we scored the lead and it showed up at the top. It was a good lead.

But unfortunately, that person had died. And he had died. And so the salesperson got mad at us saying, you guys are so bad.

You guys are 6sense. You see dead people. And so I went up and I’m like, unfortunately, that person just died last week.

How are we to know that this will happen? But this is like all these things happen. So this is probably LinkedIn stories for sure.

Siddhartha Ahluwalia 44:00
Yeah. Tell us a bit about your journey, you know, as a founder investing in other founders. How has that been?

Viral Bajaria 44:11
So I think I started writing my first checks, 17, 18 was when I started doing it. I in the beginning, I was doing more in YC companies, because that’s what was what my access was. And I did it for fun.

I also invest in like one or two friends who are starting companies. So that’s like, yeah, I’ll help them out. I think over time now, I’ve probably invested in 70 or 80 companies.

And then I’ve done a lot of bad things, bad investments. I’ve lost an immense amount of money in crypto and blockchain and everything when the hype was there. And I didn’t invest in a lot of those things.

But what I realized is the thing that I liked was to meet very early stage founders, because their Lawrence ideas are still formulating, right? They’re still figuring things out. And I actually just now have started doing what YC does, which is get to know the founder.

Do you believe in the founder? Do you believe that they can figure it out? Forget the idea, forget the business they are in or the problem they’re solving, because that will completely change.

And so that’s how I started investing now. That is like my one thesis now. And the second thesis I have now is I invest a lot in India based founders also.

Because I had this feeling that you can arbitrage. So when we acquired Slintel, which was our sales intelligence company, they were a US registered company. But there was only one founder here and CEO and maybe one or two salespeople.

The remaining 100 people were in India, including sales, including customer success, everything. That was the first time I saw like, oh, my God, this is amazing arbitrage. And you can do these things.

And you can actually build these companies from there. And you can actually do it in the right way. And so I thought, like, this is interesting.

And if founders are really trying to do it that way, it’s an amazing ecosystem to invest in. And it can lead to the next generation of SaaS companies from India. And so then that’s when I started advising and investing in a bunch of things and started getting close to some VC firms.

That’s why I think I met you. And so I think that’s how I get into this thing. So I got into it because of some friends.

And then I just kept on continuing now. And invest in ideas or people mostly.

Siddhartha Ahluwalia 46:26
And which are the investments that have turned out to be very well or some of the great exits?

Viral Bajaria 46:31
I don’t know. I don’t have great exits, man, so far. I’m waiting for it. I’m waiting for it.

Siddhartha Ahluwalia 46:34
But decent ones?

Viral Bajaria 46:35
What is the life cycle? 10 years normally?

Siddhartha Ahluwalia 46:38
Yeah, 10 years.

Viral Bajaria 46:40
Cool. I’m getting next year will be my 10th year. Let’s see.
I don’t have great exits so far. I have bad ones. I was in FTX.

I was in all those. All those things went to zero. BlockFi.

If you know BlockFi and all that. So I’ve done all that. I have had exits.

But most of them were very quick exits. In the sense like the founders. I had invested in this company called Zen Duty.

Siddhartha Ahluwalia 47:08
Yeah I have invested too

Viral Bajaria 47:09
You were also there? Yeah, okay. See, that’s cool.

And so they exited, right? Like they were very quick exit. I have another one that I invested in.

In fact, funny enough, I was just looking at my things. All my dead companies are US-based companies. All my exits are India-based companies.

I’m waiting for US-based companies to exit now. I’m sitting on a bunch of them which have like probably some returns on it, but they haven’t exited.

Siddhartha Ahluwalia 47:32
I think the issue with US-based companies in general, like that’s why we follow the India-US corridor is, like we have companies at 20 million ARR, like SpotDraft in our portfolio, right? It’s not today. There are 200 companies above 20 million ARR.

Their growth is consistent, right? Their, the money that they lose is very low, right? And they’ll not get Bay Area multiples, right?

So when they were at like, they had that term sheet at 10, they raised 54 million at from Vertex Singapore. By the time term sheet closed, they were at 20. Right, so that is there, right?

That was like around 200 kind of billion kind of valuation. So nothing crazy like Bay Area, but the good thing is that as soon as the India-US corridor company crosses 10 million ARR, it almost behaves like a public company. Like we have got two times option to exit SpotDraft.

We didn’t exit because we think that.

Viral Bajaria 48:32
You see the, yeah.

Siddhartha Ahluwalia 48:34
It’s an India-Chu company, fortunately. So the probability of listing in India at 30, 40 million ARR is very high.

Viral Bajaria 48:40
Correct.

Siddhartha Ahluwalia 48:40
Right. And every round there’s the option because they didn’t raise at a crazy multiple.

Viral Bajaria 48:49
So that’s the problem in US. I mean, I’m sitting on a bunch of these companies. If I had a chance to sell in 22, I should have done it.

Because they all raised at crazy valuations. I don’t think they’ll all get sold at the same valuation anymore. They’re probably lower end right now.

So I have done a bunch of these things. There was, I mean, I have done a bunch of, I also take part in some secondaries for certain things. So like I’ve done like in OpenAI, like all those things I’ve done.

But I don’t think those would be my big multiples.

Siddhartha Ahluwalia 49:21
Not above 10x, kind of.

Viral Bajaria 49:22
Yeah, because I’ve got in the secondary in a later round and everything.

But like early stage companies, which I’m sitting on, I’m just waiting on them right now to see where they will be.

Siddhartha Ahluwalia 49:32
Which are the other companies, like Zenduty was a 4x exit for everyone.

Viral Bajaria 49:35
Yeah.

Siddhartha Ahluwalia 49:36
Which are the other companies that you had?

Viral Bajaria 49:38
So I invested in this company and it’s going through an exit. So it was called Wigzo. They got acquired by Shiprocket.

And so I think they’re going through the whole, they had like a lock-in and other things. So that’ll be a good one. I think it’ll be a 3x, 4x too.

I exited, another India base was, which one was it now? I forget the name. This is the one that always escapes me.

I forget the name right now. But those are all 3x, 4x. They’re not big ones.

So hopefully one day, there’ll be a big one. I also started investing a bunch in, because what I call is hard tech or deep tech, right? Like you would never get to invest in space companies.

You would never get to invest in defense tech companies and other things. So I’ve started investing in some of those founders. And many of them come from like Stanford and everything.

And so I started investing. And those I get in a little earlier. So maybe that will be my big ones.

Who knows?

Siddhartha Ahluwalia 50:39
My only complaint with pure US companies have been, either when they grow, they grow really fast, right? So nobody is allowed to take secondary. That’s right.

Or they fail, they fail very fast. Because they run out of money.

Viral Bajaria 50:53
So I advise everybody who wants to do this private investment. I say like the only time you do private investment is you are okay to just lose that money. And you will not see that money for a long time.

And the reason I tell them is because when you get in, you don’t have the preferred stack. And you don’t have the exit path, right? So you have to be ready for only getting money when there is an exit event.

And the common stock sees money. I think most people forget that part. That’s why I shifted some of my other things into, I will invest with funds.

The funds who are actually on the cap table has preferred in everything. And so that’s why I started doing a bunch of fund investment, not like going directly myself always.

Siddhartha Ahluwalia 51:37
I’m glad to have you, you know, as an LP.

Viral Bajaria 51:40
Oh, I mean, I love it. I love your podcast. I’m glad I’m on it.

I’ve seen so many of your videos. And I love your thesis, the India-US corridor. And the companies that you are looking at and doing.

So I feel like it’s the best thing to be in.

Siddhartha Ahluwalia 51:55
Thank you. So a few things that I want to discuss, which are technical in nature. If you have to advise a founder on why now for something technical on the data and the AI side, what would that be?

Viral Bajaria 52:10
Timing? Timing-wise?
I think, so I’ll start one part, which I have fundamentally started believing in. Two years ago, if you’d asked me this question, my answer would have been different. I actually gave, it was more a close talk with like the Peak XV folks and others.

And I’d given this thing and I said, like with Rajan and others saying like, there’ll be different modes and how you build, right? I actually think the modes, the tech modes are disappearing. I think if anybody believes that they can create a tech MOAT right now, it’s hard.

I mean, even the foundational model companies can’t create tech MOAT, which is like the most important thing to do in this AI stuff, right? I would say, if you want to build a company which can survive, because there’ll be so much competition. You saw Sam Altman tweeting before GPT 5, this is going to be the fast fashion of software.

Like you’ll be flooded with apps. There’ll be a lot of competition, but figure out what is that unique data you’re going to bring to your product eventually, whether right now, right away, or at certain point later, and don’t lose sight of that. Because if you keep on building on that MOAT, that is the only thing that will survive.

And I also want founders saying that, hey, just because you sync first party data, you know, many people will tell you like, hey, I have the network effect because all my customers give me data and I have the network effect. That’s not MOAT. Because every enterprise customer will write in the contract that you can’t use my data to build a model.

So that is not your MOAT, right? You have to figure out some other way that you can get it. So personally, I think that is the only way to build MOAT.

Otherwise, everything else is just fair game. I think you have to go speed to market. Everything is about speed at this point.

Because you can’t build a MOAT on AI unless you are really building foundational models. And it will be probably a bad idea now to build foundational models yourself. Your workflows are getting simplified.

Agentifying workflows are getting very simple. So the workflow is not a MOAT. Being embedded in a workflow is not a MOAT because switching costs are getting lower.

So I feel like the best way to build right now is build it right, scale fast, and like the speed to market and other things. And if you can get profitable very quickly, I think that is the better way to do it. Because you will build a much better business with that.

Otherwise, everybody is just going to throw money down the drain.

Siddhartha Ahluwalia 54:42
And how do you think enterprises are discovering these new age companies?

Viral Bajaria 54:49
So this is where I feel sometimes Silicon Valley has an unfair advantage. Because the best VCs actually have a way to bring these companies in, and you can do all these things. So that is the only way I have seen work out myself.

I mean, there are other people that you will hear a lot on.

Siddhartha Ahluwalia 55:07
Where VCs introduce people to companies?

Viral Bajaria 55:08
VCs introduce, they build all these networks out and you get introduced and everything. So that happens a lot in Silicon Valley. I have the other way to get it is via build a good network.

So I’ll tell you one other part that I found as investing more and more. Build a great community of users. Like as 6sense, I’ll tell you like there was a time when we raised money.

And we raised money for not because we wanted to build more product or because we wanted to hire. We raised money because we wanted to appear bigger than we were. We took the biggest booth at the biggest B2B conference in our 2014 and 15 year.

Siddhartha Ahluwalia 55:49
Did it help?

Viral Bajaria 55:50
It helped a lot.

Siddhartha Ahluwalia 55:50
How much did you pay for that?

Viral Bajaria 55:52
I don’t even remember now. Probably a lot of money.

Siddhartha Ahluwalia 55:54
50k?

Viral Bajaria 55:55
More 100k probably.

Siddhartha Ahluwalia 55:57
Did it result in like 100k revenue?

Viral Bajaria 55:58
Yeah, but it also resulted in us building a community. Which is something that you can’t value immediately.

Siddhartha Ahluwalia 56:05
What is that community like?

Viral Bajaria 56:07
We built a community of CMOs and marketers. And then we started building around it. And that community gave us introductions to everything else.

And there were times when we were doing community. So we still do a retreat which our CMO runs called Empowered CMO. What that one was doing was it actually took one level below the CMO.

Because CMO is our executive sponsor and the buyer. But there are a lot of these VP of marketing who want to become the next CMO. So you build a community of those people saying like, we are all going to work together and discuss things of how do we become that next thing.

And that community introduces you to a lot of different things. And you just start getting introductions everywhere. It’s very hard to build it.

But I feel like those are some things that you should invest in. Is to building a good community.

Siddhartha Ahluwalia 56:56
So what we are observing in the market is two, three things are scaling fast, right? Or by scaling fast, I mean, it’s reaching 100 million ARR. The first category is the white coding category.

We’re setting second category, the data labeling category. And third category, which is very small, is like the clay kind of category. What are you observing in the market, right?

Which are the trends that can take founders to these? Do they specialize in a domain in verticals to reach that kind of a milestone? Or are customers more open to trying newer tools, AI tools?

Or you can speak about your set of customers.

Viral Bajaria 57:35
So you are right. White coding is there everywhere. That’s where majority of the money.

Siddhartha Ahluwalia 57:41
White marketing is also….

Viral Bajaria 57:43
We are saying that word now. It’s white marketing.

White marketing could become a thing. See, there is a part also. We joke about this thing in our meetings also nowadays as teams and saying like, there’s another thing that is happening.

And this is where the market is. It’s called white spending. People are spending money on trying AI for sure.

That is a given. It’s a mandate from the top, whether it’s the CEO board. Sometimes it’s even PE companies.

Everybody is saying like, hey, you have to do it. You have to figure out. You have to improve some things.

And most of the time, the improvements are around like, how do you make? First, it was, I think last year if you saw, there was a lot of things about like replacement of human labor. Or replace people.

Because that’s what the thing that financial folks wanted to see. But they all realized the technology is not fully there yet to replace people fully. But the technology is there to improve your efficiency.

So that’s why you can see the shift is happening a lot towards that. So we are seeing that too in our thing. The second part I have seen and the reason why coding companies are also doing great.

There’s also barrier to entry is low. The cost is low to try out. And to me, it feels like even if you use the Clay example.

I think Clay is also doing much better because of the credit-based pricing. It scales as you are using, using, using. They are not locking you into saying, buy into my platform.

The platform cost you 100k.

Siddhartha Ahluwalia 59:12
Even for enterprises?

Viral Bajaria 59:13
So for enterprises, they have a pricing model and a pricing calculator. You can find it on their website. You can go in and put your details.

And that’s what gives the output. So they’ll make you sign a yearly contract. It’s typical of even like if you look at Snowflake.

AWS was also working. AWS, you could just give a credit card and they would just keep on charging that credit card. That’s how it was.

Then you can sign a yearly contract to give you discounts and everything. Same thing Snowflake did. And same thing, they’ll give you credits.

You are free to use the credits in the 12-month period or use it in the first two months. It’s a usage-based thing. So I feel like if in your industry or wherever you are going, if you figure out this, what is that right metric of consumption?

And you can do it. I think the scale becomes, scale starts showing up. Like you can actually go quick, go easy, like quickly implement, show value and keep on increasing.

I feel like that’s where you can get into this vibe in your industry, whichever, vibe X industry.

Siddhartha Ahluwalia 60:17
You think there’s a right time for vibe X?

Viral Bajaria 60:21
I think it is. I think also you have to think about what is that unit of work you are generating. That is the other key part.

Because in vibe coding and software development, the easy part was I can give it some instructions and it generated code which I could easily test. It’s not always that easy in a lot of other fields. Not every field has that.

But what is that thing that you can do and you can short circuit their time to do certain things that they were taking longer cycles? Can you cut it short? That allows you to get to that vibe MOAT.

And you can figure out a way to charge based on the unit of work done. And shortening of time helped you get the efficiency gain.

Now, we are all living in a different world, all the 100 million ARR, you said, is it really ARR yet? Is it, is it like annual contracts or is it like last day’s revenue multiplied by 365? Yeah, those are those are things that we will all like shake out very, it has always happened before also in frothy times, it will shake out.

But I think there is a moment I was in some other presentation, I did not, it was like, we are so used to software as a service, software as a service. And the reason it was, you’re selling to humans, it is per user pricing, yeah, it is platform pricing, right? That was the thing that we were used to.

I think it’s going to shift to service as a software. Now you figure out a way to what service you are giving, what is that unit you are generating, and you will package it as a software or an agent in an in whatever is being powered by LLM and make it super easy for your users to use. I think that’s the key part.

Siddhartha Ahluwalia 01:02:00
And can you, you know, describe more on what you mean by service or software and with examples?

Viral Bajaria 01:02:05
So I can give, I’ll give some examples of what even I think we can get to it. So our customers, we gave them software as a service to say, we’ll find you accounts in the market. And then we’ll help you target them and run ad campaigns on them.

Now the ad campaigns required certain things. One of the most important thing is creatives, like the ad creatives. For that, they would go to an agency, some agency will build it out for them and everything.

Now that is how we had built it, saying, okay, you will go some day, you will go get it, you’ll upload things and everything. But I think now the market can change into saying, okay, you don’t need that agency, like that service that you are buying from somebody to build you that creative, we can actually package it as an agent. And we can help you why we create these creatives to load into your advertising campaigns.

So that is a service you’re packaging, because they have to work with it as if they’re working with an agency. So it should be a, it should be natural to them to say how they describe to an agency what I want. So think of every time you are trying to replace something is, what is my user going to work with and how will they naturally describe it, then create the artifact.

That’s the thing that is happening with white coding also, I think a lot of people don’t like it also, no, no doubt, there are haters for it. I myself was a skeptic, like two years ago, like, is it really going to work out? But I feel like it is really working out because I can just write what I want.

And it generates it. And then I can verify it, I can correct it. And so it’s that thing.

So think of you selling a service or agency to your customer, I feel like the word agent should have been agency.

Siddhartha Ahluwalia 01:03:51
Yeah.

Viral Bajaria 01:03:51
Or maybe it comes from agency only, it comes from agency only, but yeah, but I think that’s how you should think.

Siddhartha Ahluwalia 01:03:58
Yeah. And in the last pieces, you know, we discussed both between the American companies and the US-India Corridor. Why do you think there is higher probability for US-India Corridor to succeed in the future?

Or there is not your take on that?

Viral Bajaria 01:04:12
I mean, I personally think there is, I mean, you can call it bias, you can call it my roots, I have also invested in, as I said, I have gotten exits from companies from there. I would say a few things, right? There is a part where there is high agency in a lot of people.

And India went through a big transition over the last 15 years, where it went from services-based companies to a lot of product-based companies, SaaS companies to this thing, right? So there is that talent pool that is generated and other things, right? I think information spread and other things have become very, like when I went through YC, there were hardly any Indian companies.

I don’t think there were any Indian companies until 2013. And then it started. And then you can see there are so many Indian ones.

So everybody’s gotten that exposure and everybody’s figured it out. I think the second part of this equation right now is, as I said, like the fast fashion of software, you can create a lot of software quickly. Before the challenge was for us to create software, then to get the distribution.

Now all you have to worry about is a lot of things around distribution. The thing that the Indian founders will have to figure out and this thing will happen is how do I get my distribution, if they’re going to U.S. markets, how do I get the distribution in the U.S. markets? And you can get it via community building or like going through your LinkedIn social.

LinkedIn has become such a big channel to get your leads and everything, or get people on the ground and do events and everything, right? That model, I think, by reducing the cost of building and focusing on distribution, I feel is the model that will win out.

Siddhartha Ahluwalia 01:05:46
Yeah, I think, especially in today’s world event, if you are able to build a unique positioning for yourself in an event, that works out very well.

Viral Bajaria 01:05:54
And we did it. We did it years ago. We did it 10 years ago, where we positioned ourselves way bigger than we were at events.

And you can do a lot of things at events and make an experience for your customers. But you know what happened is that before, to build was hard, and so you had to spend a lot of money to build it. Now your build can be easier.

It can happen in a lot less capital. But then you focus on the distribution side. And I think as in this corridor, what will happen is people will not need to raise 100 million to scale up.

I think you can get to things quicker and probably change that cycle that was going on in general. So I feel like there is a… I am still bullish in that corridor.

I think a lot of good companies will come out of this thing. Now, I don’t know. I think people ask these questions like, hey, will the LLM, like foundational models come out of India?

Will this come out of India? And because people do these comparisons, I mean, sometimes comparisons are not the right thing. I think it will eventually happen.

We are going through that phase where we are getting into the phase of creation now. And then you will get into what I call is innovation.

Siddhartha Ahluwalia 01:07:08
Yeah.
I think that creation happened at scale and exits will happen at scale then.

Viral Bajaria 01:07:11
Yeah. Well, first is creation, exits for those creations. People get more hungry.

They will then invest in innovation. Then you will see all those innovation, like innovative things, like whether it is deep tech, whether it is like all these, all those things will happen eventually. But you have to get on a journey.

You can’t jump. Right. I think everybody wants to jump.

Siddhartha Ahluwalia 01:07:28
And last is, you know, just for us, why did you invest in NEON?

Viral Bajaria 01:07:33
Because I like you. Again, I will go back to my thesis. So there are two things, two learnings I had, right.

One was wanted to be in the India-US corridor. That was one thing that I always wanted. So when we met in your thesis, that was great.

The second part for me is, as I said before, I had done so many bad investments. I think I can say I’m probably one of the worst angel investment pickers. I got so into like liking the founder, liking the idea, like, oh, let’s go in.

And then I feel like that discipline wasn’t there for me. And as a person who does this thing professionally, I think, I think like you have the right thesis. Let it be with you.

And in that second portion, I also realized that my money is just locked in. There is no exit for me. And until there will be an exit for the company, but at least by being in funds, you have the front seat, you have the say on a lot of things and other things.

So I feel like those are the things that’s why I invested. But yeah, I mean, I liked your distribution model too. You have a great distribution model.

This NEON for like a podcast that you have created, an audience you have created is great.

Siddhartha Ahluwalia 01:08:40
Yeah, our goal is at least for a founder by next year, if we can do, we did 15 podcasts in this trip to do 100 podcasts by the end of next year.

Viral Bajaria 01:08:48
Oh, wow. You are going to wipe podcast.

Siddhartha Ahluwalia 01:08:52
You are right. We wish for the podcast to be wiped, you know, I could replace the bad thing.

Viral Bajaria 01:09:00
That’s one thing you probably, we can’t replace it by.

Siddhartha Ahluwalia 01:09:03
We can’t replace it by. But thank you so much. Amazing to have this conversation.

Viral Bajaria 01:09:06
Thank you so much. Yeah.

Siddhartha Ahluwalia 01:09:08
Yeah. Finally, we are able to do it. I’m glad it turned out to be so good.

I learned a lot from you.

Viral Bajaria 01:09:12
No, thank you so much. I learned a lot from your podcast too.