SaaS: 2014 $1.4m, Now $30m ARR how BirdEye Aiming To Be Hubspot 2.0

Naveen Gupta

In Episode #845, Nathan interviews Naveen Gupta. He’s an entrepreneur with experience building startups and growing a hundred million dollar profit and loss statements. Before cofounding BirdEye, which is his current company, he held executive positions at RingCentral, Monster and Yahoo. He’s launched industry-leading products across advertising, consumer search, social media and monetization. He lives in Sunnyvale, California with his wife and two kids.

Famous Five:

  • Favorite Book? – Predictable Revenue
  • What CEO do you follow? – Brian Halligan
  • Favorite online tool? — Outreach and ZoomInfo
  • How many hours of sleep do you get?— 4-5
  • If you could let your 20-year old self, know one thing, what would it be? – Naveen wished he would have taken more risks and pursued his dreams of starting a company

Time Stamped Show Notes:

  • 01:40 – Nathan introduces Naveen to the show
  • 02:19 – BirdEye is the leading SaaS product that helps businesses on their customer journey
  • 02:54 – The two things that drive purchases are customer experience and business ratings
  • 03:20 – BirdEye grows 160%, year-over-year in revenue
  • 03:33 – BirdEye has 25K paying customers
    • 04:40 – Business model is based on location and not per seat
    • 05:20 – On average, a business would have 2-3 locations
  • 05:47 – BirdEye caters from SMBs to enterprise businesses
  • 06:07 – BirdEye has a broad platform which has different functionalities
  • 07:42 – Pricing on SMBs start at $3K and $100K for enterprise per year
  • 08:12 – ACV is around $5K
  • 08:33 – 50% of the revenue is SMB, 30% mid-market enterprise and 20% for channels
  • 09:00 – ACV is per location
  • 09:24 – MRR is close to $2M
  • 10:43 – BirdEye was launched in 2012
    • 10:55 – They came up with the idea after looking for a surgeon with great reviews to take care of their mother
  • 12:07 – BirdEye was initially bootstrapped
  • 12:33 – BirdEye has raised a total of $33M
  • 13:16 – Team size is 170 globally
    • 13:48 – Around 60 are on engineering, 70 on the sales sides and the rest are in different departments
    • 14:30 – BirdEye is investing heavily on hiring the best people
  • 14:45 – CAC is around $1K for a new business
  • 15:05 – Payback period is 3-4 months
  • 15:21 – 60-70% of their contracts are paid up-front, annually
  • 16:00 – Revenue churn
  • 16:11 – Net churn is close to 0.5%
  • 16:28 – BirdEye is still too young to calculate LTV
    • 16:48 – Naveen’s estimate is 3-5 years
  • 17:05 – Paid ads spent annually is $200K
  • 17:55 – Gross margin is 85-90%
  • 18:43 – To acquire new customers, they email potential clients and ask them if they want to know their competitors’ reputations and how they compare to them
  • 19:24 – 2016 ARR was close to $13M and 2017 will be close to $30M
  • 19:37 – 2015 ARR was $5M and 2014 was $1.5M
  • 21:10 – The Famous Five

3 Key Points:

  1. Have a business model that will benefit not just your own company but your customers as well.
  2. Most people rely on business reviews before trying out a product or service.
  3. Hire the best people and you’ll have the best product and provide the best customer experience.

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives