Building, Growing, and Leading A SaaS Company Through Tough Situations

Guptshup also developed TeamChat, a smart messaging app that introduced structured templates to messaging. He also a publicly traded company. Please welcome Beerud Sheth. Beerud I really appreciate you being here today. Thank you so much. This is awesome.

And and, I really like what I've seen and, obviously, you've accomplished a lot and you've seen a lot of successes over, you know, lots of hard work, many years of hard work. And, you know, the the this podcast really tells from the pros is, you know, it's really focused on on business storytelling. And I love interviewing founders such as yourself who have been through so much and really experienced the whole, you know, process from start up to even an IPO and all of that. Right? So that's where I really wanna, I I wanna get started here is is if you can tell us a little background on how you really got to this position where you are today.

I'm sure many people have asked you that before, but just in a in a, you know, maybe a short few minutes, how on a high level did you did you reach where you are at least right now?

You're you have to be a good listener. Right? You have to listen to what the market's telling you, what the competition's telling you, what investors are telling you. When you're too close to something, you lack perspective. So the outside in perspective from others, helps.

Customers in particular tell you a lot of things about your own business, so it's important to listen. And then when opportunities present themselves, right, call it luck, call it, you know, market changes, things like that. You have to be open to them, aware of it, or the converse. Right? Sometimes when bad things happen, like an external financial crisis, I mean, no fault of yours, but when that happens it really shakes up everything, so you just have to be open to, you know, you have to be dynamic, nimble, agile.

And then, I think perhaps the the the most difficult thing really is just grit and determination and perseverance to sort of stick it out. Right. I think, because even in the, for the, you know, as I mean, the, the common joke in Silicon Valley is, you know, some, like say in my case, Upwork was an overnight success, 20 years in the making. Right. It just takes a really long time.

And I think it sounds glib after the fact, but while you're going through it, right, those those years really, you know, they age you. They grinds a grind. It can be difficult and so on. But but it's not, you know, I'm not complaining in the sense that, you know, if you really enjoyed your in it, you know, then the journey is itself the reward as much as the destination and so on. So I think we can we can unpack each of these things.

There's a lot of things that go into it. But, but yeah, I think it just, you know, and some of the elements that I mentioned, yeah.

But, but 20 years ago, it was very challenging. I mean, people would say, no, you know, I do I can't trust somebody who I can meet face to face. You know, how am I gonna pay them? What if they run away with my money? What if they don't, you know, work in the same time zone I do?

What if they, you know, don't understand or speak my language, etcetera? I mean, there was just all of these honestly, there were just mental barriers, really. But but for a business, it can be challenging as you're evangelizing these things. Right? So but I think at that time, you know, what I saw really was it's just a combination of my own, personal influences, really.

Right? For example, I just, you know, I I grew up in India in in Mumbai. I studied at IIT and then came here for grad school at MIT. I was doing computer science, and then I did a short stint on Wall Street. I was a a bond trader, if you will.

Right. So, there were, like, 3. So I was in my twenties, right? So my limited life then I had, my, my three formative influences really where I came from India and I knew that there are a ton of smart, bright people all over the world in India and elsewhere, you know, Brazil, Turkey, you name it, because, so, so you you have a, a global talent pool. The other is with my studies in computer science and so on, you knew that Internet was was making it easy to connect with anybody anywhere.

Right? And then the last thing was sort of given my Wall Street experience, I knew you could create a marketplace even for, illiquid securities or unstructured items like services, right? When you want to see, see, it's one thing to have a marketplace for products where everybody knows exactly what it is. Right? But but when it's a service like web design, web development, and how much does it cost?

Well, it depends on what the scope is. Right? So anyway, these three influences sort of, you know, were just sitting in my head and my cofounders then we were just brainstorming, and really, you know, it took a I mean, even just going from sort of, an inspiration to an idea and refining it, what categories, how does the product work, you know, what could break, you know, how do you protect the buyer, the seller, and so on. Right? And then even once you get past the product, how do you market it?

How do you get people around the world to hear about it? How do you get businesses here and so on? On? So I think, but really just seeing the fact that, you know, you have these massive paradigm shifts happening and literally, the way I like to think of it, say, describe it as, you know, you're really just connecting the dots. Right?

And there's a saying, right, the future is already here. It just unevenly distributed. So if you if you just see that these things are happening and should happen in much bigger scale and you sort of get on with it, you build something that enables it and drives it, makes it happen. I think that's how, you know, that's how we came up, with Elance. Yeah.

But, you know, I I think there's a there's a stigma out right now that it's, you know, oh, it's, it kind of like a lot of these start ups, they think it's easy to start a business because they see all these things on Facebook and Instagram, and they see all the the good things, but they don't realize the work and the grind that happens behind the scenes, you know, and I think that's a big problem. And I I like how you mentioned before, you know, it takes, it it was a startup over after 20 years. You know what I mean? It just took so long, and it's a lot of it's a very long process. It's rigorous.

It's, a lot of trials and tribulations, a lot of making mistakes, learning from them, ups and downs, and, you know, it's it's just really good to to let people know that, you know, it's that's not really the the reality of it is to have something successful takes a lot of trial and error, and it takes a lot of, hustle and and and perseverance and resilience. So, you know, for you, when you, B rude, when you were growing Elance or even, you know, the the company you have right now and, you know, Gupshop, did you experience the same types of obstacles in growing both of those, you know, SaaS companies? Or was it very, very different? Was it a lot easier for you to grow Gupshop than it was for you to grow Elance because you had all that experience?

I mean, it was hard to get even a lease. Right? Because the landlords would ask us for 5 year lease with substantial upfront deposits because they're used to all these Wall Street tenants who could easily do that. And as a startup, I mean, you know, we didn't even have a planning horizon. Didn't go beyond, like, 3 or 6 months.

So, you know, just but but a lot of these basic things have changed now. Right? So New York is a is a great hub for for startups and so on. But just basic things like that, or even employees, not understanding how compensation works in startups where this cash is lower than what street firms, but equity is higher and that's where the real value is, onto, you know, the tech infrastructure. Right?

And back at that time, you had to buy expensive servers and databases and host it and maintain it and manage it. Now everything's on the cloud. It's pay as you go. It's instant, you know, and very cost effective to get started. Right?

So so in a lot of ways, the external ecosystem has changed. I think, employees, the talent pool is much wiser about equity, wealth and so on. So that's on the external side, I think on the, as a, as a personal journey, of course, you know, again, I think, what a lot of people don't realize is the, the psychological journey of an entrepreneur is a very significant part of the overall success. And, you know, it just needs a little, a mental fortitude to deal with the roller coaster ride, you know, the the high highs and the low lows. Right?

I think it's really, and you just have to be even keeled about it, deal with it, be open minded be flexible. When something doesn't work, you know, and sort of getting discouraged you sort of really get into what didn't work and why. And what did we learn from it to then improve on it and get better. Because, you know, tech startups in general, you're operating in, uncharted territory. Right?

You're trying to push the limits, the frontier. Right. And once you just accept that, then inherently, you know, the the only way to innovate, the only way to get forward is to try certain things that are risky. There's no guarantees of success, and therefore, when it fails again, it's not a personal failure. It's really just it's part of the process.

Right? So you kind of but just use it to keep getting, better and so on. So I think certainly as a, you know, you have experience in dealing with employee situations and, you know, being, and you have more credibility. Right? So they can get helps.

Fundraising becomes easier, you know, recruiting becomes easier, dealing with board dynamics. You know, I think I think you know, you anticipate, you sort of, you know, you're not just reacting. You have a little bit more control over what you're doing and so on. So, yeah, makes a, makes a huge difference. Certainly.

When I look myself as a rookie entrepreneur, there were a lot of mistakes, I made. And again, I don't regret any of them because they helped me grow and learn. But, but for new entrepreneurs, they should learn from others mistakes as much as they can so they don't have to make their own. Yeah.

No one person can, have, you know, I mean, building, it's like, you know, building building a startup requires a combination of skill sets that's really hard for anyone to master. So teams often tend to work well and better. You know, really it was the key insight was if you're building mobile services and you wanna reach billions of users, really the only way at that time was through text messaging or SMS, right? Because that's the lowest common denominator, works on every mobile device, and you can build rich services to communicate with, with billions of users, right? So that's, what we started with and we set up a cloud messaging platform that enterprises can use to send notifications, alerts, reminders, you know, things like that to consumers.

And, of course, you you know, every time you do a banking transaction or you shop on an ecommerce site or book a flight or book a hotel and so on, or order food or a taxi, I mean, you get these notification alerts, you know, and in the US, some of it is on email, some of it is on text messaging, but in rest of the world, it's almost exclusively on mobile messaging. So it's a very, very high volume and, you know, so we we we are one of the largest platforms actually in the world, with in terms of volume of messages. And, we handle actually, the current count is about 6, 7,000,000,000 messages a month, so fairly sizable traffic. And, yeah. So I think that's, that's what we do.

And and the great thing about messaging now so previously, it was just text messaging, but these days now you have newer, IP or Internet protocol based messaging channels emerging. Right? You can now enterprises can send messages through WhatsApp to consumers, or even we've launched something proprietary that we call GIP, which is short for Gupshark IP messaging channel. Right? The point is in all of these things now you can have richer messages with images, with cards and buttons and conversational experiences, chatbots, AI enabled chatbots and so on.

So so messaging and bots are becoming sort of this new, capability for businesses to engage their customers. It almost becomes the new sort of digital front door. Right? And, the analogy I like is in the mid nineties when websites came about, every business had to go out and build a website because that's how customers were gonna find them. And now, you know, every business is gonna have to go out and build a conversational experience because again, that's how consumers are gonna, you know, reach out to them and find them and so on.

So they can use it for marketing, for sales, for customer support, you name it, but that's the big opportunity.

Yeah. You know, Birita, I wanna talk about what it's like to scale a SaaS company, software as a service. Some people that I've had on the show, they have service based businesses. For you, it looks like, you know, you're running a more of a SaaS type company. How have you been able to really scale it to a point where the the top line is is increasing, you know, your ARR is always increasing, at least for the most part.

I don't you know, I won't I won't talk numbers. I'm not a I'm not a big numbers guy by all means, but just more an essence of the the the elements of scalability. How did you scale your business and even Elance to get it to such a thriving company, to get recurring re, recurring users and revenue on, you know, on the platform? Because that's not easy to do. I've met so many, entrepreneurs and I have a lot of friends that do own product based SaaS companies and it's, you know, it's it's not that easy.

It's it's it's requires just heavy marketing and and sales and, and just the way you operate your business. So if you can dive a little bit into that, that'd be great.

I mean, in general, I think right in the beginning, it's a lot of it is around product market fit. Right? You have the right product that customers would like and use and so on. And even in our case, you know, we had to evolve, quite a bit, but for a variety of reasons, we couldn't, subsidize it. But for a variety of reasons, we couldn't subsidize it and monetize it and so on.

So anyway, then we flip to an enterprise product and started offering it to enterprises. So we had the scale, we had the technology, but the enterprises needed a few features, right, so that's where you listen very carefully to the customers, right, they need the ability to, to send messages in a certain way, receive reports, API integrations, all these capabilities. So some of that was, you know, so you need to just really listen carefully, do some trial and error around features, offer it, see if it fits well or not. That's the first aspect of it. Right?

The next aspect then is, you know, what kind of SAS. Right? There's a lot of it. These are subscription SAS models. Ours is a consumption SAS. Right? So what that means is as businesses use more, they consume more, they spend more, and therefore, you know, we can have, even without new customer addition, even existing customers can drive revenue growth. Right? So so it it now it depends on the kind of business model and what it is. Right?

So if the value you're delivering, can be a consumption based model, then sometimes that might that can be better in some scenarios. Right? It depends. So so the very design of the business model and pricing can have an impact. I think, beyond that, you know, customer success is a really critical part of it, making sure that new customers are onboarded correctly And, and, you know, consumer adoption instead of, our customer adoption of our product typically goes through, stages.

Right? So so the first is they get adopted and understand the tools. Then they they use it for 1 or 2 use cases, then they do it for a few more. So there's really onboarding happening at every stage. It's a sort of a continuous onboarding, so to speak. Right? Because there's this newer capabilities, sort of as they call it land and expand. Right? Once you have a customer, you expand the in the interaction, the engagement with them. Mhmm.

So that's important. I think customer support is also important when things are not going well. If people have issues, complaints, they have queries, I mean, we can enhance that, improve that, and so on. I think that makes infrastructure, I infrastructure, I think technology infrastructure is a very critical part of it. You really have to invest a lot in it because even the least bit of outage, can cause, you know, loss of reputation.

It can be, have a significant impact. So I have to be really careful, with, with that as well. And, and lastly, I might add is just, you know, constant innovation. I mean, you have to keep bringing new ideas to the table, things that the customer is hearing first from you. And of, you know, we found, consistently that, you know, even if, customers were not willing to switch, let's say they have a competitive product, they may not switch for, because once they get settled in, the switching car, you know, people don't switch for no reason.

But they but when there's a new thing that you're offering that others are not, then they're willing to try your system and then even switch the older, product as well. Right? So in our case, for example, we are we are the pioneers of IP based messaging and a lot of customers that may not use us for text messaging would would would use capture for IP and then also migrate SMS traffic to us. So it's really, you know, they have to see you as as leaders, you know, as like stable, reliable, great feature set and good innovators. So each of these things, and then of course, you know, the, the power of, the great thing about SAS business is the power of compounding.

Right? So sometimes it may look like slow growth, but over a few years, it it just adds up. And, you know, if you're growing at 30, 40, 50 percent, year over year I mean, once you look at it after 5 or 10 years, I mean, it just becomes an insanely large number. So a little bit of patience also is required, you know.

I think we've been running, you know, like a sustainable business. And, now, you know, I think we're looking at, raising more money to scale up even faster and and so on. So I think, but but, yeah, it's important to, you know, be able to build, scale sustainable businesses, because that allows you to, you know, invest more in business to sort of control your destiny. You, you know, you don't do optimize for the short term. You can think longer term and scale it up. Yeah. And

So and in addition to that, we've had to, you know, occasionally do pivot as well. Right? I mean, you change you're going in one direction. It's not working. Now you need to change course.

So ultimately, you know, I think you want to raise money from investors that understand how these things go. I mean, sometimes, you know, what you think you would start with is not where you end up, And, they need to be, you know, they need to have perspective themselves. I mean, if you have investors that get anxious with these kind of, you know, changes, then that's not gonna work either. So so we were fortunate enough to get, you know, not just get funding, but get funding from the right kind of people that would be supportive, understanding, and the same thing. Right?

When something doesn't work, okay, what didn't work? How would we fix it? What else could we do differently? What is, you know, what are the things that are working? You know, you do more of that and scale the other stuff.

So it's really you know, it's a fundraising can be tricky. And, yeah, the unfortunate thing is, sometimes, you know, people who really need it but have no track record, then it's hard for them to do any fundraising. And later on when they're successful, you know, and don't need money, they'll everybody's willing to give them money. Right? So it's a little bit of a feast and famine, kind of, sort of dynamic there.

But, but that's because it's inherently risky. Right? So you really when when it's a completely unknown entity and an entrepreneur, I mean, you really don't know how they'll react in different situations. So that's why oftentimes, you know, people with a track record, find it easier. Right?

So then the question is, how does somebody break in? And I think they're, you know, I mean, if you're for a young entrepreneur, sometimes if they have tried and found it difficult, one option is to actually work in in some other startup, you know, sort of, learn the tricks of the trade, build relationships because almost always, you know, the relationships lead to newer business interactions and so on. You know, exactly because it's such a deeply personal exercise. Right? You really have to know that that person has the, has the ability, you know, and the agility and the nimbleness and the grit and determination and the intelligence to be able to deal with whatever the start of journey throws at them.

You know and, you know I think this is actually a good segue because I, I do have a few more questions, but, I wanna talk Bewrit about, a little bit about the struggle that you've, you've probably seen other, you know, business leaders, other CEOs, other entrepreneurs go through as well, along with some of the things that you've gone through, some of the obstacles and struggles that you've experienced as well. Can you name some of the, your toughest challenges, that you and even other people, have gone through that's very similar? Like, have you been going through some similar obstacles and challenges that some of other, you know, business leaders and entrepreneurs have also gone through, and how have you really overcome

The communist usually is just running out of funds. Right? But or and and that happens again because, you know, maybe you can't build a product or you can't assemble a team or, you know, it's the customers aren't adopting it or it's not scaling fast enough and you can't get new investors and you're not profitable yet, and you're burning cash, you know, day after day and so on. Those are those are things that are sort of at least somewhat in your control. But sometimes it can even be external factors.

Right? I mean, when let's say the, the market collapses, right, where it's impossible to get new funding and, a lot of businesses stop spending money, right, and on your product and so on. Right? So in 2,001, 2,008, you know, maybe even last year in some industries, I mean, these are sort of external shocks that, you know, are through no fault of yours can really impact businesses quite significantly. Right?

So those are the the toughest challenges and I've I've gone through those, multiple times. I mean, I've lived through, you know, all of these financial crises that I talked about as well as, sort of internal, pivots where, you know, something just wasn't working and we had to completely change course. Those can be, or kind of nearly running out of cash and so on. Right? Those can be, really challenging, you know, sort of gut wrenching situations.

I mean, they really, even for the most experienced entrepreneur, they can be, really cause, you know, sleepless nights and and a ton of stress and anxiety. Right? And and the way to deal with it, I guess, you know, at least the a couple of things. Right? One is, I've I've found, you know, there's something called the serenity prayer, which is, you know, give me the the the courage to change the things I can. That's true. Yeah. I know that prayer.

You know, and there are different scenarios. Right? In one case, we had enough cash, but the this but the and the 2,000 crisis hit, so we had to sort of cut back on the team, we had to cut back on the projects, we switched from consumer side to enterprise side, a lot of those things. I think even at, Gupshup, we had to pivot from one kind of business to another, and refocus and so on. And in every one of these cases, right?

I mean, there's it's not just you, but you have to take your team along and it can be a lot of dispute debate and and stuff like that. And I think even they're just being authentic, being honest with the team saying, look, you know, this is what we know. I mean, it may be stressful. I don't like it either, but it is what it is. You know, what are you gonna do about it now?

Right? Not sort of, so I think that's super critical to, to deal with. So, yeah, I think some of these take, take time and take effort, you know, and, and just a lot of stress, but that's where the grit, the determination, the perseverance, sort of really matters. Yeah.

I mean, it's really not that complex. It needs a lot more, EQ. It needs a lot more, you know, just just, I mean, to me, really the board it boils down to is, you know, great determination, perseverance to, you know, keep at it. I might that alone is not enough, but that's really the most important factor because that leads to other things. You don't, you know, you're always thinking, you're thinking differently. What can I do? And so on. So I think, it really, Yeah. That that's the, if I had to