Subscriptions Management For Digital Agencies With AppBind #197

Hello, hello everyone. Welcome back to another episode here on today's podcast. My name is Akhil Jabbar, and, uh, today we're doing something a little bit different. I've got Sunir Shah joining us. He's here from appvine.com. He's the founder And what we're going to do today is do kind of a highlight and showcase to see his product, see how it works, why you guys need to check it out, and learn what's his journey been and how you guys can also learn from him. So welcome, Sameer. Yeah, tell us a little bit about yourself. Where are you guys based and what's the size of your company and a little bit more about AppBind?

Yeah, thanks for having me back. Great to see you again. So AppBind, I'm Sameer from AppBind, founder, and what we've been trying to do or have done is figure out how SaaS can actually be sold through partners, which is a weird idea because every other technology industry in the world actually sells itself. You never sell direct. I mean, the ideal is to sell through a value chain. And most of B2B software, 75%, is sold through partners, but SaaS, 20%. And why is that? I think anyone who's done this knows is that the subscriptions make it really difficult for partners to package up your software And, you know, either sell it through a consultant who just needs to put together a bunch of parts to solve a customer problem. Like a plumber would never make use of buy your own pipes and pumps at the hardware store. That would be really ridiculous if they're fixing your bathroom. That never happened. But in SaaS, that happens a lot. And then through retailers, there's no real retailers of SaaS. Any app store or whatever required integrated billing. It's really painful. So this is the world that we're in. We're all about taking your technology, your SaaS, and allowing someone else to sell it for you, which is where— how you scale revenue and margins efficiently.

Good. Awesome. So where are you guys in terms of size today? Team?

There's 4 of us full-time and then a whole sheaf of contractors on the marketing side. We raised seed over a million years through the pandemic. It was a pandemic raise.

Sure. Fun times.

Always a good time to launch your company. January 2020. We're very excited.

Yeah, I mean, I think today is probably another great place to raise as well. So I think—

Yeah, that's where we are too. I just figure these are the challenges that the universe has put in front of me to overcome.

Exactly.

We've overcome them. We raised $2.5 million. Nice. Closed it last year with our lead FFVC, and we're working through that. Right now, we'll probably be raising shortly again. Why not? To get to the next phase of growth. For sure.

Awesome. So guys, those who are listening in, so most of you probably just listening, but we're also doing a screen share here. So if you guys want to follow along, just check us out on our YouTube channel. This will be on our YouTube SaaS District channel. So Sunil is going to show his product, how it works, why you guys need to use it, and share some results on some before and after why this product is great. So starting off, so we got your page open here, appbind.com. You've told us, so this is— who's this for? So I see agencies, consultants, but then SaaS companies are also using it. Who's your ideal customer? Who's your target you want to be talking to?

Well, in your case, let's talk to your audience, right? So we built— we live in the space between SaaS companies and consulting partners for now, and then let's talk about the future later. So for SaaS companies, those of you who have channel programs with marketing agencies or IT consultants, Or, you know, HR consultants. Now, most people end up in this referral space because there's no way for them to package up your software onto their own quote for the customer. This is fine. That shows you market demand. But what you'll see, and what I saw when I was working with Pipedrive, is that their channel revenue was 4x as soon as they moved to a solution partner model. Because if you think about it, you know, asking your partners to refer a customer to you is asking them to take on risk. Or asking them to take on the billing is asking them to take on risk. What you want to do is create opportunities for your partners and allow them to package up your subscriptions to put in front of a customer, but the customer pays through them to you directly. So they're not in the middle of financial risk, allows them to build up a solution to the client. Like they're not just selling your software. The marketing agency, they'll be selling the marketing funnel full of leads and revenue. That's what they're selling, not your software. It's an HR consultant. They're setting up your your people operations. They include your software as part of the solution. It allows them to build a business on you, and that's actually much more profitable. It's just been very difficult with SaaS. So for the SaaS companies, we've built them a complete portal where their partners can log in, log out, create accounts, build a client. You can take commissions, transfer the accounts, all the things you need to set up your solution partner program.

Okay, awesome. So for SaaS companies looking to use this, so Just quickly before we go into the dashboard and showing us maybe a demo of how it works, pricing, can we talk about that quickly? It seems like you guys have a pretty low-risk pricing plan here if you want to share that.

Yeah, absolutely. So just scroll down here, make it public, crazy. Here we are. So pretty standard pricing for our customers is if you're just starting off with us, It's $299 a month and we charge 1% every time the money moves through us because that's the cost of moving money.

Yeah.

So that provides you the full PRM background, backend.

Okay.

And then what will happen is we'll grow with you. So eventually you'll have enough activity in here that you want to integrate with your CRM or accounting system. We always do a custom integration because we found every CRM is different. So we'll do it. We're not going to use Zapier for that because it turns out to be a little bit too fragile. We'll take on the risk. managing that, but that's $799 a month. And then the new stuff which we're building, which is a full UX inside your experience, will be $1,299 a month.

Okay, perfect. So let's dive in. Let's go into it. Why do we— if I'm a SaaS founder, I have a channel partnership, why do I need to use this product today?

Well, you already have demand, right? I mean, you should only do things when there's demand. So if you already have partners around you, right, that are working with referring customers, They might be lost in your affiliate program, which is a wrong place for an agency to be in because no one worth their salt is ever going to send a client an affiliate link to sign up for something. It's so offensive. Like your plumber, it's like, hey, could you go down to the hardware store and buy some pipes? I'll fix your toilet, but could you go and do the thing? But could you take my ID because I got a kickback and I'm a little bit short. I want to take my wife out for dinner on Friday. Could you do that for me? Could you do that for me? Yeah, you're going to fire that plumber.

Yeah.

But that's what's happening all the time, right? And I can tell you many stories of how people get fired all the time when the agencies, when the clients get overloaded with to-dos that they're supposed to be taken care of by the contractor. That's what I mean by risk, right? You're asking your partners to take on risk for you. They're not going to do it. That's why referral revenue, if you have it, it's good, but it means you can forexit pretty quickly if you can get them into a position where they own their customer, they control the customer experience, they lead it, they take on the burden. It's much better for everybody. And then secondarily, for those who don't know if they have this going on, if you have a product-led growth motion, there's something called the shadow channel, which if you talk to me, sunir@appmind.com, I have this spreadsheet I can share with you to look for this. So most people who are contractors don't want to talk to you because they sell time for a living. So it's not—

Yeah.

They just help the client. They're in the— so they're in the client accounts. You can identify them by just looking for email domains that are different in a single account and then domains that appear in multiple accounts. And those are likely to be your contractors. If that's happening, you have a channel, you just don't know what it is. If you just talk to them and give them tools, you can double the revenue from there. And in 2023, we're all looking for indirect revenue, cheap revenue to acquire. If you already have all this activity and you're underserving it, it's crazy not to do something.

Right.

to empower this motion to market. Over half the customers need it to buy. Here's actually a statement I should say about partnerships. We only need partners because customers need that partner in order to advance through your customer lifecycle.

Right.

And over half the customers need some kind of partner, whether a tech partner or service partner, in order to advance. And if you If you don't serve that partnership, that customer can't move forward, and then you're not going to maximize acquisition or LTV, and your revenue is going to go down because you're not actually giving customers what they need and want, because it's the customer who drives all the demand, right? So they work with other companies, so you just have to serve them. It's very simple.

Makes sense. Yeah, just giving them a tool to do their job better.

Yeah, that's very cool.

So yeah, let's dive in. Tell us some more about the function of it. How does it work? If I'm signing up today, what does it look like inside and how do I connect my systems?

So this is the app buying experience. So this is from your partner's point of view. So what we would provide them is we would like, by the way, we require no integration. We can go to market like in a day with you. It's not a problem. And that's kind of the— I'll show you the magic, how that works. But we create this, we can create this partner portal for you right away. Allows you to put all your, your assets in here. You know, you can put your partner rep in here if you wish, so they have someone to talk to, your partners, the commission structure. Yeah. All the apps you have or products that you wanna manage, you know, and then they can, you know, log in, log out of all the accounts, create the accounts, gives 'em a central place to manage all their clients. And most agencies are looking for some way to just organize their activity and then work with you separately from working with the client. And this is a place that just goes right in and you can manage them.

Mm-hmm.

With the client. And the most difficult part is allowing your service partners, these consultants and agencies, to say, yeah, I think you should own this customer. You should say that to them and we'll support you. But they can't because they're going to get stuck with the billing and account management.

Yeah.

So out by taking the plumber analogy, we took it way too far. Actually, this is normal contracting. It's like, well, what's the UX that you would experience from that? plumber. It's a time and materials invoice, right?

Yeah.

So here we are in here. So we can have— just go with— I was demoing to close.

I made fun of Steli.

I love it. Steli is so great.

Steli's cool.

I'll just bring this forward. I love Steli so much. So you can put together an entire quote for a customer here of all this stuff, not just your things, And keep in mind, this is one of those problems with the partner programs is they can only manage your product. But if you think about what an agency does, agency needs to take action for a customer who needs a custom solution. They're putting together actually a system of different technology, right?

Right.

To solve a problem. So if you're building a marketing funnel, yeah, it may be HubSpot, but you're going to add in data services like Clearbit or ZoomInfo or Vidyard or whatever, right? So this is kind of what it takes to build a channel is you got to empower your partners To build something bigger that they can sell to the client. So you can add anything. Let's say, let's add AdRoll, 'cause that's cool. I love AdRoll.

Mm-hmm.

Right? And then the, your partners can bill however they want. You know, they can mark it up, which is pretty normal actually for AdRoll, maybe 20%, or they can pass it through at cost, or for whatever reason, a partner may want to put a discount on it because it's sticky for them. Uh, one of the biggest mistakes that SaaS companies do in the channel is put the discount for the partner on the customer's bill. But who owns the subscription? Customer. Who has a right to see all the billing history? Customer. Whose commercial is on the customer's bill? The partners. That doesn't make sense. So what you should do is give the margin to the partner and let the partner extend the discount to the customer. And then that's a little bit of nice sweetener to keep the customer with the partner. And if they ever break up, the customer loses the discount. That's a much better model for the channel than like giving the partner margin and making them mark it up or do— don't do that. Never discount the customer's bill for the partner's margin. But here we could— the partner can manage if they wanna offer a discount. I think we're gonna mark this up 20%. You can also put on retainer if you want. Some partners do that. None of this, by the way, it's your decision. This is entirely out of your hands. You don't have to worry about it. We handle all the agency-to-client billing. You just sold your product. You don't even care. This is for them, right? You don't wanna get involved in someone else's business.

Mm-hmm.

You know, so add that subscription and you can put together, like I said, an entire stack of software for your customer.

Okay.

And the way it works, you know, AppBind, we're a trusted space for the client and the agency to work together.

Okay.

The customer and the agency to work together. So, you know, a typical contractor, you'd give them a deposit for materials. Same thing here. We take a deposit for the expenses, but because these are recurring subscriptions, everyone's seen one of these, it just tops itself back up automatically. So once, you know, ask for $500, once it goes below $200, we top it back to $500 to handle the recurring subscriptions. But spending limits, this creates a place so that the contractor feels safe managing the expenses for the client because it's not their money at risk. They're just using the customer's money to do the work for them, right? This is the biggest fear that people have had in the channels. They don't want to be in the middle of billing because it's terrifying.

Yeah.

Here they're not. They're managing the work for the client, right? And that's a much better place for them to be. And then finally, you know, the opportunity for your partners is that they can add their own retainers onto the bill and actually build a business based on you. You want to be able to create opportunities for your partners rather than selling them risk. This is how you build an explosive channel. This is what Microsoft did, right? In the '80s and '90s, they told all these companies, you can build businesses based on us.

Yeah.

You know, and this is true. Like, same thing with HubSpot. It showed all the inbound marketing agencies how to actually build retainer Around inbound marketing work. And this is how they had an explosive channel. 50% of their revenue is agency attached at HubSpot. That's not a small deal because they taught their channel how to build consulting practices where they make revenue. And this is something that you can enable as well through Rapide.

So beyond just subscriptions, can I also integrate any contractors as well? So if I'm a plumber, Maybe I need to hire an aide for a couple of hours and I build him in for, I don't know, he's got to do some expertise work, for example, for the church.

Yes. In fact, that's something we're adding now. So we're going to go beyond subscriptions to any kind of expense item. We can do that now. It just, they all look like subscriptions right now, and we're going to change the UX for this because we were realizing that a lot of products are mixed mode. So there's going to be, if you're an event manager, you'll have caterers, you'll have subcontractors, you'll have the event software. And if you are like a podcast agency, you're going to be buying microphones. If you're an IT consultant, you're going to be buying computers and networking cables. So this is all doable in AppLine. We just have to change the UX so that they're products rather than subscriptions or services. Just different labels for the same thing.

Okay, cool.

Yeah, absolutely. That's the future.

That's the future.

I told you I'm not showing the new things.

All right, I'll save it for next time.

Yeah. Sweet. We move quickly.

We move quickly.

Yeah, I can see that. And then finally, it's sent to the client for approval. And that's really important because in the Appline world, clients own all the subscriptions. And so what we do is set the partners up as not being working for you, but working— because they don't work for you, they work for the client. They set them up, we set them up. And this is important as a purchasing agent. They just— it's the clients delegating the work to their own staff, basically. And so these partners are signing in the customer's name and the customers own everything. This is very important from a legal point of view because the data has to belong to the customer, and so the subscriptions have to belong to them. But this allows the partner to act as a customer and do all the work, which is really the problem. You never want to burden the customer with something because they will fire you. I mean, you want to take care of it for the client. That's really the power of AppBind, is doing things the right way.

Of course.

So how does this work? You know, how does it work without an integration? Well, what's a subscription? An email and credit card. So what we do is we issue your partners a shared email here. They should never use their own email and credit card in a client subscription. So we create them a shared email that forwards all the emails to them so they manage it and the customer, so the customer owns it. If there's a shared password, they can just put it in here as well.

Makes sense.

And of course, we issue this credit card. So that this is actually the thing that terrifies contractors. We give them this credit card, so that's not their credit card, and it's paid out of that expense account that we set up. So it's the customer's money, but delegated through the contractor.

Okay.

So it's really safe. And then from your billing point of view, you don't have to change your billing system at all, right? You know, you just use your standard billing system as it is. The source of support team don't need to know this is a partner attached account. They can do refunds, credits, whatever. It's all the same to them. This is what I learned at FreshBooks when we tried building a custom portal, is that we were just eating up time from the support team. And finally, someone sat me down on support and told me, even if you took one extra minute for every support ticket deciding which billing system or mode this is, we do thousands of tickets a day. We'd have to add this many staff. So can you justify this much support staff? And I'm like, no, I can't. I don't want to make your life more complicated.

Right.

And who's going to win between support and partnerships? It's going to be support. Properly so, right? So you don't want to make things more complicated. You just want to align with what they do. The credit card is how the whole company works. So we issue a credit card.

That's how it works.

Perfect. That's a good idea. And then the last thing I'll show is what happens when they break up. With Appline, customers always own everything. So if they break up, either the customer agency can issue a transfer and then they can just— customer gets the subscriptions. Simple. So that way you're not losing your clients when the client-agency relationship ends. They don't have to create a new account and transfer it over. Yeah. You never want to set your partner up as the owner. I'm going to show you the backend just of what you would see.

Okay.

As a partner. All right. So as a SaaS vendor, you know, we're a full partner relationship manager. So we'll show you all your partners. Of course, you can approve them if you want. You have all the registered partners here. Of course, we'll show you the customers. And we'll show you who the customers are because remember, the customers are the owners of the contract. So we can disclose this to you here. We'll show you all the transaction histories. You want to watch the money flow in per account if you want. We will also roll it up, of course. And then really interestingly, we'll show you the cross-sales report. This is actually unique to us, right? Because you notice, remember on the quote, you can put multiple products on as they will. They certainly will.

Yeah.

And then you can see who in your tech partner ecosystem should be your best friends going to channel. Because remember, on one side of the table, it's all the technology, and on the other side of the table are the same companies working with all the technologies, right? So then you can go to your friends at these companies and say, let's go to market together with the same agencies and then build up your channel together. This is anonymous and de-identified and aggregated, but it's extremely powerful.

David, right? I wonder if we can use this for our— so we're actually just raising our fund right now. So we just actually launched the link from Angel. If you guys want to check it out, go to angel.co. You can check out the Horizon Tech Fund. So raising $25 million, we're going to be investing across a portfolio of SaaS companies. I wonder if we can manage each of our portfolio companies in here with each of them their own subscription for each company that we work with. So right now we have credit cards for each company. This seems to be like an easier way to see everything. In one place. So I wonder if PE firms is a place that you guys can work with as well.

That's interesting. Let's talk offline. We'll talk about how that works. I think so. And you should put some money in AppLine. That's what you should do.

You should what? Put some money in?

Put some money in AppLine.

In AppLine? Are you guys raising right now?

Yeah, I think we will. I think we will. I'm looking at 2023. Why not? We'll take another million.

Okay, so this is your moment. Take your ask. What do you want people to take away? If you're looking to raise money, you want people to use your product? Let's end it off with what's your ask here?

Well, we are— I wish I had a solid ask on the raise because we're just thinking about it, but I think we're going to raise $1 million. So if you're interested in investing, because this is the opportunity here. Yeah, we're talking about agencies, but the real opportunity is there's no retail for SaaS right now and there's no way to publish subscriptions as licenses. So the next phase is once we build this channel, which is a wonderful virtuous cycle of SaaS companies brings agencies, agencies bring SaaS companies, around the loop it goes. And then we can go to the app stores and publish the SaaS companies into these distributions without having to rip apart your billing system. That is a really difficult task. No one has actually solved that, but we have a solution for that too.

Okay.

Anyway, it's worth doing. So now's the time to take a piece of us because relatively cheaply, we decided why not take some money now? Not worry about 2023. It seems like a crazy year, so we'll take the money. And then for SaaS companies looking for indirect revenue, I mean, I know what's going out there. People are wondering how to keep revenue growing. You already have actually all this market demand sitting around you, but it's impossible to see and manage. But the problem is they just can't take your stuff and make it part of their business, which is what everyone wants. So if you think you might have a channel or you just want to see and learn about our shadow channel calculator, this thing here, a little spreadsheet, I'll work with you to help find all your secret partners.

Okay.

You might have a really great channel, actually. You just don't even know what it is. Email me, sunir@appbind.com, and I can help you work through what the opportunity is because it might be the cheapest and easiest way to grow in 2023. All these people who are already sitting there in your accounts, but you haven't talked to them about it.

Okay.

It's crazy people don't do this.

This is awesome. How can people, you know, fresh people access?

Talk to everyone who signed up who was a partner. How do you find them all? Well, this. Yeah. I mean, I have a Python script that does this, but yeah, pretty much.

And where do people access this? Is this— they have to email you and then we'll get them on the phone?

Yeah, email me.

Okay.

I want to make friends.

Yeah. All right. If anyone's looking for some friends, that's how it is. We're here to meet friends. Just hit up Sunir. He's a good guy.

That's right.

He's looking for—

so lonely, my face. Me and Gandhiji here, we're just hanging out.

That's funny. And my email.

Yeah, there we go.

All right. sales@appvine.com. Thank you, Sunir. Good catching up, man. Have a good one.

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