What Investors Want and How to Measure Success

Sandeep: Some [definitional 00:00:09] stuff. First of all is idea. Starts all with an idea. I know I have a solution. Most of the times you have a hammer, you’re looking for nail. Where do I hit it? You need to convert that to a product. Product means now you found the nails. Hammer you have, you found a bunch of nails, and God willing there are a bunch of nails out there. More people agree with you that the problem you’re solving is real for us and we’ll actually pay you money to solve that problem. You’re having notes by the way this is all going to be available to you so don’t worry about it.
Obviously, you’re a genius programmer or whatever, genius creator you’ll create your product all alone and you’ll take over the market. Unfortunately that’s not going to happen. Now you need to have a start up. Start up is a bunch of people equally passionate, hopefully more passionate than you saying, “Okay we’ll all come together, we’ll solve this problem for the world and we change the world forever.” Unfortunately starters run out of money and we’ve done a very, very deep scientific survey over the last twenty five years. Results are unanimous, 100% of companies is run out of money, guaranteed. You need to get out of the starter phase to keep alive. That’s when you become a company.
A company has a few characteristics to it, they are all up there. You can actually sell this for money and make a profit at it. You can support and grow your customer base. Selling to one, ten, twenty, fifty people is not good enough. You need all your customers telling other people buy my service. You need to be able articulate your value [prop 00:02:00] to people that people come to you to buy your service and hopefully your customers continue to consume more of yours. Whatever your product or service is your customers continue to consume more of it. That’s how you are going to grow a company and then all of these processes I don’t need to tell you probably you’ve all experienced this at some point in your life.
There are various aspects beyond the idea, beyond the product, beyond the people that come, the processes and customer service, sales, renewal, finance and accounting, all sorts of stuff comes here. This has to lead to the point where your sales are standing. As the machine wants to start, every dollar that comes in, something drops to the bottom line as profit otherwise you are not going to last too long. That’s the life if you want to go to being a true company. All of you are assuming most population here is founders’ hands up, founders all of you, most of you. First or second employee, rest of you. Assuming you are the first employee or the founders, it is exactly one job you have.
The founder job is the easiest. You are selling and selling always. At all points in time you are selling. Asleep you are selling, bathing you are selling, playing with your kids you are selling. Unfortunately that’s the job. If you are not that passionate then you are not a good founder. Few types of selling you have here. First of all if you are the only guy you need to find co-founders. Generally I’ll skip right to the end. To get funded one person team very rarely gets funding. What they want to see funders is a portfolio of talents. One guy is the geek part of the team, one guy is the selling part of the team, here is the HR people manager part of the team, whatever. The two, three, four skill sets are very important to have in a group.
Even if you as a human being, single human being are the Steve Jobs and have all those skills minus the people skills, you still can’t make it. There’s just not enough time in the day so you have to have co-founders. That’s the first selling. You have to be able to go tell another human being, “Sacrifice your wife, sacrifice your kids, come join me, live a life of austerity for a number of years and hope to God you are nearly great after that.” That’s a big sell job you are handing to somebody. Those are your co-founders. If you find them great otherwise the going gets difficult. Once you have co-founder, you got some product now you can hire employees.
That’s another selling you have to do. Selling at that point is a little different. Employees will get a salary maybe some benefits, some less stock options, less [inaudible 00:04:48] to co-founder but still there is sacrifice involved by hiring employees who will do that service. Obviously investors in all of these by the way investors are the easiest selling to make, right? Any idea why investor selling is the easiest to make?
Speaker 2: You lose your mom?
Sandeep: What’s that?
Speaker 2: You lose your mom?
Sandeep: No it’s not your mom. You will lose your mom and dad in the bargain. Friends you lose very easy, I’m very anti-friends and family round kind of guy because they become a pain to handle. More on that later but they become an absolute pain to handle. You’ll say, “No I’d rather give your money and cut you up than answer all your questions,” so don’t do that. Why are the investors the easiest bunch?
Speaker 3: You are selling them a dream not actual service.
Sandeep: Selling a dream, actual service okay. They are the only amongst these who are eager to give you the money. It is their job to give away the money. Co-founders, employees their job is not to take risk. Customer job, “I’m happy as it is don’t show me anything new I know you got genius idea keep it to yourself.” Investors are the easiest to sell because they are looking for the next lottery and you are the ticket.
Speaker 4: [Horse 00:06:05]
Sandeep: What’s that?
Speaker 4: Horse.
Sandeep: That’s right they are betting on the horses and you are all the horses in the race. As crude as it sounds that’s their due. Nonetheless you have to sell. We all want a [ten X 00:06:21] sort of greater return on you knowing very well that ten of their portfolio companies are going to fail. They need one big home run. Are you the home run or not? That’s the [inaudible 00:06:29] of you doing, “I’m the home run Mr. Investor.” Easiest sound nonetheless you have to make it.
Customers that’s not full stop. You are wanting something from them that they will never part with, that’s their money. You are selling to me annual customer, Till I see 10x value profit I will not give you a buck. You got the coolest product this and that, ten bucks a month, fifteen bucks a month, whatever, $10,000 up front. “Till I see a massive improvement in my life in some way whatever the improvement your product is bringing, I ain’t parting with my money.”
That is a big sell you have to make. Having said that, the money that they give you, the cheapest money you will ever find. By cheapest I mean everything is a cost. I’m a finance guy but if you just look at some pure and simple cost and benefit economics point of view everything comes with a cost. You are married to your lovely wife or a husband, comes with a cost or compromise. He or she leaves his toothbrush in bed not the bloody sink you put on the side that irritation as the cost of having them as your life partner.
Invest your money comes with a cost that take away part of the company. Co-founder will come with the cost they take away part of your company. Employees, they take away the money that you had dearly raised from the investors. Customer money revenue is the cheapest if you are selling your product. This is supposedly hopefully very free for you. Cost of goods sold and also stuff is very low even if you have a hundred product your profit margin should be high enough that you should love to have a customer who buys something from you for ten bucks will cost nearly a buck. The cheapest money on the planet is called revenue. Question so far, anything not clear? All right.
What are the essentials, attitude [in the listing 00:08:36]? What do I need in me that I should know that I’ll be successful? Again there is a whole laundry list of it. I put what I think is the most important and I’ll go in details. You found all those nails, customers that you want to hammer who will give you money for the hammer you need to be in touch with them in all points in time. I suggest, for example, to do that do not hire any sales guys, do not hire a [VP 00:09:06] of sales. For the first as long as you can push you as the founder should be talking to the customers because that will tell you what the pin points are.
I can tell you from personal experience I did selling for the first one year of my company and the product was massively changing with every call. Missed that part of it. Their pain is this. The sales guy show up our sales go down and the sales guy says the product sucks or the customer doesn’t. “That’s not right my feedback from the year back was different and you are telling me different.”
I go on the call as the founder, as the guy conceived of the product I hear completely different stuff the customers say. Why? I understand the product side, I knew this product, we made [inaudible 00:09:55] mutual firm managers. I know what he is meaning when he says something. The salesman just hears the pitch and says, “He says I have no time.” He has all the time it’s just that your pitch sucks so bad that he doesn’t have the time for you because you didn’t enunciate your value prop clearly enough. I suggest you be in touch with your customer, be the salesman, be the guy on the phone.
If you want to hire a guy to do the cold calling be my guest but when the pitch comes, when the demo comes it’s you who’s giving because the feedback you will hear is very different. The conversation you will have with the customer is very different than a salesman will have, right. Salesman’s focus is completely is he deal closing or not, am I making commission or not, no okay move on. I don’t want but what you are listening for is feedback. In the early days more that the revenue it is the feedback that’s valuable to you. To be in touch with the customers, that is super, super important is my view if you want to have success with them.
Work with a budget. Sounds as simple as it is. Know how much money you have, know how much you are going to spend on a monthly basis, have a preconceived idea, “Okay I’m going to make an experiment of five thousand dollars. If you hire this guy and he’s going to call fifty people and we’ll get five customers out of that.” Have a limited what I call sandbox of everything. We are going to have seven engineers, four engineers take them this long to make the project et cetera et cetera. The idea is to set guide post for yourself financially speaking and every month look at it versus the actual and say, “Did I go wrong? Have I exceeded my boundary anywhere.”
If you are screwing up you want to know early, right. That’s a low. Tons of means to screw up a company. Budget is the biggest helper of you in not screwing up but what we’ve seen is most founders entrepreneurs they are passionate about product, technology, selling. Nobody is passionate about spread sheets, nobody is passionate about reconciling a bank, nobody is passionate about wiring money to a vendor.
It’s just a chore and you will always put it to the last, give it second grade, third grade, and then [shout 00:12:21], “I’ll do it after I’m done with everything,” and you are blurry eyed you are doing something that you don’t really want to do. Budget [inaudible 00:12:31] how a monthly close, quarterly close, whatever you think is a periodic check with yourself. Honest objective check it yourself, “Am I on track?” That’s extremely important because as I said to my earlier [inaudible 00:12:47] research, a 100% companies is run out of money will die. You don’t want to be one of those.
Hire people smarter than yourself. Cliché, very easy to, say extremely difficult to do. If somebody is smarter than yourself why would they come work for you, right. Refer to slide number two you are always selling. They are smarter than yourself on something but what is that part that you are bringing that say, “Aha I want to work with you.” You have to be able to have, if you are the smartest person in the company I guarantee you if you are not Einstein your company will not do anything.
For that matter even if you are Einstein you will not do anything or if you are the smartest guy that means you are the fountain of all decision of the company. You will choke the company to death because you will not have enough time in the day to spread that wisdom even if you are Einstein. You need to be able to have people smarter than yourself. You say, “No John sales yours. Sally HR is yours. Talent acquisition is yours,” and then it’s out of your mind. Why? Sally is finding the other smart people, John is finding the right sales guys. You want to be able to delegate. That where you need people smarter than yourself.
Very, very big thing that most people are afraid to do not in the part of country where I come from, affectionately called Silicon Valley. Failure is one of those medals of honor. I have one to fifty millions of investor capital. What have you got to show for it? Nothing. Simon Company shut down. You know what? We’ll probably give you another ten million bucks for that. This guy must have learnt a lesson. I have two MBAs myself personally. One from UC Berkeley cost me $58,000. Done in two and a half years, evenings. My second MBA was my second start up. $30 million. That’s my $30 million MBA, took me five years to get nothing to show for it.
Bunch of IT, funny just yesterday my son who is turning out to be more hands on geek than I am he even recommended, “Dad I want to make a computer.” I said, “Okay.” Four days ago we bought a bunch of stuff on Amazon, we missed the Amazon prime sale but we got bunch of stuff. We have motherboard, this, this, that. I have a computer disassembled flat on the floor and he’s learning how to put it together.
At home we have no desktop but he’s making the super high powered desktop and he’s trying to get an idea of physically how and he said, “Dad the box at the corner of the garage what is that?” “Don’t touch it.” “What’s that?” I said, “That’s the $30 million machine. It’s all the source code from my company. The last software that I kept to myself and all the source code. A hundred and twenty eight man years of $30 million.” “Can I open it just to see how this is going to be?” I said, “Be careful. Don’t screw it up.” “I don’t even want the computer to switch on and off.”
All jokes aside, failure. Back to the failure part. Don’t be shy to admit your failure. A founder job, a CEO job, entrepreneur job is extremely lonely job. Not too many people you can get go look for advice, not too many people you can confide in but, “If I told my co-founder I’m having jitters on this I’ll look weak. If I tell my employees I’m not sure this is going to work they will leave.” Everywhere there is the other side and you will never talk. For you to be objective and knowing when you are failing super important for you to succeed.
It’s okay to admit. You’ve failed so my deal with this I will admit all failure to myself at 2am in the morning. Why? I get my best ideas [inaudible 00:17:03] I’m not joking I sleep with a pen and paper next to me and in the morning everyday in the morning there are scribbles on it which I have [inaudible 00:17:08] but somehow I filled it up. I solve my problems when I’m half asleep.
Why, I have admitted my failure at 2am but I’m going to get up at six. I have a solution for it or I have how to present it to other people. I screwed up yesterday but this is how I want to improve. Go to your investors, go to your co-founders, go to your employees, tell them, “Okay guys this is not working but this is what we are going to do.” Every failure it has to come with a success plan after that. Point of admitting failure is, “Okay this part is not working this is the [part I told 00:17:42] you we are going down, it’s not going anywhere, stop it, back up, different thoughts.” Nobody else is going to tell you that honestly. Right.
One of the value props we bring and we have about a hundred plus clients many of them young startups, I tell them the first thing in my first meeting. I say, “What you get from me is the hard truth. No, ‘Interesting, get back to me when you have more traction, let’s talk in six months.’” None of that bull shit. Come to me I tell you that stinks. [inaudible 00:18:16] subjective to that. Tell me the value actually and I don’t see this. It’s not going anywhere because you want to do it. What is the big word, you want to change and the only way you make proper progress is by meandering and finding what the right way is. Till you admit failure, till you say this part is not going anywhere you will never pivot away. Right.
Every child is the beautiful. No mom says, “My child is ugly,” but these are fortunately not human things. It’s the company you kill the idea and move on, “Yeah that child was ugly yeah need a new one.” Move on. Don’t get too emotional about it, don’t get too sentimental about it and you have to be controlled about it. I’m not joking you have to be ruthless about it. Right. In fact we got funding from a company called Charles River Ventures. At that time we got funding in 2005 [inaudible 00:19:14] from them. At that time they had been funding company for forty years now close to fifty years. I’m like, “You’ve been funding companies for forty years.” but this discussion I’m going to have I’m having with my investor on the board when the death of my company was certain.
We were trying to make a Bloomberg want to be, we were selling to Wall Street, 2008 happens, Lehman Brothers close up. Lehman Brothers was my first client. My first $10,000 says Lehman Brothers on it. I still have the image on my computer here very proudly taken high res sound megabyte picture of $10,000 from Lehman Brothers and that’s the end of my story. I’m like, “Okay you are going down the tubes and you have to find another way out of it.”
You tell me, Mr. Investor, you are a super smart good guy you’ve been investing in literary many hundreds of companies for forty years, what succeeds? What’s your analysis of success? He said, “It’s good you ask because recently we did an analysis of all our portfolios for forty years.” He said there was one common thing in all the success. All the successes. Any guesses? What is that one common thing that all the companies that succeeded for them? Yes, anybody?
Speaker 5: The team.
Sandeep: The team.
Speaker 6: A great wife.
Sandeep: A great wife telling them that they are wrong
Speaker 7: Flexibility.
Sandeep: Flexibility of [clothes 00:20:45]. All of them [inaudible 00:20:49] he says, all the companies that succeeded they did something else than what we funded them. We funded X finally they found success in Y. There are great stories coming out of Silicon Valley. For example you know the company slack use all the product, right. I don’t know if you guys know the story of this guy. I forget the guy’s name but he is the founder of Flicker. Same guy he founded flicker before. He started on making a video game.
His passion is video games. He makes video games and they are having to sell art work, they have made a lot of work than video games for they are to share the artwork amongst different artists. One of the geeks on the team makes this facility where all the artists can share screen. I made character X, here it is, you make character Y, you make the background, we merge them all together. This how the video game art is coming together. The video game never saw the light of the day but the photo sharing thing was Flicker. They started home making the video game and out came a photo sharing app which they sold for a few hundred million dollars Riyal.
The husband and wife came now they divorced. Then he said, “Okay, I’m back to my passion of making video games. I have enough money, I’m going to make another video game.” He starts making the second video game and they say, “You know this email traffic is killing us. You send me email, I get lost, I told you that last week you did send email and send me three times. Please attend to all these emails that I’ve sent you because I proceed there’s just too much.” One engineer made what is now Slack. He says, “We should have a common goal. We’ll all post our notes on it and you can read whenever you want it.
You have topic X, topic Y, topic Z. There goes the second video game down the tube, outcome slack. One of the [unicorns 00:22:49] now over a billion dollar plus valuation. The joke ongoing in that company is actually he sells slack what the next video game he’s going to make. Everybody knows it’s not a video game but I find some other game. Word it is people today, don’t be shy, it’s okay, that’s how you’re going to succeed. Question so far? None?
Anyway, essentials for success. All that is [attitudely 00:23:25] required at the floor of the company but how do you get the money? Very, very simple thing. Not much on the slide. The biggest thing that gets you the money, which I didn’t put up there, is your reputation. The one thing the investors’ investing in. You ask any investor, they say they invest in the team but everybody knows you’re going to pay whatever from the idea. The first idea most likely is not going to work so what they are investing is you: your flexibility, your willingness to move.
I talk to a countless investor, there’s a team ability to hire, are you smart enough to higher people smarter that yourself? Do you have a large enough network to attract good people to come work for you? All of that goes into the mix and those are the bigger factors. What do I put on my deck? What do I go tell? You need to have operation plan and of course a financial plan. What will nitty of gritty of this company’s growth. Okay we aren’t attacking multi-techs but I’m going to solve problem.
Why multi-techs? By the way then I can do Y plus one, Y plus two, Y plus three in the same market and then the same solution can apply to market A, B and C. That’s your operational business plan and each of these segments comes with this financial theme. Attacking a new market means $5 million or whatever, new geography, new mark, I don’t care. New sector, new geography, whatever it is. If you talk to Uber they’ll say, “Yeah is it $12.5 million per city attack,” that’s how they think. It takes us twelve and a half million bucks or whatever the number is, I’m just pulling it out of the high to go to a new city.
Why do need a $1 billion? We are going to go to twenty new cities in the next twelve months and it’s worth about $50 dollars per city. Right. Similarly you will have that in your financial plan just to show that you thought through. Nobody give a damn to anything beyond twelve months. Everybody knows life changes, then you will pivot but you need to show that you thought through it, you have some idea and if I come across this problem, basically you’ll solve all the known problems out there. Of course new ones will crop us and you’ll move away but show me the fact that you can think.
Anticipated less [inquiries 00:25:50] and also have the answers ready. The idea is, think through the problem like me. The [idealest 00:25:58] presentation is let the guy stops thinking [inaudible 00:26:01]. Why? Every time I have come to ask question or I’m going to come to a question you’ve already answered if you spice that. That’s the beauty of a picture. If you can do that, you’ve mastered the art. It takes a lot of iterations. I remember I made a pitch to the guy called [inaudible 00:26:23] big daddy of Silicon Valley VCC. When you get a meeting with Dag it’s difficult. Funnier we knew people through people. It was a team thing one of my co-founders was a known guy blah blah blah, we got a meeting with Dag.
He says give me a radical approach. I said three sentences, he said, “I’m third guy you’re pitching to right?” I said, “Yeah,” and I’m like, “How the hell did he know that he’s the third guy I’m pitching to?” Just the smoothness of my saying or the finesse on my words told him how many I’ve been reading that. You try that on yourself, make a pitch to your significant other, make a pitch to some friend, you will see yourself [smoothen 00:27:14] and become better with everyone. Write it down and shrink it, write down, shrink it, write down and shrink it. The lesser words you say, the better it is. It takes a lot of iterations to get there. As simple as it sound, anticipate queries and have them answered.
You need to talk to some investors. You never to talked to investors, you don’t know what the questions are. Therefore, you need some seasoned advisors or other friendly co-invest, mentors, advisers who have done business before. That’s the invaluable part of the advice and yeah, don’t say that. You only get screwed there but my biggest advice is, always take two people minimum to a meeting. Absolute minimum two people go to a meeting even if you’re meeting one guy.
Why? One guy is busy making the pitch, I’m focused on are my words, am I looking right, am I fidgeting, am I focusing on so many things. How to control my body, control my pitch, I forgot to see the guy but I’m seeing, I’m seeing through you because I’m so focused inside that I have no idea he was sitting here and I’m not even focused on the fact that you’re on your good old days Blackberry and now smart phone. If your guy has picked up a phone and started answering email, you’ve lost. So many times I see founders will not even see that they’ve lost the guy, is he looking at his watch, is the forty five minute meeting ending in forty five minutes?
Silicon valley they are all meeting forty five minutes. Every VCs calendar next forty five minutes are always blank. Every freaking assistant in the Valley knows not to book the next forty five minutes, why? “I really love this guy, let the meeting flow.” They will never kill the meeting because they have another one to go to but if they don’t like you the meeting, if a forty five minute meeting ends in forty five minutes, it’s bad news. That means you didn’t excite him enough for him to flow over into something else. These are the finer points that you need to know, understand and what I call the psychological factors behind the meeting.
Assuming you have funders, you have ongoing. I mixed the two slides of how to get and keep investors. Always give them honest update on the company. What are you doing? What did you do right? What did you do wrong? Et cetera. These things are very important, I’ll come to that in the next like but extremely important for you also to take a step back, smell the roses, look at your own charge thing, “You promised this in the last board meeting, did you make it or not?” Most of the times we are not honest to ourselves right? Let’s admit it, you try to forge all that thing about selective memory and pick the data one that suit my thesis, drop the others.
We do all this nonsense of keeping ourselves happy. Nobody wants to feel miserable but you have to be honest but they will see through it in a second. I have had investors, one of my board members said, “Don’t give me jobs give me spread sheets,” very weird guy. I would give a spread sheet full, like the whole PowerPoint thing, it would be full of numbers, all eighteen months, all glory of twenty five lines, he’d go, “That woman looks off,” you made one freaking mistake in the first ten seconds, you’ve pointed a finger at me.
These guys are smart. They handle entrepreneurs like you, thrice a day. They’ve done four board meetings in a week. They are pros. They have better background than you. Don’t try to forge it, don’t try to fool. Honesty best policy, to yourself and to your investors. Again, admitting failure part. Don’t be shy of that, admit your failure upfront. I always starting my board meeting, “Here’s the bad news.” Get it out of the way because you want to end the meeting on a positive note, everybody remembers the end of the meeting nobody remembers the beginning of the meeting.
“We screwed up here, here and here, this is what we [charactered 00:31:25] actions are and these … All the [charactive 00:31:27] action and pay or whatever.” Show them that you are self-aware enough, you will find your own mistakes, you will take the corrective action and put it into play. Questions? None. My favorite slide, took me the longest time to make.
Speaker 8: You didn’t show me the money. Does this show me the money slide?
Sandeep: Show me the money is right after this but the point is whether you want to keep investors or get investors. I need some chart like this. Everything is missing on this chart. There’s just one hockey stick you see and I’ll walk you through why is missing and what’s the purpose of this. I have no idea what the X axis is. Is this whole six month time frame or is it a six year time frame. I have no idea of the Y axis, what’s the magnitude, is this a longer scale or a linear scale I don’t know. What is the metric you’re showing? I have no idea. These are all relevant to your business what makes sense. Is it number of users, revenue, number of page views, number of adds up, whatever.
You pick the metrics that are useful for your business. Point of this chart is, you’re most likely all of you today in your company. All of this is complete figment of your imagination. I made this chart in exactly ten seconds. There’s nothing but previous number multiplied by two, what you demise, have the volume curve so mathematically behind me you can see this segment that are changing slowly, it’s not that smooth but that’s what I could do in the flight.
The point I’m making is, have this chart ready for the investors you’re sure to sell your dream but have these charts at least four of them. I ask at every fundraising point I say, “As soon as you’re done fundraising give me the deck of the next funding,” just raised your million dollar seed that going to last you thirteen months, from the month number eight you will go out to raise next round of five million dollars. On month number eight tell me four metrics for fundraiser chart to look like this. Print them out. Stick them to the wall in front of you preferably large charts, stick then on a common wall where all employees and other people in the company will see. Have the guts to every month draw up a red dot where reality is as reality is going.
Be brutally honest objective with yourself, let the chart speak, am I tracking to what I said I will track to or am I just smoking? This chart should tell you that. I’m a geek, software guy, life is easier as a software guy you can program everything anything instrument before the geek in you instruments the heck out of you old track every click, track every page, track whatever you can track than twenty, thirty I don’t care how many. They don’t take up space. This is free business. [inaudible 00:35:02] the damn thing. Why? I don’t know which one of those thirty will make me look like this.
Each one of those thirty is predictive of my future success but I want to be here and say, “We did very Lehman brothers but we screwed up in [Marilyn 00:35:20] agent.” Now I’ll go back in my data look at the thirty point for Lehman brothers, look at all the thirty points for Marilyn agency, “What was predictive of the failure at Marilyn agent and what was predictive of success at Lehman brothers?” We need more users and we need the user to come back every day.
Customer admits my users don’t login to the system everyday I’m doomed for failure why? Because it’s not habit for me, people forget our first two, three four like gym members. If you don’t go every day you forget it and the next renewal time will cancel. Have the data points so that you can study the pattern of whatever success of failure was and in software it’s all very easy I understand in hardware you can’t put all that many equations to a product but instrument the act of the software if you can.
This automatically tells a story. If you put the right X axis, Y axis then think and you convince the people that, “Hey if we have page views I’m guaranteed to have revenue. If I have users, I will monetize them.” That we one center day, two center day, online gaming, mobile gaming I don’t know but first let me get to ten, twenty, thirty forty million users and I mean the online gaming I’m sure have seen in any software has a service business these days. Every company is successful on a stand of hundreds of millions, you can never know.
Sixty million users? 3% or 4% of them pay and the company’s massively profited. Even if you get four million people to pay you ten bucks a month, that’s forty million bucks a month. It’s hard to lose money at that rate if you’re a software company. If you’ve done things right at forty million you should be very [inaudible 00:37:06] cost unless until you taken the money and dumped it down, “Okay now I’m going to make my software in a hundred other languages and I want to be not only text but I want to do video, voice,” whatever and you can complicate it further the way want and lose money the way you want but at forty million bucks a month, very difficult to lose money.
One of the simpler charts that’s this one, I call this the $13 million chart, I cut off the other one which is a $25 million9. This is a company I came into we’re out of money, we couldn’t make payroll, CEOs, we were twenty two people. Twenty people at that time. His investor called me. His investor was the investor in my company said, “The company is crumbling, they don’t know how many they have, every time, at payroll time the CEOs credit card comes up.” He was literally paying company salary on his own pocket. He started making charts and all that, the company was someday here in this month. This month had not happened yet.
This was a dead month. This is basically blue is current revenue, green is the upgrade figure, light green is basically small bar, dark green is the brand new revenue even the down grade in this, we have to control this, which was very good the company but we were not getting on the bargain. Soon as he started getting these banks, thirty million bucks came in about fourteen months after that, which was December last year we did another twenty five for this company. This was the sole chart that didn’t, there were a few others but this was the real chart for a software of the service company.
What we’re showing is close to zero and it seems to getting his dream bumps very successfully, month after month after month. That’s it, [inaudible 00:38:53] done. As I said few other things but the point of it is, the day he started keeping his chart, he just completely focused the sales force on, “Is that green there this month or not?” On the twenty fifth of every month I draw this chart and show to everybody. This is one is looking like [inaudible 00:39:17]. We have five days to go, are you going to get anything green on top or not? There were very mixed reactions because it I physically there in front of you as you look there’s a spread sheet.
It’s the data I download from your system, I didn’t cook this up. There is no arguing the objectivity of data. That is why I say you keep that, keep this stuck up there draw dots on it, real numbers. What can those numbers be? You can make all those charts on the financial side. As I said, I mostly work with software companies enterprise as types like this. I zoomed audiences like that if I’m wrong on the thing I can give it numbers. All the guides of business but the bottom line revenue in any SAS business, booking and billing is very important. As I said revenue is the cheapest source of money.
If you can bill everybody, [inaudible 00:40:15] if you can bill people in advance for one year, God bless you, you got your life made. If I can bill everybody for the full one year of service in advance I got a lot of cash coming but it’s very difficult to get to that point. You need to get to let’s say half a million a month which means if you are signing up thirty, forty, fifty thousand dollars MRA bills every month, that means you’re getting a half a million dollars, six hundred thousand dollar cash every month from your customers for free. I can bill on nothing, that’s the future of promise, promise of future services right? There is one year of subscription in advance, I will hope you will be alive in a year, and you will keep giving me service.
Speaker 9: [inaudible 00:40:59] slides?
Sandeep: They’ll come to you. You go to any auctions? What’s that?
Speaker 10: Geniusden.com.
Sandeep: Geniusden.com, all of this I think you’re putting videos for online right? Geniusden.com slides will be there? If you notice I am sure you guys use a lot of SAS services yourself other than dropbox or box or evernote or slar, Github, I don’t know but everybody owns a five bucks a month, ten bucks a month and if you pay in advance, LinkedIn twenty five bucks a month but you pay in advance two hundred twenty dollars a year and they’re giving you twenty, 30% off. Why are they giving you that much off for paying one year in advance, why? Any ideas why?
Speaker 11: Cash flow kills companies.
Sandeep: Cash flow kills companies. Revenue is the cheapest source of money. I’d rather collect revenue upfront then I don’t have to go to my dear investors and raise another five million bucks and if I have to collect five million it’s like this. Next time my revenue is half a million a month just for the record. I’m going to get six million from these guys assuming no [inaudible 00:42:10], no update, no new customer just simple math.
Half a million click, click. At the end of the year I will have collected six hundred thousand from these guys, six million sorry. Thirty five hundred grow, hire more engineers, I need salary to be paid today. If I have to give them $1 million [off 00:42:27] and collect all the five million today, I’d do it in a heartbeat.
No investors, no debt, no nothing just promise of future services. Services is largely done for free. Amazon.com, AWS, [inaudible 00:42:44] whatever [freak 00:42:45] your cloud, [inaudible 00:42:48] just paying not that much in actual cost of goods. Money is near [inaudible 00:42:55]. Anyway so what [inaudible 00:42:58] meaning how much of my expense is variable versus fixed? The less fixed expense you can keep, the better it is. If you can scale the company that’s better.
Try to go for the least fixed cost because the more fixed cost, as much as people think employees are variable cost, not true. Employees are fixed cost. Just think through an employee’s life cycle. You want to hire me as this hot engineer. It will take three months to find me. You’ll pay some headhunter what? 25, 30% of my salary to find me. I have taken six months to onboard, to figure out all your software. Am I variable cost? Are you will fire me month number seven or eight when things go bad?
You already have $150 thousand invested in me, you’re not going to fire me. Then in the ninth month or the tenth month the business picks up, you’re out on the road again trying to find me again? No way, all employees are fixed costs. Be careful on what fixed costs, the other thing which I can tell you from personal experience, bigger ships are difficult to steer. If you are the Titanic and the iceberg within three miles of you, they use a different word in Silicon Valley. Joe asked me not to use it here. You cannot steer the ship fast enough to avoid that.
If it was small ship you will turn. Ship being number of people. I raised thirty million bucks for my company, grew the company in less than two years to three hundred people, from 2006 to end of 2007. Then I got a cancellation from [legal dollars 00:44:59]. I had no idea why they cancelled. December 2007, my second renewal from Lehman Brothers. There are three users inside of [inaudible 00:45:07]. All of them vanished. Emails bounced and I very reluctantly went to the procurement guy, who I hate because he just squeeze me and squeeze me those guys are [inaudible 00:45:19] we don’t need your license, cancel it.
What happen? They go running a $1.5 billion hedge funding inside of Lehman proprietary money. Lehman decided to turn that fund down. Of course eight months later we find out what the hell is going on in Lehman, they were pulling all the money into [inaudible 00:45:36] security issue blah blah. They didn’t know that we were the Canadian [in a mine 00:45:40]. I know I was a Canadian but I didn’t know I was in a mine but I knew I was [dead 00:45:45].
I didn’t know that mines went to all the hedge funds, to all the mutual one [inaudible 00:45:52] wall street, boom! Eight months my customer base vanished, absolutely vanished. I am a big ship of three hundred people and sailing at a million dollars negative a month. I was the Titanic and I saw the iceberg eight months away, couldn’t do jack about it. The only good part that we’ve done, I’m obsessive about [data 00:46:23] instrument heck out of it. I knew every click of every user in our system. I could recreate your session instantly, when you came, what did you do blah, blah. The only thing you figure out we updated was the twenty five hundred companies I believe every quarter.
We were like a public company database, like a Yahoo finance but much specialized and more deeper. When you were the twenty five hundred companies, people look at sixty, seventy companies every quarter. The other database doesn’t even get looked at. Either I was tracking everything. I now know that of these three hundred people, I’d only need thirty percent of these people because only this database need to be kept up. From quarter to quarter only 10% of database changes and only adjacent companies come through. It is not like people access this then this then this, no, no people access this then this then this then this.
I knew how the user changes over quarter. I’m selling to tech crowd, all the people in mall retail companies, all the people in [world 00:47:23] energy companies, oil and gas [inaudible 00:47:24]. Very difficult organization, very hard to implement fighting three hundred people is not easy job. We are sixty six people in the last year of the company. Over the year and a half that company was going down, I fired only two hundred and forty people. People are fixed costs [inaudible 00:47:45], very difficult to get rid of them, it is very painful, it’s emotional.
All of these guys you made a promise to you feel moral binding to them that hey, I’m a salesman right, remember. I ask you to give your [pushy 00:48:00] job, come to me, promise of bigger options blah, blah, blah now I’m telling you, you don’t have a job. When I shut my company down the last day in May 2000, India operations shut down May, April 2010. Five co-founders they were and we made a pact the four of us. I said till we find a job for all the sixty six guys, each one of the last of them we will not move. Four months we find each one of them a job then we said okay, look for our job.
Very hard decision because we expect our blood and sweat finding each one of these guys. What I’m making is don’t make the mistake of taking people as variable costs, they are fixed costs. Be very careful on what’s [inaudible 00:48:44]. Keep as many costs as you can variable so that you can change them on the fly. Obviously cash flow [inaudible 00:48:54]. One of the deep analysis is something very simple work. Most people can’t do that, what’s your profitability per customer? That goes into knowing that number extremely well, can you break it down by customer. What is your average cost of delivering the service?
You’re delivering a video, sure. [inaudible 00:49:18] is making a tax return per person, sure. Do you know how much infrastructure gets used in making one tax return? Can you split that between numbers of customers. Have those things in mind because when the going gets tough which it inevitably will, know company’s success graph like this. Even if you look at the Facebooks of the world or Microsofts of the world, you [inaudible 00:49:42] company is dead, comes back.
Read closely any company story there are enough number of death points that became. At that point when you have to do this, you ought to know what to leave behind. If you have no idea where your costs are and all that, sorry to say that but you’re screwed. There is no take off after that. To all the stuff you need to know if you have charge for yourself, in the chance you’ll get it wrong the first time always, guaranteed. Then some crisis will prove to you that it [charges wrong 00:50:19]. Hey I taught course of this but now all the customers are gone but I still have this cost.
You should have gone to zero, obviously it is a fixed cost in the system. Oh we borrowed this AWS reserved instances $60000, 5000, now none of them can be used. We don’t got any [inaudible 00:50:37] in the face, very interesting [inaudible 00:50:40] but nonetheless, it hurts you. What I’m saying is make these charts even if they are wrong in the beginning, let yourself find out if you are wrong. If you don’t even make the charts … I want the most perfect chart otherwise I will not make, you’ll never have a chart. Guaranteed you’ll never have a chart.
There was a Spanish mathematician, [inaudible 00:51:04] he was Spanish or Portugal whatever. He said [inaudible 00:51:10] I’m a little [maths 00:51:12] not mad [inaudible 00:51:13]. All mathematicians of the world from Newton to all these other guys, they were all very spiritual guys. All mathematicians have written books on philosophy. When you read the philosophical books and the [inaudible 00:51:26] very beautiful. It’s been [inaudible 00:51:30] one thing which I still stuck in my mind. He goes, even if you figure out your model framework is wrong, stick with it till you find the right one because living without a model frame [that 00:51:45] is very difficult.
You don’t know in that framework less time you’re floundering and you’re bound to make a mistake. The point I’m trying to make is you charts are wrong, no problem stick with them. Let time tell you they are wrong but have a chart. Have a discipline of making a chart, have the discipline of following some numbers otherwise you will have no idea when you [inaudible 00:52:10]. Then you find out you’re wrong hopefully sooner rather than later, great. Same thing about this [inaudible 00:52:22] are you guys familiar with this letter mumbo jumbo letter soup, alphabet soup or explain. Number of users and customers that’s very clear, very simple right?
We want to show activity and engagement with, are they coming back? Are they active? Some services are very active, some they are weakly active. We found this very interesting pattern, most people come on Monday and there is no usage for seven days. Monday again there is usage, like oh, something is wrong. Turns out some geek in the company had put a one week cookie. If you logged into the servers once, it never ask you for a log and for seven days. The other geek who instrumented the goal for only tracking log ins. Two guys not talking to each other [inaudible 00:53:22] doing that, no idea. We thought we were screwed because people are not coming.
In five weeks we saw this, I’m looking at the CFO that I’m [sitting 00:11:31] there. This is a product meeting. I get very inclusive with my companies. I said your data is wrong. “No, our data is right.” This guy is a wizard. I said obviously this is such a massive pattern. It can’t be the, and our services what? The log in service. We are a secure logger, people log in everyday, what are you talking about? People don’t log in, and then this guy [Chan 00:53:55] I put a cookie which expires in seven days therefore people don’t touch our service for seven days.
Why did you put that thing? He wanted to save the pings to the database because it was killing his [servers 00:54:05]. [Dude 00:54:08] just to make your improvement better, you lost all the logging for six days? You have no idea what people do for six days? What a dumb idea is that? I’m saying if you put this charts help you find on reducing [interest 00:54:21] that one part of the company has done something the other does not. Just [analyze 00:54:25] the usage, if you have usage it’s like I’ll put this in [churn rate 00:54:32] Churn rate is very important.
How many people I’m I losing? It’s extremely important in any subscription based business because it takes a lot of money to get the guy in. It is the second this [inaudible 00:54:47] customer acquisition forms. To retract that is a big science. It’s not easy to find out what the customer acquisition costs, if you can talk of lying about it because that’s a lecture in itself. Since your [tech 00:55:01] is very high, buying largely a subscription business you will take six to eight months to recover your customer acquisition cost. If your subscription is ten bucks, your customer acquisition cost should be no more than $60 to $80.
If your subscription is $250 then you can spend $3000 or $2000 I don’t care. These are summit standard industry ratios we can talk about. The point I’m saying churn rate very closely because that is a big indicator of the stickiness of your service and the profitability of your service venture.I believe nothing but one [inaudible 00:55:35] like the time of a customer. How much time before my customer dies? Am I a user for four months, five months, forty months, fifty months? That’s how long I’ll live.
If my churn rate is 2% a month, which means of the hundred users, I lose two people every month. My average user is gone in fifty months. Linear math don’t get too complicated geometric on me. Linear math 2% losing every month, I would have lost my average guy in fifty months therefore if I’m a $5 a month service, average guy gives me $250 in his life before he vanishes. That [LTV relationship 00:56:17] is super important.
Speaker 12: What’s LTV?
Sandeep: LTV is life-time value. How much money will I have given you before I drop your service? That LTV doesn’t take hindsight to figure that out. If your churn is greater than your LTV, you’re dead. It takes you $10 to acquire a customer today. Remember [inaudible 00:56:39] always happen today because you rolled out your marketing money, sales money, commission money. You’ve given out $10 and a customer walks in, you welcome them and over the next twenty months he can give me $8 right?
It’s like selling a buck for $0.80 and say I’ll make double volume. You’ll never make volume. In fact volume will kill you. I don’t know if the same a story about this cookie lady in Chicago and New Jersey I forget, [inaudible 00:57:10] killed her. You’ve heard of the story guys? You know what happened to her? Anybody?
Speaker 13: Too many orders with discount.
Sandeep: Too many orders and discounts. She didn’t know break even. She sold a cookie, 50% off of whatever price. If it was $2 she sold it for $1. She didn’t know that a cookie costs $1.50 to make. She had no idea. Suddenly ten thousand people show up for cookies and she is giving them away for a buck and a total cost of [inaudible 00:57:43] about fifty. She sold a negative loss margin, shut down. She had to put a notice, ‘no more [inaudible 00:57:51]’ out of business. It’s very important to know your CAC, customer acquisition cost, the life-time value because if CAC is running out of LTV you’ll never make any money guarantee, just mathematically impossible.
This again goes back to churn rate. What are customer relations and net customer relations and net customer relations of what you’re looking for. This, this and this are kind of related. Net customer relations. That is where your sales and marketing dollars are going to acquire that new customer. MLR there is always [base 00:58:24]. If you go back, blue bars, [inaudible 00:58:29] going customer they are costing, acquisition costs. All the acquisition cost is going to acquire this, the new business. That’s what you need to keep your eye on. Obviously organic [environmnet 00:58:43] growths supremely important. Why? Anybody?
It’s free. It costs you zero. Your customer should be able to tell other people, “Hey, try this service.” Why will companies put out, if you refer us to another customer, we’ll give you a one month free. Very standardly. That one month is the cost of acquisition because they’ve given you a month free because you referred him et cetera et cetera. That’s the cheapest way to acquire customers. It’s a very, very high probability customer. If I go to the website, I don’t know how I’m going to do this but [inaudible 00:59:43], “You slack man, what your email [inaudible 00:59:26]? Sign up for slack thing.”
Word of mouth, organic they are super important. Obviously heart and soul of any business. You don’t want to lose your parent customers. That’s your free money. Don’t let go. Keep an eye on those blue bars. That’s your repeat business and if you can have an account manager focused on the existing customers, track the hell out of their usage, know if they are overusing your service. For example using my example of my company. This happens every day, I’m just giving an example because fortunately me I sold a product to a very large [mutual fund 01:00:08] and I leave them [unnamed 01:00:10] because they didn’t stop [inaudible 01:00:11].
We signed a contract that the [inaudible 01:00:14] only two seats. You have fifty people in the [inaudible 01:00:17], test your service. I say, okay test it up. We are selling financial data and if you know the mutual fund setup there are a bunch of guys who do tech, bunch of guys who do energy, retail, industrials, different people do different [sectors 01:00:33]. Two guys in tech [inaudible 01:00:36] and six months later I’m like, “Hey, they are looking at GE, they are looking at [Exxon 01:00:41], they are looking at McDonald. Tech guys don’t look at that.” Next thing I know their log is coming from ten different machines, distinct machines.
They cleared their sessions. You can read the fingerprint of the user. This guy goes out to cash flow, this guy seems to go out to balance sheet. What the hell is that? I just hand that list to the head of research. Then you go [inaudible 01:01:00] the uses [pending 01:01:01] from the last six months, I can send it up to a year when the renewal time. You quietly up the two ten users, right back and pay me then use from day one. I didn’t ask for it, I just sent him a [username 01:01:15]. Thank you very much John. Your customers have been great. He knew he was in violation of the contract.
I’m going out [inaudible 01:01:24] like if I tried that and I know where is that repeat business coming from, cheapest revenue. I have an account manager focus on current customers. If you license five seats in a company and only two guys use it, guess what? The renewal time will renew only two not the five. Have your account manager proactively call the other three guys. “Hey dude, what’s going on? Can we do something? What did you wrong? Why are you not using?” Supremely important to do that.
Next, this part, repeat customer goes back to what I said way in the beginning. Have a way to service your customers. That is customer service, account management, proactive calling out et cetera et cetera. If you are hi-tech enough, have email alerts. If a user doesn’t log in for six months or one month send mail, “Hey, not seen you in a long time. What’s going on? Can we help?” et cetera. Whatever your plan is to harness that customer and revenue base, do that. Questions? No? That’s it. That’s the end of my show and all will be available to you.
Thank you to Joe for inviting us over. What we doing with Joe and Geniusden as I said my page, we do books, we walk people through all of this stuff. We have an arrangement with Joe that we give our services on a heavily discounted basis to all the companies where everything is [done 01:02:55]. We are partners with, we are more than happy to make your company successful in the way we can. Talk to Joe after the show [inaudible 01:03:11].
Speaker 14: You talked a lot about memberships and [paying ever month 01:03:13] generating revenue and how that’s vital and important [inaudible 01:03:21] business and membership and they are very successful. Is there any statistics on being that sort of …?
Sandeep: Stickiness?
Speaker 14: [inaudible 01:03:33]
Speaker 15: Can you repeat the question?
Speaker 14: The question is, I talked of membership based services being successful because you’ve charged the money upfront or whatever. There’s the membership and people are paying or they come to you [inaudible 01:03:50] but he’s saying like Uber service, which has no membership. He added it so why it’s successful. There are a couple of things in that. Uber is more network marketplace issue. It is like the EBay of the world. Where there are drivers there are riders and where there are riders there are drivers. What Uber is doing is a membership less thing but if I’m a new driver, do I sign up?
I’m in Philadelphia, lift or sidecar doesn’t even have a presence in it, Philadelphia. Uber does so I will only download Uber app because they’ve spent so much marketing money and they’ve signed up drivers and they tell all riders, “Come hey you Philly people. Come drive with Uber because we are a hundred fifty drivers in your neighborhood.” Of course I download [inaudible 01:04:39] Philly one, two, three main street and I see ten drivers around me. That’s a marketplace issue it’s not a membership issue.
Those businesses by the way are extremely difficult to start because they take a lot of marketing money. Have you just met somebody before his meeting he’s trying to start a marketplace [inaudible 01:04:55], same thing. EBay doesn’t exist in Japan, why? Because Yahoo auctions a lot to Japan before Ebay. That has to do with the whole [inaudible 01:05:11] Japan and the Japanese guy put money and establish Yahoo in Japan. Why did I [inaudible 01:05:18] all the bars and sellers are selling and buying on Yahoo auctions in Japan? EBay [inaudible 01:05:24]. I can’t do this.
Same thing with Alibaba in China. They are the dominant marketplace. Uber, same with dominant marketplace. Uber is not a membership service, it’s a marketplace of drivers and riders and they have tons of marketing money, we know that and they just raised $1.2, $1.3 billion. They are in the history of mankind. They are the company which has raised the most money. They can do even across $10 billion. $10 billion is a private [number 01:05:58]. This used to be talked of the industrialist ten billion. Here is one company that’s raised $10 billion plus. Other questions? Yeah you.
Speaker 16: You mentioned about EBay trying to [inaudible 01:06:14].
Sandeep: The question was that I talked of Yahoo Japan conquering the auctions in Yahoo and EBay not doing there. If you are a startup and you want to start a marketplace company, how do you start to dominate your industry right? It’s a good question. I will tell you I don’t have a single good answer for it. It takes a lot of gumption, it takes a lot of product differentiation. Hope to God that you have some angle on some new company, new market meaning. Companies do things differently.
I’ll tell you one of my clients. He started a marketplace and [inaudible 01:07:08]. He started a marketplace of GeniusDen like people. I [put 01:07:13] that separate, it’s not a GeniusDen, it’s a virtual GeniusDen. It’s a marketplace of desks or rental space or that kind of stuff. While doing that, he realize he can’t dominate it, very difficult. He’s now become a marketplace of [inaudible 01:07:30]. That thing with different angle on your question on the pivot thing.
He makes marketplace software. You want to make marketplace of photographs, you want to make marketplace of candles, you want to make marketplace of cats and dogs? You can use his software [inaudible 01:07:44] for all your customers whatever call your suppliers whatever, call your goods whatever. Market place app in two days. Coming back to your question, it’s very difficult. There is no silver bullet, it is market by market.
Is your market geographically dominant? Is it vertical dominant like only the techies come here for a [inaudible 01:08:04] demo whatever. This marketplace is for only women forty plus. You look at Pinterest. It was a very heavily female dominated marketplace. Women were posting, women were looking. Of course they have expanded from that. The characteristics of the marketplace will determine what you are successful with. I don’t have an answer for, answer to that, I don’t have a silver bullet answer. You look lost.
All right thanks for coming and if we can help in any way, as I said we have a deal going on with Joe whatever else you guys need I’ll help [inaudible 01:08:46] We charge on various basis. We have various services. We do time and [material 01:08:51] by large. What we do is we offer full [inaudible 01:08:55]. I’ll give you my full page in short. All companies need good budgeting, good bookkeeping, good accountancy, good tutorials, good CFOs. All need that except you need very good of everybody at a different time. Fundraising CFO, every day bookkeeper, bookkeeper but you think planning, the graph look very different for different services.
As a company yourself, which services do you hire? Goes back to the employees at fixed costs. Do you have a CFO who will never touch books? Or do you hire a bookkeeper who will never even tell you the difference between a good pitch and a bad pitch? We have that full stacks for, let me give you name. For smaller companies we do on a project basis, on a retainer basis. We understand you don’t want to take any. We are not a fixed cost but even you don’t want to take a retainer we do project basis.
We can do pure time and material. I don’t want only quarterly books, come back to me ten hours of month or ten hours of quarterly. We don’t care how small or big you are. We are here to help any company, any size and we charge only for the time used and the time spent with only your books and your projects. Question?
Speaker 17: You guys are obviously Indian. You are going to be using offshore [inaudible 01:10:11]. One of my concerns would be are they going to get me? Are they going to get my industry? I have financial documents that have credit card numbers on them, tell me about how you safeguard my security and how you address our cultural concerns.
Sandeep: Good question. Safeguard security on the data front, I tell you that by and large the data never leaves your shores. We are fully virtual company. I talk of the social purpose of the company at some other time. We are more into involving people working in home, trying to make a full virtual company but everything is logged on in the US. We work on tools like Dropbox, tools like Box et cetera. We are our own [inaudible 01:10:54] books resides in the US so social security numbers, financial docs don’t leave the US. People log in from there. Cultural [inaudible 01:11:02] yes, that can be sometimes a problem for some people honestly.
We’ve been doing this for now a total of what, seven years. We have acquired in seven years doing all US market. A 100% of our business is US market [phase 01:11:13]. We don’t [act 01:11:15] service any pure Indian clients. We have clients all over the world, Russia to Ukraine to Switzerland, England, Poland, Hungary anywhere. India of course but all of these companies have some US angle. They are parent of subsidiary in the US and all that. [Contrary 01:11:36] we are quite adept to US financials, US tax laws, people are all CPAs or enrolled agents with the IRS. They are all very educated in the US.
Is our accent different? Sure. I have been here twenty six years. My accent is still funny. [inaudible 01:11:54] I said yes. Questions? All right. Thank you very much. If any private question, you know I am available.