Winning Against Heavily-Funded Competitors: Al Lalani, CEO of Social Annex (Part 5)

Sramana Mitra: You managed to get to $5 million in what time frame?

Al Lalani: We’re past that stage now, but it took us about two to three years.

Sramana Mitra: Who else in the competitive landscape was really giving you a hard time in deals in particular?

Al Lalani: We were getting hit by the individual vertical competitors. In the loyalty space, there were three of them. In the referrals space, there were two or three that we normally compete against. The market is still frothy but it’s starting to taper off. I believe in the next 12 to 18 months, most of these will really taper off because they haven’t been able to sustain what they raised. Our value proposition was the platform perspective. That’s the thing we’ve built that’s going to take us over time.

This one piece can be commoditized very easily. When you have five companies, the first thing that happens is that there is a drop in price. The person realizes that there is competition and they can play the game of price. If you look at all these different products, they tend to merge over time. If you’re trying to compete in this one piece, it’s very difficult to keep the price advantage. You don’t have a solution. You’re selling a product and who wants to pay more than $20,000 to $30,000 for a product annually? When you have a solution, you can get six-figure deals. You don’t have to fight on price. Your renewals are stickier.

That has been our forte. We feel that what we’ve built is really strong foundation, which is going to play for us in years to come. It did take longer because we had to build a lot of products but the foundation we built is unmatched.

Sramana Mitra: You want to continue building this with the capital you’ve got and growing organically? You don’t want to raise money?

Al Lalani: At this point, we’re not looking to raise money because of multiple reasons. We’ve grown close to 100% without raising any capital. While it’s slow, it’s not really slow. The second part of it is in the next 12 months or so, there’s still some frothiness. We don’t want to get pushed in a different direction.

Sramana Mitra: What is the attitude of your investors?

Al Lalani: We have extremely supportive investors. I can’t say more from that perspective. When I raised money, it was just me and a few dollars in recurring revenue. They’ve seen us grow from there. All those investors who started off with us are 20x to 30x of their valuations. It’s a good outcome for them.

Sramana Mitra: What’s the size of the team?

Al Lalani: It’s about 110 people between three offices – Los Angeles, London, and India.

Sramana Mitra: What is the distribution?

Al Lalani: India is about half. US is about 40 and London is about 5.

Sramana Mitra: Where in India?

Al Lalani: In Pune.

Sramana Mitra: Great. Thank you for your time. Good luck.

This segment is part 5 in the series : Winning Against Heavily-Funded Competitors: Al Lalani, CEO of Social Annex
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