Bootstrapping a Generative AI Venture Using Services: Abhinav Girdhar, Founder CEO of Appy Pie (Part 3)

Sramana Mitra: Out of the 10,000 registrations, how many converted into paying customers?

Abhinav Girdhar: Mostly these were small customers, so people were coming in on a freemium model. I would say the conversion rate from freemium to paid was pretty low – 1 or 2 out of hundred users.

Sramana Mitra: 1-2% conversion rate. That’s normal in freemium. If you can get to 4% conversion in freemium, you’re doing great.

Abhinav Girdhar: Eventually, it improved to 4-5% as well when we changed the model later on. It started at 1-2%, but we were pretty happy as this was not my core business at that particular juncture. We didn’t have to create a new office. The team was already existing. I just migrated a few of my services.

Sramana Mitra: It’s Bootstrapping with Services kind of story where you bootstrap the product within the company.

Abhinav Girdhar: Exactly. So, no outside capital was needed to scale it up. The secret sauce of this entire project was the search engine optimization skill set that we had. So we optimized the website for large keywords. We started getting a lot of users and a lot of positive press, and the product took off.

Sramana Mitra: So, this was all happening in 2016?

Abhinav Girdhar: In just two years from 2016 t0 2018, the product took off pretty nicely.

Sramana Mitra: The the go-to market was primarily through search engine optimization, is that how people found out about you?

Abhinav Girdhar: That is correct.

Sramana Mitra: How did you position this company? Did you highlight the fact that you were providing human services at $7 per month?

Abhinav Girdhar: The core competence of the company was to have an app on the app store. Even right now or even at that time, to create a basic app would cost you not less than $10,000. If you wanted to get it created, you’d be hiring a few developers for Android OS and for IOS, and you’d be doing native level. Then you’d need a CMS to manage it. So even a basic app was $10,000 and then you were getting the same done for $84 a year. So that was basically our product differentiation.

Sramana Mitra: All these other companies that you mentioned that were also DIY app builders, were they all in that $10,000 ballpark or were they competing with you at price point level as well?

Abhinav Girdhar: Those companies were also competing in the same model.

Sramana Mitra: They were all in the Wix business like you. So a bunch of little companies like yourselves who were in the Wix kind of business model, correct?

Abhinav Girdhar: We’re competing with services companies that are charging $10,000-$50,000 for an app. So that’s what we were competing against that time.

Sramana Mitra: So the the established market is at the $10,000 per app price point, you are doing $7 a month, and there’s a bunch of little companies competing in that space. That’s the lay of the land in 2016-2018 time frame.

Abhinav Girdhar: That’s correct.

Sramana Mitra: So how long did it take you to do to get to a million dollars annual recurring revenue?

Abhinav Girdhar: It took us about four years. In 2020, we crossed the $100,000 MRR mark.

Sramana Mitra: At this point, are you still inside your services company or have you spun out?

Abhinav Girdhar: I was still because you know that is where the majority of the revenue was coming in. We saw that there is potential in it, so in mid-September 2020, I decided to move a 100% to the product company. I decided to take the plunge and move from services to the product company.

This segment is part 3 in the series : Bootstrapping a Generative AI Venture Using Services: Abhinav Girdhar, Founder CEO of Appy Pie
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