Bootstrapping a Vertical CRM Product using Services: Cleverping CEO Haysam Ali (Part 3)

Sramana Mitra: Do you charge the brands?

Haysam Ali: No, they charge me. They invest resources and we invest resources on our side to make sure that we can accomplish the integration. At the end of the day, both sides generate revenue by using the CRM.

Sramana Mitra: How many of these mom-and-pops are out there that you are selling this to?

Haysam Ali: There are more than 30,000.

Sramana Mitra: That’s your TAM. How much do you charge?

Haysam Ali: It’s in-house. The plan is to release next year, but we don’t have a price tag for this yet.

Sramana Mitra: I see. Currently, your service is still a pure services business where you work for the brands and do their customer acquisition strategy.

Haysam Ali: We haven’t completed all the full integrations with the brands. The plan is to target the mom-and-pops and bring them in as affiliates by the last quarter.

Sramana Mitra: How many services customers do you have and what kind of average deal size do you get on an annual basis?

Haysam Ali: We sell to thousands of customers on a monthly basis. If you’re summing up everything that we’re delivering to them, we are talking about millions of dollars, but we only keep a share of it.

Sramana Mitra: I’m asking about your revenue.

Haysam Ali: $10 million.

Sramana Mitra: $10 million from providing services to large brands.

Haysam Ali: That is correct.

Sramana Mitra: At what point in the evolution of building your services business did you start building this product?

Haysam Ali: Right in the first year when I saw the opportunity with the activation rates.

Sramana Mitra: It’s been almost five years that you’ve been working on this product.

Haysam Ali: We first had to work with Frontier for about a year or two. The CRM is ready, but we didn’t have the other brands to integrate. Every integration takes a while.

Sramana Mitra: You have to build this relationship in a service provider mode with the brands. Then you do the integrations in six to eight months each. Then you have a product to be able to go out to the market with. What is the critical mass of integrations that you need to be able to start selling the CRM product?

Haysam Ali: Ten integrations that include all the major brands. We’ll be there before the end of the year.

Sramana Mitra: I understand what your business. Is there anything else you want to share?

Haysam Ali: Have you heard about Commission Junction?

Sramana Mitra: Yes.

Haysam Ali: It’s pretty much what we are doing but only focusing on telecom. Commission Junction has a CRM that integrates with multiple types of services. They offer an affiliate program to all the mom-and-pop stores. It’s similar.

Sramana Mitra: You’re doing an affiliate marketing platform. It’s not exactly a CRM.

Haysam Ali: It’s still a CRM because we have other features that go along with it that is beyond placing orders. When it comes to our revenue, it’s important to note that we started the business about five years ago. We got to $10 million in the second year. We’re spending a lot of time planning before executing everything.

The goal within the next three years is to get a valuation of a billion dollars with the technology and services sides. We have recently opened offices in Rio and Sao Paulo. We also have an office in New York. We pioneered a call center in Rio.

We have recently signed an agreement with a digital bank in Brazil which is 40% owned by JP Morgan. We are going to expand our vertical to the financial industry. We signed with them about a week ago.

Sramana Mitra: Are you bootstrapped?

Haysam Ali: We have financing from two partners. We have partners – one American and one Brazilian.

Sramana Mitra: I don’t understand. Who are the financing partners? Are these venture capitalists?

Haysam Ali: These are small boutique banks.

Sramana Mitra: It’s debt financing?

Haysam Ali: Right.

Sramana Mitra: Thank you for your time.

This segment is part 3 in the series : Bootstrapping a Vertical CRM Product using Services: Cleverping CEO Haysam Ali
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