Pricing as a feature: Monetizing commodity SaaS products – with Neeraj Singh, CEO @ Neeto

Welcome to the Reasonable Product Podcast! I’m your host, Salva, and today we’re diving into the intricate world of monetizing commodity digital products. I’m thrilled to have Neeraj Singh, the CEO of Neeto and Bigbinary, joining us to discuss this complex and somehow misunderstood topic.

In our discussion, Neeraj and I explored the challenges and strategies behind pricing in the highly competitive digital product space. Neeraj shared fascinating insights from his journey with Neeto, a company that builds a suite of essential software tools for small to medium-sized businesses.

No mystery: scheduling and form solutions are nothing new, actually they’re a commodity. Neeraj has made his whole pricing strategy around leveraging this competitive space by designing tools to offer just the right features at a price point that’s remarkably lower than the market giants.

We also delved into the reasons why customers are switching from established leaders to Neeto, not just for cost savings, but because Neeto often makes complex features more accessible and easier to understand. Neeraj emphasized that their commitment to providing exceptional customer support and continuous product improvement is central to their success.

Throughout our conversation, we touched on the broader industry trends and the philosophy behind Neeto’s approach to pricing. We discussed how Neeraj plans to keep their products affordable without sacrificing quality, and why he believes in charging only when customers derive real value from their services.

This episode is packed with valuable insights for anyone interested in product pricing, particularly in the digital and SaaS industries. Tune in to hear more about Neeraj’s innovative strategies and how Neeto is navigating the competitive landscape of commodity digital products.

You can find the whole Neeto Suit at https://www.neeto.com/

If you’d like to keep in touch with Neeraj, here you go:

• Linkedin https://www.linkedin.com/in/neerajsingh0101/
• X/Twitter https://twitter.com/neerajsingh0101

Transcript:

Hello and welcome to the reasonable product Podcast
I am your host Salva
As always, in the next hour or so we will be digging into the most interesting aspects of Product Pricing and Monetization.
Today it will be all about the fascinating topic of how to monetize commodity products and whether
or not you can really compete on pricing in the SaaS and digital products industry.
And to discuss his experience pricing commodity digital products I have with Me Neeraj, who is CEO at Neeto and Bigbinary. Welcome Niraj.

Neeraj Singh (00:19.918)
Thank you. Thank you for having me.

Salva (00:22.113)
Niraj, I probably tried to condense too much of what you do. I know you do a lot of stuff in your life, so why don’t we take a little bit longer to go through your activities?

Neeraj Singh (00:30.414)
Sure, so I have been running BigBondRoof, which is a consulting company. We build web and mobile applications for the last 13 years. And for the last two and a half, three years, we have been building Nito, which is under the umbrella of Nito. We are building a number of software products, and which is what we will be talking about shortly.

Salva (00:50.945)
Totally. And when I met Niros the first time, I said I totally have to speak with him and we have to be in this podcast for different reasons. There are many things I like about what you’re doing. You’re running two businesses at a time and they’re completely different. You’re managing, I don’t know how many products together and you’ve got a very special attitude and approach when it comes to pricing. So there are three great reasons I wanted to talk with you today.

Neeraj Singh (01:15.662)
Yeah, definitely looking forward to it, yeah.

Salva (01:17.985)
So probably in a nutshell, the part about software agency is relatively straightforward, I guess, what you do there. But what about Nito? What is Nito?

Neeraj Singh (01:27.118)
So Nito is basically a collection of software. So the reason why we started with Nito is because when we are running our consultancy, we need a certain number of softwares. And the builds for those softwares, those SaaS products, start spawning slowly. In the beginning, OK, just a few people are trying out, a few things are there, and then you need one more thing, and you need to move up the higher plan, and then the higher plan.

And it’s not only that we experienced that, we saw that with our clients also, because we have been working with our clients for 13 years. We saw that, OK, they are trying this. And then we saw the logistical also nightmare in the sense that some of them you are connected with the Google account, some of them they are using their passwords. And when the people leave, then you have to change the password and then people forget. They haven’t. In some cases, people have been paying for years.

The bill and the bill was not much 250 dollars until one day somebody caught it or the credit card expired and they got the notice that, hey, you need to pay. And he said, why were we paying all those things? So that led us to to to build a need of products where from the very beginning, we were very clear that we what I mean, if you look at individual sectors, like let’s say you’re trying to build a ticketing unit, have a problem of ticketing, there are tons of ticketing solutions.

scheduling currently and other products are there, form other software are there, communication, project management but small to medium -sized companies they need all of these and they need to inter -operate with each other while at the same time being reasonable and especially targeting a small and medium -sized businesses which means that they don’t need a lot of other enterprises software.

The other reason why I have a theory that the software becomes complicated. Everybody says the software gets complicated. True, it gets complicated, but doesn’t have to be. Here is the reason why the software gets complicated. Let’s say that you start with something like form building. So you started, it’s your startup. Initially five people are working. It takes off, you make a lot of money. But when the product is successful after second year, third year, fourth year, after fifth year, what do you do?

Neeraj Singh (03:45.934)
You need to take it to the next level. That is the expectation because you are raking in a lot of money. And who has the money? The enterprise clients. So what happens is that your engineers are not going to sit idle. They will you keep adding more features. But then there is a point inflection point beyond which if you go and you take certain number of features from the enterprise, you know, it’s not a reflection of your.

engineering teams capability or product management capability. It’s just that it will make it harder for the new people to come in. Now you are more on the enterprise side. Nothing wrong with that because if you want to go IPO or a big exit, well these are the people who have money. But then what happens is that there is a gap. Gap in the sense that you have left this market open for SMB, small and medium sized places. You can come in and do that. And that’s what we are doing.

Salva (04:36.289)
Hmm.

Neeraj Singh (04:40.91)
And I’m not here to say that tomorrow we will not we will not follow that playbook. Maybe because if you are successful, that is the thing. But what we have from the very beginning, we have a mechanism set to prevent us from doing it. And here is why. See, if you are a type form, look at type form. Type form is a very successful form company. But the name itself says it all. Type form except form, you cannot do anything else because.

And that’s true. Typeform also does quiz. Not many people know that because if you need a quiz software, you will go to a quiz software. You are not going to go to type from because type form has branded itself into form building company. And that’s why they created another company. But type form cannot go from the very beginning. Our structure is that the Nito will build multiple products. So at any point of time, a product reaches certain maturity size.

Or we think that, OK, we are not so sure if this feature, two clients are asking, should we build it? But what do we do? In the meantime, the engineers are there working on the project, right? What do they do? We have the mechanism that we will go and take up a new product. So this is the reason why we are saying that the number of features on a particular product type, we, Nito, will not have too many enterprise features.

Rather than going vertically and adding more features, we will rather add more products which will simplify your life.

Salva (06:12.321)
So actually two things, I’m here to share things. One is there is kind of a gap in the market. There is a need which is not covered yet from SMBs because everybody’s looking at the big guys. Everybody’s looking at enterprise. So nobody really wants to do SMB. We’re going to do SMBs. And secondly, we’re going to channel our energies rather than in making a lot of features in one product because at a certain point we’ll have to, we’ve got engineers, we have to keep them busy. We rather keep them busy on doing something else because we’re…

keeping this door open from the beginning, is it so?

Neeraj Singh (06:44.046)
Yeah, true. And it’s not that the other companies are not doing it, but the other what happens typically is that once the success of a product means that you keep moving down that path and you end up adding the features because the reality is that the enterprise companies have money. They have a lot of money. If you get a one big deal that will cover for your last five, six years of work. So this uncertain this that’s so lucrative that you end up doing enterprise things and then you have.

tasted enterprisey world. I remember the time when the Dropbox had taken out a New York Times, a big ad against Microsoft. That was when Dropbox was a startup. Two years ago, Dropbox joined hands with Microsoft and they have announced the partnership in New York Times. So see, that is exactly what happens. That after a while, you see that enterprise companies have money.

Salva (07:38.817)
And to be clear, people listening, so when you’re not talking about software which are like rocket science or anything extraordinarily new, I really loved when we first spoke and I said, but isn’t this very similar to what, I don’t know, like Calendly does? And you told me, yes, that’s exactly what you’re doing, right?

Neeraj Singh (07:57.646)
Exactly. That’s what we’re doing. The issue is not with the calendar or with the type form. It’s just that each company needs both form and the schedule. Most of the companies need it. Now, the free plan of type form allows 25 forms in a month or something like that. So you will very quickly, you will have to go to the next plan. And other thing that I see with the SaaS pricing, which is which I.

really don’t like is that they will have one a few features which are in a higher plan and you would need just you don’t need to go to the plan for all the things just one thing and that’s the thing for which you so before you realize it your your bill for both type form has gone high and your bill for the Calendly has gone high so that’s what we are trying to and but you need certain number of features because you are a small to medium -sized companies so what we are trying that Nito form will have

some of those easier features of typeform and easier features of NitoCal, so that you can have both NitoCal, both Calendly substitute as well as typeform substitute.

Salva (09:07.777)
And I guess the fact of being very clear and being focused on the kind of market you want to serve makes your life easier from this perspective. You know what are the features that really matter for your customers. You don’t need to make all the bells and whistles that Calendly does for enterprise.

Neeraj Singh (09:24.366)
True. And not only that helps us build the product better, but to build the company better, which is building the product, meaning that it helps us get into the right mindset. For example, not only that we are going to be having less features, we are also going to be very price competitive. And I consider that’s an advantage for me in terms of running the company that we are not going to be charging a lot more. So if that is the ceiling and that is the our North Pole.

guiding us then that means that while doing the engineering, sales, marketing, customer support, whatever we cannot incur too much cost. So how do you try to do all these things while having less resources and you will see that we have one product UX person for 15 products while other companies might have a lot more.

And how did that come about? Because we just cannot afford to have more UX engineers working on the thing. So how do we go about it? Well, we go about it like there’s only one UX person who can do all the work on Figma. So we utilize that person’s skill for doing the thing where actually a Figma is actually needed. Other times, it’s OK. Maybe just go to production with

I mean, you have intuitive sense of it. And one more thing, there’s an advantage. And that’s the only advantage that a person who is jumping into the Red Ocean, meaning that there are already multiple products in the market, is that we can see all of them and we can see, OK, this is the feature that seems like our customers are asking or we want to build it. This company has built it like this, this, this, this, this. Have a call, discuss it. And OK, just without Figma, you can go for it. In some cases,

After implementing it, we have to go back to and revise it again. But that happens with Figma also. It’s not like all the things that you build with Figma you never have to do. So given that other companies have implemented it, how much wrong can we get? That’s the only advantage that the followers have because they can see the thing. Incumbent.

Neeraj Singh (11:35.342)
or the trailblazers have all the advantages. But we have the advantage that we don’t need to spend too much. And what I see is that the other startups or the products, they are not necessarily trailblazers, but they act like they are trailblazers and they’re trying to be both innovative at the same time, not necessarily being innovative. And in the process, I think that there are a number of people who are working in the company that becomes very big and that becomes very unsustainable.

Salva (12:03.521)
So when you speak with entrepreneurs or product people in general and you say, hey, this doesn’t look to be like a blue ocean, looks like a red ocean, they’re, my God, a red ocean. What you’re saying here is that, yes, it is a red ocean and your specialty is to become a very good swimmer in this ocean. Is it so?

Neeraj Singh (12:20.91)
Not only I will say that’s a good ocean, I proudly say that the our products, Nito products are commodity. In fact, one of the things that the very first product we went to product hunt with was Nito Cal. And we wrote that we are commodity because people are asking that how are you different from currently? And I said that the not much different currently has the market power. They obviously have they have more features. And what we have is that.

probably the features that you need and we are very price competitive. What I see is that, which is what I think the main reason of existence of Nito today is to bring the pricing power change. We believe that the commodity products are charging as if they are luxury items and they were luxury at some time, not today. If you look at the form software, VR31st form.

In fact, a firm company to come in the market. In fact, in our blog, we have the list of all the other firm companies and the link directly takes to their pricing page. You can go and you can check it out on that. And the question is that why is that in spite of having so many players in the market, the price is not budging as much as it is partially. I think it’s also because of the startup mantra that, OK, charge more, charge more. Otherwise you will go bankrupt. There is some truth to it, but also.

the capitalism, the way it’s supposed to be working, that enough people are competing in the market, the price should go down. And I feel like we can talk about it. Multiple factors could be leading up to it, but one of them could be that VC funded companies, they come and they don’t want to be on the price competitive market. They want so once again, they are thinking that they will be.

They are trailblazer, but they are actually not. And then you will see out of these companies, there is a high chance two years, three years from now, some of those companies, half of those companies might not be in existence.

Salva (14:22.433)
Is it to some extent that all the Kelenly and the like and the similar, let’s say all those that belong to the 30, I guess, right first positions, at least, with except from the 31st, they’re pretty much innovative, but eventually they’re doing a little bit of the same. They’re very close to one to each other. You’re trying to get some distance in being the 31st, something like this. You try to be the first one with really different in pricing.

Neeraj Singh (14:46.286)
Yes, so the first one is obviously they took the risk because before Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to Kailan and Kudos to

Salva (15:12.993)
Yeah.

Neeraj Singh (15:14.862)
But at the same time, as we discussed, it’s not possible for a big company with a 3 billion valuation to serve all the needs of all the people. They will leave enough small holes which other companies can fill in. Now the question is that the other companies who come in, what is their strategy? I feel like the people who currently is a market established player, they have a lot of features. If you can afford them, then

did work great. But what if they are not able to afford? In that case, currently, I will say. And that is the starting position. We hope that in the due course of time, we are able to build in a few features. So for example, I’ll give you one feature which only NetoCal has it and nobody else has it. That is called split payment.

So what happened is that we are working with a therapist agency, a therapy agency based out of UK, and it’s a two -sided marketplace. They have 100 -plus therapists on this side, and they have a bunch of customers, patients on this side, right? So I was talking to the founder, and it was beginning of the month, and I said, okay, what is the, can you tell me, like in the last month, two biggest problems that you faced?

And I can ask those generic questions, not just the scheduling software, because we are Nito. We can’t build any problem that you are having. Right. So I do want to know what what problems you are having specifically with Nito Cal or Nito form. But I also ask, what’s your general problem? it’s the beginning of the month. I need to settle the book for the last full month. Which therapist made how much because they are being paid based on the how many sessions they did.

and 80 % or 70 % of the revenue they bring goes to them. And I said, my god, first of all, it takes two days for you and your team members to do all the work. And then when you make the payment to them, you incur the fee one more time, right? Because it’s a payment transfer. Exactly. So you receive the customer. The platform receives the money from the customer. And then the platform at the end of the month. And I said, hm.

Salva (17:13.537)
you have to repaint it.

Neeraj Singh (17:23.15)
We had heard of something like a split payment, like you can split the payment in Stripe, but I never paid much attention. So we started digging into that and we built it. And today they are using a split payment and it gives you ability to spread the payment based on percentage. This feature is not available in any of the scheduling software. So what I’m saying is that the D just because we are starting without and it’s not like they cannot add the feature. Anybody can add it, but they have bigger fish to fry, right?

They follow a certain path and we went in this path not because we are genius. We just happened to find the client who needs this feature and others have not built it. And that’s what I feel like when the companies become big, etc. Even if you are small, you will leave enough holes for a small or medium sized companies to survive. And I’m not from the very beginning, I’m positioning Nito not as a mega billion dollar unicorn company enough.

a decent small size company which can build the software and have enough customers to have a decent life.

Salva (18:27.841)
And I find this very smart to say, we do have a strategy. And another strategy might not be the strategy that the others find sexy. Definitely not. But that’s your strategy. And everything is very consistent around it. That’s what I really like in your pitch. When you look at the pricing about your competitors, I mean, it doesn’t matter which particular software we’re talking about. I guess we’re talking in like in the 10 to 20 bucks per month starting roughly, right? Every piece of software right now is

Neeraj Singh (18:55.594)
Yep.

Salva (18:57.281)
like that. What you also said at the beginning is that they start to add up at the end of the month because you pay 10 for Calendly, 10 for forms and so on. And so the bill is pretty much higher. I was always wondering, I do have my theory, but where does this like 10 bucks kind of figure comes from in your opinion?

Neeraj Singh (19:18.126)
I think that the partially the payment processing companies have shaped this thing. When I first, like almost 10 years ago when I was reading a blog or something, they said that every single time you buy banana at one of the retail shops in the USA and you pay using credit card, the company loses money. And that was…

Why would they lose money? Because the charge in many cases is not just the percentage plus fixed amount, 10 cents, 20 cents, 30 cents. So that what, so for example, online, if you’re making payment on a stripe is 2 .9 % in USA plus 30 cents. Now, this 30 cents makes it very difficult to put the price of $2 or $1. If you’re taking only 2 .9 or 3 % well, you can take 3 cents out of.

100 cents that I’m earning, but now you’re taking 30 cents. So now it’s 33 cents, which makes it very difficult to have the pricing on the lower side. So if you do the math and also the operational cost, people churn, customer support, so overall industry has rightly come to the conclusion that, well, somewhere around $10 plus, it’s good. But that was when that when you are starting up because you need to start and make money.

And I feel like as you get more customers, your price should actually go down. And for that reason, I really love this strategy by AWS at the beginning when they came out, when AWS initially came out for the next five, six years, almost every six months they kept reducing the price. Partially also because the hardware cost actually goes down with the passage of time, but partially also because, well, one of the things, and AWS is a combination of hardware plus software.

With the software, all your cost, pretty much all your cost is upfront cost. After that, the marginal cost of a particular item is a lot less. So you do want to get the customers more and more as you get more customer, you can afford to go price down. But I feel like a certain style of working, partially Silicon Valley style of doing things. They keep saying that, well, now we have got the customers, customers are not going anywhere. Searching cost is high, charge more. And…

Neeraj Singh (21:39.566)
And yeah, so far that has worked out so far this is worked out partially because for the last 13 years We also had were living in the zero interest rate era where the money was cheap But I feel like in the long run it might not might not work out

Salva (21:55.681)
Right, so I hear a lot of cost plus kind of reasoning where you say, you know, we’ve got this hard minimum amount of money we have to pay to the payment processes anyway, so we’ve got 30 cents to cover, so our price has to be such that we still make a margin on that. Or in the case of hardware, we get higher prices because hardware was very high, and then we reduce the price of hardware to reduce the price. But isn’t this one very much a…

company center way of looking into this. What do you think that the customers think? I mean, if you look at the market from the eyes of the customers, they don’t really care about the 30 cents to the payment process, right? They care about their business eventually. What is your experience there? How people feel about paying 10 bucks to your competitors?

Neeraj Singh (22:42.734)
Bingo. The last word that you said, how do you feel about it? That is what is I keep in mind thinking about how do we structure the pricing of Nito and other things, because at any point on any given month, I get the bill. OK, so I look at the bill. There are each of the bills that I pay for the software I put into three categories. One is that, my God, it’s like, OK, I don’t have a choice. Maybe. And then I think about it. Ten seconds. I said, OK, next month, maybe you look into.

migrating or doing something. Second one, that’s okay. That’s great. I mean, okay, you don’t think too much. And third one, it’s like instantly not even it’s okay. I am paying this one. It’s worth the money. You want to be in the third category. If every single time the customer is actually is having this feeling kind of this, like, my God, I’m paying it. If that’s the kind of your pricing is, then you are anytime there is economic recession, like there is a slowdown.

People will try to save money and then they will churn out. Also, even if the economy is good, they are because internally you feel like like this. You are not wholeheartedly. If somebody asks for a software, you will not recommend it because you yourself, you don’t feel good about it. You don’t have a commitment. If somebody point blank asks you which software you’re using, you will say this. But you might add the ASTRAE. but.

Yeah, we are looking into switching many times you see on Reddit. Like, OK, I’m using this, but I’m looking for a turn.

Salva (24:14.561)
Is it a resort to say, I understand this product by product, say, I do like this invoice and it happens to the same to me. I’ve got a fee invoice, I really like paying. I’ve got a feel that there is a lot of value there. And I think there is one of the things that people get wrong. It’s when people speak about value -based pricing, people believe that this means bringing price to the sky.

But in reality, there are many companies start giving a lot of value and that’s also in this direction. Say you got so much value, then the price is not a concern anymore because people understand they’re getting a lot of value from you. Still, if you look at this from the eyes of the customers, isn’t there a sort of subscription fatigue or people say, another one, you know, somebody else asking me, even if 10 bucks is not a lot.

Neeraj Singh (25:05.07)
Yeah, true. I mean, subscription fatigue is real. I mean, my favorite example for that is when Netflix lost like 240 ,000 customers in one quarter. If you think that the $10 do not matter, then why did 240 ,000 people cancel their subscription? Right. Yeah, so subscription fatigue is definitely there. But more than subscription fatigue, other things also is that this feeling that…

Many companies, what happens is that my best style of charging is usage based charging. That’s why I love AWS pricing. I mean, a lot of people and it doesn’t mean that they are perfect, but usage based, how much you use it. So there are few companies where, let’s say that I subscribe for something and the whole month I didn’t use it. Let’s not have a single comment, nothing was posted because maybe, OK, companies busy, many things you subscribe for and you don’t use it.

would be really nice if the company says that well last month you hadn’t and that will be very pleasurable experience and a few companies have done that kind of thing so that’s the thing that i like it where you over the period of time you build the trust with the company saying that okay they are charging me when i’m getting value out of it in this case i didn’t get any value out of it and then what happened well you still charge me some the counter argument could be that well you signed up you can cancel it

Sure, it’s your business. You can run the way you want it. But I feel like the business which is taking care of you and is charging based on the value there in the long run, they’re more likely to stick around.

Salva (26:39.681)
And that’s exactly the opposite of the other example you made before. I’ve got an invoice, I completely forget it, and I’m being charged for this one until my credit card expires. That’s the end of the story.

Neeraj Singh (26:47.502)
Correct. True. Exactly. Yep. And then there are companies who are very like very much on that side where they will charge you. And let’s say that you have misconfigured something and you suddenly you build instead of one hundred dollars is three hundred four hundred dollars and they will not. Well, you made the mistake. True. But.

There are certain things which are this is the reason why you will see that at Walmart and other places now that the things have become a bit more difficult for them They have a person who sits and looks at your bill if the person starts counting every single item being hundred percent precise there will long queue Then I will stop going to Walmart Target and other stores So there is something called in the business the cost of just doing the business one percent two percent. What is the?

what is the right number that’s for you to decide and how much you want to provide the value.

Salva (27:41.921)
And talking about the right numbers, I understand the overall strategy of Nito is we play in a competitive market and we are okay with this and we serve a particular niche, let’s say, within this market who is price sensitive, product by product or in general, and we give a very competitive price to this one. So how do you define this price? And what is your current pricing, by the way?

Neeraj Singh (28:05.358)
So current pricing is right now is that I feel like the first of all, in order to make the name for ourself, I believe that the pricing needs to be something which is shockingly good. Everything actually needs to be shockingly because that’s the only way the 31st company will will be able to rise above the noise. A lot of companies are building the software and building software is every passing day is getting easier in many ways.

So now what’s the problem? The problem is that the rising above the noise. How would you become remarkable? And so I thought that the and there is no scientific formula to it. I just felt like if you’re charging two, three dollars and just a bit too like too less, maybe. I don’t know. And 10, anything you reach 10, everybody starts at 10. And if other companies are charging 15 from 15 to 10, will I switch?

Maybe not because they’re established player for a reason things just work. They have better documentation. They have filled out. They have gone through all the bugs and all the success. So that’s why right now our pricing is around five dollars for every product, every person. And but with the caveat that the caveat in the sense if you don’t use it, then and it’s not yet 100 percent implemented yet, but we will be working around, we’ll be working towards it.

that you will not be charged if the whole company or the person let’s say that there’s a project management software the person is just reading and has not posted any message in the whole month is the person getting the value out of it definitely but the fact that the person hasn’t posted any message will it be nice if we don’t charge it i think that will definitely be nice so we will be working towards that

Salva (29:51.713)
Is this kind of like we understand you didn’t use it, and we could charge you like everybody does because you still signed up, but we’d rather have been you shocking good experience by telling you we’re not going to charge you for the past month, and instead of you eventually churning at a certain point, it just becomes like the drop too much.

Neeraj Singh (30:10.574)
Correct. Exactly. That’s another thing is that very good point is that when do you share? What happens is that the customers, let’s say that for a month or two months, it’s $10. I didn’t use it. I didn’t use it. And then one day what will happen? You will just hit the cancel button. Right. What if customer didn’t use it? You already have the software out there. The fact that customer didn’t use it, it means that your resources were also not spent. You didn’t have to pay for the bandwidth. You didn’t have to pay for the computing costs that much in the database.

So it will be nice just to because in this way, if you’re not charging, then what’s happening? Customers are not canceled. And then three months, six months later, they might come back and say, now they will start using it because they are already familiar with the product. Right. It’s just that they right now they don’t have the need. Or you can ask the question. OK, we notice that you stop using it. Is there any particular reason and things like that? And you might be able to bring them. But I do like this idea of not charging existing customers even when you can charge them.

And just surprise them, just say that, hey, but I do believe that you need to explicitly tell them to win the goodwill. Otherwise, in this busy life, if you don’t charge, people will think that, I’m still paying for it. And.

Salva (31:20.161)
Gotcha, yeah. So part of the value, the way you receive this is part of the value. So part of what you do for me as an user is that on my behalf, you suspend, let’s say, my account, you suspend my billing. You don’t need me to take an action. And that’s part of the things you do for me. So that’s additional value, right?

Neeraj Singh (31:34.542)
Did you?

Neeraj Singh (31:38.478)
Correct, exactly. Just by default, do the right thing. And you would be able to do that. And you would think of doing that if you come from this belief that we should charge the customer if the customer gets the value out of it, if they’re not getting the value out of it. And that’s why we are first trying to build something which is of value. If there’s something of value, there’s plenty of way to charge. I mean, you will not have any problem in making money.

If people are coming and hanging out over there, they’re getting the value out of it. You can display ads and you can start making money. You can put up a paywall and you can start making money. There’s so many ways you can make money. But the important thing is bringing the value.

Salva (32:20.545)
So you’re seeing two interesting here in the rush. So one is, yes, you’ve got shockingly low price when it comes to the price tag. And you said something like around like it has to be below a psychological threshold of 10 US dollars or equivalently, it has to be kind of an order of magnitude below what the others do. It doesn’t have to be 10 % cheaper. It has to be a lot cheaper. That’s one of the things.

But you’re also saying that you changed somehow the value units. So you still keep the subscriptions. People love subscriptions. But in reality, it is a usage -based subscription. Because if the usage is zero, the subscription goes down to zero. Is it something like this?

Neeraj Singh (33:03.502)
It’s exactly like that. Exactly. If you’re not getting the value, you’re not using the product, then why should you be paying for it? Yeah. So like that.

Salva (33:13.441)
And I was interested to know how do you think about this? Because when you say shocking good price, talking here about the price tag and shocking good is the good version of what could be said in a less positive way, bad quality perception. If you price too low, it might have a perception of bad quality of even of predatory pricing, like artificially lowering the prices to put the others out of business. Now, I don’t think that you’re going to put out of business, not your intent to put Calendly out of business.

I don’t think it’s predatory pricing in this sense, but it might be perceived like, you know, these guys are coming, they are breaking the market. But eventually they have to raise the price like everybody. How would you answer to this one?

Neeraj Singh (33:56.174)
There is no good answer to the question. The thing is that these days, in order for actually to believe in what the people are doing, you can follow the people and their thinking, because usually what happens is that the people don’t change their views too often. Once you have taken the VC money and things like that, you’ve gone down that path. It’s very hard to extract out of it because unless you buy out the VCs, right. But the problem is that the not just the buying out the VCs, the problem is that you’ve gone down the path. So you’re thinking also changes along with that.

So the only way I can counter that argument is that you have to listen to this kind of fast cut and year after year if the person is saying that still there is no guarantee as such and I rightly so there should not be any guarantees because you can change the business. But overall I feel like is that you just I don’t think that there is anything else but you have to take the leap of faith on the person that this company is not going to do that. And sometimes those faiths are

They are broken by the companies. But as a consumer, I don’t think there is any I mean, what can you do? There is not much choice. I mean, that’s just the reality.

Salva (35:03.457)
I think there is a part of faith. There’s also a part of positioning. I understand you’re very straightforward about the fact you want to serve small and medium enterprises, for example. And there is a business there. So you’re not doing this for charity. And you are viable. Because if you are not viable, there would be a problem of curve. But if you are viable, you’re there to stay anyway.

Neeraj Singh (35:22.442)
That’s yeah, that’s that’s true. Yeah.

Salva (35:28.609)
So one of the things we are not saying is that, of course, you’re making shockingly lower prices on your subscription, but you’re also giving a lot of value for free in your products and reality. So the subscription comes much further in the process.

Neeraj Singh (35:42.094)
Yeah, and that’s why I say kudos to all the people, 30 people who came before me. And I don’t know how they are running the business, because when I look at their pricing, I am very surprised that they are in business, they are alive and they are doing well because their price difference from the market later is not much. And if you’re not much, then how are you gaining the customers? How are you rising above the noise? Kudos to them. I think that would be for me. It’s a very difficult thing.

I am very clearly saying that I want price sensitive customers, at least in the beginning. Why? Because you’re price sensitive, because, well, for whatever reason, you’re price sensitive. Nothing wrong in that. And but what happens is that no software, you can build it in isolation. People come, people have all kinds of requirements. They will test out the software in multiple ways and you’ll find the bugs, etc. And you fix it.

So what happens is the first couple of years, all these people who are price sensitive people, they can fix it. The other thing what I noticed is that because we are not charging people right now is that the amount of goodwill, the goodwill in the sense that even if sometimes the software does break while we’re developing it, it builds. People are nice. Why? You will be nice because you’re not paying. I would be nice to somebody who will. But if I’m paying, even if it’s a 10 bucks, I will say, dude, I’m paying you and still I’m not getting the right thing. Right.

So that is, am I using them as a QA and things kind of thing? I will say yes, because we do all the QA possible and still there are things people have Chrome extensions, people have tons of different platforms. Somebody is using iPads, somebody is using Tivoli, older version of Android, older version of IE, bunch of things. We cannot take, you cannot test an account for all those cases only when people do it. You find out the bugs, you fix it.

and the product over the period of time gets better. The other thing which I want to mention is that at least my strategy is that let’s see if maybe in two years from now we can talk again and we can see if the strategy works out is that if your price is above certain like very close to the threshold minimum or something like that, that makes it very difficult for competitors to come in. The reason is that the

Neeraj Singh (38:00.91)
is that how would you come and now do you really want to build another Nito type of company and compete it on the price? Well, you need to be there is not much left there. So that also like it’s a hedge against that. And yeah, in that case, it’s better that you compete on the higher scale of the market. And that’s fine. You can compete on the full spectrum. We are just saying that we are competing on the lower spectrum.

The other thing that I see is that we usually the lowest charging company, they will have less features and they might have less number of people on the customer support and this and that and all those things. But once you overcome that friction and you are able to align yourself and you work with the company, then you have already paid the price of learning the software, meaning that you know the software. And then so let’s think about it like somebody becomes start using NetoCal.

Why would you leave it to go anywhere? Either either you need an enterprise features that we don’t have it. In fact, that’s the only thing I could think of. It’s not like our customer support is a key or anything like that. Whatever the feature you’re using, they’re building it. So the churn or the other reason we’ll turn is that you no longer need this software. Well, in that case, you are just getting out of that that market itself. So what I really like is that the with our line of thinking is that.

getting customers will be hard because we are charging less, which means that we have less money to do the market, to do marketing and sales, etc. But if the customer comes and if they need it, probably they are going to stick around for a very, very long time. So it’s a different strategy where the growth will be really slow because customers are getting less. Why they are less? Because, well, we are not spending a lot of money on marketing and sales. We cannot afford to. And yeah.

Salva (39:46.401)
Thanks.

Salva (39:54.669)
So what I understand makes a lot of sense to me is saying there are a few things you can really get rid of, which is the market as a customer. If I’m there, I don’t care about your marketing because I’m there anyway. So I know about it. Probably the others don’t, but I do. And I also hear that there are a few non -negotiables, like support. If there is no support, you can have the best software in the world, but that’s at table stakes. So…

Neeraj Singh (40:08.174)
Exactly. Yeah.

Salva (40:19.489)
Where do you put the cursor in between the two? When you have to cut, of course you cut marketing. Of course you don’t cut support. And where do you put the cursor? How do you define those things which are really non -negotiables, whether you are on Calendly, on your top tier competitors, or you need to, you always have to get.

Neeraj Singh (40:37.39)
Yeah, so customer support is absolutely the must because without that you are already started using it. There’s nothing like it. We are thrilled about it and we want the customer support to be excellent. And this is the reason why all customer support today that is provided by the actual engineering team, because we are still in a phase where we want to know why you have this problem. Not just that problem can be solved this way. We want to have more.

context so that we can design the better product. So for at least for a couple of years, it will continue to be engineering team, not just a customer support person. It seems annoying in the middle of the work, the engineers want to do the engineering work, but that’s extremely important. So not only that I’m putting premium on the customer support, I’m putting a lot of premium to customer support because what is my thinking is that it’s very hard to get a customer for us because we have

less money to spend on marketing and sales. But the customer has come now we need to do our utmost to satisfy this customer. So we are on customer support. We are very very bullish and we are doing a good job on that. If you talk about the sales and marketing, because of our structure and the low pricing sales is not in the picture. But marketing if we talk about it, it’s not that we are not going to do the marketing. We will honestly talk about whatever we are doing.

We have a few campaigns here, they’re not necessarily the paid campaigns on Google, etc. We are trying out a few strategy, but we are very price conscious. We are seeing where every dollar, where it is going and where how the money is coming. If you look at the companies like Asana, Freshworks and other companies who have been in the business for a very long time and they are publicly traded companies. If you look at it, 70 to 80 percent of their expense is on sales and marketing.

maturity level has reached. In our case for a long time it will be the other way around 70 to 80 percent I want it to be on the engineering side and only 20 percent marketing. Because of that lower spend on the marketing our growth will be slow but I’m okay with it but VC funded companies will not be okay with it because they need to show their return on investment in seven to ten years right.

Salva (42:46.305)
So it goes back to this consistent strategy. I know I don’t want to get VCs beyond me because I don’t want to get pressure on this one. I’m okay growing slower, but I can live without marketing, without intense marketing, and I will spend this money basically on R &D and support in the meanwhile.

Neeraj Singh (43:04.91)
Yeah, true. But it’s not like they hate VCs or anything like that. But the problem is that I feel like they will not support my low pricing strategy, which is what to me is gives me this energy to wake up in the morning and do the work, because I feel like fundamentally the commodity products should not be charging luxury prices.

Salva (43:26.657)
We were speaking before a little bit about these features you give for free, which is like your model is still a free -me model, right? So it’s aggressive pricing on the paid part, but you still have got a large part of the features who are for free. What is your assumption? I understand you’re at the beginning of this, of moving people to the paid plans, but still, what is your assumption and what is the kind of number of the kind of KPI I’ve got in mind in terms of upsells? How many people has to be on a paid plan?

as opposed to people who live on the free ones, they’re going to be living on your shoulders and on the shoulders of the paid users.

Neeraj Singh (44:03.79)
Right now, I’m not at a point where I have to think about that or worry about it. I mean, still the product development is our main thing. And we are trying to talk to the customers like, OK, every customer that we talk to, very few of them are fresh users. They are switching from someone. OK, why are you switching from? OK, is that the cost is the reason?

And surprisingly, what you’ll find, I found is I’m extremely surprised by that. And this is a recent thing in the last two months I’m finding out, because until two months ago, I was not asking questions to the people, to our customers. Now I’m asking questions that what is one thing you find frustrating with Nito X? So if you sign up today, 72 hours after you sign up, you’ll get an email and people are replying and I’m having a conversation with the people. I thought that.

almost 90 % of the people will be switching because of the pricing but that’s not the case and this is totally new thing to me. They are thinking that this feature that I want I’m asking for it’s not there and the surprising thing is that the I thought that all of these features that they are asking for they are on the fringe. It’s not. So I don’t know why they are not building it or they have built it in a way which is not easy for them to implement and in many cases they are

adding asking for the feature I know that they come come come competitor where they’re coming for they have this feature but they are saying here that this feature they don’t have it and they have been their customer for many cases months and years so either they are not giving them a forum to ask the question but one thing is very clear that talking to these people it’s a strengthened my belief more on the customer support and talking to people meaning that the people

People want to be heard and if you take care of the people, I think they like it. Yeah. So one thing I really find surprising that not the number is not that high on the pricing side. Pricing is definitely nice to have. But I also found this application to be people saying things are simpler or easier or in many cases. Yeah. But I can understand it. I can give the example of a couple of products because we have been using these products.

Neeraj Singh (46:23.15)
We built earlier Nito desk, Nito form, Nito chat. So in all these three categories, there are market leaders. So that’s what we looked up to. And we saw that because we don’t have any customers, we have to kind of make the guess that what is the minimum viable thing that we would need. Right. And based on that, we built it. And now that we go back to because sometimes we need the competitive analysis and somebody asked for this thing and we say, OK, how should we do it? And I say, OK.

Let’s see how competitors are doing it, because that is the one advantage that we have for being the 31st player in the market. Let’s look at how the market leader is doing it. And we have seen, I have seen, because I run the product team, I migrated from the engineering to product now, is that 18 months later, when I go to those market leaders, I can see for myself that the experience has deteriorated unmistakably in all three of them.

which has further resolved my view that in 18 months, if I can see the marked difference in the onboarding and the usage of the features by the people who want small features. So now as we are adding these features called, say, like a split payment on other things, and as customers are asking, I’m much more mindful of writing the help document and being deliberate about.

Salva (47:45.473)
Hmm.

Neeraj Singh (47:47.406)
not complicating things. It’s not like those people are idiots. They are all smart people. It’s just that how, where do you want to position? And it’s quite possible that things that are easy today because we have less features. Tomorrow we might become that, right? Possible. How do you guard it against? I don’t have a clear solution, but I’m mindful of it. I’m now very much mindful because I am in my own eyes, I’m seeing those products becoming harder to use for SMB.

Salva (48:15.969)
But did I understand correctly? At a certain point, you said there are people churning from… We get basically people churning from other products, from the market leaders, part of them because of price, which is something you can expect, but the majority because of, let’s say, features or not being happy with the leader product. And some of them because they’re lacking a feature that actually the competitor does have, but it’s so complex that they don’t understand that the feature is there. So they come to us because we do a better job.

not in having more feature but in explaining that the feature is there. It’s just… Did I understand this right?

Neeraj Singh (48:49.518)
you understood that right you use the word majority not majority of the customers but still a large number of customers are coming here because they are not able to make things work or the when they ask the question they have so many features that they find it it’s very confusing that is true.

Salva (49:05.057)
So does that mean at a certain point you do have to kill features? And I guess for your competitors, and I don’t know how your competitors do, I know in the industry, nobody does a good job about killing features because everybody is very protective about their babies. So I don’t know the exact case for your competitors, but did you really have the case where you had to kill a feature yourself to keep the simplicity?

Neeraj Singh (49:26.926)
So far because we are in the early stages, so we haven’t had to kill the feature But I feel like those companies they don’t need to kill the feature The reason is that if you look at those features like initially there is one option or two option then it’s easier to Navigate your customer. Okay, choose it tomorrow You have eight options if you look at these other six options they’ve been added they have been added because of a big client So the client for which you added those features those clients are using it

So you will not kill the future. Now the question is that how can you balance it where you have a small people can and some people have played a good role. For example, I will say a stripe, a stripe. If you are starting a startup, the one person company you’ll use a stripe and Uber and Lyft, they also use a stripe. Kudos to Stripe for balancing it such a way. Google Workspace is another example of it. Like, OK, we use Google Workspace. And if you are tomorrow.

5 ,000 company, 10 ,000 company, you might be running on the Google workspace. But it’s extremely difficult, very, very difficult. And you need to be very conscious about how to manage both.

Salva (50:31.457)
So either you go the difficult way, which is you do focus, you do cover two target groups, but it’s very difficult, or you take the easy way somehow and say, you know what, I just take one of those groups and I just cover them. So.

Neeraj Singh (50:46.094)
But what I will say is that the major one of the product does become complicated. But as you go bigger, like Google Workspace and Stripe example is that their pricing, most of the startup companies, their pricing also changes, which becomes cost prohibitive for the startup. Because now they are raking in more money, they move the features from this column to this column. Now you need to sign up for it. So yeah.

Salva (51:01.235)
Hmm. Totally.

Salva (51:10.145)
And I was wondering, we were talking about the features, what is the process for you of coming up with new features for one given product? Or I guess the way you’re managing your products, your products are features actually of a bigger product somehow, right? Say you might say we’ve got a new area, a new adjunct, a new module, I don’t know how you call them.

Neeraj Singh (51:30.638)
No, so right now, initially we made a few mistakes where we started building things for others. But now we build things only for ourselves because we are a consulting company. So we and we are also the company which is building the Nito. So we which means that we have to do product management. We have to do the chatting. We have to do the recording. So let’s take the example of something like Nito record. We were using Loom and Loom has a limitation of five five minutes.

I got account for myself, pro account for myself, a few more people who are more in a technical leadership position because they have to give a lot more feedback to the junior people. But we love Loom so much that I wanted to give it to everybody in the company, because sometimes people will post two, three videos of five, five, five minutes each. And then people switch to other tools because they hit the monthly limitation of 25. So that was the limitation. I said, OK, let’s guys, let’s figure it out. How hard can it be?

And that is why we built Neato Record. And Neato Record is now a Luma alternative. It is very, very competitive. And our pricing is very competitive. So now we build only the products that we will use it. So that has simplified our life a lot. If it is good for us, there are a bunch of hundreds of people, and if not thousands of people, who have similar Neato. We are now a special snowflake.

We are like we are nothing special. We just run an average company in an average way. So let’s just build it for ourselves. Once we are very happy with it, then we will have. So that’s why if you go to need to product right now, we are live with seven products. But the other 50 products which are listed, every single one of them, we are using it internally. Every single one of them. The only it’s not like they are to do and we’ll take it up on the next year. No, no, no. That anything which for which the development has not happened, they are not listed there.

Salva (53:15.745)
Okay.

Neeraj Singh (53:26.318)
Everything that is there. So right now, maybe 12, 13 products, which are what we call it private production. Like we are privately, internally we are using it. And some people do ask for it, that hey, can I have access to that? And so we give a warning saying that, OK, well, it has some rough edges, but you can try it out. And some people do try it out.

Salva (53:45.953)
how many products in total right now you said like six seven are public and and 12 and

Neeraj Singh (53:49.774)
Yeah, so around 18, 19 products we are working on here.

Salva (53:53.345)
What is your schedule? So they give you yourself a schedule saying that we have to get out one new product for, I don’t know, a month or whatever it comes.

Neeraj Singh (53:58.158)
No, no, no, no, no, no, no, no, no,

And the reason for that is I, after running a big money for 13 years, what we saw, let’s say that a particular feature will be built by five, let’s say four engineers in five months. So the total time spent is 20 months, right? If I, instead of, so total, the cost is 20 months, right? If instead of four engineers, I put two engineers.

On paper, it should take 10 months, right? Because 10 months multiplied by two. But it will not take 10 months. It will take nine to eight months. Because when the more number of engineers are there, more people are working. There is a communication overhead. And things get lost and there is a dependency. So we have taken this approach. Jeff Bezos famously had two pizza team. We have not two pizza team. We have just two people team. That’s it. And not team. That’s two people in one product. That’s the average. That’s it.

Salva (55:13.921)
Okay.

Salva (55:18.561)
And that’s part of this, again, overall and consistent strategy, which is frugality, frugality in marketing, but also frugality in your product teams. And I know that, especially a few years ago, and I was very critical about this, but of course the trend and the kind of the average was getting bigger teams, more product managers, more developers. What you’re seeing is to a certain extent, you’re trying to get lower on this curve.

Neeraj Singh (55:24.49)
That’s all.

Salva (55:46.145)
where the efficiency is much higher because you’ve got less overhead, rather than going on the right part of the curve where you’ve got more output but the efficiency is much lower.

Neeraj Singh (55:56.366)
I mean, I think that what I’m doing is makes total sense. I mean, let’s play it out. Let’s see if you are 31st player in the market. What’s the rush? You said, God, I mean, let’s move fast so that we are not 31st, but 30th or 29th. No, the question or it doesn’t really matter whether 29th or 39th. It doesn’t really matter. What matters is that when you come to the market, will you be able to rise above the noise?

So this is the reason why the speed does not matter. Speed matters when you are building a new charting a new trend. When Calendly came, of course, if I accidentally come across a category where I invented a category, of course I will take the VC money. Maybe I’ll spin that company as a separate company. So in spite of all this thing that I’m complaining about the VC thing, I will take the money because in that case you need to have more boots on the ground and cover as much as possible.

If you are building Uber, obviously others will copy your strategy because you have chartered a new territory over there. When you are when you are the 31st player in the market, what is your strategy? Your strategy has to be more important is to rise above the noise. And for that, what the strategy that we have taken is that our pricing needs to be shockingly good so that the people who use it, they will tell their friend, dude, why are you looking around? Just use Neato.

So internally, we use that the get the company, what is the branding of the company you want so that people can say, just use Neto. You’ll be happy. And you’ll thank me later. So that’s where we want to.

Salva (57:34.048)
And I was trying to take notes and say, if I have to summarize all that I learned today, I would say, you’re doing something that nobody would like to get as a market, not as a product. I say, I’m getting a market nobody’s really interested about, and I’m going full pull on this particular market, which is like SMEs, for example, or like lower, more price -sensitive kind of market. You said.

If I have to do things in a different way, I want to be shockingly different, not just a little bit. For example, when it comes to pricing, you want to be very different, not just like 10 % cheaper. You said this frugality when it comes to marketing and sales, but also in reality, engineering, because you’re getting the smaller teams. You mentioned using this for yourself. So it’s not like inventing features because somebody told you, but being the first users and this way you’ve got 12 products in the kitchen right now that you’re using internally.

And also you set simplicity, so you’re kind of fighting and winning against your competitors because you’ve got kind of the same feature, but they’re much easier to use or to know that they are there. Would you say that those points together, they make your strategy today?

Neeraj Singh (58:44.783)
Absolutely, that’s our strategy that we are here. But the biggest strategy is that we are here for the long term, because if you are not invested in the long run, long term and long run, you would not follow this strategy. And the reality right now is that a lot of startups these days, they are too much in a rush. They are in a rush to have an exit to sell the company to someone. But the other person will buy the company only when they see the money on the table and they say, what’s your MRR? How much is the profit margin?

we have so given the fact that we are charging less that’s just kind of it’s an indication that we are here for the long run and I feel like in the long run we will be vindicated so we’ll see.

Salva (59:27.425)
I’d like to close with a prediction and getting use of your crystal ball. Hopefully, you’re going to be there for the long run. What is your prediction about the other 30? What’s going to happen? You cannot have other 30 players winning. How do you see the industry? It doesn’t matter in which vertical if it’s calendars or forms or whatever.

Neeraj Singh (59:46.99)
Yeah, I feel like the the. See, so I will answer this with 2008. We had the financial crisis in the USA. So at that time, the Fed lowered the interest rate and they kept the interest rate low for a very, very long time. And then they increased it just a little bit. And then Covid happened and they reduced the interest rate again. So since 2008 until this time. So if you look at 2021 for 13 years, the

interest rate was extremely low in this all over the world and all over the world partially because the Fed reduced interest rate and Fed dollar being so powerful, it impacts every single currency in the world. This event that 13 years money is so cheap, it is unprecedented in the history of mankind. In fact, I read a book on the money and the interest rate, et cetera, and how cheap it was. It was not. And previously,

from since the money came in the picture and people have been living money buying interest rate is nothing else but the cost of me not using the money, giving the money to you. And it’s cheap. It’s and that has given rise into a lot of startups, a lot of companies, which is a great thing that companies are getting taste of it. But it has also given rise to a lot of unprofitable and zombie companies, meaning that the companies which will not survive tomorrow and immediately when the interest rates.

started rising, you saw the impact of it. Tons of layoffs, tons of the companies. But I believe that the cleanup has not yet happened. Great that some companies have survived, but they have survived today. They are there, but I believe and given that they know the inflation is around 3%, they are stuck and the Fed wants the interest rate to be at 2 % before they can lower the interest rate. But at 3 % we are stuck, which means that interest rate is not going down, which means that we have high inflation.

not too high inflation but high interest rate. So we are stuck in this situation and I have a feeling and it’s a bad feeling that the next two three years are going to be not too painful but not too easy also. Which means that the companies which have a greater sense of perseverance companies who are much more I won’t call it efficient productive and those companies will prevail. But another thing is that I believe

Neeraj Singh (01:02:10.926)
I will close it on this note that I’m a strong believer in habits. I believe that each person has a habit and the company have their own habits. So a lot of time people ask me that, you’re competing on the price and the future. What if they reduce their price? And I said they will not reduce the price. I said, why? Because let’s say that your salary is something fifty thousand, hundred thousand, and then you start earning five hundred thousand five hundred five years ago. Now, if I ask you the person who’s earning five hundred thousand.

that start living on the life on the 10000, it will be very painful. You might not be able to survive it. And same thing with the companies. Companies would rather go bankrupt, meaning that some CEOs and some investors rather than change because everything structurally for the last five years, seven years, the company has been running as if we have easy money and high growth. Now, suddenly from high growth, how can you change your mindset and be like Nito?

Salva (01:03:06.177)
And so your bet there is to be well structured for this one. So.

Neeraj Singh (01:03:09.71)
extremely. So now is that and but what? Maybe Nito is lucky in the sense that I am a more suitable to run this company in this environment, but I’m not because for the 13 years when the company when the interest rate was low, if I’m not taking money, am I being a fool? Maybe if you’re because because it’s unprecedented in the history of mankind, that money is cheap and you’re not taking the money. Is that not taking money is the wise thing?

The problem is that a lot of people think they can be like Amazon. Jeff Bezos kept running Amazon in such a way that for the 10 years or so, in spite of being a public company, it was running in loss. And then he decided to make money and he flipped it. Not everybody can pull it off. But people think that, running loss, loss, loss. And then one day I will be like Amazon. No, structurally, that’s why Jeff Bezos kept saying in the interview that on all the interviews that be prepared to be misunderstood for a very, very long time.

He was structurally making the company sound, but the people on Wall Street, they were not able to see it. They constantly kept criticizing it. But a lot of people, they are not structurally making sound. What they’re doing is that they’re taking the VC money, they’re taking the money and they’re spending it on marketing, sales, etc. and getting the numbers. But structurally, every single day that is passing by, you need to have a better relationship and the company needs to be stronger. Are they being stronger? It needs to be seen.

One story that comes to my mind is that a long time ago, United Airlines started getting into competition from other companies, other airlines. And one of them was Southwest Airlines that came and said, startup. So they, and United Airlines was losing money. So what they did is that they created a smaller unit and they gave the name TED, very cute, United, you see, TED. So a small name, startup mentality. They hired new people.

And they gave the company $5 billion. But here is the mistake they did. Who became the CEO of the company? One of their board members. So now you’re thinking like a real startup, but you don’t have the startup mentality because the person who is running the company is not a startup. Guess what happened five, six years later, terrified of bankruptcy. So but the other company who came from the ground up, they were in the adverse environment. They were able to succeed. So that’s what I’m hoping that in this new world where the money is tight,

Neeraj Singh (01:05:35.95)
I feel like that Nito might do better. We’ll see.

Salva (01:05:38.433)
So is it kind of like, you know, if you’re pointing, if you’re looking at your prices, you’re looking at the finger, not at the moon, right? Because what you’re saying is that because of your prices and your prices are justified right now because of inflation, because, you know, people are absolutely on fatigue and so also they would go for it. But in reality, what you’re doing, yes, you’re creating for some short -term lower margin, which are pushing you to more frugality and over time to more sustainable and viable way of doing this kind of business.

Neeraj Singh (01:06:08.238)
Absolutely. And the other thing is that any time if I want, I can raise the prices. But the people who have raised the prices, in fact, they feel like they can lower the prices any time they want. But actually, that’s not true. They feel like that it’s true. It’s not true because everything your sales, marketing, everything is structured for $15 per user. You cannot come down from 15 to five. It will be unthinkable for them.

Salva (01:06:20.929)
I loved it.

Salva (01:06:34.497)
You know what I really love about this technology is very, very refreshing. There are two things I really love. The first one is that you’re killing a myth somehow, right? You’re killing the myth of, you know, if you look at products, you have to be more expensive. You have to get to a price where we point to where the price always is almost a little bit of a pain. You’re killing the myth of create more premium features, create more value so you can charge more. So and you’re changing this one with being reasonable.

do things that make sense and think long term and kind of reverse this VC kind of mentality. But what I really like even more about this discussion is that it doesn’t matter whether you’re right or wrong. You’ve got a strategy. You’ve got something which is consistent and that makes sense end to end. And I think this is very rare today. And to be honest, that’s one of the reasons why I really was fascinating about having this discussion today and was definitely not disappointed because…

This really covered this feeling of you’ve got this cover from so many angles and pricing is just one, it’s just a cherry on the cake. But in reality, it’s a very good indicator about what is underneath.

Neeraj Singh (01:07:42.958)
True, yeah, no, it was really fun talking to you and I didn’t coming into this part because I didn’t think that we’ll be touching upon all these topics but yeah it has been fun talking about all these points.

Salva (01:07:55.201)
Nersh, thank you very much. It was extremely fun. And if people like to get in touch with you, I know you’re a very upfront person and you’re very open to contact. What is the best person to reach out to you? Sorry, the best way.

Neeraj Singh (01:08:05.262)
Yeah, you can email me at niroj at nito .com. I’m also on Twitter. We will post the link of my Twitter in the show notes.

Salva (01:08:15.105)
Exactly. Nior, thank you very much and have a nice day and have a lot of fun with your Nieto products. Bye.

Neeraj Singh (01:08:19.662)
Okay, thank you very much. Bye.