Scale Your SaaS

249: Software Companies Waste 20-30% of their Spend - Fix It This Way - with Indus Khaitan

January 31, 2023 Matt Wolach
Scale Your SaaS
249: Software Companies Waste 20-30% of their Spend - Fix It This Way - with Indus Khaitan
Show Notes Transcript


EPISODE SUMMARY
Being in business often means being busy. For many of us, this means needing to be more watchful over all the company spending. What if I tell you that as much as 30% of your budget is being wasted? But worry not! A little bit of mindfulness and that 30% waste will turn into a 30% gain in no time. 

Quolum Founder and CEO Indus Khaitan discuss optimizing spending so that every dollar is used profitably and meaningfully. He also talks about other methods of scaling your business and growth pitfalls to avoid with Host and B2B SaaS Sales Coach Matt Wolach. Watch and ensure that your entire capital is truly scaling your business!

PODCAST-AT-A-GLANCE

Podcast: Scale Your SaaS with Matt Wolach

Episode: Episode No. 249, "Software Companies Waste 20-30% of their Spend - Fix It This Way - with Indus Khaitan"

Host: Matt Wolach, a B2B SaaS sales coach, Entrepreneur, and Investor

Guest: Indus Khaitan, CEO, and Founder at Quolum


TOP TIPS FROM THIS EPISODE

  • Audit Your SaaS Spend
  • Never Stop Learning in SaaS
  • Establish Trust with Personal Connections
  • Market the Product Early On
  • Consider the Niche of Your Connections

EPISODE HIGHLIGHTS

  • Software is Creating Something Out of Nothing
  • Up to 30% of SaaS Spend is Wasted



TOP QUOTES

Indus Khaitan

[6:59] "Software delivered overnight– change the color, change this code, and you have a new product altogether. Lovely."

[20:20] "That's what's happening in SaaS. We do not know how much we have bought. If you have bought it, we have not used it… That's the biggest issue: Overbought licenses, underused product features."


Matt Wolach

[6:15] "Software is something you create out of nothing. It's just kind of an amazing thing. You don't have to go out and source some plastic for manufacturing or something. It's pretty ridiculous how we can create this million-dollar idea that Indus has created just because you saw a problem, saw pain, and know that you can create a solution."

[21:04] "That's good advice. I think it's really smart to be able to pick a niche that you're connected with or at least start to realize– how do I get more connected with this niche."




Get even more tips by following Matt elsewhere:

Matt Wolach:

Most software companies are wasting 20 to 30% of their spend. They're just simply not using it or not using it efficiently enough. And it's really scary because imagine how much more you could be profiting or how much more you could be putting into actual, real helpful initiatives. Well, fortunately, Indus Khaitan was here he came in to share what's going on why people are missing this and where you can fix this loss in these dollars. He also shares some really cool stuff about his journey and how his company has been able to grow. And what they've done to make that happen was cool advice for early stage founders. If you're gonna like this, welcome to Scale Your SaaS, the podcast that gives you proven techniques and formulas for boosting your revenue and achieving your dream exit brought to you by a guy who's done just that multiple times. Here's your host, Matt Wolach, and welcome to the show. Thank you very much for coming. So glad to have you here. My name is Matt. And my goal is to help you Scale Your SaaS so you can achieve that incredible dream exit that you've always wanted. I am super super excited to be joined by Indus Khaitan today, Indus how're you doing today?

Indus Khaitan:

Doing very well. Thank you for having me. It's like a sunny Thursday morning, after all the rain that we had

Matt Wolach:

very cool, Sunny mornings, you can't beat that. Right? You know, let me just let me make sure everybody knows who you are. So Indus is the CEO and founder of Quolum, Quolum is a SaaS and cloud spend reduction product funded by Sequoia and Nexus. They've got a lot of good, awesome backers. Most recently, he led growth a chargebee, where revenue grew three times under his watch now chargebee, by the way, super amazing system. If you are a SaaS company, you probably have heard of it already. This is that guy into so in his free time, this is something I absolutely love. He flies a single engine Cessna 172, over the San Francisco Bay Area, something that I have always dreamed of becoming a pilot. And so I'm really jealous that Indus has gone out and done that, and he gets to fly around. So it's thanks for coming on the show.

Indus Khaitan:

Super, super excited and love chatting with you now.

Matt Wolach:

Absolutely. So tell me what's going on with you lately? And what's coming up?

Indus Khaitan:

I think, you know, sometimes I'm waking up worried these days, what's happening in the markets, tech valuations, venture capital dollars, overall revenue pressure, you know, worldwide and technology spending. So that kind of keeps me awake, but super hopeful of where software has come in the last 20 years. So that's where we all are.

Matt Wolach:

It's pretty amazing. You know, I got in the business about 1617 years ago or so and to see the evolution that software has had over that time. And when we started, one of the big things we had to do with our market was just educate them on what SaaS even was like, That's how long ago I was, like, they had no clue what this whole SaaS thing was. And what software's are oh, wait, I don't have to store this. How are you don't send me a CD that I have to load. Like, that was what we went, we had to fight that battle first before we can even tell about our product. So yes, the evolution has been quite amazing, hasn't it?

Indus Khaitan:

From I remember working for larger companies, and I would file a ticket to it, hey, I need this piece of software and say, Okay, fine, get it approved by your boss, somebody will pay and then we will install it overnight remotely by an agent on your machine. How magical was that?

Matt Wolach:

Yeah. Yeah, that was next level when they could do that. Install it remotely that you were like, holy cow. That's incredible. And now we look at that it'd be like that would be a nightmare of a process.

Indus Khaitan:

And that was an evolution from CDs, or you know what you mentioned, right? Everyone like, gosh, software on demand. And then SAS happens. Oh, the world just changes.

Matt Wolach:

It's been a pretty, pretty fun ride, that's for sure. So well, I want to understand Qualcomm looks like an amazing product. Tell me a little bit. How did that idea come about? Where did you Where did you decide, hey, I want to do this.

Indus Khaitan:

I think the the Genesis was definitely while I was at charge B. I ran growth for chargebee. For some time, the company grew very rapidly while I was there, nothing that I did. I was just hanging out. And my team was spending a lot of money on campaigns and growth initiatives. And we bought a lot of software to power that. Fast forward six months down the road, somebody in finance would knock my door saying in this, I see all these charges on your card statement. When did you approve this and I would scratch my head saying I don't remember the tally up like 1000s of dollars. And it dawned on us that If we were not doing a great job, we were post facto then started using spreadsheets to track these products. And you know how growth organizations are, we find a hack, we harness it to the fullest, and then we move on to the next one. And that happened to a lot of products that we bought. And the idea just lingered in my mind saying, hey, something has to be done, you know, can we be a buyers friend to buy these tools rather than just buy randomly. And then fast forward, I quit chargebee in the summer of 2019, with a thesis that something has to be done without a product started kolam December ish 2019 Writing product we launched we did betta in revenue in last year 25 paying customer by end of 22. A to close to a million arr. Now. So that's where our journey has been.

Matt Wolach:

I love it. It's such a fun story. And one of the my favorite things about software, we talked about how awesome a software is. But the fact that you have this idea and you see this problem, and you can create something out of nothing. Now I know that there's code and there's a lot of work. But really software is something that you're kind of creating out of nothing, it's just kind of an amazing thing. You don't have to go out and like source some plastic for manufacturing or something. It's pretty ridiculous how we can create this million dollar idea that Indus has created. Just because you saw a problem saw a pain and know that you can create a solution. So first of all, well done on that knee, isn't it so cool?

Indus Khaitan:

is just amazing, I think, do your plastic example. It'll take you six months to source machinery raw material, get your county to approve the manufacturing unit. And by the time the first product comes out, you want to pivot to something else, guess what all of that equipment goes to waste. Software delivered overnight, change the color change this code, and you have new product altogether. Lovely.

Matt Wolach:

So cool. So cool. Now I know that a lot of SaaS companies struggle with controlling their spend, and it's a real issue for them. What are some of the challenges that that lead to this and some of the ways that they can overcome it?

Indus Khaitan:

I think the basic is, you know, you and I, let's say we go to our neighborhood supermarket, thinking we will cook during the weekend, invite all the friends over and over buy supplies. And then they put it in the refrigerator, the weekend goes by because the fan friends came over to meet you not to necessarily eat with you, right? You do a little bit of a cooking, you watch a movie, but then the raw material sits in your refrigerator forever. That's what's happening in SAS, we do not know how much we have bought, if you bought we have not used it. And that money is like hundreds of millions of dollars is just being wasted, rotting in the refrigerator and nobody accounting. That's the biggest issue that we see overbought licenses, underused product features. And you know that money could have bought. And I'll give you an analogy and you laugh at it. For a customer who said oh, you could have given one Tesla Model three to each of your employees. That was a scale of waste.

Matt Wolach:

Wow. That's incredible. And I'm sure that they were loving that you were able to find that for them and uncover that.

Indus Khaitan:

Yeah. And this is the situation worldwide across every product company that has bought software.

Matt Wolach:

Yeah, well, I can speak from my own businesses, even though they're they're quite small. But we have multiple products that we've bought that are sitting there doing nothing, and we haven't really employed them or use them or very, very lightly use them. And we could certainly do without them. So it's definitely something that people need to look at. But when we look at SAS procurement, a lot of people are making mistakes. How can these companies how can these leaders do better?

Indus Khaitan:

I think you start at the top level and slightly cliched, but you find out who is the buyer in your organization. So let's say you're buying let's take sales tools as an example. Right. And you know, some smarts. SDR comes in and say, hey, I can do my outreach better if I can use sales loft. And let's say they are already using let's take a poll or outreach or something similar. What normally happens, the leaders do not question this notice saying, Okay, I want you to succeed. I want you to hit the quota. Go ahead and buy it. Now fine. You bought that one license of SalesLoft. But did you cancel the license of outreach that was assigned to You and the rot, or the damage starts from there because people are not asking the hard questions. And not that they don't want to because their motive is let this guy run it his business or her business, let him or her achieve her objectives. And that's a $45 or 100 $100 per month two, we'll figure that out. And then soon, this contagion, I'm going to amplify this goes across the business in sales, everybody's buying whatever they want to buy, in marketing, hundreds of tools in DevOps, engineering, buy whatever they want to buy, essentially have duplicate product. So to answer your question, first thing is ask that, why do you need it? Do we have a comparable that you're already using? And why it doesn't work? Is that something that you do not like? Is it the configuration that's missing? And you start with that? The second is beyond the, you know, what you already have is sometimes the shiny object phenomenon, saying, oh, I want to use copy.ai, or Jasper to write better cold emails? Fine. Try it out for 15 days, don't pay for everybody. And then you control the proliferation of things that you will never need. So I think those are the two key starters. And then behind the scenes, you do hygiene, saying, oh, having negotiated is procurement or it involved? are you monitoring every quarter if you're not using? And can we cancel those accounts. So I think if you take care of these three foundational things, 10 to 20% of your spend, will already be not wasted.

Matt Wolach:

That's pretty amazing. And Qualcomm is doing all this for you, right?

Indus Khaitan:

Yeah, we do this we come in, we start with a very simple, what we call it an audit, but it's kind of automated way to look at your licenses, look at your consumption, and then match it up with your contracts or invoices saying Oh, Matt, you your sales team, 100 employees, you bought 150 licenses, because you thought your team is going to grow, renewal is coming up, scale it down. 200 don't pay 450 what you agreed upon. And many times SAS vendors would reluctantly agree saying, Okay, you're not using, I'm gonna give you a life will renew at 100 rather than 150. And you save a bunch of money there.

Matt Wolach:

That's super awesome, really, really cool ideas you've had. Now I want to look back at your history. How does someone go from a small company to a large company and into a small company? Like what? What were some of the changes you had to make in your work style and the way you dealt with other people? What were some of those lessons you learned?

Indus Khaitan:

I think foundationally the the one element is curiosity that has to hang in with you. I'll give you my chargebee recruitment. When I started talking to crush was the founder and CEO. I told him up front. Hey, Chris, I have no idea how SMB sales cycle, how SMB products get sold and bought. And my desire to come work for chargebee is to understand that because in my prior life, I had done a startup, which sold to Fortune 500, you know, my previous startup in mobile security, we sold to companies that had billions of dollars of revenue. Our first check at bitser. My previous startup from our customer was 950k Arr. first customer. So I knew how big businesses but I had no idea how smaller businesses work. So coming in saying, hey, I want to learn how SMB sales or SMB SAS works. And that drove me into into chargebee. I brought over what I knew, but I learned quite a bit from Chris and the other team that was already there. And that is the change that is continuous that hill, let's find out in ourselves what we do not know. I'll give you one more example and you'll be shocked when we started Coulomb. I did not know how finance works. I had no idea what left and right accounting system looks like how a ledger is managed. We learned it through YouTube videos, some advisors and we ended up writing products that do accounting management and have dollars and cents. So I think that this is the journey of mine that hey, find something that I do not know that excites me Hey, go figured out a way to learn it quickly and then implement it, make mistakes and then can iterate over. And that's how I have been in the last 1015 years of my life.

Matt Wolach:

Very cool. I love it. So a, I think it's a great lesson for all of us that first of all, once you enter a market, you may not need to be perfect, but go learn, go soak it up, go, go become knowledgeable and become an expert in that thing. There's, there's a wealth of knowledge available to us out there. I'm, I'm sure I'm preaching to the choir, a lot of people listening to this show are saying, Man, I'm doing that I'm learning about SAS, you're teaching me Thank you. So so good job doing that. But don't ever stop, keep going. And I think that that's something that I tried to do. I tried to get my team to do it. It's definitely the way to do it. So that's awesome share there in this. I want to ask, though, at the beginning, when you got column kicked off, and you said, Okay, we're going out there, we're going to do the same, we're gonna save people a bunch of money. How did you gain that trust early? How did you win some of those early customers? When they looked and said, Well, you're brand new, like, how do we know? How did you earn that trust?

Indus Khaitan:

I don't think we have fully earned the trust yet. And that's a journey. But we did win the trust of early customers. And that's very difficult, it's still very difficult for us, we are still a very small seed funded startup, we have not raised hundreds of millions of dollars, not even 10s of millions dollars and a single digit still. And if you have not an in this is in a good or bad part of a small business that if you have not done a great job, at least in tech, of raising money and doing brand awareness, people think or they misconstrue that you're incapable in general. And nothing against that. This is how our mind works, right? We buy stuff that we see on TV, not necessarily what we see in our, you know, our journal that's get thrown at our face, or somebody Hawking at the roadside. They could be equally good products, but we somehow attribute brand value and trust to what we see, we are more than more. So what we did early on, we found out on social media, we did a lot of outreach on LinkedIn, people who could trust us easily by proxy. So either in a fan out my own background, say, Hey, I've worked for X company, I am an entrepreneur in I've sold a startup, or I know x, who's a common connection. So use that proxy of you as an individual, or somebody, you know, to establish trust with a potential buyer. That's how our first 510 customers came into being just by our first degree or second degree of connections.

Matt Wolach:

I love that I think that's super smart. And a lot of people who come to work with me, they, you know, they say, Hey, Matt helped me grow, help me scale. And one of the things I ask is, have you used your own personal network? Have you? Have you gone at least to use that resource? Now? It's obviously a limited channel. There's only so many people you know, but it is one that some people don't even use and don't think about, but it's super important. I'm glad you did that. Let me go the other way. As you're getting going, what were some of the mistakes that happened that you look back? And were like, Oh, I wish we didn't do that? Or I wish we would have avoided that somehow?

Indus Khaitan:

Hmm, good question, thinking about it. I think we took some time to build relationships with the buyer. And this is my, you know, my inner engineer, you know, kind of stopping me to do what should be done in a business. You know, the engineer and me says, Hey, we got to build it. First, we're going to show that this thing is possible, then you start selling. And I get complaints about this from my investors that you started selling very late, which I now agree wholeheartedly, that I should have started selling the product while we were building it like Jan 2020. I should be behaving as if I have a normal product. But the engineer in me was stopping me and saying no, no, you got to build at least 75 or 80% of your MVP before you go out and sell tickets I have to correct something that I did not do is exactly this, you know go talk to more people as if the product is ready rather than Hey, I'm built thinking of building this gonna be ready in nine months. That's one change

Matt Wolach:

I would make. I think that's great advice. That's that's kind of the old way of doing things a build a product and start marketing and one of the things that I've learned through this whole process is none of those start marketing now start getting that ball rolling because it takes a while to get things to actually start to click within your marketing and and if you do it right, and you do it earlier, and then once the products ready now homerun you can start to win really, really early start to see at scale. So I think that's that's really an awesome lesson to have learned? What advice would you have for other software leaders who are just getting started and looking to grow and follow a strong path like you have?

Indus Khaitan:

I got this radical idea. And this is I'm going to try in my next startup, but I want to give it to people. Look at your LinkedIn and find the people who have the most amount of titles in a domain is your connection only in finance, only in DevOps, only in sales. And pivot around building software for what your first connections are, because that's what you're going to struggle for when you start your sales cycle. And for example, we sell to finance. The minimum amount of connections I had was in finance on my LinkedIn, like a shocker for me. If I had known early on, I would have thought, a totally different destiny, or started reaching out to finance very early on in 2018. January.

Matt Wolach:

Makes sense? That's good advice. I think it's really smart to be able to pick a niche that you're connected with, or at least start to realize how do I get more connected with this niche. So that's really awesome. In this this has been really, really awesome. And I appreciate you coming in. How can our audience learn more about you and Qualcomm?

Indus Khaitan:

You can find me on social media or on LinkedIn, in this case, and my first and last name, you know, Google me my Twitter handle is there, follow me there column is qu o l u m, Google it, we can help you save a bunch of money on software.

Matt Wolach:

Perfect, and we'll put all that into the show notes as well. So if you're listening, you'll be able to see that all there is this has been great. Thanks for coming on the show.

Indus Khaitan:

Thank you and stay warm and stay safe. And I am trying to do the same here in the Bay Area rains.

Matt Wolach:

Sounds perfect. Everybody else out there. Thank you for coming as well. Thanks for listening and watching. Make sure you're subscribed to the show. Hit that subscribe button right now. That way, you're going to get notified of any new episodes coming out with other people like into sharing their experience and showing you exactly how to scale your sass. Thanks for coming, and we'll see you next time. Take care.

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