Episode #198: Rabi Gupta and Satwick Saxena, EvaBot, “EvaBot Is…A Gifting Assistant…It Makes It Easy For Businesses to Send Gifts”
Guests: Rabi Gupta and Satwick Saxena are co-founders of EvaBot, a company founded in 2016 that puts a new spin on gift giving by harnessing technology to deliver personalized gifts tailored to recipient preferences.
Date Recorded: 1/21/20 | Run-Time: 53:48
Summary: Rabi and Satwick walk through the early days of EvaBot and how the pair started the company accidentally as a way to improve their networking efforts in Silicon Valley. As a result of some feedback, they launched their company, EvaBot.
They discuss building the product from an idea, and deciding that a bot was the solution that would make the product work paired with some additional automation in their operations. Meb follows with some questions on EvaBot’s target market. Rabi and Satwick discuss traction in the real estate and mortgage industries, but feel there are other verticals that offer use cases for EvaBot.
The conversation then transitions into the company’s experience with funding. The pair get into their seed round in 2017 and the growth they experienced after that round which served as validation of product market fit. As the conversation winds down, Rabi and Satwick dive into the process behind sourcing all of the great gift products they offer.
Comments or suggestions? Email us Feedback@TheMebFaberShow.com or call us to leave a voicemail at 323 834 9159
Interested in sponsoring an episode? Email Justin at firstname.lastname@example.org
Links from the Episode:
- 0:40 – Intro and welcome to our guests Rabi Gupta and Satwick Saxena
- 2:36 – Overview of Rabi and Satwick’s company EvaBot
- 4:58 – Origins of EvaBot
- 8:02 – Process from idea to implementation
- 13:41 – Target market
- 19:45 – The past year
- 25:40 – Outlook for EvaBot
- 28:48 – Developing the tech that powers EvaBot
- 32:51 – Sourcing vendors and gifts
- 34:40 – A look at EvaBot’s users
- 38:09 – Pricing the service
- 39:30 – The power of the referral
- 43:50 – Challenges
- 45:50 – The background on co-founders
- 47:25 – Advice and resources for other founders
- 50:44 – Learn more about EvaBot and their special offer for the audience
Transcript of Episode 198:
Welcome Message: Welcome to the “Meb Faber Show,” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas all to help you grow wealthier and wiser. Better investing starts here.
Disclaimer: Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.
Meb: Welcome, podcast listeners. Today we have another episode on our podcast founder series where we invite kick-ass entrepreneurs to chat about their experiences from the front lines of starting a company. We cover everything from newly minted startups still struggling to make it out of their garage all the way to the elusive unicorns that are either transforming traditional business sectors with innovative ideas or creating entirely new ones through cutting-edge technologies. Either way, the result will be total catastrophic failure and bankruptcy or hundreds of millions of dollars of revenue and evaluation worth north of $1 billion. Listen in to hear the tales of blood, sweat and tears as these founders try to change the world. As a disclosure reminder, I’ve invested in most, if not all of these startups, and will look to invest more as they continue their startup journey. Please enjoy the next episode in our founders’ series.
We got another awesome show for you today. Our guests founded their startup in 2016, and their company tackles the age-old problem of sending thoughtful personalized gifts. They do this by making gifting easy and convenient using technology to deliver great gifts tailored to individual recipient preferences. In today’s episode we discuss the origin story behind EvaBot and the humble beginnings where their founders delivered all the first packages on foot. We then dive into gift-giving, why it’s valuable, and why EvaBot is bringing to the table to make the experience better and more efficient. We cover building on customer feedback and the important role bots and technology play in making EvaBot so unique as well as product-market fit and the verticals that have been most receptive this far. Hint, real estate and investment people you better listen in. Make sure you stay tuned to the end of the episode, please, where founders make an incredible offer to send you a personalized box for free. Please enjoy this episode with EvaBot co-founders Rabi Gupta and Satwick Saxena. Welcome to the show, Rabi and Satwick.
Rabi: Thank you, Meb. It’s great to be here.
Satwick: Same here. Great to be on the podcast.
Meb: Great to have you guys live from the Bay Area. This is a triple episode. We got you guys down in from different but relatively close locations. It’s great to meet virtually. I’ve known you guys for a little while. I want to hear… First, let’s talk about your company. EvaBot. What is it?
Rabi: So, EvaBot is basically a gifting assistant. And what it does is it makes it really, really easy for businesses to send gifts to their clients or to their employees. But what it essentially does is it removes the friction of understanding the preferences of the gift recipient and the whole awkwardness which goes with it. When you want to send a gift to your client and you don’t know what they would prefer, it’s a very hard conversation. So what Eva essentially does is it makes it really, really easy for you to send gift while it collects all of the data, the preferences from the gift recipient, without making the whole thing awkward. And then Eva sends a surprise gift which matches the taste of the recipient.
Meb: So, it’s funny you mentioned awkward, and I’d put in that same category unwanted, because we are a professional asset manager and we have a lot of service providers, and so usually around Christmas time every year, we get a just absolute avalanche of sugar. So, I mean, it’s 19 different iterations of chocolate, another 20 iterations of cookies and gift baskets. It’s odd enough that they all come at the same time, but it also I feel like in 2020, the vast majority of the people in our office either don’t want to eat those or want to eat them, but really don’t want to eat them, I mean, they don’t want them in the office, and so it creates this really strange situation where not only can I not name who sent them, but I attach almost a negative connotation with getting all of these gifts including, not last year, the year prior, we got like a four-foot chocolate Eiffel Tower which, meanwhile, was kind of awesome, but I still can’t even remember who sent it. So, the process is a little odd. The only thing that I still give a little positive to that process is the surprise and delight factor. At least you get to open something, you don’t know what it is, but then it’s chocolate again, so it just doesn’t matter. So, talk to me about the… What was the idea origin? How did you guys come up with this? And then I want to hear actually how it works and we’ll get pretty deep into the whole concept. What was the idea that really spawned this?
Bb: We actually started this company accidentally. What happened was I had a company before this in India, we sold it off, and then I first came to Silicon Valley and Satwick then later join me. When we were here, we were finding it very, very hard to build relationships with people. And because we were immigrants, we didn’t have any idea about, you know, people’s taste, the cultural context. And I wanted to build relationship and the whole thing was, “Okay. What if after my meeting I give people gifts so that they remember me more and they help me more to build a network and then probably we’ll start a company sometime later?” When I wanted to do that the biggest challenge was how to figure out what to gift. And then Satwick joined me later, so we were figuring out, “Okay. I just met this guy who gave me an advice or met this woman who is now willing to help us with our startup.” And then after the meeting I was like, “Let me thank him or her with something.” And we thought, “Okay. People in Bay Area, they all love their alcohol and coffee, so just let’s give them alcohol and coffee.” But then we realized everyone has their own coffee taste, everyone has their own alcohol taste. So, we came up with the idea where we got a new mobile number and basically we started texting these people saying that, “Hey, I’m Rabi’s assistant and he wishes to give you a wine or a coffee gift. What type of wine do you like or what type of coffee do you like?” And to our surprise, everyone was responding to that text. And we thought like… We didn’t know why they were responding, but in any case, they were giving us a lot of data. So, when they gave us this information that, “Oh, I like Phil’s coffee with milk or black, whatever.” And then the next day we would basically go with their coffee, like, freshly made coffee from the nearby coffee shop, we’ll go and gift it to the person. And they will be amazed. And then the next question which we asked was, like, “What actually made you answer all those questions?” And to our surprise, everyone was saying the same thing. They were saying, “I never thought I was chatting with you. I thought I was chatting with a bot, and that removed all the awkwardness in the conversation, so I was very open with what I really liked.” And that kind of triggered the idea that, “Oh, okay, so people are more comfortable sharing their desires with a bot than another human being, and especially in a context like this where the other person is willing to accept a gift, but they are not willing to share a lot of details about their personal lives.” So then what happened, some of these people came back to us saying, “Oh, that was pretty cool. Can I do this with my clients?” And that’s when I and Satwick discussed and kind of thought of making this into a company.
Meb: Talk to me a little bit about how it went from idea to actual operating company. When was this and what was sort of version one of the product look like?
Rabi: So this was like… We came here in 2016, early 2016, but then most of the first six, seven months we were just, like, figuring out and doing this one and off. And then end of 2016 we got accepted into Boost VC Accelerator, because Adam Draper, we gave him a wine gift and then he was like, “Hey, why don’t you join our accelerator and try to launch this company from here.” So, December 2016 is when we really kind of built the product and launched it. And Satwick, do you want to talk more about how we actually build the product from the idea?
Satwick: As Rabi mentioned, when we started off, it was just texting people from a SMS number. And at the time period when we were thinking about how to convert this into a product, that was around the time F8, the Facebook event happened and bots were all the craze there. And that’s the moment it struck, I said, “This is actually a perfect use case for a chatbot and this actually solves a real-world problem rather than just like esoteric solutions for bots that people were trying.” So we started building it from that as a chatbot, but in the beginning, we were still doing deliveries by hand. We, initially just me and Rabi running around and making all the deliveries ourselves, which is a very interesting experience. We got a lot of feedback from people, we could talk to them directly and understand, you know, what they liked about the experience, what they did not. And then we added a few more people who could deliver the gifts in the beginning. So that was like an easy, faster way of launching where we could just launch without having to figure out, like, all the moving parts of it in the beginning.
Meb: You get the concept, you start making some foot-based deliveries. What is in the process of trying to scale this up? How do you acquire the products to then include? How is the technology stack build-out? What’s the whole process of getting this company up and running?
Rabi: Yeah. So, we have, like, really iterated based on the feedback and also from day one we were resource constrained. So the whole idea was how can we automate this process? So, the first thing was, of course, collecting data. And we knew that we cannot have a person chatting with someone to figure out the data, so it had to be automated. So, the first version was, you know, the chat was automated. And then we collected the data, but the deliveries and the selection was mostly man-made. The second step was actually after we have figured out the preferences, how do we match them to physical products which we can share? Because what happened was, you know, in December, actually, December 2016 when we still doing deliveries by hand, we realized that people are sending gifts to different states. Gifting is not a product where you are just gifting to your friends in the same city or same state. So, we had to solve that problem. So, we knew that we had to go from hand deliveries to shipping, drop shipping, and once we had to do that, we also had to figure out, “Okay. Now, what product should we put in?” Because, giving a coffee or a wine from a local coffee shop or a Safeway is much easier, but actually sending a physical gift in a box, that is also, you know, a surprise and delight is very hard. So, we came up with the idea that, you know, let’s build our own partnerships with local vendors or local shops, and that way we can kind of create a distribution channel for them, and people who are receiving these products will like it more because it’s probably something which they haven’t tried before. So, gifts become a surprise but also an opportunity to discover a new product. And once we realized that, that we could do that, there were so many new direct to consumer companies, new products coming out in the market, which all needed a lot of attention on marketing. And we kind of created this solution where on one hand, we understand the preferences of the gift recipients through an automated chatbot, and on the other hand, we match those preferences with surprise gift from local new artisanal products or brands. And that kind of felt like a very good match. Once we tried it out, people loved it, and then, you know, we started expanding on it.
Meb: I’ve been through the experience, because as part of my due diligence when I invested in your company, Rabi made the very generous offer that, “Hey, we’ll send you a free box.” So I said, “Okay.” I went through the chat process which was pretty cool, was very honest about it, and then voila, I don’t know, a week or two later, however long it was, a couple of days, I can’t remember, a box shows up, we open it and I do distinctly remember what was in it, at least some of the stuff because one of them was wild honey sticks. Do you know what I’m talking about? Like, there’s little… Listeners, there’s little like plastic honey sticks you chew on because my son loves them more than anything. He’s two-and-a-half. And so you guys contributed to quite a bit of joy for my son. He loves eating an entire thing and then turning into a total terror. And then you got it right. I had some coffee. God, there was something else. What was it? Oh, yeah, there was like a smart plug for an appliance and then also a pet-focused gift. We have a 14-year-old dog. So, it worked out well. So, the experience I thought was great. And going back to, you know, my interest was that so many of these subscription particularly-based box companies and ideas can just be absolute Rocket Ships when they find the right product-market fit. The very first investment I did on Angel List was actually probably my most successful ever. It was a company that does it focused on women. Talk to me about where you guys found your particular niches of people who were using this. What did you learn over the past year or two on who’s signing up to gift it? Is it just Aunt Greta who’s sending her family AI-based gifts or is it actually businesses and companies and what types?
Rabi: I’ll first talk about our first year, and then Satwick can take over and talk about, you know, how we expanded into different verticals. I mean, the first year was 2017…
Rabi: …from January till November 2017, which was still a very experimental phase where we were just figuring out what are the… Okay. We have a cool product but who is going to use this product? So we started with some companies like Silicon Valley Bank where they were kind of using it to send gifts to their employees. So one was, okay, employee gifting use case. And then, you know, some random people came and they sent out gifts to their clients for some reason, like thank you or a referral. So, it was more like all over the place because we didn’t know who to really target so we were just going after our friends or other startups who we thought, you know, would like to use it. Everyone who used it loved the service, but our challenge during the first year was, you know, there was not enough repeat usage of the product. So, we had to figure out what are the verticals where this is like a constant problem and people or businesses want to do this on a more regular basis. So, we kept experimenting in the first six months, we tried, you know, different verticals, different use cases. So, we thought of our sales teams at the pre-sale stage, this could be a pretty interesting use case to kind of engage with the prospects they were talking to. So, get a bunch of, like, cold emailing there, we looked at customer success teams for a post-sale engagement especially in part where there is a lot of onboarding and training and customers need to spend time for that. And doing all of the experimentation.
One of the verticals that we got recommended by some of our friends was real estate. And we happen to meet Mark Choey from Climb at one of the tech events, and he was the co-founder of Climb Real Estate In San Francisco. And he saw the whole product, he loved the experience and said, “Hey, why don’t you come to our office, we’re doing a small event, lots of agents will be there and just share what this is with our agents and see what feedback you get.” So that event was pivotal because when we showed up there and did the demos, agents really loved it. We got literally mobbed trying to like just do the demos there. And that was the first main use case we figured out where real estate agents have this constant stream of business where they’re closing stuff and they have this whole tradition of doing closing gifts, and it takes time, it’s a complicated thing. Most people default to very basic stuff. So, we found this perfect product-market fit there in real estate. And then we, like, spend the next six months figuring out what was the best way to reach out to these agents through cold emailing, through Facebook campaigns, through events, meetups. So we started working with them and targeting that vertical. So, like, the second half of 2017, first half of 2018 primarily went into figuring out how to scale real estate for us. And then the interesting thing was because real estate is essentially people who were buying houses, just high net worth individuals, and we started getting a bunch of different kinds of users from there. So first became mortgage because of a lot of referrals, from real estate agents to mortgage agents. So, that started opening mortgage for us. And then between mortgage and home buyers, we started seeing the first manage usage and traction from wealth managers, financial advisors, insurance agents, especially in the B2B space. And now today we have, and this is one of our largest verticals, but we are seeing now rapid growth in mortgage and wealth managers.
Meb: Part of that I imagine is because the clients tend to be, you know, a higher revenue-generating, I mean, particularly with real estate, it’s often a one-time big chunk with the RAAs. In my world, it’s more recurring. And I imagine, you know, part of the whole concept for the listeners who are in our world, in the RAA side versus even the mortgage and real estate, but maybe it’s the same, is actually not as much just about a thanks, but also client retention. So many people in our world I think, the, like, success rate of moving from generation to the younger generation, it’s like 80% leave, but people also just think their advisors just forgotten about them. And so the concept of at least, you know, having that some sort of touch that you’re interested, it seems like an obvious use case that many just don’t do.
Rabi: True. And what we have realized is in every industry especially all these service-driven industries where it’s the retention of our existing customer which matters a lot because you’re getting more referrals out of your existing customers. So, if a customer retains, that means the customer is also giving you more business. And if the customer doesn’t retain, then you lose the customer as well as all the future referrals which you were going to get. So, what happens is in all these industries, which are in a way kind of related because the problem is same, the problem is, okay, you did one high-value transaction with the customer, and then the challenge is you’re probably never going to do any other like high worth transaction for a year at least or in some cases, three to five years. So, how do you engage with that customer during these three to five years so that, number one, they send you more referrals, and number two, I mean, whenever they need your service, again, they come to you as a default source, not go to some other competitor.
Meb: So, 2018, you start to figure out a little bit of the target market. Walk me through the next year. Has the last year really been about just growing the business or you made any sort of iterations, changes in the product, in approach? I know you eventually did a fundraising round. Walk us through what the last year, year and a half has been like.
Rabi: We raised our first round, like, first real seed round in December 2017 from Bloomberg Beta and some angels. After that round, the whole of 2017 we were just targeting real estate agents through Facebook campaigns. And we scaled it to a really good level. Like, in 2017, the whole year we did maybe like 70K to 80K in annual sales, but 2018, you know, we were able to do around half a million. So, the whole idea that we were able to grow after raising a small seed round, you know, was pretty good because it was a good validation of a product-market fit. But after 2018, we faced some challenges raising money because we also realized that although we were growing fast, we had a very… We didn’t have like a model which VCs love. So, for example, VCs either love a subscription model or they want ecommerce in consumer space and they want SaaS in like enterprise space, and we were kind of in-between. We were selling to individuals, not really businesses, but more like B2B2C. And our business model was more like ecommerce. Most of the VCs were like, “We don’t understand this model and we don’t really have seen much success in gifting space.” So, 2018, we basically was a hard realization that we have to focus on profitability. 2019 was more about how do we, you know, shorten our payback period from each customer, you know, figure out, how do we keep our CAC in control and try to focus more on LTV. So, we launched a lot of things like subscription product and spent a lot of energy and time in building a very, very good product which not just helps you send gifts but also help all these businesses achieve ROI.
Satwick: Yeah. So, 2019, I mean, that was one of the main focuses there that we spend a lot of time with our customers to understand what is the business objectives they want solved. While solving gifting for them did save them time and effort and it made, you know, one key aspect of their work easier and better, we wanted to understand what is the value they really derive from it, and what can we do in our product to enhance that and make that eventual business goal easier. And what we realized was that essentially at the end of this what agents really want, any business owner really wants is, A, the ability to collect more reviews and testimonials which enhance their social proof and help them stay in touch constantly to drive more reference and retention. So, like, in 2019 we added a bunch of software features in our product all aimed at leveraging the gifting delight and our unique chat experience to enable more of these things. So, one small thing that we do in the chat now is at the end of the chat, you have the option for Eva to ask for a review on your behalf in the chat. And it can give a link there of a review site. And people we’ve seen from data that we people are, like, three times more likely to leave a review from our gift chat than otherwise or even after a follow up after sending a gift, because it’s that moment of reciprocity. It’s that moment when they know they have received something, they’re going to receive something from you, and we’re able to leverage that to create that review for you, for the agents. Same thing in the way gift campaigns is a feature we enabled where instead of having to remember all these things, the agent or the user could just simply upload a list with, say, all the birthdays of all their customers and in one shot, set up campaigns for multiple years and not having to worry about it. And Eva will notify them, you know, when the next book is coming up, the campaign will go out. That made the experience much more easier for them. They don’t have to manually act every time. We added a very cool feature about video messages where you can add a video message along with a gift and that plays out in the chat which makes it, you know, even more personal and makes experience even more memorable.
Meb: I bet people love that one.
Rabi: Yeah. Also, like, we collect birthdays. So, most of… I was talking to someone who has worked in the CRM space for long and he was saying that 90% of the birthdays in CRM, they’re all empty, so no one really has the birthday data. So, you know, once we started doing this where when Eva chats it also asked you for your birthdays and more than 80% of the gift recipients actually leave their birthday. And once Eva has collected all of these birthdays, you can automatically set up birthday campaigns. So, you know, every gift which you are sending using Eva, Eva is creating more opportunities with the same person like to reconnect. If you send a closing gift today, the next year, same week, Eva will remind you of the house anniversary gift. So these are some of the use cases which we actually built that has helped retain our customers and also improve their usage over time.
Meb: That’s really smart. I have enough trouble… I mean, I feel like I need that just for my family, my nieces and nephews. I need that to send them something. All right. So, we’re turning the page on 2019. Phil Nadel, who is wonderful who we’ve had on the podcast, was instrumental in introducing us to you guys. Where do things stand now, and where’s the kind of vision as you look out to the horizon of what the future looks like for EvaBot? What’s the plans for the next 1, 3, 5, 10 years?
Rabi: That’s not an easy question to answer, but…
Meb: Take your time. We got lots of time.
Rabi: Right. Right. So, yeah. I mean, of course, every year it’s a new challenge. 2018 when we actually, as I said, we faced challenge in raising money, so we started focusing more on the real business, real metrics so that we can make it a profitable business. And then when the time is right, we can raise more money to grow faster. The thing which delights us is there are customers who have received like 5 to 10 gifts from Eva on a repeat basis, and they still love interacting with Eva. So they have a lot of thoughts about, “Oh, this is just like one-time exciting thing and then it will die off.” It never really happened. And that is the most exciting thing for us that we have built something which is not like one-time gifting. Every time someone interacts with Eva, they know that they’re going to get a new gift, new product, they’re going to discover something new. So, we have been able to manage that expectation from both the gift sender’s side which is, say, gifter, and the giftees side where even if they receive multiple gifts, they love it every time because we have created this network of amazing vendors or partners who build amazing products and Eva kind of access this great channel of discovering product. So, if you look into the future, I mean, even three to five years, there are some fundamental things which are not going to change. For example, every business still would need to do more to build better relationships with their customers, especially in today’s era when everything is digitized and everyone is sending out those text messages, those emails, so you need something physical to help you take it to the next step. So, we are in this era where, even MailChimp is now trying to send out direct mailers not just email campaigns because they know that that is going to be the future where people are so bored with like, all the digital conversations that they want something physical. So, we believe there will be part of that big transition. And the other thing that, you know, the core idea of Eva, people still love it, and even in future, no matter what happens, you’re always going to love receiving new products or discovering new products which are coming out in the market. So, if we combine these two things, I believe we have a great future. We are just going a bit slowly in terms of, you know, verticals. We don’t intend to kind of target all the verticals all at once because it’s very hard to do. So, we are just taking, you know, an approach where we are going vertical after verticals, but we believe that we will be a mass product, you know, in three to five years down the line.
Meb: What’s the technology… Sort of two parts to this. The technology development, the chat bot, I assume is mostly build, but what’s the process of adding new tech features that are on your mind or your brainstorming about? And in a similar vein is, you know, I’d love to hear about the product acquisition. Do you have just, like… Is it Rabi and Satwick just wandering around the mission in different places looking for products? Like, how do you… I saw you got some Hibiki on the website, great Japanese whiskey. How do you guys go about finding interesting new products? So, tackle each one as you may. Building out the tech stack features, and then two, how do you guys find all these great products?
Rabi: So I can talk more about, like, how we think about the product, and then Satwick can talk more about how we actually find all these amazing products. So, we really have three products, I mean, not just one product. One is, of course, the chatbot. And although the chatbot seems very simple, I mean, there’s a complex technology behind it because it is very customizable. It knows when to ask for an address, it knows when not to ask for address. It knows a lot of things. It knows that you are receiving a second gift or a third gift, and you can do easy settings. For example, if you don’t want alcohol question to be asked to your customers, you can just click one button and it’s done. So, there are things like that which we have really thought about in the chatbot itself, but now what happens after we collect all of this chat data is very important. Because, if there is a human being who is reading all the chats and then kind of figuring out the gift, it’s going to be very, very hard. Once the data is collected, you know, what happens is we have our internal recommendation engine. Now, how the recommendation engine works is, of course, one of the data is preferences. What do you really like? And the second data is, are you allergic to something or you don’t want something, and then you know what State you’re in. And the other interesting thing which we do is every time a gift is sent, there is a feedback loop. So, we ask the gift recipient how they rate each product which they have received. And we get 20% gift recipients to actually rate the products. So, now what happens is all of this data is now fed back to our recommendation engine, which automatically recommends what is the best gift based on the price point, based on the preferences, the city, the weather in that city, and also how people have rated the product in the past. So, all of this data then kind of enables us to automatically pick the right gift box because as you know every gift box has more than two products. So, all of this information is now fed back into the system to kind of generate the right gift boxes, and then, you know, whether this gift box is going to go in a branded gift box with a branded handwritten note. All of this technology is built-in so that we never mess up with gifts, because if we send one wrong gift, that means we actually send out two wrong gifts. Someone else is receiving something else. So, we have to be really careful about how we use this technology to personalize gift, and at scale it can only be done if it’s done through technology, not manually. Now, the third piece of this is the vendor management system. So, we do have a dashboard for our vendor partners as well where they can see how their products are doing, how people are rating their products, in which cities their product is sold more or rated high. All of this data then helps them understand more about their product. So we are really building this suite of products which is not just about the gift sender, which is also about how people receive and rate the products, how our vendors interact with our system, and then kind of tries to keep everything together and bring everyone together to make a holistic solution. Satwick, you wanna talk about how we go after choosing the vendors and partners?
Satwick: So when we started, it was, as you mentioned, like, in the beginning, it was me and Rabi checking out different products, things we knew. And we started like that. But as we started sending out more gifts, one channel we tapped was we asked our customers things that they would recommend or things that they’ve used in the past that they loved. And we started getting a lot of recommendations from our customers itself, which opened up, like, new products for us. So, that was like one of the first channels to go look at interesting products and figure out which ones are a good fit. After that, as we scaled our operations, we added a specialized person on our team, Magila who leads our whole procurement effort. And what she does is she looks at, you know, different trends from our data as well as, you know, product trends in the different categories we are. For example, smart home stuff is a very popular category and interest in that category is growing exponentially. So then she will look at, you know, what are the new product coming in that area, reach out to those companies. What are the unique parts available there? What is something just different? Not necessarily a mass-market brand, and then work with them, test run the product. That’s the best part about our platform that we can very quickly do a test run and see what the feedback is from recipients on these products. And in that iterated way, we are able to keep finding a new product and then testing out which ones make sense, which ones are getting great ratings, especially for different use cases. So, something which will make a great gift as, say, a birthday gift may not necessarily make a great gift as a raffle gift or as a closing gift. So we’re able to pass this data, not just at a basic product level, but also matched to different use cases.
Meb: So I imagine you guys have sent out probably thousands of boxes at this point, probably not on foot all anymore. If you could, like, find, like, your biggest power user, if there’s someone who’s just, like, “Oh, my god, I’m a EvaBot evangelist,” is it sort of that real estate segment? Is it something else or is it a company? Is it an entire organization? What’s been the kind of the most extreme product-market fit you guys have seen?
Rabi: We actually have sent out more than 35,000 gifts till date. So, yeah, we cannot definitely do it on foot. Every type of customer… So, for example, there are companies… Our largest customer is a financial company which does more than $100,000 worth of gifting every year with us, and they have been with us since the start. But then the type of customer which we have in real estate, they are either, like, large teams or they’re, like, independent team of four or five people. Their volume in terms of dollar amount will not be as big as, say, a large financial company, but it’s still very significant, and also in terms of the usage it’s very heavy usage. So most of the brokerages we have the users like that, and then even in like mortgage companies, we have either independent loan officers using it individually. We see a lot of land and expand which happens with our product. So, for example, a company like Unitus Mortgage or [inaudible 00:36:10] Mortgage, now, one or two of their loan officers started using the product and now we see more than 40, 50 loan officers using the product. So, we definitely see a viality in the product, and we do have great referral programs where people can refer Eva to their friends and they get an opportunity to test out the product by receiving a free gift. So, those things really work well. And as you asked, like, we do see all different type of companies, like large companies, small companies, teams, individuals, all of them are using the product. But mostly it’s either individual brokerages or small teams. In terms of volume, they are our biggest customer.
Satwick: As an example of, like, what you mentioned, like an extreme product-market fit. So the financial company that we mentioned, like, they are… One of their favourite use cases is to generate referrals and collect testimonials. So, that company has been using us for now almost two years and they’ve, like, collected close to, I think, 2,000 reviews on Trustpilot, and the way they work is they work with a lot of independent mortgage agents who refer them business. So, collecting reviews, which helps them land very high in search results. And then, you know, getting those agents to refer more and more other mortgage agents to that company helps them directly grow. So, that referral plus collecting testimonials are very, very powerful use case that they leverage. Another very popular use case which we see across teams is the birthday gift campaigns. So both for real estate agents, mortgage agents and some of our early wealth manager customers, that’s a very popular use case where they can just upload the entire list, or if they don’t have the list, then once they send the first gift to their customer, we automatically capture the birthdays and they can just enable a birthday gift at one click. So, these two are like very, very popular use cases.
Meb: I’m not kidding when I say I’m gonna start doing that for my family. Remind me. So, what’s the price points? I assume people can customize it. But is it… People say, “Look, I wanna set a max. I wanna set a specific price target.” How does that work?
Rabi: Yeah. I mean, that is one of the key things about Eva because, I mean, even when we were working with wealth managers, we saw that budget is kind of their biggest constraint. So, I mean, they have regulations they have to follow to make sure that every gift is within a limit. And that’s why using Eva is so simple because you can set a price point from $30 up to $1,000, anything which you want. So that makes it really, really easy for you to kind of send gift because the only constraint you have in your mind is the price point. You don’t have to worry about what is going to go in that price point because we will take care of what happens after that. We have actually three different plans which our customers choose from. One is the basic plan where they just buy gift credits upfront, say, minimum $200 worth of gift credits and then they use those credits to send gifts, but they don’t get access to any premium features. The other is premium account where you pay a monthly subscription fee and then you get access to all of our premium features including integrations with your CRM, the campaigns, the birthday campaigns, the customer data collection, and the branded gift boxes and branded handwritten notes.
Satwick: Free shipping.
Meb: The fascinating idea that you guys mentioned about if you’re, say, a real estate person or whomever and the ability to get a testimonial for whatever you call it, 50 bucks, 100 bucks, 25 bucks, I don’t know. Obviously people are much more likely to leave one after realizing they’re getting a free gift, and that’s a brilliant way to acquire reviews. Secondly, have you guys thought of this? Maybe you’ve tried it, maybe you haven’t. But also as a lead gen for the underlying person where they say, “All right. I’m gonna send my client Jim a gift.” And either instead or in addition to this gift, at some point, you can be like, “Hey, Jim, by the way, if you like me as a broker, tell you what? You can send a free gift to a friend who then you would acquire the lead… He would be able to acquire the lead gen so he would pay for it and be able to expand his potential customers.” Has anyone experimented with that? Is that something that you guys think about?
Rabi: So, yeah. Our referral program is like one of…I mean, not the biggest but still like one of the major ways in which we are growing right now. And we recently also launched another referral program only for a select few customers where if they refer another customer within their company and the customer signs up and then kind of subscribe to our service, then they get $200 worth of a gift card like real cash.
Meb: I was actually saying it where the broker sends his client a gift and then says, “Hey, client, by the way, if you know anyone else that would like my service as the broker because you love me so much, tell you what? You can send them a free gift and I’ll pay for it,” and then he would then acquire a new lead for, whatever, 50 bucks, but in that world, the probably value of a lead is in the thousands of dollars, so they would probably, in many ways, get a high-quality lead.
Rabi: So that’s a very cool idea. So one thing that we’re building, this is in the works, actually, is exactly what you mentioned, just as we have a whole workflow towards collecting reviews, is building a workflow like this for collecting referrals and leads where, say, if you’ve set up a campaign, you’ve sent a birthday gift to this customer, in this chat Eva can ask them say, “Hey, do you have somebody in mind?” Eva will also give them some talking points, “Hey, I closed this much business in the last six months. This is some great thing I did. And by the way, if you have somebody in mind, you can just leave their details here, or if you want me to follow up later, just let me know and I’ll follow up later.” And one of the options there is, as you mentioned, that, “I’ll send them a gift on your behalf.” But I think the way you put it is even better. They can send a gift directly to their friend, and what we will do is not only will the gift go in, say, the branded box of that agent, but it could also include some marketing materials or some more information about that agent in that gift box along with the gift itself.
Meb: Yeah. Because, I mean, that to me seems like such a viral way to do it, you know, whereas we jokingly have told our listeners, we tried a direct mail campaign once where we sent out thousands of postcards to our local neighbourhood just being like, “Hey, we’re local nearby just if you ever wanna say hi,” and got only one response which was someone who mailed the card back and said, “Don’t ever contact me again.” But to the extent that you have these very warm leads of someone who already loves you and would like to share it, and, oh, by the way, they’re gonna send them a box of goodies seems like an obvious way for the real estate agent or whomever to really build their business in a way that would probably be low cost but also have the potential of very high-quality leads. It’s like, you know, the biggest problem in our world, you know, we’re digital and quants, so we don’t really do it, but a traditional financial advisor, the oldest school way of growing the business is asking for leads, but people hate doing it because it feels very salesy and icky. But if you had the ability to say instead, say, “I’m not asking you to give me leads, but rather if you wanna pass this long, this person will get something in the mail.” That’s totally different than… Anyway, that’s your brainstorm for the day from Meb.
Rabi: We are going to do it.
Satwick: Yeah, that’s a very cool idea. I think we are going to implement it the way you mentioned.
Meb: Yeah, yeah. Anyway. All right. This is great, guys. What’s been some of the big challenges? I know you have a partially remote team. I see you have an office in Canada? Is that right? Or opening one?
Rabi: Yeah. So, we have a fully remote team. We all, like, either work from home or from co-working spaces. The warehouse we have is in Fremont. We are going to maybe open another facility or warehouse in Tracy, California soon. It’s still in the works. But yeah, we intend to kind of build a company which has remote employees because, I mean, we kind of feel very comfortable working in this structure. The challenges which we have faced, of course, you know, as I told you, we are not from here. We immigrated, like, just a couple of years ago without any network or support. So, the initial, you know, first two years were very challenging in terms of, okay, we had a cool idea and then kind of build this product, but it was really, really hard to raise our first round. And then also, we intend to build this as a VC-backed company mostly because we want to grow this into a global product. But right now, we are also kind of managing expectations between, okay, raising a large round versus first becoming financially independent and then raising the round so that we are in control of what we are building. So, those are some of the things where we have faced some challenges. But overall it has been a very good journey mostly because we love what we are doing and we see a lot of love from our customers. And the existing investors which we have they are, like, extremely supportive, including, like we have Roy from Bloomberg Beta, Charles from Precursor Ventures. They’re extremely supportive and, like, Phil and you guys. The whole philosophy of building a profitable company, it kind of runs in all of our investors, and that is what we love and that’s why we have been able to achieve what we have achieved till now.
Meb: That’s a good segue. I’d love to hear a little more about y’alls origin story. When did you guys meet? And I know you worked together on a prior company to starting EvaBot. Let’s hear it.
Rabi: We have four co-founders, two of us are here, two of us are in Calgary, Canada. All four of us, we have known each other for more than 15 years, actually. We went to the same college. Three of us went to the same college. Our fourth co-founder, I worked with him in my last startup. That’s how we know him. And then we were actually… We built a social TV company back in India which was more like Twitter before Twitter was popular in India, only for TV channels. So, yeah, we built this company and then I sold the company, then we thought, “Okay. What should we do next?” So when I came here, we had two, three different products. One was, basically, a video sharing app. And then we realized, “Oh, there is Facebook. There are so many video apps. No one is going to look at our video app.” It was more like TikTok, but way before TikTok was popular. So, we did that, but in the process of doing that we kind of accidentally got this idea. And then it started working. When it started working. I went back to my same old team in India and we all discussed, and everyone was like, “Let’s do it. This time let’s build a global product.” That’s how we, again, like, came back together to do this. So, we have been building products together for more than eight years now.
Meb: And the prior company was called… Was it iCouch?
Meb: I love it. Very cool, guys. Well, look, this has been great. It’s been a lot of fun. Talk to me a little bit about this startup journey having done it a few time, all the agony and ecstasy of being a founder, all the struggles. We can sympathize dealing with those pesky VCs. I always love telling people it’s like the writing business where you talk about JK Rowling, about how many publishers turned her down before writing Harry Potter. I think Airbnb was turned down by, like, it was either 50 or 60 VCs. So, I always smile at that. Any particular resources or ideas, people, books, websites that have been particularly useful to you guys on your journey? Any philosophies, anything in general that’s been particularly helpful as you guys have kind of built this?
Rabi: When we started back in India, it was 2010, and at that time internet was just getting popular and internet startups were just coming up, and Indian investments were really, really hard. So, we saw some challenge during that time, but we were eventually able to raise from some good angel investors and then, again, like, built a profitable company before selling it off. And when we came here, the advantage which I always had was, you know, we were a great team. It’s very hard to build anything without a great team. So, number one advice is, like, have co-founders and have co-founders with complementary skills. So, for example, we were able to build this company which is a combination of not just a tech product, but also a lot of operations and a lot of things that goes behind the scenes. And because Akshay had a lot of experience with operations and finance, he was able to manage that. Ashish was doing the whole tech stuff. I was looking at the product and Satwick was figuring out how to grow the company. So, we all had complementary skills and that made it really, really easy in a way, like, I mean, comparatively not like really easy, but it was easier for us to at least build and test the product. And that is very important I think in any startup because you might have to try multiple products, multiple approaches. And during all of this time, you know, it might take one year, two year, three years, but during all of this time, you need to keep it together. And that is where I think having great co-founders help, otherwise, it’s just going to be very, very hard.
Satwick: Especially in the early days when we were building the product, “Hooked” was a book that we constantly kind of referred back to. The way Nir Eyal has outlined the behaviour loops, the internal and external triggers, you know, for product design, that was something we kind of… That was a basis to not just design the product, how it works, but also, like, what is the pricing model? What is the business model for the company? Is it driven more by external inputs or more by internal triggers? That was a great book. “Zero to One” is still I think one of, both of us favourite book to kind of lean on a whole startup philosophy and how do you go against incumbents and disruption. Those are two very books we’ve kind of leveraged a lot.
Meb: Great. We’ll add links in the show notes. We’ll add both of those, and agree. Where do people find out more? If the listeners wanna check out your service, what you guys are up to? What’s the best places?
Rabi: Yeah. So, our website is evabot.ai. And we do have a special offer also for your listeners. If you go to evabot.ai/referral/themebfabershow, if you go to this link, you will be able to chat with Eva to get your free gift. And then there will be a special offer if you subscribe.
Meb: Oh, man. I love it, guys. Well, I appreciate that. Listeners, you guys better make sure you have your servers up and humming because you’re definitely gonna get a few subscribers there. Make sure you send them the honey. That was my favourite. What’s been the most highly reviewed product? Is it one of the smart home devices or what… Is there anything that people are just like, “Oh my God, this is the bomb.”?
Rabi: Yeah, yeah. So, in every category, we have popular products, right, because you might receive honey but someone who doesn’t like sweets will not get honey. So, there is no, like, generic great product, but in every category, we have amazing products. For example, in coffee, Ritual is kind of number one. I mean, Ritual Coffee Roasters has been number one since, like, I guess…
Satwick: Since the start.
Meb: Is that a Bay Area roaster?
Satwick: Yeah, they are.
Meb: Okay. Yeah, I loved that. That was great.
Rabi: And in smart home, Satwick, what do we have as a number one product? Smart home.
Satwick: In smart home the smart plugs are really, really popular because of how versatile they are. One product which is also extremely popular in the lifestyle category is Aervana wine aerator, automatic wine aerator that we have. A great product if you are a wine enthusiast especially with the red wines, it’s a very, very popular thing.
Rabi: Also the tripod. The tripod kind of blew up. We got this tripod…
Meb: It’s all the influencers out there. That’s why.
Rabi: Yeah. That has blown up.
Meb: We actually did a wine tasting at my family’s holiday a couple of years ago and did a pre and post aerator and it was astonishingly universal that people… Well, probably because we were aerating some garbage wine. I don’t know. But everyone preferred the wine post aeration than pre, so it sounds like it works. All right. One more time, the link. Where do people go to check out the generous gift?
Rabi: It’s evabot.ai/referral/themebfabershow.
Meb: Awesome guys. Rabi, Satwick, thanks so much for taking the time today to join us.
Rabi: Well, thanks.
Satwick: Thank you so much for having us.
Rabi: It was so much fun.
Satwick: Podcast listeners, we will add the links to the show notes, mebfaber.com/podcast. Take them up on their gift. I promise you guys will love it. Leave a review on iTunes, break or anywhere good podcasts are found. Thanks for listening, friends, and good investing.