Meeting Title: Uttam-Kumaran <> FlowFi-X-Brainforge Date: 2024-05-01 Meeting participants: Braden Bullen, Brian, Uttam Kumaran
WEBVTT
1 00:00:15.430 ⇒ 00:00:16.149 Braden Bullen: There we go!
2 00:00:23.550 ⇒ 00:00:24.680 Uttam Kumaran: Hey!
3 00:00:25.060 ⇒ 00:00:26.550 Braden Bullen: So how are we.
4 00:00:27.067 ⇒ 00:00:27.809 Uttam Kumaran: How are you?
5 00:00:27.810 ⇒ 00:00:31.439 Braden Bullen: And move. That’s way too bright in the background.
6 00:00:32.630 ⇒ 00:00:33.710 Uttam Kumaran: How’s everything going.
7 00:00:34.070 ⇒ 00:00:37.700 Braden Bullen: Good. I see the Lakers cups are probably not going good for you.
8 00:00:39.480 ⇒ 00:00:44.380 Uttam Kumaran: Yeah, you know, we gotta make some trades. I’ve never been an ad fan.
9 00:00:45.020 ⇒ 00:00:49.189 Braden Bullen: Oh, well, I have, because from New Orleans, so I.
10 00:00:49.190 ⇒ 00:00:51.669 Uttam Kumaran: Oh, yeah. Well, you guys, should you guys should have kept them.
11 00:00:52.000 ⇒ 00:00:52.530 Braden Bullen: He’s.
12 00:00:52.530 ⇒ 00:00:54.000 Uttam Kumaran: Not as one, but.
13 00:00:54.400 ⇒ 00:00:57.840 Braden Bullen: We’re not doing. We’re not doing much better over here. So.
14 00:00:58.530 ⇒ 00:01:00.789 Uttam Kumaran: You guys had a good season, though. So.
15 00:01:01.240 ⇒ 00:01:05.401 Braden Bullen: Yeah. Didn’t really result in anything. Is it going, Brian?
16 00:01:05.780 ⇒ 00:01:06.669 Brian: On s.
17 00:01:07.360 ⇒ 00:01:08.568 Uttam Kumaran: Hey? Nice to meet you.
18 00:01:09.060 ⇒ 00:01:10.370 Brian: Nice to meet you as well.
19 00:01:10.830 ⇒ 00:01:13.990 Brian: Where what are you guys talking about? I guess talking about some games.
20 00:01:14.573 ⇒ 00:01:15.739 Uttam Kumaran: The Lakers.
21 00:01:15.740 ⇒ 00:01:17.810 Braden Bullen: Yeah, he had a lakers lakers cup.
22 00:01:18.154 ⇒ 00:01:21.940 Brian: Bad bad bad year to be a lakers fan, I mean.
23 00:01:22.760 ⇒ 00:01:23.550 Uttam Kumaran: Yeah.
24 00:01:24.450 ⇒ 00:01:28.318 Uttam Kumaran: it’s we’ve won a lot, you know. So it’s okay.
25 00:01:30.380 ⇒ 00:01:32.079 Brian: True, true. I thought.
26 00:01:32.080 ⇒ 00:01:36.060 Uttam Kumaran: I thought, the pelicans are really gonna have, I mean, like Zion. I thought they were having.
27 00:01:36.060 ⇒ 00:01:42.729 Braden Bullen: I mean, I heard right for the playoffs. It was going well. Our coach is like way out of his death.
28 00:01:42.910 ⇒ 00:01:45.789 Braden Bullen: and then the roster is just kind of
29 00:01:46.110 ⇒ 00:01:56.265 Braden Bullen: weird, like we need to make some sort of change. I really wanted Jared Allen from the Cavaliers. The center was like kind of the only thing we could change and then Cj, Mccallum
30 00:01:56.880 ⇒ 00:02:02.540 Braden Bullen: kinda like, just, you know, just shrinks down to like a molecule in any large game. So it’s not.
31 00:02:02.540 ⇒ 00:02:03.050 Uttam Kumaran: Yeah.
32 00:02:03.050 ⇒ 00:02:04.129 Braden Bullen: Not good for the playoffs.
33 00:02:04.960 ⇒ 00:02:17.657 Braden Bullen: Okay, I’ll get. I’ll get off the the pelicans. This is Brian. Thomas wanted to starting like, I’ll I just wanted to do the intro and basically, I think the plan today would
34 00:02:18.310 ⇒ 00:02:26.510 Braden Bullen: would be if Tom, if you want to give him the rundown on on Brain Forge. Where you’re at now. Where are you looking to go?
35 00:02:26.865 ⇒ 00:02:44.620 Braden Bullen: Brian, me and Tom, and we’ve met with some of our partners that sort of do financing, but not really and so that’s why I I wanted to have him have a conversation with you, and kind of just brainstorm where he could go from where he’s at. So
36 00:02:44.953 ⇒ 00:02:50.110 Braden Bullen: I’ll I’ll give you a rundown of what brain Forge is at, and what the plan is.
37 00:02:50.110 ⇒ 00:02:51.179 Brian: Yeah. Sounds. Great.
38 00:02:51.180 ⇒ 00:02:52.960 Uttam Kumaran: Again, Brian. Thanks for taking the time.
39 00:02:52.960 ⇒ 00:02:53.929 Brian: Thank you. Yeah.
40 00:02:54.210 ⇒ 00:02:55.050 Uttam Kumaran: We’re on what.
41 00:02:55.050 ⇒ 00:02:56.460 Brian: Where am I catching you? By the way.
42 00:02:56.460 ⇒ 00:02:57.570 Uttam Kumaran: I’m in Austin.
43 00:02:57.910 ⇒ 00:03:01.198 Brian: Oh, okay, you’re you’re that cool new town.
44 00:03:01.968 ⇒ 00:03:08.061 Uttam Kumaran: I was in New York before this. But life here is quite a bit nicer, so.
45 00:03:08.420 ⇒ 00:03:10.379 Brian: Agree if you couldn’t tell this.
46 00:03:10.750 ⇒ 00:03:11.690 Brian: White
47 00:03:11.870 ⇒ 00:03:14.730 Brian: Wald’s prison is Chelsea in New York.
48 00:03:14.730 ⇒ 00:03:20.850 Uttam Kumaran: Okay, I had a feeling I had a feeling I heard the weather was good last weekend, so.
49 00:03:20.850 ⇒ 00:03:22.789 Brian: It is, it is for sure.
50 00:03:23.521 ⇒ 00:03:42.448 Uttam Kumaran: Yeah. So again, I my name is Utah. I started Brain Forge about a year ago. Maybe like July last year. Brain forge is data analytics consultancy. We basically help clients stand up data infrastructure. So anything from data engineering to data modeling to data analysis, related services.
51 00:03:43.221 ⇒ 00:04:03.748 Uttam Kumaran: My background is in data. Engineering did that for a number of different startups in New York, and as a contractor for a couple of firms. And then, after my last kind of stint and startup world, I was like, I don’t really want to go to another job. Let’s see if, like, we can make some money on the Internet.
52 00:04:04.080 ⇒ 00:04:04.950 Brian: Doing yeah.
53 00:04:05.561 ⇒ 00:04:22.370 Uttam Kumaran: Yeah. So probably it’s probably similar motivation. But I you know, I was able to land a couple of clients just through word of mouth. I kind of work to them myself, and then in the past past, like 4 months now, have begun to build a team. So we have about like
54 00:04:22.460 ⇒ 00:04:29.410 Uttam Kumaran: we have about 5 people now working some in the Us. Some
55 00:04:29.500 ⇒ 00:04:38.205 Uttam Kumaran: outside the Us. All contractors working anywhere from like 10 to 40 HA week.
56 00:04:39.000 ⇒ 00:04:44.519 Uttam Kumaran: the business is doing well. We’re doing like, you know, anywhere from like 20 to 30 grand a month.
57 00:04:45.875 ⇒ 00:04:46.650 Uttam Kumaran: Where
58 00:04:46.790 ⇒ 00:04:51.753 Uttam Kumaran: slowly onboarding new clients and kind of the mode I’m in right now is like a little bit of growth mode.
59 00:04:52.353 ⇒ 00:05:19.979 Uttam Kumaran: We’ve hired, you know enough of a team. And we’re hiring like a project manager. So I’m spending some time more on sales and kind of growing. The one thing I was really interested in. I talked to Braden about this, and when I sign up for Flow 5. This is one of the things I was interested in was just like understanding, like access to credit beyond, like, just like a monthly revolving credit card, mainly for growth, related expenses. So for things like hiring, like growth agencies.
60 00:05:20.478 ⇒ 00:05:23.981 Uttam Kumaran: for marketing related expenses and sales related expenses.
61 00:05:24.510 ⇒ 00:05:42.080 Uttam Kumaran: and I tried to go get like a credit facility through Chase, where I all the banking is, and they’re like you need to be in business for 2 years. There’s a couple of people that we’ve talked to that do more like invoice, related short term financing. But this is more interested in like a just like a revolving line of credit.
62 00:05:42.615 ⇒ 00:05:57.710 Uttam Kumaran: We’re just a credit line that can draw down. That’s not like a monthly term. But again, this is like my kind of like first foray into trying to look into opening up like a line like that, and like what the concerns or like pros and cons might be
63 00:05:59.940 ⇒ 00:06:02.969 Uttam Kumaran: But yeah, I mean happy to answer any other questions, or
64 00:06:03.346 ⇒ 00:06:04.629 Uttam Kumaran: if you have any thoughts.
65 00:06:05.410 ⇒ 00:06:08.640 Brian: Well, first of all, as a data engineer.
66 00:06:08.770 ⇒ 00:06:19.020 Brian: you sound a lot more sophisticated in learning, or having more so, know how how these products work, or in general, which is awesome. So that’s a great start.
67 00:06:19.656 ⇒ 00:06:21.480 Brian: Yeah, I mean, there’s.
68 00:06:21.480 ⇒ 00:06:37.044 Uttam Kumaran: I studied a little bit of finance in school, and I’m like just a big fan of finance like I. That’s what I read a lot about so kind of familiar with the lingo, but glad I didn’t go into banking, or anything like glad I landed when I landed, so.
69 00:06:37.350 ⇒ 00:06:45.589 Brian: Yeah, no, I I can assure you I don’t. I mean, I learned a couple of Excel hot keys, but you know I don’t know if that was worth
70 00:06:45.960 ⇒ 00:06:47.280 Brian: my, you know.
71 00:06:47.350 ⇒ 00:06:50.453 Brian: Probably ye years I shaved off my life.
72 00:06:51.889 ⇒ 00:06:59.280 Brian: okay, I I mean, there’s different ways of slicing this. I could go intimid by instrument of what
73 00:06:59.300 ⇒ 00:07:01.689 Brian: you’ve laid out and talk about
74 00:07:01.700 ⇒ 00:07:08.300 Brian: generally how the mechanics work. But I think for you what would be really helpful.
75 00:07:09.066 ⇒ 00:07:15.460 Brian: Before all of this, as I do, and as I have done when I was like operating home capital
76 00:07:15.834 ⇒ 00:07:23.379 Brian: and essentially what we did. There is kind of like a kayak, like experience, for private capital raises especially focused on venture debt.
77 00:07:23.770 ⇒ 00:07:25.200 Brian: And so
78 00:07:25.230 ⇒ 00:07:27.520 Brian: in that platform we kind of
79 00:07:27.550 ⇒ 00:07:30.240 Brian: help companies understand the different.
80 00:07:30.570 ⇒ 00:07:31.320 Brian: you know.
81 00:07:31.940 ⇒ 00:07:37.340 Brian: arrays of different instruments, and how that fits into their capitalization. And the most important question that I’ve
82 00:07:38.136 ⇒ 00:07:39.250 Brian: kind of
83 00:07:40.050 ⇒ 00:07:54.760 Brian: gone to in an as an investor myself like has been like, what? What is your ultimate goal? That you’re really trying to get out of right like right now you’re at 20 k, 30 k. Mr. That’s awesome. But in terms of
84 00:07:55.170 ⇒ 00:07:56.760 Brian: this capital
85 00:07:58.410 ⇒ 00:08:01.990 Brian: How are you looking to use this? And how like
86 00:08:02.850 ⇒ 00:08:04.259 Brian: do you have
87 00:08:04.400 ⇒ 00:08:09.630 Brian: plans of growing this agency slash, you know. Development platform
88 00:08:11.780 ⇒ 00:08:35.699 Brian: to be more so. A enterprise that’s really like, you know full stack development agency that’s doing like 4 to 5 million dollars a year. So you feel like you need to grow capital to do so. Or is this really just a working capital slash revolving light of credit that is going to really help you in the interim, like we’re Pldr. I’m just trying to get a better understanding of what you’re really trying to accomplish with
89 00:08:35.780 ⇒ 00:08:40.299 Brian: with this current company, and then then we could take take the conversation from there.
90 00:08:40.309 ⇒ 00:08:56.669 Uttam Kumaran: Sure. So definitely, it’s like, we’re not. We’re like a services company. We have, like some aspirations for like products and things we could do, but like definitely, not like a venture backable, startup and like frankly, not interested in like
91 00:08:56.869 ⇒ 00:09:07.329 Uttam Kumaran: giving away equity for financing. What I’m thinking more about, and really, again, is like kind of changing. This year. The target was like, can we reach like a million dollars in like arr.
92 00:09:07.821 ⇒ 00:09:30.049 Uttam Kumaran: and so that’s like about like 80 per month 86 per month, and like, what’s the gap between now and then? That was like the short term kind of goal. For like just this year. Beyond that I’m not really sure, like, I think this could continue to grow. But I don’t think we expand much beyond data like, I think, where we’re probably expanding.
93 00:09:30.050 ⇒ 00:09:32.910 Brian: So typically 80 to 90. K Mrr.
94 00:09:32.910 ⇒ 00:09:34.990 Uttam Kumaran: 80 to 90, K Mrr.
95 00:09:34.990 ⇒ 00:09:35.859 Brian: Okay. Okay. Yeah.
96 00:09:35.860 ⇒ 00:09:45.869 Uttam Kumaran: Is like ends up being like roughly a million, you know, run rate per year. That was like the goal for this year, which is like to hit that
97 00:09:45.900 ⇒ 00:09:47.570 Uttam Kumaran: like 80 k.
98 00:09:48.710 ⇒ 00:10:04.100 Uttam Kumaran: but in terms of like, after that I’m not sure. The 2 2 kind of prongs of the business is one data where I’m like, very, very comfortable where I myself have a lot of ability to get leads and get business. And of course, like train engineers and to service that business.
99 00:10:04.380 ⇒ 00:10:25.360 Uttam Kumaran: The second part of the business that we’ve started doing some work in is on AI within, like the AI development side, mainly helping companies think about AI architecture and stand up like generate AI related solutions we’ve worked with like one or 2 clients on that, and like have some threads. But that whole arena is like brand new, and there’s really no
100 00:10:25.380 ⇒ 00:10:33.208 Uttam Kumaran: like. There’s not a lot of competition for deals. But the problem is, there’s also not like a fixed architecture, and how to deploy these things.
101 00:10:33.540 ⇒ 00:10:48.224 Uttam Kumaran: but those are the kind of like the 2 prongs of the business that I was thinking more about the data, though I think easily, can scale past a million dollars in in just doing what we have mentioned, which is data engineering data modeling. But.
102 00:10:48.530 ⇒ 00:10:49.140 Brian: Yeah.
103 00:10:49.940 ⇒ 00:10:51.870 Brian: how? How do you think about
104 00:10:52.327 ⇒ 00:10:57.549 Brian: and getting to that? 80 K, let’s break down some like high level numbers here, right.
105 00:10:57.550 ⇒ 00:10:58.000 Uttam Kumaran: Yeah.
106 00:10:58.950 ⇒ 00:10:59.940 Brian: how much
107 00:11:00.130 ⇒ 00:11:08.289 Brian: or how big are in the average contracts that you guys are signing? And are they on a monthly retainer basis? Or they’re in their fee basis.
108 00:11:08.500 ⇒ 00:11:17.799 Uttam Kumaran: Yeah. So everything right now is on a hourly fee basis. The average client is anywhere from like 10 to 20 K,
109 00:11:17.810 ⇒ 00:11:24.649 Uttam Kumaran: we’re like 8 to yeah, probably, like, probably like 8 to 16 k, so we roughly.
110 00:11:24.840 ⇒ 00:11:28.430 Uttam Kumaran: you know, need like what? Like 6 or 7 of those
111 00:11:28.540 ⇒ 00:11:33.190 Uttam Kumaran: 5 like 5 to 7 of those. All of our clients we’ve like expanded.
112 00:11:33.190 ⇒ 00:11:37.430 Brian: Hourly fee I’m assuming, like anywhere from like a hundred 150.
113 00:11:37.430 ⇒ 00:11:39.799 Uttam Kumaran: Like a hundred 50, and up.
114 00:11:40.010 ⇒ 00:11:40.740 Brian: Okay.
115 00:11:41.135 ⇒ 00:11:48.259 Uttam Kumaran: And we’re expanding those clients. Yeah, it’s about 150, and up the largest expense is headcount
116 00:11:48.935 ⇒ 00:11:55.919 Uttam Kumaran: like aero related expense. We don’t have any like office. We don’t have much equipment, and it’s just software for, like.
117 00:11:56.060 ⇒ 00:11:57.970 Brian: And are these people full.
118 00:11:58.020 ⇒ 00:11:59.040 Brian: holy.
119 00:11:59.060 ⇒ 00:12:00.220 Brian: employed
120 00:12:00.640 ⇒ 00:12:03.029 Brian: staff, or are they contractors underneath you.
121 00:12:03.030 ⇒ 00:12:04.340 Uttam Kumaran: It’s all contractors.
122 00:12:04.820 ⇒ 00:12:05.640 Brian: Got you.
123 00:12:07.180 ⇒ 00:12:14.257 Uttam Kumaran: again, like long term, would prefer to have full time staff, preferably here in Austin. But
124 00:12:14.910 ⇒ 00:12:18.204 Uttam Kumaran: again, like I think we have a little bit of a ways to go
125 00:12:18.910 ⇒ 00:12:20.000 Uttam Kumaran: and.
126 00:12:20.240 ⇒ 00:12:21.319 Brian: On a
127 00:12:21.760 ⇒ 00:12:26.459 Brian: average contract to which you’re laying out is 8 to 16 K.
128 00:12:26.640 ⇒ 00:12:27.710 Brian: And
129 00:12:28.330 ⇒ 00:12:31.269 Brian: what would you net out typically on that?
130 00:12:31.920 ⇒ 00:12:33.400 Brian: The after payroll.
131 00:12:34.226 ⇒ 00:12:38.599 Uttam Kumaran: Yeah, payroll on. That may be close to like
132 00:12:38.610 ⇒ 00:12:40.209 Uttam Kumaran: 6 or 7 k.
133 00:12:41.390 ⇒ 00:12:42.470 Uttam Kumaran: so.
134 00:12:43.180 ⇒ 00:13:01.327 Uttam Kumaran: And I, I would say, the one thing is, we’re hiring a project managers, and that person will work across clients, so there will be a little bit more added expense. I was hoping the business could run at like a 30% margin all expenses in, because again, we don’t even have an office. Everything’s pretty much software
135 00:13:01.630 ⇒ 00:13:06.069 Brian: That’s pretty, I’ll say, in in my experience of doing like
136 00:13:06.450 ⇒ 00:13:11.949 Brian: acquisitions of it, consulting businesses. That is a aspirable.
137 00:13:12.560 ⇒ 00:13:18.969 Uttam Kumaran: It’s a really good margin. But I have. I have hired a lot of data agencies
138 00:13:19.110 ⇒ 00:13:21.150 Uttam Kumaran: who are charging way more
139 00:13:22.158 ⇒ 00:13:29.430 Uttam Kumaran: with way, worse talent and the talent like typically won’t ask for more than like
140 00:13:29.560 ⇒ 00:13:32.999 Uttam Kumaran: 100 or a hundred 50 bucks, even like super super senior people.
141 00:13:33.585 ⇒ 00:13:37.489 Uttam Kumaran: And I know agencies that are charging upwards of 300 plus
142 00:13:37.870 ⇒ 00:13:44.900 Uttam Kumaran: like. And again, I don’t have an office there. I think there will be expense if I convert people to W. 2, if we add an office and things like that.
143 00:13:45.281 ⇒ 00:13:47.899 Uttam Kumaran: But you’re right, I mean, like again, I think
144 00:13:48.500 ⇒ 00:14:07.959 Uttam Kumaran: for me, I’m like look anywhere like in the 10 to 20 would would be great. But I do think some companies like again, I’ve known so many people that were run some of these companies. I do think there is bloat that like I, I really have like managed to avoid and we we mainly again, if like if we’re able to hit that
145 00:14:07.960 ⇒ 00:14:21.180 Uttam Kumaran: 5 to 7 client range active at any time, which means like, of course, like, if there’s any churn, or if there’s new pipeline. I think the margin will be pretty healthy. The amount of like software expense that we have now.
146 00:14:21.270 ⇒ 00:14:29.739 Uttam Kumaran: the only thing that’s really scales like our Google and our slack expenses. There’s not much on the expense size that scales except for headcount.
147 00:14:30.234 ⇒ 00:14:31.130 Uttam Kumaran: I see. So you’re.
148 00:14:31.130 ⇒ 00:14:33.020 Brian: Not doing like your own like
149 00:14:33.040 ⇒ 00:14:44.350 Brian: thing that you’re onboarding people to your own like azure, or, you know, like aws, or anything like that you’re going all on prem, and you’re really just being the guide that’s running the Etl and everything.
150 00:14:44.350 ⇒ 00:14:58.710 Uttam Kumaran: Yeah, it’s all cloud, but the client owns all the clouds, owns all the different vendors. We also have cut referral fees with each of the vendors because we do some implementation. So if people are doing annual contracts, we get a fee on that
151 00:15:00.120 ⇒ 00:15:07.860 Uttam Kumaran: And yeah, I mean, again, there’s just a couple of different other like revenue opportunities in that world, and doing like working with these vendors to get deals and things like that.
152 00:15:08.196 ⇒ 00:15:24.313 Uttam Kumaran: Again, I think, like the larger headcount expenses will be one if we like onshore. Everybody like half the folks are working offshore like in either Latin, and then we have one in the Philippines. Rates are quite a bit lower, and we still pay like pretty pretty good out there.
153 00:15:25.300 ⇒ 00:15:32.929 Uttam Kumaran: So that’s where I would see, and then again, the rest is like, if I I don’t, if I if I need to hire like a full time salesperson
154 00:15:33.170 ⇒ 00:15:36.699 Uttam Kumaran: like that’ll be another like straight expense. But
155 00:15:38.240 ⇒ 00:15:47.259 Uttam Kumaran: again, I don’t know that the initial goal for this year I think I can accomplish just selling by myself, just looking at how much deal flows coming my way.
156 00:15:47.593 ⇒ 00:15:52.870 Uttam Kumaran: Right now the goal of the company, and we’re about to hire a project manager like this week.
157 00:15:53.050 ⇒ 00:15:59.800 Uttam Kumaran: and that pretty much will take me out of like a good amount of the day to day, allowing me to go do sales and marketing basically.
158 00:16:00.350 ⇒ 00:16:03.230 Brian: Gotcha, and talk to me about like the
159 00:16:03.610 ⇒ 00:16:09.999 Brian: the cash conversion cycle here, if you’re, you know, on a month to month, hourly basis
160 00:16:11.220 ⇒ 00:16:17.329 Brian: on average. Have you gotten those on like the mid of month the next month? Like, How how are you invoicing? And how are you getting that.
161 00:16:17.330 ⇒ 00:16:21.829 Uttam Kumaran: Yeah. So it’s all invoices, like, we’ll go out today, basically. And then.
162 00:16:22.310 ⇒ 00:16:25.200 Uttam Kumaran: yeah, I mean, that’s the game. I would say.
163 00:16:25.500 ⇒ 00:16:36.210 Uttam Kumaran: like, people are better than others. But it’s basically like a re, like, just like a receivables game. I would say, it’s it’s it’s usually within the first 7 to 10 days of the month.
164 00:16:36.963 ⇒ 00:16:37.830 Uttam Kumaran: And then I don’t.
165 00:16:37.830 ⇒ 00:16:40.210 Brian: Have you had any instances with where
166 00:16:40.470 ⇒ 00:16:44.380 Brian: they haven’t collected, or or you’re not able to collect rather.
167 00:16:44.380 ⇒ 00:16:45.932 Uttam Kumaran: Nothing that is like
168 00:16:47.230 ⇒ 00:16:52.494 Uttam Kumaran: like anything dramatic. It’s more just like it’s either forgetting or it’s like,
169 00:16:52.940 ⇒ 00:16:56.590 Uttam Kumaran: we’re moving some money around. Or can you try this other thing?
170 00:16:56.890 ⇒ 00:16:57.540 Brian: Gotcha! It’s.
171 00:16:57.540 ⇒ 00:17:00.798 Uttam Kumaran: There’s never been anything where it’s like. Oh, we did a bunch of work, and they haven’t paid
172 00:17:01.637 ⇒ 00:17:04.860 Uttam Kumaran: and I would say, like we?
173 00:17:04.869 ⇒ 00:17:07.959 Uttam Kumaran: These are things with a sales cycles, maybe anywhere from like
174 00:17:07.970 ⇒ 00:17:16.179 Uttam Kumaran: more than a month, like one to 2 months, and they’re pretty like again. It’s like a hundred $50 an hour. So it’s pretty like large contracts.
175 00:17:16.250 ⇒ 00:17:22.570 Uttam Kumaran: The reason why I haven’t signed anything on like a cock project basis is a little bit hard to predict.
176 00:17:23.178 ⇒ 00:17:27.159 Uttam Kumaran: And I will probably end up getting screwed more often than not. If I.
177 00:17:27.160 ⇒ 00:17:27.860 Brian: For sure. Gotcha.
178 00:17:27.869 ⇒ 00:17:28.479 Uttam Kumaran: Tap.
179 00:17:30.089 ⇒ 00:17:30.989 Uttam Kumaran: the
180 00:17:31.349 ⇒ 00:17:38.619 Uttam Kumaran: yeah. And that’s like, that’s basically why we decided to do that. Maybe in the future that like changes. But
181 00:17:39.059 ⇒ 00:17:41.079 Uttam Kumaran: I would say, like.
182 00:17:41.089 ⇒ 00:17:46.599 Uttam Kumaran: I don’t know. It’s really hard to predict on the data side unless till you’re in there, like how much stuff is, gonna how long stuff is gonna take.
183 00:17:47.060 ⇒ 00:17:50.009 Brian: Gotcha, and how are you? Are you paying yourself right now?
184 00:17:50.360 ⇒ 00:18:00.663 Uttam Kumaran: Yeah, I’m I’m paying like, whatever the lowest is like, 20 or yeah, whatever like the lowest paycheck I can put into gusto, basically. And then
185 00:18:01.380 ⇒ 00:18:05.510 Uttam Kumaran: I have. I’m taking out like owners Comp, just for my own expenses.
186 00:18:06.170 ⇒ 00:18:09.220 Uttam Kumaran: But there was a there was a bunch of startup costs that I put in
187 00:18:09.910 ⇒ 00:18:11.840 Uttam Kumaran: when we started last year. So.
188 00:18:12.560 ⇒ 00:18:16.750 Brian: How much, how much cash do you have on hand right now at the at the business.
189 00:18:17.404 ⇒ 00:18:26.535 Uttam Kumaran: We probably have, like 35 KI should check flow 5 if we were set up. But yeah, probably, like, we probably have like 35 k or so.
190 00:18:26.850 ⇒ 00:18:27.490 Brian: Okay.
191 00:18:27.490 ⇒ 00:18:31.781 Uttam Kumaran: I think they’ll we’ll probably end up being closer to like 50 once I when stuff comes in.
192 00:18:32.364 ⇒ 00:18:42.380 Uttam Kumaran: That’s a lot higher than we have been but the last 3 months we’ve been like stabilizing more and like, money’s coming in. And people are getting paid on time. And so yeah.
193 00:18:43.290 ⇒ 00:18:43.910 Brian: So
194 00:18:44.730 ⇒ 00:18:52.069 Brian: first first week of every month invoices for the clients go out. When do the contractors get paid? Typically.
195 00:18:52.070 ⇒ 00:18:55.289 Uttam Kumaran: Contractors all get paid after the money comes in.
196 00:18:55.820 ⇒ 00:18:59.619 Uttam Kumaran: And that’s all like in the contracts, basically that like
197 00:18:59.910 ⇒ 00:19:02.880 Uttam Kumaran: clients kind of have to pay first, I mean.
198 00:19:02.880 ⇒ 00:19:06.610 Brian: Actually, I’m really, I’m really glad you did that cause you could get really fucked in terms of.
199 00:19:06.610 ⇒ 00:19:10.039 Uttam Kumaran: Yeah, I basically. Well, yeah. And then I, I was like.
200 00:19:10.260 ⇒ 00:19:17.099 Uttam Kumaran: well, cause I was in this game. Where again, I was like some new contracts. Then there’s like delays, and I’m like, I just told everyone
201 00:19:17.230 ⇒ 00:19:23.709 Uttam Kumaran: as soon as they pay you get paid. And that’s like pretty great. And I and I just like, I think, I just, yeah.
202 00:19:24.110 ⇒ 00:19:32.769 Uttam Kumaran: yeah, you’re. I think you get exactly a why, I would pro like, I prefer not to do that. But someone gave. A a friend of mine used to run one of these companies.
203 00:19:32.800 ⇒ 00:19:42.009 Uttam Kumaran: He was a GM. And so he was like, that’s the hard. That’s gonna be the biggest thing you deal with. So just make sure that people get paid after, if possible.
204 00:19:42.827 ⇒ 00:19:44.530 Uttam Kumaran: After you collect.
205 00:19:45.930 ⇒ 00:19:47.440 Brian: yeah, you’re okay.
206 00:19:47.900 ⇒ 00:19:51.660 Brian: I’ve gotten my notes. And I feel, like, I have a pretty good handle.
207 00:19:51.660 ⇒ 00:19:52.660 Uttam Kumaran: Okay? What else?
208 00:19:52.660 ⇒ 00:19:54.122 Brian: Where you’re at.
209 00:19:57.570 ⇒ 00:20:04.380 Brian: Okay, that’s on the current business front. If you look forward in the next couple of months.
210 00:20:05.360 ⇒ 00:20:07.419 Brian: how do you think about pipeline?
211 00:20:07.700 ⇒ 00:20:11.099 Brian: Right? Because you’re at what 30 k. 20 to 30 K. Month
212 00:20:11.398 ⇒ 00:20:15.689 Brian: do you think about pipeline? And how do you think about turn as it relates to
213 00:20:15.840 ⇒ 00:20:19.770 Brian: the businesses that you have today and new business acquisitions.
214 00:20:19.880 ⇒ 00:20:20.610 Brian: Yeah.
215 00:20:20.760 ⇒ 00:20:24.629 Uttam Kumaran: Yeah. So the only so in terms of pipeline for the future
216 00:20:24.680 ⇒ 00:20:31.709 Uttam Kumaran: part of that is really just like me getting in front of people. There are a ton of leads
217 00:20:31.800 ⇒ 00:20:36.529 Uttam Kumaran: that I have from like warm intros and people I need to follow up with
218 00:20:36.570 ⇒ 00:21:00.299 Uttam Kumaran: that have like lots of opportunity. So I’m very confident in closing that I have a lot of like partner channels through other service agencies, people that are doing like product, people that are doing like a like a higher level data analysis. They want us to come in and do data engineering. So I would say, like, I’m not. I’m pretty confident that without even like cold outbound, we can get like quite a bit more business.
219 00:21:00.850 ⇒ 00:21:08.850 Uttam Kumaran: in terms of churn. The only reason customers have churned, if, like their company, starts to fail outside of us, which is part of the reason. Like I would
220 00:21:09.920 ⇒ 00:21:12.550 Uttam Kumaran: part of the reason I would like to continue to go
221 00:21:12.650 ⇒ 00:21:16.590 Uttam Kumaran: out of like startup land and work for companies that are more like
222 00:21:16.880 ⇒ 00:21:19.199 Uttam Kumaran: midsize, private or enterprise.
223 00:21:19.857 ⇒ 00:21:25.540 Uttam Kumaran: A lot of that is kind of dependent on industry specific. So we have clients that are kind of all over the place.
224 00:21:25.660 ⇒ 00:21:28.609 Uttam Kumaran: We have like private e-commerce.
225 00:21:28.620 ⇒ 00:21:34.230 Uttam Kumaran: We have, like private manufacturing. We have, like a startup like a series, a startup.
226 00:21:34.678 ⇒ 00:21:40.741 Uttam Kumaran: So the the startups are the one that I’m like, most worried about. Just cause like, that’s just just what happens.
227 00:21:41.643 ⇒ 00:21:44.359 Uttam Kumaran: The private companies. I’m actually.
228 00:21:44.510 ⇒ 00:21:47.371 Uttam Kumaran: I only see us really expanding. And that’s what we have done.
229 00:21:47.975 ⇒ 00:22:06.679 Uttam Kumaran: Because we go. Data is kind of like you go in from one arena to the next to the next, and start to measure and manage so that expansion process, though I don’t have like a there’s no clear like understanding of, like how fast that is. And like how often we do that since we we’ve just had, maybe like 5 5 or 6 clients total.
230 00:22:10.190 ⇒ 00:22:24.749 Uttam Kumaran: yeah. I mean again, like, I don’t know. I think, in terms of pipeline, like I have meetings every week that it really it’s just like there needs to be a follow up motion and materials that go their way. And like, I have not had time to basically purely because
231 00:22:25.030 ⇒ 00:22:35.666 Uttam Kumaran: we’re working on the company. The this Project manager hire is pretty much like the last thing that I’ve been doing on the engineering side, which is like managing all the engineers every day. And
232 00:22:36.250 ⇒ 00:22:42.409 Uttam Kumaran: that person. We’re also hiring externally in Latin, so the prices will be fair, favorable.
233 00:22:42.950 ⇒ 00:22:43.550 Brian: Okay.
234 00:22:44.100 ⇒ 00:22:49.560 Brian: Alright, your doctor’s orders. This is this is what I think your situation is.
235 00:22:49.560 ⇒ 00:22:50.240 Uttam Kumaran: Okay.
236 00:22:50.460 ⇒ 00:22:56.289 Brian: I I don’t know that you’re in the best place to get any type of external financing today.
237 00:22:56.290 ⇒ 00:22:56.650 Uttam Kumaran: Okay.
238 00:22:56.650 ⇒ 00:23:00.209 Brian: Right. The reason being is 35 k. Of cash cushion
239 00:23:00.310 ⇒ 00:23:06.100 Brian: with the caveat that you have, you know you’re probably incrementally bringing in anywhere from like
240 00:23:06.370 ⇒ 00:23:08.750 Brian: 5 to 6 k. Per month
241 00:23:08.790 ⇒ 00:23:10.390 Brian: into this bank account.
242 00:23:12.190 ⇒ 00:23:23.850 Brian: caveating that again by saying, if you bring in a project manager, that’s probably gonna get less and be probably more or less like 2.5 k. To 3 KA month net of payroll expenses. Right? I think
243 00:23:25.170 ⇒ 00:23:32.160 Brian: I start to think about. Then, like, Okay, where? Where is the need? Here? Like, what is the actual need for the working capital cost?
244 00:23:32.220 ⇒ 00:23:33.339 Brian: I don’t, really.
245 00:23:33.550 ⇒ 00:23:36.824 Brian: because you’re not a business like
246 00:23:37.560 ⇒ 00:23:38.960 Brian: for example, like.
247 00:23:41.080 ⇒ 00:23:53.903 Brian: yeah, okay, couple ways to think about it. If you’re not a, you’re not a marketing agency, where, if you do outbound sales. And if you throw a lot of money into adsense and all these things in terms of having the access to capital where you’re gonna get incremental.
248 00:23:54.480 ⇒ 00:24:06.289 Brian: you know, return on investment cap at all right? Because those guys are purely, it’s really important to get in front of as many people as possible, compel them. Go through the outbound sales process and hopefully you’ll get one of those.
249 00:24:07.597 ⇒ 00:24:10.270 Brian: Sorry I’m getting a phone call that I will.
250 00:24:17.740 ⇒ 00:24:18.780 Uttam Kumaran: Like bribe.
251 00:24:18.920 ⇒ 00:24:23.490 Braden Bullen: Oh, no, Brian’s awesome. This is the first time I’ve I’ve like seen him work, or or been in a meeting with him.
252 00:24:23.490 ⇒ 00:24:24.700 Uttam Kumaran: I’m loving it.
253 00:24:24.700 ⇒ 00:24:26.100 Braden Bullen: I’m super intrigued.
254 00:24:27.240 ⇒ 00:24:27.970 Brian: Clicked.
255 00:24:28.140 ⇒ 00:24:29.080 Brian: Cancel twice.
256 00:24:30.090 ⇒ 00:24:40.949 Brian: So yeah, I I don’t. I don’t know that it makes a lot of sense right now to get any type of debt in the door when you already have
257 00:24:41.990 ⇒ 00:24:44.420 Brian: a pretty tight cash situation.
258 00:24:44.420 ⇒ 00:24:44.780 Uttam Kumaran: Yeah.
259 00:24:44.780 ⇒ 00:25:02.189 Brian: You’re you’re currently in the early innings of navigating what your actual net expenses look like. And actually the cash flow situation. So all that being said, you probably only have, like 12 months of historical financials, right? Of of products as a company.
260 00:25:02.190 ⇒ 00:25:25.840 Brian: Oh, even less, which if you go to a regional bank which generally tends, have the best rates, and they’re gonna give you anywhere from 7 to 9%. Although right now, in current climate probably gonna be somewhere close to 8 to 11%. They’re not gonna give you that because one you don’t have enough assets collateral because you’re not a AR business, right? You’re not gonna get any AR because your your conversions are more or less
261 00:25:26.020 ⇒ 00:25:46.450 Brian: the cure on a month to month basis, the next question becomes, okay. So if you have steady clients that come in and out, and right now, 12 months like out of all those, I don’t know at what point when each client has stayed, and what that General Ltv. Of each client is. But let’s assume that one of them has been with you from the beginning.
262 00:25:46.610 ⇒ 00:25:57.789 Brian: That is one where you could probably get some type of factor invoicing, where, if you have demonstrated abilities in the same way, how that customer cohort just has been behaving over time.
263 00:25:57.870 ⇒ 00:26:06.049 Brian: just taking that one cut and going to like a funder, or even like Cap Chase has like very small loans that they do
264 00:26:06.760 ⇒ 00:26:09.029 Brian: and and they would be able to probably like
265 00:26:09.270 ⇒ 00:26:28.860 Brian: front like 50 to 60% of that on a float basis. But with a caveat, that of that being on a Apr basis, that is gonna come at a cost you for 22 to 24. So very, very expensive capital, right? And it’s gonna be advertised along like 6 months to 8 months. And so that’s gonna really cut away at your cash.
266 00:26:28.980 ⇒ 00:26:29.900 Brian: So
267 00:26:30.660 ⇒ 00:26:36.019 Brian: ultimately, when I think about where you’re trying to get to. I feel like
268 00:26:37.130 ⇒ 00:26:45.149 Brian: to be honest. I don’t. I don’t really feel like you have a need for this cash right now up until the fact that you really manage
269 00:26:47.520 ⇒ 00:26:57.270 Brian: you feel like you’re really at capacity. Right? I feel like you’re you’re you seem pretty chill. You know you like you. You seem like you’re you’re calmed out right now in terms of you know. You know.
270 00:26:57.270 ⇒ 00:27:00.964 Uttam Kumaran: You’d be surprised. But that’s just why they’re moving here.
271 00:27:01.300 ⇒ 00:27:05.110 Brian: Like, yeah, yeah, you took some of your Bramatas, and you know you’re you’re good. But.
272 00:27:05.110 ⇒ 00:27:06.740 Uttam Kumaran: I’m off coffee right now. No.
273 00:27:07.250 ⇒ 00:27:07.740 Uttam Kumaran: Married.
274 00:27:09.030 ⇒ 00:27:11.419 Brian: Yeah. But you know, in general.
275 00:27:11.420 ⇒ 00:27:12.590 Uttam Kumaran: That’s the way you might sit down.
276 00:27:12.590 ⇒ 00:27:15.209 Brian: Yeah, I I think in general, like.
277 00:27:15.620 ⇒ 00:27:17.189 Brian: more or less like
278 00:27:17.460 ⇒ 00:27:18.380 Brian: you’d.
279 00:27:18.540 ⇒ 00:27:33.219 Brian: you’re at a place where you’re in the scaling process, right? And so to that end, you know, what is this actual access to capital gonna get? You will probably gonna get you a couple or months or 2 where you don’t have to get reoccurring like
280 00:27:33.656 ⇒ 00:27:41.059 Brian: cash inflow in, but at a pretty high cost to you out of business. If I think about your actual expenses today.
281 00:27:41.458 ⇒ 00:27:48.070 Brian: You’re already returning so a great way that I’ve been odd from my mentors has been like
282 00:27:48.070 ⇒ 00:28:13.119 Brian: any line item into P. And L. Like, think of it. Think about it as the same way. How you think about a stock investment like more or less. What you have told me is, if a average contract on a month month basis is gonna generate 8 to 16 KA month, and your payroll for that is 6 to 7 K. Assuming on the higher end of that, your incremental return on invested capital, for that is more or less like 30%.
283 00:28:13.160 ⇒ 00:28:26.080 Brian: Right? You’re getting 30% on all the money that you’re spending as net and so you know to me that’s a more attractive yield than what you’re getting on a 22 or 24% paper that you’re gonna get right. So
284 00:28:26.180 ⇒ 00:28:27.950 Brian: saving more
285 00:28:28.400 ⇒ 00:28:41.186 Brian: trying to optimize more on the payroll side makes more sense to me than getting 25 like 25 K. Check just to upfront more of the cost that you would get on the project manager side.
286 00:28:42.880 ⇒ 00:28:50.867 Brian: another way. How you could skirt away at this problem, at least for this project manager potentially is on a commission and a basis.
287 00:28:51.200 ⇒ 00:28:57.499 Uttam Kumaran: What I’m thinking, even on the engineering side, I’m like trying to figure out, cause this not really pops. The people don’t really do it.
288 00:28:57.510 ⇒ 00:29:00.722 Uttam Kumaran: But I just think it’s like kind of like out of laziness.
289 00:29:01.160 ⇒ 00:29:10.590 Uttam Kumaran: It’s like they don’t set incentives for like these first engineers. But again, there should be some sort of pool bonus for retaining these clients for expansion.
290 00:29:10.650 ⇒ 00:29:20.730 Uttam Kumaran: And again, maybe the engineers don’t have much to do with it, but maybe the project manager is on more of a hey? If this project expands once we land it almost like an account manager role. There’s some sort of mission structure.
291 00:29:21.070 ⇒ 00:29:22.970 Brian: Yeah, for any type of
292 00:29:23.354 ⇒ 00:29:30.450 Brian: I feel like consulting business like the name of the game is, how do you lower your operating leverage, ie.
293 00:29:30.450 ⇒ 00:29:53.329 Brian: How do you decrease the amount of fixed cost that you have on a monthly basis? And that’s the biggest thing. When you think, when you look at like my former company, like, if you think like Fti consulting, for example, right? They’re a public traded company that does consulting all across data, analytics, over structuring, which is my world for a long time like, go look at their value as a percentage of sales
294 00:29:54.380 ⇒ 00:30:02.270 Brian: or or like ev sales, for that business is very low. People don’t look at that as a forward looking business, and, on the contrary.
295 00:30:02.430 ⇒ 00:30:08.990 Brian: for businesses like that as well as businesses like investment banks. The way how people view
296 00:30:09.442 ⇒ 00:30:17.667 Brian: actually, how valuable and services business is on account divided by revenue, especially on those that are
297 00:30:18.440 ⇒ 00:30:20.579 Brian: those that are like the actual, like
298 00:30:20.990 ⇒ 00:30:23.660 Brian: sales generating like partner level guides, so like.
299 00:30:23.660 ⇒ 00:30:24.009 Uttam Kumaran: Sort of the.
300 00:30:24.420 ⇒ 00:30:37.370 Brian: This senior managing director divide by revenues, and very good proxy of thinking about it right? And so for your your end, like the way, how I would think about it as you scale up to that 80 to 90 K is like, okay, this month, like, how how we tracked
301 00:30:37.790 ⇒ 00:30:52.039 Brian: revenue to the actual head count that we have like. Are we going up or down? And then from there, then on, like once you bring on that project manager. Obviously, you’re gonna take a hit. But with maybe these bells and whistles that you have in terms of commissions, you could you know.
302 00:30:52.160 ⇒ 00:31:02.500 Brian: decrease the upfront cost, albeit you’re gonna get less of the nut, you know, at the end, I think what would. What’s the probably goal for your end is probably to cruise where this ship kind of
303 00:31:02.560 ⇒ 00:31:06.302 Brian: operates and generates on its own, as you kind of could, you know, go out and do your.
304 00:31:06.510 ⇒ 00:31:06.890 Uttam Kumaran: Correct.
305 00:31:06.890 ⇒ 00:31:08.119 Brian: Bring all the numbers right? So.
306 00:31:08.120 ⇒ 00:31:19.099 Uttam Kumaran: Yeah, the consulting business is nice, is it? Just throws off cash. And it’s not like a business I was planning on like selling, because again, the multiples wouldn’t be that good. And it’s really probably hinged a lot to me.
307 00:31:19.395 ⇒ 00:31:25.019 Uttam Kumaran: But the goal, the actual goal of the business that I thought of originally was like, Okay, if this spins off a lot of cash
308 00:31:25.470 ⇒ 00:31:38.459 Uttam Kumaran: like, you know, 20 or 30%, then use that cash for more product development or things that could achieve higher multiples. But again, that’s like, if that’s in 2 years or 5 years, like, I don’t know, I can’t bet on that plan today.
309 00:31:38.460 ⇒ 00:31:38.940 Brian: Yeah.
310 00:31:38.940 ⇒ 00:31:44.910 Uttam Kumaran: So. But that’s like that was the idea. And that way I can go fund projects without having to go raise like venture.
311 00:31:45.340 ⇒ 00:31:45.890 Brian: Brett.
312 00:31:45.890 ⇒ 00:31:46.329 Uttam Kumaran: And I say.
313 00:31:46.330 ⇒ 00:31:50.629 Brian: And and like, I, I think your business gonna is gonna do great regardless right.
314 00:31:50.630 ⇒ 00:31:51.049 Uttam Kumaran: Can I be?
315 00:31:51.810 ⇒ 00:31:52.390 Uttam Kumaran: Yeah.
316 00:31:52.390 ⇒ 00:31:57.735 Brian: No, it’s it sounds like it. And one of the one of the things that
317 00:31:58.220 ⇒ 00:32:03.829 Brian: I think you might want to consider just because for you right now any investor or any
318 00:32:04.320 ⇒ 00:32:30.979 Brian: you know, Smb, financing platform might be a reluctant for is the fact that you have not enough track record. And one way to skirt skirt against that. Actually, if you want to go through this arduous process is potentially getting any municipalities or governmental contracts in the door right? And so that is more or less viewed, even though if it’s a if it’s a monthly retainer, those guys have more. So a stickier you know.
319 00:32:31.090 ⇒ 00:32:48.550 Brian: lens right in terms of how they think about contracts. And I I’ve personally funded a couple of contracts a, as you know, Rbf’s revenue based financing in the nature of, like, you know, funding 90% on contract value. And then, you know, just because, you know, we know that they’re gonna pay right the moment you sign this thing.
320 00:32:48.915 ⇒ 00:32:50.740 Uttam Kumaran: Or government, or like municipal.
321 00:32:50.740 ⇒ 00:32:58.170 Brian: Exactly exactly so. That might be one way. If you really are thinking about in in desire of getting that capital in the door.
322 00:32:59.840 ⇒ 00:33:00.869 Brian: What else am I thinking.
323 00:33:00.870 ⇒ 00:33:04.640 Uttam Kumaran: So the main. So the main other lever is just like, try to stack capital.
324 00:33:05.940 ⇒ 00:33:18.810 Uttam Kumaran: Yeah, in terms of like cash holdings, cause I can’t. I can’t really affect the fact that we haven’t been in business that long, but in terms of like, okay, just try to save as much as possible to increase like the amount of capital on hand.
325 00:33:19.445 ⇒ 00:33:19.730 Uttam Kumaran: Yeah.
326 00:33:19.730 ⇒ 00:33:21.050 Brian: Yeah. Yeah.
327 00:33:21.850 ⇒ 00:33:22.400 Uttam Kumaran: It is mainly.
328 00:33:22.400 ⇒ 00:33:22.799 Brian: Yeah, like.
329 00:33:22.800 ⇒ 00:33:33.069 Uttam Kumaran: Like, if I have to get like a website done, or if I have to like fly somewhere to meet some people that’s like short term, one or 2 k. Or like 3 to 4 K. That I’m like
330 00:33:33.250 ⇒ 00:33:34.309 Uttam Kumaran: I was like Barry.
331 00:33:34.310 ⇒ 00:33:34.930 Brian: Yeah, comes up.
332 00:33:34.930 ⇒ 00:33:37.400 Uttam Kumaran: That’s like that’s that’s the reason why I was like.
333 00:33:37.430 ⇒ 00:33:40.970 Uttam Kumaran: damn if I could just hit this to another account that I can pay.
334 00:33:41.230 ⇒ 00:33:45.220 Uttam Kumaran: I’m not. I’m I’m very confident that them that we’re gonna get the clients
335 00:33:45.420 ⇒ 00:33:50.224 Uttam Kumaran: right. And so I can bet on that. But then I can’t bet on that on a credit card cause. Then I’m gonna it’s gonna be a one month
336 00:33:51.110 ⇒ 00:34:01.242 Uttam Kumaran: thing. So like I again, I think I think the average like it’s gonna take us about one to 2 months, I would say. It’s probably later than I expect to close clients.
337 00:34:02.750 ⇒ 00:34:09.609 Uttam Kumaran: and so that process like has to happen before we close. And eventually, Bill, it’s gonna be more than one credit card cycle.
338 00:34:09.610 ⇒ 00:34:11.250 Brian: Are you? Are you using
339 00:34:11.300 ⇒ 00:34:12.910 Brian: business credit card today?
340 00:34:13.100 ⇒ 00:34:13.679 Uttam Kumaran: Yeah.
341 00:34:14.560 ⇒ 00:34:16.539 Brian: Like a Brexit, or something equivalent.
342 00:34:16.815 ⇒ 00:34:19.840 Uttam Kumaran: I’m using. I just have like chase business cards for everything.
343 00:34:20.270 ⇒ 00:34:20.909 Brian: Okay.
344 00:34:21.139 ⇒ 00:34:23.411 Uttam Kumaran: We’re not using any sort of expense management.
345 00:34:23.980 ⇒ 00:34:29.119 Brian: I mean, because they they come at a cost, too. Right? So yeah, yeah, I get that. I would say, one lever.
346 00:34:29.120 ⇒ 00:34:34.370 Uttam Kumaran: This is me expanding everything like Nope, it’s me. It’s like, I don’t have any other external employees that are spending so.
347 00:34:34.850 ⇒ 00:34:41.069 Brian: And and when you, when you pay your contractors, is that through like a an outbreak equivalent? Or how how are you doing that today?
348 00:34:41.070 ⇒ 00:34:42.279 Uttam Kumaran: It’s all through gusto.
349 00:34:42.730 ⇒ 00:34:43.929 Brian: Gusto. Okay.
350 00:34:44.429 ⇒ 00:34:55.023 Brian: alright. So I guess that that doesn’t give you much room for you to like. Try to leverage any credit card in the interim to kind of get that floated through. Okay, yeah, I think I think.
351 00:34:55.310 ⇒ 00:34:57.010 Uttam Kumaran: It’s an interesting problem. I mean, like, I.
352 00:34:57.010 ⇒ 00:34:57.550 Brian: Yeah.
353 00:34:57.550 ⇒ 00:35:01.070 Uttam Kumaran: If I was less confident that we could get the leads.
354 00:35:01.220 ⇒ 00:35:03.740 Uttam Kumaran: I would be like a little bit more like, okay, let’s just wait.
355 00:35:03.930 ⇒ 00:35:05.350 Uttam Kumaran: But it’s just like
356 00:35:05.420 ⇒ 00:35:19.030 Uttam Kumaran: there’s just some people sitting that I know there’s business I could go to. But if this is it, then that’s it. I just I needed to hear like cause again. There’s there is all these alternatives for short term financing, but if it’s like.
357 00:35:20.060 ⇒ 00:35:21.300 Brian: The risk is too much for.
358 00:35:21.300 ⇒ 00:35:22.119 Uttam Kumaran: The risk is too much.
359 00:35:22.120 ⇒ 00:35:43.900 Brian: That’s the the fact that most of them are gonna also require a parent guarantee so, or in this case there is no parent, so would be a personal guarantee. Right? So you’re gonna be on the hook right? If you’re getting a 30 K loan or whatever 40 K. Let’s say the entire world just collapses all of a sudden, or everyone goes through austerity. And there’s a new war. And all these clients stop right? And that’s your body that you’re that’s gonna be on your.
360 00:35:43.900 ⇒ 00:35:44.400 Uttam Kumaran: Yeah, yeah.
361 00:35:44.400 ⇒ 00:35:52.940 Brian: And I never want you to be in that position. So I think the goal for you is considering that you’re just a cash.
362 00:35:54.750 ⇒ 00:36:02.410 Brian: not cash your asset like business. So any any lender is, gonna look at you and only think about one thing. It’s pipeline
363 00:36:02.490 ⇒ 00:36:11.210 Brian: track record conversion of contracts to actual dollars in the door. And how efficient is he actually getting these dollars? And how can we think about growth?
364 00:36:11.558 ⇒ 00:36:24.249 Brian: As a function of this business in terms of derisking our position and giving access to something that’s like more or less greater than his monthly you know, income that comes in right, and to do that you have to bring in
365 00:36:24.370 ⇒ 00:36:37.400 Brian: clients that stay with you for a long time. If clients, if you, if you constantly switch in between clients that are like 3 months, 4 months, I feel like, more or less like lenders are even gonna be more scared. Feel like.
366 00:36:37.400 ⇒ 00:36:38.030 Uttam Kumaran: Yeah, just because.
367 00:36:38.030 ⇒ 00:36:56.639 Brian: Because that that that’s, you know. And so, as you grow employees or contractors to be dedicated to like this one client, and really just scaling with them over time. You know, I think you. Then you naturally just scale up and really stack that cash and develop that cohort curve to be really compelling.
368 00:36:56.640 ⇒ 00:37:13.780 Brian: Where then, once you have, like, you know, north of 75 KI think that’s when you start, can start leveraging a lot of these conversations with you know, guys that would fund you any anything like 20 to 25 K at way, better rates, whether that be in regional banks and whatnot. I think that would be the name of the game that I would prescribe to you at the time.
369 00:37:13.780 ⇒ 00:37:14.110 Uttam Kumaran: Okay.
370 00:37:14.110 ⇒ 00:37:14.860 Brian: God.
371 00:37:14.860 ⇒ 00:37:16.000 Uttam Kumaran: Okay, cool.
372 00:37:16.550 ⇒ 00:37:21.320 Uttam Kumaran: Alright. It’s good to hear. We’ll keep. We’re gonna keep going so. But we’ll get there at some point.
373 00:37:22.320 ⇒ 00:37:25.181 Brian: Yeah, I mean, otherwise, I feel like,
374 00:37:27.050 ⇒ 00:37:30.939 Brian: I don’t know. It might. It might be interesting to kind of create a
375 00:37:33.290 ⇒ 00:37:50.229 Brian: and I mean experiment right with with your pricing structures. Like to to see if you could eke out any wins along the way that are a little bit different, like building in milestones. That’s what I’m doing with my clients right? Like on your end. Like, if if cash is right now, not as interesting
376 00:37:50.340 ⇒ 00:38:04.370 Brian: or or cash is interesting. But you also, wanna, you know, add in some bells and whistles, like adding in some warrants for these companies, so that you could get some upsetting the down downtime so that you could start collecting potential upside cash in the end or
377 00:38:04.640 ⇒ 00:38:14.080 Brian: being able to, you know, as a business scales, getting some type of milestone bonus, or whatever right like. I feel like those things. If they’re really far stretched. I feel like
378 00:38:14.150 ⇒ 00:38:16.309 Brian: a lot of the clients that I’ve worked with.
379 00:38:16.640 ⇒ 00:38:45.979 Brian: You know, people are generally reluctant or or okay with it, if it’s so so down to line but if it’s something that they’re really looking for, and you really deliver. You know, there’s no reason why they wouldn’t be able to give it to you, and also on your end. I feel like, what’s more important, more than anything, is the ability for you to flexibly renegotiate contracts when you feel like you have the upper leverage, especially if it’s a a greater ask than you think, even though you’re on hourly basis, so that you could start to like.
380 00:38:46.430 ⇒ 00:38:47.170 Brian: you know.
381 00:38:47.610 ⇒ 00:38:53.910 Brian: deploy 2 you know, engineers at the same time, so that you’ll probably get, you know, better economics.
382 00:38:53.980 ⇒ 00:38:55.810 Brian: and, you know, utilize your employees as much.
383 00:38:55.810 ⇒ 00:39:07.199 Uttam Kumaran: And is that just a contract? Is that like, what do you mean by like having the flexible contract? Is that just like, okay, we’re gonna have a milestone where we renegotiate 6 months or like is is that is that just basically that.
384 00:39:07.530 ⇒ 00:39:16.160 Brian: Just just. Yeah, I would. I would say the way how your verbiage new contract should be always flexible to at any given moment.
385 00:39:16.700 ⇒ 00:39:24.070 Brian: both on your end. You have the ability to bring up a renegotiation. Obviously, some people might be, you know.
386 00:39:24.280 ⇒ 00:39:26.999 Brian: like Go F yourself. But
387 00:39:27.120 ⇒ 00:39:37.190 Brian: in most cases where you feel like you’re having or developing a good relationship or rapport not to scam everyone you know, like, but actually to like feel like you could develop and
388 00:39:37.500 ⇒ 00:39:41.508 Brian: cross, sell different opportunities and products to someone.
389 00:39:42.200 ⇒ 00:39:56.160 Brian: what is really important is always to just really have a tight sow. So that once you feel like you’re potentially going out that scope that you layer on different products and expand the overall contract value right?
390 00:39:56.160 ⇒ 00:39:57.360 Uttam Kumaran: Yeah, yeah.
391 00:39:57.920 ⇒ 00:40:00.110 Brian: Yeah, I don’t know. That’s that’s what I think. So.
392 00:40:00.110 ⇒ 00:40:08.220 Uttam Kumaran: No, that’s really helpful. Yeah. I mean, I mean again, like, I, I’m trying to avoid startups like, really hard. It’s that’s just like a lot of my network.
393 00:40:08.673 ⇒ 00:40:22.159 Uttam Kumaran: But I do have like a lot of ends, and like a lot of more like mature like enterprises, and like more medium sized private businesses. So that’s the folks that it’s very reliable income. And the work is actually a lot easier.
394 00:40:23.100 ⇒ 00:40:32.850 Brian: I would I would. I would recommend you to start looking into like small to Midsides misses like financial institutions, those guys you up. We would have a lot more of like
395 00:40:33.100 ⇒ 00:40:42.869 Brian: operating or like leverage in general, just because they’re gonna be like, Wow, you’re a wizard like I could never get access to this file, you know, 1 million dollars.
396 00:40:42.870 ⇒ 00:40:44.709 Uttam Kumaran: I know what they say. I could never get out.
397 00:40:45.025 ⇒ 00:40:45.340 Brian: Yeah.
398 00:40:45.340 ⇒ 00:40:46.430 Uttam Kumaran: File without you.
399 00:40:46.430 ⇒ 00:40:46.885 Brian: Yeah.
400 00:40:47.621 ⇒ 00:40:49.590 Uttam Kumaran: No, it makes a lot of sense.
401 00:40:50.040 ⇒ 00:40:50.730 Brian: Yeah.
402 00:40:52.030 ⇒ 00:40:54.589 Brian: yeah, that’s all I got. I don’t know any thoughts breathing.
403 00:40:55.430 ⇒ 00:41:08.759 Braden Bullen: Well, I was going to just turn my camera off and hang off and hang out here, but I was locked into the whole thing. I from the beginning. Jj. Took a look at everything, Tom, and like he had told me, like, it’s a little early to like.
404 00:41:08.760 ⇒ 00:41:11.659 Uttam Kumaran: Surely also, I know I’m gonna ask, though, cause it’s like.
405 00:41:11.960 ⇒ 00:41:12.689 Braden Bullen: I mean to know.
406 00:41:12.690 ⇒ 00:41:23.369 Uttam Kumaran: And then it’s like, I’m gonna know when I get there, what the deal is. And for me, it’s like, just need to kind of know what people are thinking, especially now that interest rates are a lot different environment. I think maybe.
407 00:41:23.370 ⇒ 00:41:24.259 Brian: Very very expensive.
408 00:41:24.260 ⇒ 00:41:27.169 Uttam Kumaran: I think maybe 4 years ago would have been a different story.
409 00:41:27.170 ⇒ 00:41:29.300 Brian: I I I would have said, Yeah.
410 00:41:29.450 ⇒ 00:41:30.760 Brian: that’s that’s correct.
411 00:41:30.940 ⇒ 00:41:31.520 Uttam Kumaran: Yeah.
412 00:41:32.620 ⇒ 00:41:33.359 Braden Bullen: But
413 00:41:33.420 ⇒ 00:41:36.399 Braden Bullen: I mean I’m not gonna take no for an answer. So I wanted to get you every.
414 00:41:36.400 ⇒ 00:41:36.780 Uttam Kumaran: Oh, yeah.
415 00:41:36.780 ⇒ 00:41:41.425 Braden Bullen: It’s impossible. And then let’s I mean it doesn’t hurt to just talk it out and and figure it out
416 00:41:42.170 ⇒ 00:41:43.050 Braden Bullen: So
417 00:41:43.210 ⇒ 00:41:43.910 Braden Bullen: huh!
418 00:41:44.450 ⇒ 00:41:45.170 Braden Bullen: Both.
419 00:41:47.090 ⇒ 00:41:47.750 Brian: Soul.
420 00:41:48.570 ⇒ 00:41:49.550 Brian: Thanks. Guys.
421 00:41:49.550 ⇒ 00:41:53.189 Uttam Kumaran: I have any other questions I’ll let you know. But again, I really appreciate. Yeah, thanks so much.
422 00:41:53.190 ⇒ 00:41:59.539 Brian: Yeah. Feel like, use me in whatever way possible. I promise I won’t charge you so.
423 00:42:00.027 ⇒ 00:42:01.490 Uttam Kumaran: Charge whatever I.
424 00:42:01.490 ⇒ 00:42:01.963 Brian: Yeah, yeah.
425 00:42:02.200 ⇒ 00:42:05.052 Uttam Kumaran: It’s been helpful. It’s been really helpful.
426 00:42:05.460 ⇒ 00:42:06.330 Brian: Sounds good.
427 00:42:06.520 ⇒ 00:42:08.880 Braden Bullen: Awesome. Appreciate it, Brian. Thanks for the time.
428 00:42:09.110 ⇒ 00:42:10.339 Braden Bullen: Thanks, guys, thanks.
429 00:42:10.340 ⇒ 00:42:11.760 Uttam Kumaran: Like you, said Bye.