It’s something most of us have encountered: visiting a website and being given the option to login with our social media account. But I never considered the fact that someone is actually making money off this simple idea.
That man is Rakesh Soni. Soni, along with Deepak Gupta, launched LoginRadius in 2012; soon, they had over 100,000 businesses using their product.
But where did this idea come from? And why did Soni feel the need to open three offices when LoginRadius only has 27 employees?
Below is a record of my conversation with Rakesh. We touch on how the company has grown, when he realized the product was going to take off, and how social login is valuable for any business.
Give me a quick background about yourself. Have you been in technology for a long time? How did you get into this line of business?
My co-founder and I are originally from India. I came to Canada in 2006 and my co-founder went to the US. We’ve known each other since we were 14; we were high school friends.
We both received our bachelor degrees as engineers (I studied mechanical engineering; Deepak studied computer engineering) and started LoginRadius as a personal project. It actually originated from a problem we encountered while launching another startup idea (we were working on two startups at the time). We were driving traffic to our startup’s website but visitors were not registering and converting into users – therefore, they were not engaging. People just don’t want to take 15 minutes to create an account. That was our biggest challenge.
Soon we realized, “Why can’t we build a solution around this problem? It could be used by millions of internet sites.” So we put our other two ideas on hold and launched this one.
The company launched in 2012 and now has over 100,000 businesses using its product. Just how quickly did the product take off? Why do you think the company has been so successful?
We started getting customers from the very first day but we offered very limited features. We were testing it out and analyzing customer needs. We spent basically all of 2012 to prove that there was a product market fit – that was our objective for the year. We then focused on the product. We wanted to create a valuable user experience and find ways to save the user time. It didn’t take us long before we had a lot of customers and were making money.
How many employees did you start with? How many do you now have? Are you continuing to expand?
My co-founder and I both started part-time – that was the idea. After six to eight months, we looked at the data and realized that this could actually work. That’s when we started working on it full-time. It wasn’t long before we brought others on board. Now, all together, we have 27 employees. And we will continue to grow.
Is that when you realized that this product was for real and would turn into a full fledged business? After 6 months?
Yes, exactly. After about 6 months we started analyzing our data. We looked at how many customers were adopting certain editions, how many end users were signing up, and how are we were adding value to them. We also understood the problem faced by the market and just how big of a market this really was. That’s when we realized that this was the right product at the right time.
In early 2012, we decided to quit our full-time jobs and focus solely on the company.
You now have three offices open: your main headquarters in Canada, an office in California and one in India. Why do you have 27 employees but feel the need to have three offices?
We started working on the project while in Edmonton so that ended up being our main headquarters. Because we wanted to be a global service, we wanted to make sure that our support team and sales team are up 24/7 to answer customer questions. That’s why we decided to open an office in India. When it’s nighttime in India, it’s daytime here and vice versa. This allowed us to cover the whole world pretty much.
So in Edmonton we have 10 people, in India we have 15 and in the US we have two.
The reason we opened in the US office is because it’s in the heart of Silicon Valley. The type of technology developing there, the relationships you can build – we knew that it would be incredibly valuable to help gain more customers and help our business grow.
How did you initially go about marketing your product? Has this changed? Is it something that almost sells itself?
Initially it was very difficult. One thing we started doing was contacting our friends and our network to figure out who owns a website. We told them this was a product that would be worthwhile for them to try. So we got a few customers from there.
Then we started reaching people through a bunch of different discussion forums – just a simple message saying “Hey guys, this is a cool product to try on your website” or something to that nature. Next, we began reaching out to bloggers to write up articles. All these things helped us acquire more customers and as we acquired more customers, it just started to spread through word of mouth.
So yeah, for the marketing strategy, it changed drastically. Initially, we didn’t want to get a huge amount of customers; we just wanted to test it out and get customer feedback and so on. That was the reason we weren’t very aggressive – we were only focusing on certain channels.
As we began 2013, we dedicated the year to proving the business model – meaning ‘how are we going to make money?’ We wanted to acquire more customers so we started getting more aggressive. We began exploring even more channels and analyzing which of these channels were sending the most traffic our way. We kept pursuing the aggressive channels while dropping off the ones that were taking too much time to pay off.
Since we raised a lot of money in February – 1.3 million dollars – we are looking to expand to one million customers so we will continue to explore new channels.
I’ll touch on that money in a bit… I saw a video where your co-founder, Deepak Gupta, said that over 75% of users do not register with websites. Why is it important to have users logging into a website? How does it help improve a company?
There are a few big challenges most of these companies are facing. The first is that they are bringing a lot of users to their website but they’re not registering. This means they’re not engaging. The reason for that is because these people have too many passwords and they don’t want to spend 10 minutes filling out a form, registering an email address, setting up security questions and such. People just don’t have time for that anymore.
The second problem is that even though people sign up and fill out the information form, businesses have no way to track and analyze this information. Consumer data is important for every business. Without information about the consumer, you cannot make educated decisions about business strategies, marketing strategies and such.
And the third problem is that when people come back later, they forget their username and password. They don’t want to go back and check their emails, they don’t want to make a new password… It’s overall a negative experience. To overcome all of these challenges, we came up with an extremely simple and affordable solution for mid-size and small businesses by using social login. This allows businesses to know more about their customers while also allowing the customers to do marketing for them via social sharing.
Can you talk a bit more about social sharing? How big of a role do you think that plays in a company’s success?
I think that social has been a big thing in recent years and will get bigger down the line. When you go back 10 years, cold calling was effective but it’s no longer effective. People don’t see the calls, they protect themselves from the calls… It just doesn’t work.
When your friends recommend something to you, it is the most powerful recommendation. This is why social is playing such a big role and why it’s going to get bigger. Sharing is the way they can push their experience or their message to those networks and those potential users.
You’ve raised over 1.3 million dollars from venture capitalists. How did you raise all of this money? How do you plan on using it to reach your next milestone of one million businesses?
We showed our growth plan and our proven track record to the investors. The investors did their due diligence of the market, the market size, the demand, the company, the founders and such. Once it was all said and done, they decided that they wanted to invest in our company.
The reason that we took the money is because now that the product market is proven and the business model is proven, we need to take the product to millions of sites. We needed the money to hire more people, to market the product, continuous product innovation and so on.
Most of the money will go towards marketing. We need to focus on inbound marketing and building partnerships with other companies. Then another 25-30% of the money will go to product innovation.
Last question… What’s next for LoginRadius? Anything else you want to get into besides just login accounts?
Our continued focus is on social logins for sure. We want to make it extremely simple – even if someone has no programming knowledge or skills, they can implement it on their site. We want to make it affordable to millions upon millions of sites out there.
There are over 650 million websites on the internet. We want to make this solution a possibility for five percent of the market within the next five years.