Hey everyone! In today’s episode, I share the mic with Shan Sinha, founder and CEO of Highfive, a company that sells a video conferencing hardware/software bundle.
Tune in to hear Shan discuss his tech journey from Microsoft to Highfive, how much he sold his business DocVerse to Google for (who turned it into Google Drive), the difficulties of building a hardware/software company, and what they did to grow their YoY revenue by 170% from last year to this year.
Download podcast transcript [PDF] here: How Shan Sinha Is Tackling the Videoconferencing Space with His Hardware/Software Biz Highfive TRANSCRIPT
Time-Stamped Show Notes:
- [00:40]Before we begin, please leave a review and rating and subscribe to the Growth Everywhere Podcast!
- [01:33] Shan has been in tech startups for his entire career.
- [01:56] He left Microsoft to start DocVerse.
- [02:05] Google then acquired the company and it was turned into Google Drive.
- [02:28] He then worked for Google Enterprise Apps for a few years.
- [02:46] Then he stumbled upon the idea for Highfive, which Shan deemed a remarkable opportunity.
- [03:05] Highfive has been around for five years and is continuously growing (they now have 2,000 customers).
- [03:35] They grew by 170% over the last year.
- [03:45] They are a hardware/software company that operates like a SaaS-based business.
- [03:50] The company handles over 150,000 meetings per month.
- [04:33] The purchase price of DocVerse was around $25 million.
- [05:20] It’s easier to build a hardware company today than it was 10-15 years ago, but it is still incredibly hard.
- [05:46] When it comes to B2B SaaS, there aren’t too many examples to rely on.
- [06:28] Shan and his partners set out to solve a problem: getting people dialed in to a remote meeting.
- [07:01] When Shan and his team set out to solve the problem, they realized the normal meeting today required flexibility in the way everyone connected to a remote meeting.
- [07:28] Some people will be in a conference room, others will need to join via a laptop, others will need to dial in via mobile phone.
- [08:03] They realized the only way to solve the problem was to build purpose-filled hardware and software that people could use remotely.
- [08:16] It turns out this issue is happening in many other aspects of our daily lives (hardware and software working in conjunction).
- [08:48] Shan realized putting hardware and software together was the best course of action.
- [09:11] To start a hardware company, adopt the mindset that it will be a hard road.
- [09:30] Also, realize that you will need a lot of capital.
- [10:35] Surround yourself with people who have experience creating successful hardware companies.
- [11:04] Above all else, hire the “right” people.
- [11:55] This requires a lot of networking and word-of-mouth.
- [12:55] Shan had a contract manufacturing partner lined up, but they dropped out when Apple gave them a contract.
- [13:29] Within 24 hrs, they landed a contract with another manufacturing partner.
- [14:30] Shan thinks there is a difference between networking for networking’s sake and networking with an endgame.
- [15:22] The answers are never readily available, so you have to actively seek them out.
- [16:09] Figuring out the pricing structure was part of innovating the hardware/software.
- [16:27] Highfive spent two years in R&D.
- [16:50] The original plan was to sell the hardware in the typical way, but to sell the software on the basis of the number of users per number of months.
- [17:56] It took them a while to figure out their pricing structure.
- [18:01] They figured out a pricing model that bundled their hardware and software together; then they charge you based on a per room, per month basis (with that comes an unlimited software user license).
- [18:42] Highfive now has a few different packages that they offer that cater to a variety of offices.
- [19:13] Shan believes this makes conference calls truly collaborative.
- [19:43] Competitors like WebEx, GoToMeeting, or Zoom will have a free option with limited capabilities, a cost for each software user license, and a per month charge.
- [20:45] These competitors also charge for minutes used by people calling in.
- [21:10] Basically, the competitors are nickel-and-diming everyone.
- [21:47] When the iPod came out, Apple sold it based on how many songs you could store vs. the actual Megabytes, which was an effective marketing strategy.
- [23:04] Highfive’s biggest challenge has been figuring out solutions to completely new and untested problems.
- [23:33] There were very few examples of companies packaging hardware and software.
- [24:11] They have reached the point where they have figured out their product and their business model.
- [24:23] Now, they have to figure out how to take it to the next level and continue to grow their business.
- [25:34] The goal was to make Highfive easy to use, deploy, and sell.
- [26:01] Highfive tries to offer deals to gain new customers.
- [26:30] They are anchored in the thesis that the product should be the thing that drives customer reactions and responses.
- [26:43] All their marketing is done online and they try to take advantage of SEO.
- [27:32] Shan thinks it’s important to create a consistent picture that stitches all your variables together in a single model and then work with your team to determine which variables you are going to optimize.
- [29:24] The “tool” that has proven effective was simply paying attention to the payback on acquisition costs.
- [31:11] Shan believes the thing that measures a company’s efficacy is tied to the payback on costs.
- [32:11] Shan recommends Founders at Work and The Five Dysfunctions of a Team.
Resources From This Interview:
- Highfive
- DocVerse
- WebEx
- GoToMeeting
- Zoom
- Must-read books:
- Shan on LinkedIn
- Shan on Twitter
Leave Some Feedback:
- What should I talk about next? Who should I interview? Please let me know on Twitter or in the comments below.
- Did you enjoy this episode? If so, leave a short review here.
- Subscribe to Growth Everywhere on iTunes.
- Get the non-iTunes RSS feed
Connect with Eric Siu: