How “As-a-Service” Business Models Are Transforming Marketing & Legal | Rish Bhandari

New Podcast Episode with Rish Bhandari of Content Beta 

Monjur CEO Rob Scott sits down with Rish to discuss how “As-a-Service” business models are changing marketing and legal industries alike. 

From content creation to contracts, learn how predictability, focus, and recurring revenue drive sustainable growth in modern service businesses.

Transcript

SPEAKER_00 0:03

Welcome to Top Tech with Rob Scott.

SPEAKER_02 0:07

Rish, welcome to the show.

SPEAKER_01 0:10

Thanks for having me, Rob. Good to see you.

SPEAKER_02 0:13

It's good to see you. It's my pleasure. I've been trying to get this show uh scheduled, so I'm so glad we're able to get together and talk about as-a-service businesses. Uh, you know, Monger is an as-a-service legal um uh solution. Uh MSP Beans is an as-a-service uh accounting uh practice and bookkeeping, and content beta is an as a service content creation and digital marketing agency, by the way, the best one I've ever worked with has been helping Monger with all of our stuff, and we're thrilled with all the work that you guys do. So tell us a little bit about content beta, how you started, and how you guys are different.

SPEAKER_01 0:56

Great. Rob, thank you for your kind words. Uh, we we really love working with Monjar. So um, to step back a bit, I mean, why do we exist? So traditionally, when I was in the role of marketer and I used to work with larger agencies, my number one pain points was they had like long-term lock-ins, they wouldn't have flexibility, they'll charge me hourly billing, I wouldn't know what I'm charged for. Um, and in the end, experience was always pleasant to neutral. It was never like great. So we thought, how do we displace this um traditional agency model? Because, of course, not a lot of agile companies can adopt that. Maybe enterprise sure they can. Um, so we thought, hey, let's uh let's dismantle this. And we identified the top three problems that, hey, we got to improve our turnaround, we got to lower our cost, and we got to maintain our quality, if it not upgrade, from the traditional big agencies like Ogle V or Ericsson. Um, and we thought we can't do this for everybody in the world. So let's just build out for a particular industry, let's win that industry. And that's how we we build content beta. How do we displace this traditional uh way of outsourcing of content creation with more agile and flexible methods?

SPEAKER_02 2:20

That's awesome. And I would tell you, and just working with you, it is totally different than any marketing or agencies I've ever worked with. And part of it starts with just the pricing model and the plan. So talk talk a little bit about how you do your pricing and how that's critical to the uh transformation and the uniqueness of content beta.

SPEAKER_01 2:43

Sure. So for any as-a-service kind of business model, my learning, I mean, people call it different words, some call it productized service, where you make your service more like a product. But the key thing is three things. You got to make your pricing transparent and flexible, just like how SaaS companies do, right? Per seat, per day, per month, uh, per deliverable, right? So it's super transparent in somebody's head. Um, the second and the third thing is about to turn around and uh take on quality, but I'll deal I'll deep down a bit on pricing. Um on pricing, it's uh it's always tempting, right? Once you have cracked something that, hey, let me also try e-commerce, let me also try uh retail, let me also try banking, because uh I've learned the skill of digital marketing in content creation, I might do that, but uh, don't do that. You got to stick to a particular industry uh so that you could build more credibility, more number of social proofs, more people would know you in the industry. And with that, you get a premium on pricing, right? Because if you are um let's say uh you are a tech company and you are choosing between two service providers, somebody who's worked with 200 plus B2B tech companies, and somebody who is working with e-commerce, banking, and insurance, you'll definitely choose somebody who's deep down, right? Uh so going deep in that industry helps you improve your internal processes and pricing premium over your peers, um, and of course, efficiency, right? Because you're doing the same thing again and again. You master that, you build internal swipe files to make sure one plus one is not two, it's three.

SPEAKER_02 4:29

That's that's that's brilliant. You know, I used to tell people that the legal industry is going the way of XM and satellite radio, where everything is very specialized. You know, I'm a kid from the 90s, uh, I like 90s rock and roll music and and grunge. And so I'm gonna listen to a very specific station that has my few years of, you know, my nostalgia time in high school and college. And a lot of people will stick with that. But XM Radio has taken the four or five channels that we have and created hundreds. The same with cable, satellite, and streaming. We went from having when I was a kid four or five channels to watch. Now, if you add all the streaming content, this seems unlimited. And I think I think that focus is critically important. Uh, it's important for the reasons that you mentioned, but it's also important from a business perspective. Um, because once you're focused, you can deliver more value. You're having the same sales conversations, solving the same pain points with businesses that have the same needs. I know that with Monger, we service a very narrow niche of um IT services and software firms. That's our niche. And we we know how to do legal work for all these other sectors, but we don't do it. And the reason is we don't have time because we're too busy focusing on our niche. And so I agree with you. I think that focus and as a service models go hand in hand, in part because when you're on the as a service model, you're on a fixed price. So you have to be highly efficient. You can't be experimenting with new projects you've never done before. You have to be doing the same work for the same types of people over and over and over again. And then when you build a culture of continuous improvement around that, uh, then you can have something that really can produce remarkable results. And and and talk a little bit, uh Rish, about how you measure success. I know that you you created this sort of disruptive model, which is extremely attractive, I think, to the people you serve, particularly you know, companies like mine that are on fixed pricing. You know, our revenue is is subscription. And so we can't have the surprises and all the ups and downs of uh, you know, uh one month it's X hours, the next month it's some other amount of hours. That would be hard for us to manage. But but in terms of how you measure success internally and how you make sure that you're able to make money and that your model works for you, I think there's probably some other agency owners out there that are thinking, yeah, this sounds good, but I'll lose money or the clients will ask so many questions or have too many revisions, and I won't, you know, I'll do it on a fixed price and it'll cost me more of my labor than it than it does to get it. So so talk to a business owner, Rish, a digital marketing agency that maybe wants to move in this direction. You know, what kinds of concerns were there as you were going down this path? And what learnings have you uh come across along the way that would be helpful to another business owner that might want to consider adding a recurring component to what they're doing?

SPEAKER_01 7:54

Yeah, I think the number one reason why we move to recurring is to make our business model more predictable, right? With project-based uh earnings, sometimes you have a lot of work, sometimes you don't. And you don't know then how to plan your life around it. You don't know when to hire somebody, when to fire somebody, uh, when you venture invest more or when trying to invest less. So uh I would say recurring model, embracing recurring model was more like a compulsion for us because if we wanted to sustain as a business, it had to be predictable. Um, your first question about customer success. So we measure it on two fronts. On the tactical side, which is more on the operations front, the way we do it is that we have our own project management portal. So when our customers create requests that, hey, I want to do a video, um, I want to do uh an infographic, they create requests. And once they close the request, sorry, do you hear a siren on my background?

SPEAKER_02 8:59

I can't hear anything, Rish. Everything sounds fine. Okay, perfect. So But I understand everybody lives in places where sirens are. Hopefully, not too many, but for sure.

SPEAKER_01 9:11

So yeah, so um, so for every request which they create, when they close it down, we ask them to rate their experience out of five stars. And on an aggregate basis, we can measure each team member, each account manager, each creator director, what's the average number of stars you see in your profile, right? And at any point of time, if you see less than 4.7 out of five, it's like a big yellow flag. You've got to address the solution problem right now. So that's the tactical side. On the business side, the way we measure success is on two fronts. One is the churn rate because we are a recurring revenue business. We we are also mindful about what kind of churn do we see. If in any month, if we see more than like 5% churn, um, it's like a big red alert in terms of what should we do next. Uh, we try to minimize the churn, and of course, we have multiple initiatives to make sure that our clients get more value than what they paid for. Um, and the second thing which we measure for success is expansion. So if we um we genuinely want to help our customers to excel at what they do because only when they succeed, we will succeed. So we kind of give them a lot of recommendations. Um and uh and and some of these recommendations they like and they implement, and when able to expand that account, that's our win. So these are the three ways, the tactical ways to measure the feedback, the review on each request, and the strategic fronts are churn rate and expansion of accounts.

SPEAKER_02 10:42

So what are the biggest challenges that you faced in adopting the and maintaining the as a service or recurring model for your agency?

SPEAKER_01 10:52

I think it changed from in different phases. At very early stage, we didn't have a big pipeline, right? So getting customers, acquiring customers, we were nobody in the business, nobody knew us. Uh we were like a fresh brand. Thankfully, people are willing to take a bet on a fresh brand and see what it's in for them. Um so that was the number one challenge in the first stage. I would say when I say first stage, like like zero to one million kind of range. In one to five, I would say more on operations uh efficiency and sustainability. That, hey, how do I ensure that I don't overshoot what I'm committing for, right? Because if you are trying to, there is a reason why the the traditional agencies are still early model, right? Because they're able to manage the costs really well. But we are not, we are trying to displace that. So we have to be very mindful about what we do. Not that we are uh we are working on really slim margin, but we are not working with the margins which uh traditional agencies are working. So I think these are the uh I'm yet to cross the five million phase, so still working on that. But I think these are the two uh different phases of problems which I've seen.

SPEAKER_02 12:03

That's an incredible journey, Rish. Uh talk us a little bit about what the timing was to go from startup to now uh approaching five million and recurring. What was that journey like for you? How long did it take? What was the hardest part?

SPEAKER_01 12:20

So we started during COVID, right? So um I still have a business. We used to run a business on online education, uh, where we taught people software tools around analytics and visualization, stuff like Power BI and Tableau. Um and we were doing pretty well, and the COVID struck and that business shut down because people were not investing in themselves that much at that point of time. So we thought let's take a step back and see what we know. And because we knew how to teach software content, we thought maybe let's create content around um other software companies and not the large enterprises. So that's how we started during COVID. We started as a uh like a product education kind of provider and slowly uh vertically integrated towards making more on the marketing and product marketing content. Uh so we are probably four and a half year old today. Um we we worked with probably 200 customers. In the initial stage, it's still difficult to know which customer is good fit for you, what which are which are born for you, which are not, right? So you've got to dip everywhere and see what works. Get your lesson. I mean, you never lose, you either learn or you make money. So um, whatever the situation is, if if you're not making money, learn and then move on and use that learning to build something else. Uh that's great.

SPEAKER_02 13:40

That's that's great advice, Rich. It sounds like you've been adding uh a little over a million in recurring revenue each year. That's very impressive. Uh and I'm assuming that as you've gone by, it's gotten easier as you've grown. Has it been become easier to add and grow? Or have you found that there were plateaus along the way? And if so, how did you deal with that?

SPEAKER_01 14:04

So there are plateaus on the way. It's like having a kid, right? I mean, the problem with the kid, with your kid never ceases to exist. The problem's nature changes. So initially, when you'll cry about, hey, how am I going to get my first few customers? Then you'll say, How do I expand those customers? And how do I get more customers? How do I fix my operations? So the problems keep on changing. Um, but to answer your question, um, I think, I think the, like I said, I mean, you just focus on solving that problem for a customer. If you're genuinely adding value to the customer, that customer um will definitely give you more business. If you're looking for short-term money, then um this may or may not be the right thing. But if you're looking to add value, I think um in the world of digital marketing and marketing agencies, um, it's pretty typical that if the customer grows, you grow with them, right? Because if they are growing because of their marketing, I mean, why would they stop working with you? So I think uh keep on investing in customers. Sometimes you'll feel that hey, this is um not financially attractive or this is less profitable, but uh do it and learn.

SPEAKER_02 15:13

That makes good sense. You know, we we went through the same processes with Mondra, you know. I have a co-founder, so a lot of what we dealt with was sort of the the the tug of war between the front of the house and sales and the back of the house and operations. Um, but we worked through all that and and and all that process makes you learn, makes you stronger. If you, like you said, there's always an opportunity either to learn or make money, maybe uh, maybe just learn. But but the beautiful thing about recurring revenue models is that you're in control of how much money you make because of the way you you know your revenue. Uh, you could get some predictability around it after you've been doing it for a while. I could predict the amount of dollars that I'm gonna have in my bank account two weeks from the end of the month within a couple thousand dollars. So it gives you the ability to really have a predictable business when you add to it systematic, systematic logo growth, low churn, and expansion revenue. Now you've got something that you could get very wealthy from in a way that probably you couldn't uh with a did with a traditional digital marketing agency. My guess is that your business at 5 million in recurring is worth way more than it than a comparable traditional digital marketing agency with 5 million in project revenue.

SPEAKER_01 16:39

Totally, totally. I think I think that was one more reason why I shifted to predictable, because the multiple which you get, it first of all, it makes a business sellable. And the multiple which you get on your business is much higher because then they value the business and not just the money in the bank.

SPEAKER_02 16:56

Yeah, and in a lot of ways, a lot of the money is deferred. You know, when you start thinking about these as a service businesses on the accrual method of accounting versus the cash method, what you see is huge amounts of deferred revenue. Like Mondra has millions of dollars in deferred revenue, meaning deals that it's already sold, that the customers are contractually obligated to pay, but there's still a long window on payments. And that's why these businesses trade for so much money, is because there's so much deferred revenue under contract coming down the pipe. And if you could show that your churn is is low, your expansion revenue is good, so your net retention revenue, which is the measure of how much money you're losing from attrition and churn versus how much you're adding from expansion, if you could keep that number positive and you can add new logos at a rapid rate, then you've got a business that could be extremely valuable. And so that's the model we used at Monger. We took a traditional legal service and converted it into a SaaS platform. And um, with the help of Content Beta and many others, all of our clients, uh, we've been very successful and rich. I am grateful for content beta and all that you guys do, and and and your story is is amazing to me, and that's why I wanted to have you on. But what's the future look like for content beta? You know, I'm an AI zombie, one of these guys that builds AI solutions and and is just a nerd when it comes to AI and helping people uh use it in a way that makes sense. But AI is very disruptive and has the potential to be disruptive in the digital marketing world. So tell us what your plans are for leveraging AI and and how you see it impacting content beta as we move forward.

SPEAKER_01 18:51

So the first um um what the how the team thinks about AI is we we say AI is going to displace us in the next two years. What now? So we assume that AI is going to displace us. So um it's not that we we have to run away from AI. What do we do to make AI as a moat for our business so that people still need us and not like AI replace us? So we are constantly investing in new projects uh with AI. We are working on AI Movie Studio where we are able to create short stories and more IP-oriented um content for the world. Um so yeah, so we are embracing AI um for efficiency, for creativity, for innovation. Um, and of course, trying to, we are not successful today, but we are trying to build a business model around how we can leverage AI so that we could we could sustain for a longer time.

SPEAKER_02 19:48

I think you and me and the rest of the world are trying to figure out how we're gonna work with AI and and uh leverage it for our businesses. I would tell you for us, we have a number of initiatives involving AI. The first is I'm building a custom GPT for a knowledge base for all of our staff where they'll be able to go and see, you know, salespeople will be able to see what sequences they need to program in HubSpot and have uh programming guides for that. They'll be able to see all the event details. You know, our go-to-market strategy is through events. So they'll be able to go into a chat interface and it's knowledgeable about all the events, all the prospectus, the agenda, the assignments, who to contact, all that's gonna be available in uh the solution. As well, as we're in the middle of testing our AI voice assistants. So our customers and prospects will soon be getting calls from our AI voice assistants to help with a variety of activities, including scheduling appointments, rescheduling appointments, um, following up to confirm that documents have been received, answering questions about how to log into our platform and doing some tier one support, um, opening tickets for customers so they don't have to do that on their own. And so we're in testing on it, Rish. And I'm telling you, it's really amazing what these voice assistants can do. And so my prediction is all of us are gonna be talking to AI voice assistants more frequently, not only on our phones, but and and not only on our speakers, but uh communicating through AI voice assistants and working with AI. You know, there's gonna be a point, Rish, where we're working together and my AI is gonna talk to your AI, and they're gonna do some things before our people talk to each other. You know, it's gonna be where the AI is doing some of the initial collaboration and working through some of those details, but it's definitely evolving quickly and it's very exciting. And the one thing that I take some confidence in, Rish, is that the AI. The generative AIs now could pass the bar exam in almost every state in the United States. Wow. But they can't get a license in any. And so there will always be a lawyer in the loop when it comes to AI. And so for us, we're looking at lawyer-in-the-loop AI solutions, where what is the role of the lawyer in the AI world? It's really going to be to review the AI-generated documents and make sure they're not hallucinating and make sure they're not quoting the wrong cases and all of that. But Rich, I want you to know we did our first fully AI-powered arbitration. And we used AI for everything, including opening statements, preparing questions for the witnesses, searching documents to cross-examine witnesses, preparing the closing statements. And we even built a predictive model to help us look at the strengths and weaknesses of the case and benchmark how likely it is for us to win. So there's so many cool things to do in AI. And I think there's going to be two people: those who are afraid of it and run away from it because they think it's going to take their job. And those of us who embrace it and use it effectively to deliver solutions to clients more effectively and efficiently. And I think the second category is going to be the winners. And I tell people all the time, and I speak about legal, but I tell people that AI is not going to take a lawyer's job anytime soon. But lawyers that use AI will take the jobs who don't very soon. And I think I think it's true in your industry as well, right? Yeah, yeah. Rish, I it's an inspirational story. It's a uh something that arose out of necessity from COVID, which a lot of us, you know, made shifts in our lives and our businesses during that time. Uh what you're doing is truly unique and transformational and in my mind inspirational. So thank you so much for joining the show. I really appreciate you coming on and sharing your experience and more about content beta. And if anybody's interested in learning about content beta or looking at the work they do, you could certainly see Contents Beta's work and everything that Monja does, including on our website at Monja.com, as well as all the videos they've created for us at Monja's YouTube. And you could also go to Content Beta and see the hundreds of other customers that they've helped with their digital marketing. So, Rish, bless you. Until next time, uh good to see you. Happy New Year. And let's do this again uh uh at the end of the year and see what all has transpired and how these predictions about AI have played out.

SPEAKER_01 24:54

Totally, Rob. Thank you so much for getting in this call.

SPEAKER_02 24:57

Of course, great to see you.

SPEAKER_00 25:00

You've been listening to Talk Tech with Rob Scott, brought to you by Monger. Monger is the first mover in providing contracts as a service solutions specifically designed for IT managed service providers. Their SaaS-enabled legal solution is based on industry-leading templates are customized for each client and periodically updated to ensure that MSPs always have the latest protections and are legally compliant. For more information, visit monger.com. That's M L N J U R dot com.