After seeing how little the average software engineer in India makes compared to their peers in the US, Ayush created a bootcamp that teaches coders how to be effective remote employees, then helps them get full-time remote jobs at US tech companies, making up to 10x more than they were making before.
Davis Baer: What’s your background, and what are you working on?
I’m Ayush from New Delhi. I dropped out of college after a year to work fulltime on the startup I wanted to build. I was disappointed looking at the broken education system. I decided to self-study.
A couple of years ago, I found venture capital very cool. I made a TV show (Shark tank of India) as an associate producer and invested in a few startups as a scout for another firm- Project Guerrilla.
I’ve been working on different projects ever since. I built different products but never found product-market fit until Pesto happened. I’ve been working on Pesto fulltime for a little over a year.
At Pesto, we run a 12-week boot camp in Delhi where we teach software engineers how to be effective remote employees and then help them get full-time remote jobs at US tech companies.
The education is completely free upfront and we bear all costs (Office space, food, etc.). The graduates share 17% of their salary for the next 3 years if they get placed at a minimum package of INR 15,00,000 annually.
This makes it easy for students to enroll in the program and pay us later. We believe income share agreements creates a win-win situation for all of us.
What motivated you to get started with your company?
Pesto started as a consulting company in April 2017. We soon realized that we were making money with insane margins(10x) but our business was based on artificially keeping our employee’s salaries low.
We felt that we were not fair to our employees. We believe that someone should not be undervalued just because they’re born in a different country. We decided to do the right thing and get these engineers the opportunity and respect they deserve.
The impact that our program creates has been our biggest motivation so far. Getting 8x better-paying jobs truly changes their lives as well as the lives of their families.
Personally, I feel I’ve grown a lot in the last few months in multiple ways. I’ve always been a hard working person but I think you truly learn something when you get your hands dirty. The journey of growing with the company is beautiful.
What went into building the initial product?
The best product we’ve built so far is our curriculum and the internal tool to automate admissions. Both the products were the result of the pain we went through. Because of this, we knew exactly what we needed.
We built a standard way to train people for our consulting business. The problem was to find a fast and standard way to train people, so we did it. Later we realized the impact we can make with this so we did a pivot and made this our core business.
The admission process: 15 min culture call followed by a 1-hour technical interview.
20,000 people signed up for the second batch. It was impossible to do the calls for everyone so we built a tool to automate the screening process.
We’re using the following technologies for our internal product:
ReasonML, graphql, ziet, react, typescript, Postgres, circle-ci.
When did you start this, and what were you doing before this?
We’ve been working on this since early 2018.
Both Andrew and I were bankrupt when we started this. I lived out of a coworking space for a year to minimize my living cost and refrigerated food from startup events. Andrew went backpacking and did some freelance work as he traveled throughout the year.
I was working on another startup called Dealflow. It was about building a stock exchange for private equity. We did some work with VC funds to help them manage their pipeline.
How have you attracted users and what were your biggest challenges?
We opened applications for the first batch in June and got 300 applicants, the majority thought it was a scam though. We advertised that we’ll get people 10x paying packages and a much better learning experience in just 3 months for no fee upfront.
I went on the ground to each city and invited everyone for a coffee, somehow convincing some of them to join us! We had 30 spots, but only a few people joined us. It was a nightmare! But we knew what they couldn’t see. Their lives were about to change.
After the program, 2/5 of people from our first batch actually got 8x higher paying jobs and so much more opportunity to learn which is priceless. At this point, we knew we were doing something right.
For our second batch, ~20,000 people signed up. Now we had a good problem: Screening 20k people.
We accepted 4 and automated the screening process in the last 7 weeks. We’re now looking at launching a ~20 person batch in November 2018. We’re working towards launching a batch every month starting early next year.
Email marketing, Facebook Ads and WhatsApp broadcast list have helped us get traction. Apart from this, cold emails have always been my thing. Reaching out to people with value always end up in conversions.
What have you learned from your experience of building Pesto?
While building Pesto, my biggest learnings have been around culture. Focusing on building the right culture from the early stages is very important. We realized this when once the team grew larger than 8 people.
Building a workplace where everyone has a feeling of belonging goes a long way. I learned about 4Hs from Sameer Dholakia (Founder of Sendgrid) and adopted that for our culture. These 4Hs are: Happy, Humble, Honest and Hungry.
I would recommend a couple of books that helped us as well: Peopleware by Timothy Lister, and Delivering Happiness by Tony Hsieh.
What’s your business model, and how have you grown your revenue?
The program is free upfront, and we take 17% of the employee’s salary for the next 3 years if we help them get a high-paying job. Each contract (income-sharing agreement) is worth ~$20k per student. We just graduated our first batch of 4 students a few weeks ago.
We charge $500 per student per month to companies additionally for managed hires (Helping them with a standard pile of paperwork, office space and some other things to support their productivity).
Until now, we were focused on the quality of business. Currently, we’re focused on increasing the frequency of our batches.
What are your goals for the future?
We’re now working towards a 20-person batch starting soon. We want to start a Batch every month in 2019. We’ve already launched applications for next 5 batches.
This would mean close to ~125 students in next 6 months.
This will mean $2.5m in assets and up to ~$60k additional revenue every month.
Our long-term goal has always been to give equal access to opportunities to people who deserve, irrespective of where they’re born. Starting with 5 million engineers in India.
What are the biggest challenges you’ve faced and the obstacles you’ve overcome? If you had to start over, what would you do differently?
As a startup, you always try to move fast. We were growing quickly in the first few months and we were excited. But this excitement made us hire fast and make wrong hiring calls.
If I get a chance to go back, I would define a culture doc on day 1. It’s very important to define culture early. Some useful resources that helped us are culture docs of Zapier, Zappos and Netflix.
Another thing that we learned about was documentation. Building a habit of documentation in the entire team is super productive. It helps to overcommunicate, create processes and sets expectations straight.
I would recommend going through Gitlab’s handbook, it’s a great example of how documentation can help run a fully distributed team.
Have you found anything particularly helpful or advantageous?
I’m a big fan of YC’s content. We recently participated in the Startup School that has helped us a lot to tackle different startup challenges. And of course, Paul Graham’s blog has always been like a bible for us.
I read a lot to catch up the pace with everyone else and I feel the book Venture Deals was my gateway to understand how Venture Capital works. I hate legal paperwork but this book told me all I needed to know. It’s very useful for first-time founders.
As a business, I feel the timing and market have been a big boost for us. Remote work is on the rise and we use remote work as an unfair advantage over everyone else. Our team’s deep understanding and background just helped us move so much faster.
What’s your advice for entrepreneurs who are just starting out?
When I started my first company, I used to be too scared and insecure. I soon realized that the biggest risk in life is not taking any risk. I’ve seen a ton of people who have insane potential not live up to it just because they doubt themselves too much. The biggest qualities I’ve seen in successful people is their optimism!
Where can we go to learn more?
If you’re looking to join our program, you can apply here.