A Product Market Fit Show | Startup Podcast for Founders
00:34:04 · Pablo Srugo
[00:34:04] S1: Well, you know, I just just in to kind of give some of the perspective of what's happening here, because it's easy to just read this and say, wow. VCs are pretty dumb like lemmings. You know? But and there is maybe some truth to that. But but what's happening, you know, behind the scenes is as a VC, not getting into the thing that becomes huge is so much costlier than than losing the 150 k that you would have put in and not going to zero because you really need these outliers. And at pre seed, frankly, there's just not that much. Like, you have every pre seed has no revenue, and so you don't have that many signals that you can, like you can't DCF it and make your own first principles analysis. It's not that easy. So for better or worse, when something gets hot, that becomes a signal in of itself. And all of a sudden, it becomes, well, if other people like it, maybe it is really good. And and then you you kick that FOMO in where it's like, shit, if I don't put in a 100 k and I miss on it, and it becomes a huge thing. I've lost out on so much money, and you get that kind of FOMO tailwind. Right? So the other thing I wanted to ask actually about was because we've talked a lot about fundraising with many different founders that come obviously, process is always the thing. FOMO is a thing. But what as as you go when you have these 100 conversations, and you mentioned 47 nos, I'm sure you iterated and changed it over time. What are some things that you feel like you learned when it comes to pitching VCs that maybe if you would have known like on day one of doing this, you would have gotten only 20 no's upfront. You know what I mean? Like, it just would have made the conversion a bit higher.
00:35:27 · Ali Khokhar
[00:35:27] S0: Yeah. I mean, this is the challenge. Right? So like, I actually think there is this thing of like VC product fit or VC company fit quite a bit, where there were some folks that I was pitching where they have written off a certain space in their mind, and it just does not matter who you are and what you've built. If they don't have any thesis or any goals or any desire to invest in a specific space, it really doesn't matter. You can start disqualifying some of those before meeting them. So like you can turn the 47 no's before you get your first yes into 10 no's maybe, right, because there's a bunch of them in the middle that would have said no no matter what. And can you seek identify those signals early on? And like all VCs nowadays will like write you know Substax or on Twitter, and they'll tweet things that I have this thesis in this space, and like here's what I believe is happening etcetera etcetera. And so like if you can find those people who already believe that there is a big company to be built in the space, then that makes your job much easier because now you just need to convince them that you are the right people to build that company. Whereas in some cases, was having to first educate the VC, here's let me tell you about the space. Why this is an interesting space to invest in right now? Why is massively going to change right now? When I say services being delivered as software, what does that actually tangibly mean? What is insights that I have? Like there's a lot of education that you can end up doing on things before you even get to like, here's who I am and here's what company I'm building. If you can skip those, if somebody comes in being like, yeah, I know there's gonna be a massive company in this space. Just tell me why I see you. Very different conversation. So there's sort of this like fit thesis piece that I think a lot of people or at least early on in the first time I had fundraised, I was not doing at all. After that, I I started doing a lot more, and it just made our life a lot easier as well.
00:37:09 · Pablo Srugo
[00:37:09] S1: Perfect. So that's the the fundraising kinda segment. And then the other thing we were gonna talk about was you got your first million in revenue through communities. Tell me about that entire like, the thinking behind the strategy, and then we'll get into the tactics of how you build communities and and make that kind of drive sales for you.
00:37:27 · Ali Khokhar
[00:37:27] S0: Yep. So once we sort of narrowed in our focus and realized sort of we wanna go all in on health care specifically where there's a lot of opportunity, my co founder and I care a lot about the space, and so we're like okay let's go do this. But again, the challenge we had was we don't come from a health care background, right? And so we're not like ex MDs who spend five years at Cityblock as an example, or One Medical, or whatever the case may be, to then say look we already have such a strong network of other healthcare operators, founders, you know, c suite execs at hospitals, etcetera etcetera, that we can just go sell to them. And so what I then ended up doing was I basically joined a couple of healthcare centric communities with the goal of saying, hey, I'm here as a newer healthcare founder to learn about the space everything I can. And I have a thesis and a vision, and I am building the company, I'll be upfront and transparent with you on that front, but I want to understand and and hear from you what I'm building, does this make sense for you or not? Sort of what I did with coaches early on, but through specific communities this time around. And oftentimes then those conversations then would say, wait a second, I'm a founder of a healthcare startup, or I'm working at this heart health system, whatever the case may be, what you're describing, like we have a need for it. And so then it was almost like I wasn't being very salesy or pitching them buy this product, I was saying I'm newer to this space, here's my current thesis, help me formulate and like see are there blind spots in my vision. That then wouldn't translate into actually I have a need for your product, are you ready for me to buy? And then that's where we got our first million of revenue. And that's also another signal of like, you know, everyone else is like, you're pushing a boulder up a hill, eventually the market starts pulling it from you. Right? Like, I could feel the market pulling the product because I didn't need to be salesy to get to our first million. Folks were like, I need that thing. How do I sign up? Where do I sign up? How much does it cost? The conversations be went in that direction from them asking it versus me forcing it.
00:39:13 · Pablo Srugo, Ali Khokhar
[00:39:13] S1: So maybe give me like a like an example, let's say, of you know, because I think building through communities, I hear a lot of founders talk about it, I think very few founders actually do it properly, like, make it work for them. Tell me maybe an example of, like, a community that you saw, like, you actually penetrated, how you post consistently, right, in order to drive traffic. It's easy enough to go on Reddit, find a forum, and, like, make a post, but that's one post. Right? Like, how do you make this something that you can do recurringly and then get a million dollars in revenue versus just, one or two customers? [00:39:43] S0: Yeah. We focused on, like, paid communities. So we do not do something like and I don't mean, like, Reddit or subreddits, etcetera. I mean, like, closed paid Slack channel communities or, you know, things like that. Mainly because we found that if you're paying to be part of this community, there's like a higher bar to cross to join, and people will also be more responsive and active if they're actively paying for it. Right? And like the the the first community I joined was like $20 a month subscription. [00:40:09] S1: And this is a community of of who, for example? [00:40:11] S0: This of of just healthcare operators. It's like very specific to the to the audience that I was going to. [00:40:15] S1: And you just go, you just search like healthcare communities, whatever, you just look through them, start finding them, or you ask people in the space what's really good?
00:40:15 · Pablo Srugo, Ali Khokhar
[00:40:15] S1: And you just go, you just search like healthcare communities, whatever, you just look through them, start finding them, or you ask people in the space what's really good? [00:40:22] S0: We ask people. Exactly. Like, DM edged and I was like, what are you part of any communities? Do you what newsletters do you read? What do you what media do you consume? Right? Because I'm like, where do my people hang out? That's basically what I'm trying to understand. And I came across a community that was like $20 a month paid community. There's a Slack channel. I was like, okay, cool. Let's go join it. And in there, I introduced myself, started DMing a few folks working on interesting things, and then basically went and start having the conversations there. Like some of the folks that I closed that were in that first million dollars, I initially met through there, and then I, you know, I invited them to a conference that we were hosting or sponsoring two weeks two months from then. And then I was posting on LinkedIn, and so, like, let's give you I'll give you one example. That founder then bought Amigo. It was like a 200 k plus deal. And again, we didn't go at it as like, hey, buy my thing. It was purely like, you're building something cool, we're building something cool, let's chat founder to founder. [00:41:09] S1: Because they're building what? They're building their practices when you say they're building something cool? [00:41:13] S0: They're building practices or like the consumer facing digitalhealthcom [00:41:16] S1: Got you.