A Product Market Fit Show | Startup Podcast for Founders
00:11:15 · Pablo Srugo, Jonathan Awad
[00:11:15] S1: I mean, obviously 20 deals closed all straight means not only did you have something people wanted, which led them to a demo, but you'd build, you know, the right enough solution that you beat whatever other competitors, whatever else they might've been considering. So tell me a little bit like, you know, 2023, 2022, whenever it was that the idea kind of came, like what was happening? What were you doing? And what was kind of the origin for, for Baselayer? You know, it's really interesting. [00:11:36] S0: I've been in financial services, fintech, et cetera, Jason for the last 15 years. So I did investment banking, you know, JP Morgan, UBS, Lazard, and that was M&A. So banks buying banks, bank buying lenders. You knew a little bit about it. You don't really understand what's going on, but like generally how they operate. And then I started a fintech and that's a whole story. We can get into that. Real estate, stock exchange, et cetera. And then just went to a series of smaller startups. So I went to one, underwriting automation, did something cool, went to an even smaller one. [00:12:06] S1: Did it fail or work? What was the end outcome just of that startup, the first one, [00:12:10] S0: the fintech one? TLDR, we were very early to fractionalizing real estate. [00:12:16] S1: A lot of people in 2016
00:12:16 · Pablo Srugo, Jonathan Awad
[00:12:16] S1: A lot of people in 2016 [00:12:17] S0: was like, is this on the chain? Is this on chain? I was like, no, it's not on chain. We went way more difficult. Not difficult. That's not true. There's no juxtaposition. It was just not on chain. We filed a brand new security, Reg D security, SEC finner registered. We're a licensed broker dealer and we were trading app. So it was like, we're JP Morgan, Robinhood, NASDAQ in one, basically. And we created a brand new security and it was a licensed, like an ATS. So that's for alternative trading system. Instead of NASDAQ, which is a stock exchange, we did an ATS. There's only 12 licensed ATSs in the world. And we tried to just IPO buildings. When I say try, we IPO'd four buildings, raised about 30 million bucks. And you could buy a piece of a building that way you can buy a piece of a company. It's just then COVID came and destroyed commercial real estate. And it was very difficult to raise that in the wake of COVID. And we were up for a series B and then we ended up selling the company. I was chief investment officer. I wasn't the CEO. So I didn't really get that experience. I didn't have as much management experience. I didn't have as much like, how do we make money experience? And yeah, so I'm a first time CEO, second time founder. For anybody that's in that like close, but not CEO, [00:13:24] S1: how big of a difference is the load, you know, like the pressure of CEO, founder and founder and anything else, any other title?
00:13:24 · Pablo Srugo, Jonathan Awad
[00:13:24] S1: how big of a difference is the load, you know, like the pressure of CEO, founder and founder and anything else, any other title? [00:13:32] S0: What a good question. What a difference. The amount of small, random or big random things that just fall on your plate. Elon Musk has this amazing quote. [00:13:43] S1: He's like,
00:13:44 · Jonathan Awad
[00:13:44] S0: the CEO's job is to deal with all of the problems. If something's going well, you don't really want to focus on it as much. You want to hire amazing people to go and make it even better. You need to focus on just the problems. So all the problems come to you. And so when I was chief investment officer, I had like a domain of things I would focus on and handle, but I didn't have to deal with some other team's personnel issues. I didn't have to deal with some other team's like filing of a license or, you know, the marketing thing or what do we do here? Hey, are competitors pricing like this? Or, hey, what should the website look like? Website copy is one of the most interestingly, doesn't look hard, but it's so hard of a challenge. And it's so, you have to be so creative and you have to be so thoughtful. There's so many things that go, like, are there hard or go wrong and the CEO deals with it and every single other person doesn't. The reason why my CTO, our CTO, Tim, Timothy Hyde, shout out, my best friend, incredible person, literally genius. The reason why we work so well together is that we just completely divide the company into engineering and all of that, product execution and all that, design execution and all that, him and I stay out of it. I literally don't have access to our GitHub. I think that's a hilarious thing to say as a CEO. I always find it very funny. It's kind of like an inside joke at this point because I don't need access where I'm not pushing to prod and they don't want me to. And then I deal with literally everything else. And that's why I work so well. Even though I chime in on things, high level, but like not really. And it's just so different.
00:15:18 · Pablo Srugo, Jonathan Awad
[00:15:18] S1: The difference is it's this coach player thing. Like at the end of the day, there is no line. As much as he owns all of that, if let's just say that stuff stops working, now it's back to being your problem. You can't escape that fact, right? And I think that's just a crazy idea is like every single problem is your problem if you're a CEO, which means you're always waking up with that heart, like beating out of your chest because inevitably something's not working. [00:15:42] S0: Yeah, I love that. It's funny you said that line. I always say, I love that line. Every problem is my problem. I totally agree. And that's the best kind of acceptance to just hold on because then you're kind of relaxed about it. You're like, something's going to go wrong and ultimately it's a reflection of me and that's okay. I'm like, I'll improve and we'll get better and the next day and the next day. It is what it is. I totally agree. Banger line, by the way. [00:16:07] S1: So back to, I took you off the storyline. So that, you know, you did the startup, then you did a few small startups. When do you get to this kind of Baselayer idea? Where does it come from?
00:16:15 · Jonathan Awad
[00:16:15] S0: Yeah, so I was working in kind of identity broadly, fraud broadly, and that company was my most sales experience. Signed like 95 deals in eight months or something. And it was on a tear. COVID had just hit. You know, it was 2021 and there was this massive transformation in financial services where folks, when I say folks, I mean banks, lenders, payments companies, folks. Financial services before could rely on face-to-face, coming to my branch, coming to my company. I know you. I see you. I can onboard you. In COVID, 2020, they didn't do that. PPP, so many hundreds of billions of dollars was handed out in the Paycheck Protection Program. So all these businesses were applying online for the first time. All these banks were decisioning for the first real time. And no matter what any financial services company says to you, very few, even the really big ones, were doing that much digitally. And for the most part, it was really just like the top 10. Not even the top 10. Some scattering, smattering of the top 10 had a bunch of digital. Very little, actually, like half the top 10 didn't. When I say top 10 banks, lenders, payments companies, and then most of the rest was just, weren't relying on digital as much. And then they had to. And so that was this humongous moment, basically, of massive transformation in the industry. And I was at a company that was doing pretty well. And I learned a lot really fast. And there's just so many ideas that were constantly coming because they kept asking. You have that many signed deals. I'm talking to hundreds and hundreds more, obviously, right? Like, even at a 40% win rate over time, you're still dealing and juggling. I probably juggled 400 or 500 deals over the course of that, those 12 months, which sounds crazy. And it is. It was the most I ever worked besides Baselayer. It was like that and then Baselayer. And they just gave me so many ideas and they asked so many questions and they literally like, hey, can you do this? Can you do this? Can you do this? And so I took a bunch of them and I brought it internal and I was like, hey, like, I wrote up PRDs. I have all these customers who want it. Like, this is how we source the data and the product, et cetera. And I got a lot of no's. Hey, you're in sales. They in sales. And I was like, okay, that's kind of not good enough for me.