A Product Market Fit Show | Startup Podcast for Founders
00:18:28 · Jonathan Awad, Pablo Srugo
And then I met Tim and I love the way I met Tim. We literally met out via mutual friend. Tim went to Columbia undergrad and he was math econ. One of our mutual best friends, I met him in high school, went to Bronx High School of Science in New York. Shout out to Bronx Science. And he went to Columbia as well. Our friend Andrew, so Tim's a co-founder, Andrew. Andrew's a CS engineer and then after was an engineer for a bit, became a DJ. Like a really good one too. He's pretty popular. And we met out one night, myself, Tim, and we were just with Andrew. And then I was just like ranting and raving about some startup ideas I had in 2022. And Tim, we're in the back of a yellow cab and Tim's just asking a question, question, question. I was like, who are you? These are amazing questions. And Tim's just this awesome, super cool, like very tall, awesome guy. And he was like, oh, CTO of a machine learning company. He just sold to Snapchat two years ago. And I'm getting kind of bored. I'm getting antsy. Like I want to do something. I'm like, amazing. Let's start a company. And he looks at me. [00:19:31] S1: He's like, [00:19:31] S0: we just met. [00:19:34] S1: So what?
00:19:34 · Pablo Srugo, Jonathan Awad
[00:19:34] S1: So what? [00:19:35] S0: Who cares? Let's do it. And a year later of chasing, I was like, hey, like we hung out here. We met this VC. We talked about these prospects. We didn't have an idea necessarily, but I was like, in financial services, we're going to do something. I have all these prospects that I know will give me a shot. Like all these customers, all these relationships. He's like, no. And then I quit my job early 2023. Still with no clear idea. [00:19:58] S1: You had many ideas, but not the one yet. Literally no idea.
00:19:58 · Pablo Srugo, Jonathan Awad
[00:19:58] S1: You had many ideas, but not the one yet. Literally no idea. [00:20:02] S0: Quit in a huff. Said, no, I have to. Let's enter the void. Let's figure it out. I'll be honest. The first two to three weeks, I was like, oh no, what did I do? I had a pretty sweet gig. It's kind of killing it. I mean, every year of sales and partnerships, I was 600% my quota, 800% my quota. Like I was crushing it, but I just was, it wasn't enough. And I call him and I will never forget. He's in the Cayman Islands with his family, with his parents. And it's like a trip with his parents. And I call him like, hey, I just quit my job. Like, let's do it. Quit your job too. Like, let's go. He's like, what are we doing? No idea. What? Let's go. And he's like, no, no, let me talk to my parents. I'll let you know later. We'll talk to you later. Talk to his mom and his dad both. And then his mom was like, absolutely not. Don't do this. You barely know the guy. And then he comes back. He's like, look, no, but if you raise at least $3 million, I'll join. And I was like, wait a second. Will you join the meetings at least? Like, are you going to be involved? Like, is this your CTO? Like, we'll figure it out. He's like, I'll join the meetings. I'm CTO. Like, let's do it. But you got to raise $3 million for it. And then the story of our fundraiser is also a whole other story. I don't know if I should get into that. I think, yeah, let's do it.
00:21:12 · Pablo Srugo
[00:21:12] S1: Because you don't have at that point, I mean, you're, you have like, you know, you were a founder, you've got pedigree for sure, but it's not like super clear, easy. I mean, I'm curious to hear actually how you raise. It's not like, plus 22 is a funny time, man. 22 is, was not, uh, you're remembering correctly. Not a great time, man. Second half of 22 is deadly. No, it was horrible by the way.
00:21:32 · Jonathan Awad, Pablo Srugo
[00:21:32] S0: Yeah. By my estimation, because I was still, I was at a company that raised at 150X in early 2022, right before it left. Right. So right before the boat left. And then by my estimation, about a month later, because they closed in April, my take and sales, you can feel it. Okay. I'll explain how you can feel it. In May of 2022, everything dropped, everything dropped. And the way you could really feel it in sales, particularly in, in my seat was people before in like 2021 and, and like 2020, 2021, early 2022, they were buying like crazy. They were making things fast. Every meeting, the follow-ups were easy. The decision-making, all the decision-makers joined. They're excited. They're eager. I know the summer was coming, but then all of us, I mean, I did a lot summer of 21. I did a ton of sales in summer of 21. And then all of a sudden, summer of 2022, people were really slow to respond. Everything, it was like, oh, cuts, cuts, cuts, employees being fired. Sales are dropping, volumes dropping. You really felt the difference. I totally felt the difference. And I write a, I never publicize it, but if someone wants to find it, I write a sub stack on sales. And I wrote a lot about that time of like 2022, 2023 and what it felt like and how you have to overcome it because it's, and especially the one I wrote recently, it's like, now we're in SaaS-pocalypse. There's way too much SaaS at this point. And that's confusing, but 2022 is really tough. We ended up raising in 2023. Essentially like the TLDR was, [00:23:00] S1: Tim and I,
00:23:00 · Pablo Srugo, Jonathan Awad
[00:23:00] S1: Tim and I, [00:23:00] S0: we just hung out a bunch and we just jammed. And then we called a bunch of my friends and prospects and customers and managing director at a very large credit card company, a partner, executive director at a big bank. And then just like the list goes on. We talked to probably like 70, 80 of just my friends, my past deals. And I was like, Hey, what do you need? Just help me out. And there's this common thread of, well, here's this extremely difficult thing that I don't think you can do. But if you did, I'm down. And that was a fraud consortium. And a fraud consortium is very simple. You go to a hundred of the top lenders, payments companies, banks, whatever. You get all of their list of fraud, which they could share if they felt like it, because it doesn't have to be PII. It doesn't have to be actually personally identifiable information. And basically like their, like imagine scale AI, you go and get their labeled data across all of them that they never would share with each other. You go and label a bunch of businesses is what the idea was versus people or attributes. And then each one could benefit from that because what's currently happening in financial services and lending and payments, especially now with the fraud grown rampant with agents, is you go and onboard somewhere, some bank, some lender, go to Brex. Brex shuts you down because like, oh, this is a fraud. And then you just go to ramp. [00:24:13] S1: Right. Brex doesn't tell them.