A Product Market Fit Show | Startup Podcast for Founders
00:02:20 · Tushar Mishra, Pablo Srugo
[00:02:20] S0: Absolutely. Yeah. That and much more. Even though franchising is a massive industry, I'll talk more about it, but most people think of like Subway at McDonald's. So imagine your local McDonald's. When you go to your local McDonald's, there's usually a lot happening there. So there's... You need to train the employees, you need to make sure the stores run exactly the same way no matter which one you go to. You want to run like LTOs and new campaigns that you want to do across hundreds of locations. So how do you coordinate between all of that? How do you make sure employees have the best experience? How do you keep your team trained, answer all their questions? And essentially these franchisees are the brand's customer. So if you open a local McDonald's, you're essentially paying royalties to McDonald's every month from your top line. So you expect more support from them to help you be a better operator, to help you make more money. And so all of that support that you expect, we basically enable brands to deliver that to franchisees and frontline employees working at those locations. [00:03:18] S1: So let's start where we always do with the the PMF moment. You you were telling me that, you know, at first you were selling to kind of smart... Small locations, you know, franchises with like three to 10 locations sort of things. And then you landed a really big one. Maybe walk us through kind of what happened there and why that was PMF for you.
00:03:18 · Pablo Srugo, Tushar Mishra
[00:03:18] S1: So let's start where we always do with the the PMF moment. You you were telling me that, you know, at first you were selling to kind of smart... Small locations, you know, franchises with like three to 10 locations sort of things. And then you landed a really big one. Maybe walk us through kind of what happened there and why that was PMF for you. [00:03:32] S0: So essentially, we were sending out like a bunch of these emails and we got one brand which had about 50 locations back then and was growing really fast. They got interested. We signed them up, onboarded them on the app, they started using it. The moment that I knew that we have Product Market Fit or it was working was when the CEO called me. She invited all of her HQ team members to an Airbnb, this was in Dallas, and invited me there and wanted to do a full day session of how they're using the app, what all we can do to make their experience better. And in her own words, they had assumed they would need to hire more people to sort of ask their opening more location. But because of the light sheet, they were able to do it with the current capacity that they had. So they wanted to go really deep and start to use more and more of the app. That's when we knew that something is working. Somebody is actually willing to spend their time and not just their time, but all their corporate team members in trying to help this little tiny startup and is actually seeing real value to their business.
00:03:32 · Tushar Mishra, Pablo Srugo
[00:03:32] S0: So essentially, we were sending out like a bunch of these emails and we got one brand which had about 50 locations back then and was growing really fast. They got interested. We signed them up, onboarded them on the app, they started using it. The moment that I knew that we have Product Market Fit or it was working was when the CEO called me. She invited all of her HQ team members to an Airbnb, this was in Dallas, and invited me there and wanted to do a full day session of how they're using the app, what all we can do to make their experience better. And in her own words, they had assumed they would need to hire more people to sort of ask their opening more location. But because of the light sheet, they were able to do it with the current capacity that they had. So they wanted to go really deep and start to use more and more of the app. That's when we knew that something is working. Somebody is actually willing to spend their time and not just their time, but all their corporate team members in trying to help this little tiny startup and is actually seeing real value to their business. [00:04:40] S1: So I think if I kinda say back to you, like, the key piece of all that, yes, it was a big customer, but it was the fact that they were making it core to their operations that felt like product market fit you? [00:04:49] S0: Absolutely. So they were not just making it core to their operations, they were making it a part of one of their key strategies on how they would grow. [00:04:56] S1: And when was this, by the way?
00:04:56 · Pablo Srugo, Tushar Mishra
[00:04:56] S1: And when was this, by the way? [00:04:57] S0: Like, what year? This was 2023. [00:04:59] S1: When did you start the business? [00:05:00] S0: We started the business late twenty twenty. [00:05:03] S1: Okay. So it's like two and a half, almost three years into the business when you have this big product market through moment. [00:05:08] S0: Absolutely. [00:05:09] S1: Where were you at before that? Like, what what kind of customers were you selling to and kinda how are they using the product? [00:05:15] S0: So before that, we were doing a lot of iterations of the product. So we would launch a product and then we would try to improve it. Most of our customers were six units, somebody who was using in California. They had a small restaurant. [00:05:29] S1: And was that still like franchisors or this was somebody that just owned like six restaurants, they wanted their managers to kinda like use the app? [00:05:36] S0: It was a mix. So it was still not completely focused. So some of them were non franchisee. They just had six restaurant. They wanted the managers to use it. We had one or two like franchisees, but none of the brands. So this was the first brand that we really got. [00:05:51] S1: How did you close this brand? Walk me through the kind of sales process. It's always hard to get your first meaningful logo.
00:05:51 · Pablo Srugo, Tushar Mishra
[00:05:51] S1: How did you close this brand? Walk me through the kind of sales process. It's always hard to get your first meaningful logo. [00:05:56] S0: Yeah. So we were sending out a lot of outbound messages. We got them interested. We walked them through the demo. They really thought that what we have built solves the current burning problem that they have, which is they're trying to grow and open a ton of locations, but they don't know how to support those locations. And so they decided to give us a try. What we knew from our experience back launching the first product that we'll probably get into was free means nothing and we'll not really get feedback. So we basically told them the pricing, we agreed on a pricing, we signed an agreement, we told them as part of the agreement, we give you like a one month pilot. But if that is successful and these are the success criterias, it rolls into a full annual contract. They agreed to that. They were like, okay, if it doesn't work and they had a back out clause. So if it doesn't work, then we don't owe you anything. We were confident that we could sort of make it work. So the next one month, we did the onboarding. They set up a few workflows and they started using it. And then organically, they signed up all 50 of their locations. [00:06:59] S1: And so now let's let's go back a little bit in time. Like, late twenty twenty, you started this business. What were you doing just before you started this business? Like, what's the kind of origin story here?
00:06:59 · Pablo Srugo, Tushar Mishra
[00:06:59] S1: And so now let's let's go back a little bit in time. Like, late twenty twenty, you started this business. What were you doing just before you started this business? Like, what's the kind of origin story here? [00:07:06] S0: So before starting Delight Tree, we used to run a company called Servitor, which was doing customer experience management for multi location businesses. So it was a similar kind of industry, but not particularly focused on franchisees. We had hotel chains, restaurant chains, DTA chains and our customer. And they would use SurveyDev to aggregate their customer reviews from different online channels and then have one dashboard where they could look at those reviews and reply to those reviews. We exited that company in 2020 before sort of starting Delight Tree and sort of there was an overlap between when we were trying to do both those things. [00:07:42] S1: Where did this idea come from for Delight Tree? [00:07:45] S0: During the last few quarters of running the last company, what we were really trying to do was this whole space of aggregating reviews was commoditized. Right? There were so many vendors that were doing it. We thought our differentiation was this NLP engine that we had on top that would analyze unstructured text data and tell them what's happening across different locations. This was before NLP was still not a solved problem. [00:08:09] S1: The world has changed so much, man. It's absolutely insane.