A Product Market Fit Show | Startup Podcast for Founders
00:23:12 · Tushar Mishra, Pablo Srugo
[00:23:12] S0: think the biggest shift has been as we got this formula right and those initial customers that we had really started to get the value, we started to get a lot of referrals. And every event that we would go to, there would be a customer who's using the Lightly and they would say, Oh my God, the Lightly is so amazing. It's helping us. We stop using these four things that we were doing and now just using sort of the Lightly and I get all my work done. That was important. But most importantly, we had amazingly overwhelming feedback from owners. So franchisees and frontline employees were actually using the app. They were getting a lot of value from it. So that rolled into us winning sort of a lot of deals. So for example, in Q4 of twenty twenty five, we were still three reps of sales reps in our team. Out of those three sales reps, one of them hit 2.5 x of their quota, the other one hit almost three x of their quota, which is we closed more revenue in q four of twenty twenty five than we did in all of last two years. [00:24:07] S1: What's quota, for example, for a rep? [00:24:09] S0: So back then, our quota was about 800,000 a year.
00:24:09 · Tushar Mishra, Pablo Srugo
[00:24:09] S0: So back then, our quota was about 800,000 a year. [00:24:13] S1: Okay. So these guys are closing multimillion. Yep. And that... Like, if I if I kinda say back to you, if, like, mid twenty three, land this first one, you know, you'd probably roll with them, you know, till the end of twenty three, and then you start kind of truly running a motion, going outbound, but it's kind of like you're hunting. You're... Because nobody knows you for most of '24. And then as people, you know, the referrals start to trickle in, they start to build themselves. And it's really in 2025 when you start to see that kind of pull from the market because the the growth is kinda self fulfilling. [00:24:41] S0: Yep. Absolutely. As of 2025, we grew almost like more than 4x from start of the year. And it was happening in two ways. So one, we were signing up new logos, but also some of the logos that we signed in 2024, they were also growing. So, we had a brand who started with us when they were less than 10 locations. They grew to about 100 locations. So our NRR was also climbing a lot. [00:25:03] S1: Well, what's NRR? Like over over a 120, [00:25:06] S0: assume? End of twenty twenty five, it was close to a 140. [00:25:09] S1: Wow. Okay. Yeah. So that's like best... Like best in class is over one twenty. So you're like best best in class, 140.
00:25:09 · Pablo Srugo, Tushar Mishra
[00:25:09] S1: Wow. Okay. Yeah. So that's like best... Like best in class is over one twenty. So you're like best best in class, 140. [00:25:15] S0: So we started to get that and because the product was sticky, we didn't have a lot of churn. So any churn that we had was during onboarding. So when we sign a logo and this is again, which is once you find product market fit, you get good at, like, one thing, and then you have to start to get better at the other thing, which was... We were still not great at onboarding, and we're still learning. [00:25:34] S1: I'm really worried because listen, like, you've been listening for, like, what, ten, twenty, thirty minutes now. Clearly, you like it. And the thing is, the next episode is way better, and you're gonna miss it. You're gonna miss it because you're not following the show. So take your phone out and hit that follow button. Onboarding is the non sexy thing I keep hearing about, like, over... And I feel it with my companies. It's like, you've gotta figure out onboarding. It's so predictive of future retention and and expansion. It happens right away. You've gotta get on it. It's pretty crazy. [00:26:01] S0: Absolutely. That that that was the biggest lie. Like, we had a ton of logos that we signed that could just never onboard. And because we didn't have a great process and we could never take them there. But if you have the onboarding right, it's a sticky customer. At the
00:26:01 · Tushar Mishra, Pablo Srugo
[00:26:01] S0: Absolutely. That that that was the biggest lie. Like, we had a ton of logos that we signed that could just never onboard. And because we didn't have a great process and we could never take them there. But if you have the onboarding right, it's a sticky customer. At the [00:26:12] S1: time when somebody buys is when they're most excited. And then if time rolls and later on you hire a CS person and they're like, oh, this account is dead for three months. Let's... You can't reengage. Like, your champions moved on to the next thing. People are like, oh, this tool doesn't work. I tried it once already. It's shit. You know, it's just like minds are made up. So you've kinda lost your window. [00:26:29] S0: It is really hard. Like, that is the moment. Like, when you sell, you have whoever is buying the product. If you don't do anything in the next two to three weeks, like set them up, get them excited. Anything after that is 10 x harder. Basically, you have to go through the whole sales cycle all over again and you're setting up yourself up for failure. [00:26:47] S1: When did you hit like a million ARR for example? [00:26:50] S0: Mid twenty twenty four. Okay. That makes sense.
00:26:50 · Tushar Mishra, Pablo Srugo
[00:26:50] S0: Mid twenty twenty four. Okay. That makes sense. [00:26:53] S1: Yeah. So that first key customer takes you a year to get to that million, and then '25 is when things really take off. Yeah. Okay. So let's let's jump into kind of the the tactical pieces that that... Know, this is where we really go deep and, you know, I think the the hope for founders listening is that we give them something they can they can copy. Right? One of the things you you talk a lot about is how the product evolved over time and how you... Obviously, iteration and, you know, listening to customers is key things. Every founder knows about it at a high level. But then it's like, you know it at a high level. How do you really implement it? You were talking about... You had a process early days, maybe still now, but early days about listening to your customer and acting on that feedback exceptionally fast so that the next demo was different than the previous demo based on the things you heard. Maybe tell me a little bit about that, and we can try and go deeper just kinda pull out as many of the learnings and and the outcomes of that.
00:27:38 · Tushar Mishra
[00:27:38] S0: Yeah. So what we would do is, number one, we were very clear about we want feedback from strangers, so people who don't know us. And we want feedback from strangers in the notion that they are looking to buy the software, not just for helping out a startup. Right? Because that's when you actually get real feedback. So we used to send out a bunch of these sort of emails and we had a system for that. It was by industry. We had two different kind of messaging. And when we would get a demo book, it could be a real sales call. You show them the product and we would actually even though we do not have that built out, it would be a Figma prototype. And now you could probably build a prototype on cloud or something. But back then it was a Figma prototype, like clickable prototype. And that's when we get real objections. We usually talk about pricing. Okay, here's how much it costs. This is the product. So that's when people would actually say, oh, but my system is this, can it have... So I wrote some of these things down. But one interesting one that came out of that was when you complete a task, so we had you click a picture to basically show an evidence of you've completed the task. Now this prospect asked us, what if somebody uploads a picture from... Like, they clicked yesterday saying they key in the restroom. We're like, okay. Now that is... That is true that that could happen. So that's when we decided to... Basically, in the next prototype, we did not have a option to upload anything. It was when you click the button, it automatically just opens up your camera. Then to further titrate, we said, okay, every picture that click... Gets clicked here is actually geo stamped and time stamped. So now, you know, it was clicked when it was supposed to happen. So these are the small iterations that you are doing while sort of you're doing this. And then within that, you also have to be very clear about what are the things you don't want to do. So in these calls, would also often hear one popular request was scheduling. Do you also have scheduling as a feature? And we knew that's a big space, but we knew that there's so many vendors doing scheduling. That decision is not made in HQ, but it's made at the location. So I'm selling to HQ, that feature is useless for me. They aren't going to pay for it.