A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · George, Pablo Srugo
[00:00:00] S0: Create a few principles. One is like it has to be a massive market. It's gonna sound obscene, but we have to see some path to go public or to make a company that will do, you know, a 100,000,000,000 top line, not not valuation, but top line. And the main reason for this is like smart, ambitious people wanna work with fast growing companies. There's only, like, so much yapping that I could do to motivate the team. People wanna look at grass and go up into the right. What I've realized is that if you got a job at a big enough company to own this function, you kinda wanna log in to somewhere to see what's happening. It's like not enough for it to just happen behind the scenes. You want a dashboard. And then I lost one deal to a competitor because we didn't have a dashboard and didn't seem like we're serious, and that was kinda like a punch to the face, and so we built we built the front end. I signed everyone I could to the point where it hurt, and one of the larger mistakes that I've made is I signed a fairly large customer that was just a bad customer for us. This business required a lot of custom work. This business needed an integration that we did not have. It was a sexy company, but I made the mistake of trying to create workarounds. We should not have made a workaround. [00:01:02] S1: How fast did you hit like a million in ARR?
00:01:02 · Pablo Srugo, George, S2
[00:01:02] S1: How fast did you hit like a million in ARR? [00:01:04] S0: You know, Reactubis started selling last fall, and we hit a million in roughly six months. That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. [00:01:19] S2: Product market fit. [00:01:20] S0: Product market fit. Product I market mean, the name of the show is product market fit. [00:01:25] S2: Do you think the product market fit show has product market fit? [00:01:28] S1: Because if you do, then there's [00:01:29] S2: something you just have to do. You to take up your phone. You have to leave the show five stars. It lets us reach more founders, and it [00:01:35] S1: lets us get better guests. Thank you. George, welcome to the show, dude. I will. Thank you. So you're running a monk, and things are going pretty fast. I mean, you started a year ago. You raised the seed late last year. You raised a $25,000,000 series a this year. So clearly, you're you're on quite a ramp. We're gonna get into why you started it, how you started it, and and how you kind of grown the business through this. But as a first question, because we like to focus on product market fit as much as possible, like, tell me, when was the moment for you when you felt like you'd found true product market fit, when things were really starting to work?
00:01:35 · Pablo Srugo, George
[00:01:35] S1: lets us get better guests. Thank you. George, welcome to the show, dude. I will. Thank you. So you're running a monk, and things are going pretty fast. I mean, you started a year ago. You raised the seed late last year. You raised a $25,000,000 series a this year. So clearly, you're you're on quite a ramp. We're gonna get into why you started it, how you started it, and and how you kind of grown the business through this. But as a first question, because we like to focus on product market fit as much as possible, like, tell me, when was the moment for you when you felt like you'd found true product market fit, when things were really starting to work? [00:02:11] S0: I think for us, from a co founder at Joe, that moment was with a customer of ours today, they emailed us, I ignored, they emailed again and again, and then I couldn't do a call, so I just sent them like our sales platter, which is like a one pager. And then they said, okay, send me something else. And I couldn't do a call again, so I just sent them a loom, Like a loom of me yapping, showing our product. And then they said, yeah, sounds good. Like, send me the DocuSign. Let's do a pilot, which in my experience, doing B2B SaaS, selling B2B SaaS, it takes like multiple calls, video calls. So that that was a good one for us. [00:02:45] S1: What kind of ACV are we talking about? Is that 10 k, 50 k, 5 k? [00:02:49] S0: A 36 k.
00:02:49 · George, Pablo Srugo
[00:02:49] S0: A 36 k. [00:02:50] S1: 36 k. So that yeah. That's like that's real money. I mean, someone's paying you almost $40,000 and not even really talking to them, and it's not like PLG where they're using the product, they're uncomfortable, and they're and they're ramping up. They literally just they see a deck, they get the loom, and they're like, this is amazing. I gotta have this product. [00:03:06] S0: Yeah. I think some of it is because the paint is quite sharp, we could talk about that if if you want. But the other piece is, I mean, I'm very biased, but we're very proud of our product. Like, sells itself. [00:03:16] S1: Yeah. We're gonna get to all that. Maybe let's let's start there. Like, this is kind of the the moment where you really felt like things weren't working and obviously very scalable if you can sell things that easily. How do things start? Like, take us back maybe two years ago before, you know, what were you doing two ish years ago that then led to you even starting this company? [00:03:33] S0: Two ish years ago, I was running a different company, a role called Gattaca, because I like that film and the scene where he swims and then he doesn't give up. But it was a different company. It was like a YOLO model to do computer vision two way testing. We became profitable quite quickly, but I returned the money because it was a small market, and I had a co founder breakup. And so the big learning there was like, we're never doing a small market again.
00:03:33 · George, Pablo Srugo
[00:03:33] S0: Two ish years ago, I was running a different company, a role called Gattaca, because I like that film and the scene where he swims and then he doesn't give up. But it was a different company. It was like a YOLO model to do computer vision two way testing. We became profitable quite quickly, but I returned the money because it was a small market, and I had a co founder breakup. And so the big learning there was like, we're never doing a small market again. [00:03:54] S1: You shut it down. Like, you literally said, kid, it's just not big enough. You you hit pause, return to whatever capital you had, and and moved on. [00:04:00] S0: Yeah. We're we're friends, but someone I've known for seven years who was a I found an engineer in the company that I sold, we had a breakup and then it became clear that like, QA is just not it. And I felt like I could've done the world to my will. Every VC said this is a bad market. I said no. And then
00:04:00 · George, Pablo Srugo
[00:04:00] S0: Yeah. We're we're friends, but someone I've known for seven years who was a I found an engineer in the company that I sold, we had a breakup and then it became clear that like, QA is just not it. And I felt like I could've done the world to my will. Every VC said this is a bad market. I said no. And then [00:04:17] S1: yeah. Well, you know, this is I know that we're just starting, but I'll take you on a tangent even just right now because this is a classic failure mode in the sense that founders, they wanna feel like they're relentless, like they never quit, they never give up. And yet, I've met many founders like you who gave up on a certain feature or idea or even company, but didn't give up being a founder, which is effectively what you did. Like, how do you think through that? When is it kinda like you're you're giving up prematurely and you should've just fought harder and and success was right there? And when is it like, you know what? It's actually okay to say this is not gonna work, give the money back, refresh, restart, and go a different direction?