A Product Market Fit Show | Startup Podcast for Founders
00:15:06 · George, Pablo Srugo
[00:15:06] S0: Yeah. I'll do a fast plug for like probably a very simple book that was discussed on the show by a lot of people and then my process. So the plug is for a book called The Montest. It's like a 100 pages. It's written for like someone like quite new to this, like I found it useful. It helps you to do is like, as you said, fake compliments, which people often give from like actual real feedback, and then listening to people, looking at them, and then seeing concessions. So like the penultimate test is, hey, let's sign this doc. Like, give me some of your resources, sign this pilot doc and or dedicate some resources to implement my thing. An NDA could be a good signal. And then I think a lot of it was listening, in my space, so our first product automates account receivables. No one raved about their account receivable solution. Everyone was like fairly displeased to quite unhappy, and there was we're stuck with this. It was very obvious. But do you [00:16:02] S1: remember like specifically what you heard? Like when you told them you would stop AR for example, what what did people say back to you?
00:16:02 · Pablo Srugo, George
[00:16:02] S1: remember like specifically what you heard? Like when you told them you would stop AR for example, what what did people say back to you? [00:16:07] S0: There was a lot of I don't wanna talk too much about the competitors. I respect like these businesses. They're all doing as well as they could, but it was a lot of folks being frustrated with what we already had today. So like, yeah, we use X and it took CEO to implement X and we failed to implement. And it was so disastrous that my team, my entire team had to take a vacation after implementation or like we use X and we're stuck with X and for us to request any change in X, we have to like log a ticket that goes somewhere in a foreign country and like my thing never happens. Things like this. [00:16:42] S1: So it's actually more the frustration of the problem, the status quo that you picked on than like the eyes lighting up for your solution necessarily. [00:16:50] S0: Yeah. The thing that we do, which is account receivables, we manage the revenue side of the business, is it's a hard fact that the world accepts that exists that is broken. Like, everyone already has some sort of solution, whether that's spreadsheets or another like piece of SaaS. We're not inventing that new thing. It's just that we're making the existing thing better. So, yeah, everyone was frustrated. [00:17:10] S1: So you take this, you know this is where you wanna go. What is like v one of the product that that you decide to build?
00:17:10 · Pablo Srugo, George
[00:17:10] S1: So you take this, you know this is where you wanna go. What is like v one of the product that that you decide to build? [00:17:15] S0: Awful, awful thing. So at this time we have like the basics of the cursors of the world and my co founder and I went crazy building too much stuff. So the v one had no front end at all. It was like a back end service only, it was a black box. And we started to sell it and we made some money in the beginning, and we've learned very quickly that finance leaders don't want like a black box. [00:17:37] S1: How did that work? They would just say, here here are like accounts that are laid, go collect for me? Like what what was the [00:17:42] S0: Yeah. Just connect to my systems and then, like, give me the money. [00:17:46] S1: So this is classic, like, services as software play, like, the way that you approach it. Yeah. [00:17:50] S0: Yeah. Yeah. And in the beginning, I was doing things manually. We had, like, our LHF based on me. I was doing things manually and then automating them as I'm doing them. [00:17:59] S1: Were you calling customers? You were emailing customers yourself to try and collect? [00:18:03] S0: Like, hundreds and hundreds and hundreds. Super painful, crazy hours. [00:18:07] S1: So you're almost like running an outsourced collections agency, except you're trying to automate some pieces of it, but that's where it starts. [00:18:14] S0: Automating myself out of it.
00:18:14 · George, Pablo Srugo
[00:18:14] S0: Automating myself out of it. [00:18:15] S1: Yes. Got you. Yeah. It makes sense though for what it's worth. I mean, I know you you all and we'll get to what the next evolution was. But, like, today, there's just so much like, services and software is a big category. A lot of founders are thinking about doing something AI native first. And it's like, you know, you either start with the the product and you try to get it to here's the thing. Let's think about, like, AR. Right? There are already outsourced collections agencies that some of these companies might be using or might have thought to use or whatever. That's a known thing. You could just max their service and do it all manually, and then backfill and automate yourself, which is what you did. Or you can just start with, well, it has to be tech only, and then try and get your way to, like, realize the same service. But it's harder. It seem feels harder that way. I don't know. [00:18:55] S0: We're still early and I think it also depends on who you're selling to. And like our product has evolved since then. But man, if you look at like our seed slides, I even branded it as such, I was proud of it, we called it RAS, results as a service. And I was like very proud of it. And then I think the VCs felt like maybe, but the customers actually didn't like it. They did not at least the customers that we're selling into at the time Tell [00:19:19] S1: me more about that, it's unintuitive.
00:19:19 · Pablo Srugo, George
[00:19:19] S1: me more about that, it's unintuitive. [00:19:20] S0: What I've realized is that if you got a job 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. [00:19:43] S1: And they wanted to see I think this is interesting and and generalizable. They wanted to see what? Like, how many tickets, this and that, or what you were actually doing? Like, hey, what are you saying to these cuss these are my customers that you're talking to collecting from. Do they wanna see that level of visibility?
00:19:43 · Pablo Srugo, George
[00:19:43] S1: And they wanted to see I think this is interesting and and generalizable. They wanted to see what? Like, how many tickets, this and that, or what you were actually doing? Like, hey, what are you saying to these cuss these are my customers that you're talking to collecting from. Do they wanna see that level of visibility? [00:19:57] S0: Both plus without like dragging you through the world of AR. They're like basic reports and basic functions that you would expect. I think people wanted to see and wanted to tinker. Now it feels like this whole results of the service thing and like selling services as software is like again in vogue. Also my conclusions are based on like a pretty small sample, like we're visual design partners last spring, but yeah, we built the front end. So to answer your earlier question, we started with just the back end service only and we built the front end. It became quite easy for us to build the front end because of Cursor, but it was also easy to get carried away building like crazy front ends that impress customers, but then like it's hard to build the back end service. Now we obviously have the full app. [00:20:40] S1: When did you walk me more through that product. This we're talking, like, what? March May March, April Yeah. Twenty twenty five ish. Yeah. How how did you structure because this is another big piece of getting the product right is how you work with design partners, who you choose as your early customers. Tell me more about that phase of the business.