A Product Market Fit Show | Startup Podcast for Founders
00:20:40 · Pablo Srugo, George
[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. [00:20:57] S0: Unfortunately, it was not very methodical. I felt like immense pressure to win. We are very late to what I think is an amazing space. We're not the first company to start this. I think we're doing something new, but we're late. And I just I signed everyone I could to the point where it hurt. And one of the larger mistakes that I've made is and I've made many last year, I'm still making them now, is I signed a fairly large customer that was just a bad customer for us. And the pilot was bad, and I ended up like, what the word, firing this customer before they could even like [00:21:30] S1: We hear a lot about bad customers. Like, what does that mean? How does that actually manifest itself?
00:21:30 · Pablo Srugo, George, S2
[00:21:30] S1: We hear a lot about bad customers. Like, what does that mean? How does that actually manifest itself? [00:21:35] S0: This business required a lot of custom work, which is classic. This business needed an integration that we did not have. We created a workaround with this business via, like, an s three bucket FTP file transfer that required people from both sides, my team and their team to like handle the data. So now we're relying on like a random person of that team to give us the data that was not working no matter like how much I tried and we had no actual way to talk to this business data. And my system doesn't work otherwise. It was a sexy company, but I made the mistake of trying to create workarounds, which should not have made a workaround. [00:22:16] S1: What was the final product that you like? Obviously, product exchange, but like the one that you would say was launch ready that you launched with? [00:22:23] S0: It's a system that either takes your contracts, processes your contracts, makes the invoice, sends the invoice, collects some of this invoice using agents, like applies cash, gives reports, basic reports, and then pushes the data back into the ERP. And it was launched only with connectivity to a few banks and only with connectivity to one ERP called QuickBooks. So that customer that was a bad customer for us, outside of the fact that it was a very complex business, they wanted connectivity to, like, something else entirely different that I said I have, I didn't have it, and it was a mistake. [00:22:58] S2: Oh, you're such a selfish person.
00:22:58 · S2, Pablo Srugo
[00:22:58] S2: Oh, you're such a selfish person. [00:23:00] S1: I actually can't believe how selfish you are because, like, you've been listening to the show, you listened to this episode, you loved it, listened to a [00:23:05] S2: bunch of other episodes, and you haven't told anyone about it. You haven't told any of the many founder friends that you have about it. Think about how many founders have helped you out when you're building your startup. So don't be selfish. Tell your friends about this episode, tell them about the show, and help me help them. [00:23:22] S1: You're doing the full end to end life cycle. Tell me a bit about the ROI and how their ROI is realized. Like, are you finding your customers are laying off a bunch of people and saving costs? Do you find they're just doing more with what they already have? Like, how do they get that? Obviously, it's nice that this is doing automated, but how does that translate into getting value?
00:23:41 · George, Pablo Srugo
[00:23:41] S0: Depends on the size of the business. So no laying off. The main metrics that we are proud of that we sort of cite is like time savings slash making the team more efficient, furloughing your cash. So like Pablo is owed a $100 over the next year, you expect to get a $100 the next year, I'll give you $90 tomorrow. So saving time, following the cash and like visibility slash reporting needs. And truly the number one metric people care about is just money. I think that like insights and reports are nice. It's hard to quantify these things. One of the reasons why we picked the space and like, yeah, I cited three reasons, but then we honed in on this idea besides the pain. We had other ideas that were like, what I would call insights tools, which is basically only doing reads from the database. We're not doing any rights. So there's no system of action. Our product gives you money, more money sooner. Yes, it's your money, but everyone the number one metric that every finance leader or CEO cares about is just more cash in hand. So these are the main metrics. No one gets fired and it's not a marketing tactic, we just, we prefer to talk about how we augment the people, but yeah, those are the main metrics. [00:24:47] S1: How did you launch and like, what was your main like go to market channel that really worked at the beginning?
00:24:47 · Pablo Srugo, George
[00:24:47] S1: How did you launch and like, what was your main like go to market channel that really worked at the beginning? [00:24:52] S0: It was cold outbound email, and that was our only channel all of last year. No sales team, no nothing. And then finally I ate my like pride and ego and I started to post on LinkedIn, again, learning from other founders, I found it to be very cringed, I cared a lot about my reputation, who I'm connected, what people think of me from my, like, past experiences. But then once I started closing on LinkedIn, and for that I had to build a bit of like a different brand and cohesive identity, we started to get inbound. So now heading into this year, we had email and then some inbound. That's it. [00:25:27] S1: Tell me more about I mean, cold outbound is compelling because well, few things. First of all, like, I think people assume that it's dead just because they get so much spam. I certainly thought it. But I met a founder recently on the show, and he told me he got his entire first million of ARR through Cold Outbound. But he walked me through it. Is it half a million emails, 1% reply rate, so 5,000 replies, 250 meetings booked, 40 sales at like 20 k ish ACV million dollars ARR. Is that similar? Like, I'm curious, like how many outbound emails more or less did you send? Like, what kind of conversion rates? It doesn't have to be exact, but like more or less do you think you got?
00:25:27 · Pablo Srugo, George
[00:25:27] S1: Tell me more about I mean, cold outbound is compelling because well, few things. First of all, like, I think people assume that it's dead just because they get so much spam. I certainly thought it. But I met a founder recently on the show, and he told me he got his entire first million of ARR through Cold Outbound. But he walked me through it. Is it half a million emails, 1% reply rate, so 5,000 replies, 250 meetings booked, 40 sales at like 20 k ish ACV million dollars ARR. Is that similar? Like, I'm curious, like how many outbound emails more or less did you send? Like, what kind of conversion rates? It doesn't have to be exact, but like more or less do you think you got? [00:26:03] S0: I will mess up the stats. They were higher conversion rate, lower volume, but still mass volume. And I don't know about this person, but we have a horizontal solution, so we're industry agnostic. [00:26:15] S1: That was a key thing like he you know, that that was one of my takeaways was like, if you're gonna do cold email, you can't have like 10,000 customers because you're gonna you're gonna blow through that, need millions.