A Product Market Fit Show | Startup Podcast for Founders
00:16:26 · Shmulik Fishman, Pablo Srugo
[00:16:26] S0: Yes. [00:16:27] S1: The risk is you're building something that actually is never a top priority, never going to become a top priority. You're getting stringed along. What signals are you looking out for to make sure that there's something real here? When you decide to charge for it, the money will be there. [00:16:42] S0: To use your AI Pin as an analogy, I like building tools that are just a better mousetrap instead of something that is actually new, and I think the AI Pin is like that's a net new product, which makes it even harder to extract value out of or to price around. Everything that Argyle builds, even in the early days, is just a better, faster, cheaper, more automated version of something that a business is already paying for. Every lender already pays for income verification services and to know income by year. We're just giving you the next generation of it. I think it's easier to price around that because there's already a reference of value with a client, but they're already spending on it. They're not allocating new spend, or having to get a new PO, or get a new approval. I like to say that every business spends on income verification services already. You can go to your P&L. We do this as part of our sales cycle. How much money do you spend on this today? We're going to cut your cost. That’s a very different way of communicating with a client, with a prospect than trying to convince them that they need a widget that they're not buying today. We just have a better widget.
00:17:52 · Pablo Srugo, Shmulik Fishman
[00:17:52] S1: I think that makes a lot of sense, and it's an important distinction if you're selling B2C or B2B. I think B2B is clearer, and there's already budget allocated and being spent on something. It's not budget risk, it's not demand risk they need to solve for, which is really what an MVP does. It's actually more product and value. Are you actually going to be that much better than that other thing? That just takes time. [00:18:14] S0: Put yourself in the mind of your client. He has to pitch it to his boss as well, and the pitch is so much easier internally when you can say I've tried this new product. It's better than the current product we're using today. Here's the price points. Here’s how it works. I've done it a hundred times. I can show you it. I like it. All of a sudden, you've made the pitch so much easier for your buyer or for your client. [00:18:41] S1: I think that's what – that's another thing I've heard as many times going through these interviews is – in your case, you're a repeat founder, a little bit different, but it's not that different in the sense that, as a startup, you have no credibility. I think sometimes founders forget that. You have no credibility. The larger enterprise you're selling into, the less credibility you have. [00:18:56] S0: Correct. [00:18:57] S1: Unique ways to establish that and, having worked with someone for months as a design partner, definitely can check that box.
00:18:57 · Pablo Srugo, Shmulik Fishman
[00:18:57] S1: Unique ways to establish that and, having worked with someone for months as a design partner, definitely can check that box. [00:19:03] S0: A hundred percent. Use that lack of credibility, if you can, to your advantage. You're going to be allowed to give out product that's more MVP, to get feedback in a way that the big behemoth in your space can't do, so there's a way to have some asymmetry there. [00:19:21] S1: Walk me through this first paying customer. It actually wasn't in the same vertical. It's a different vertical, a lending use case. How did you find them? Why did you find them, all the story around them? [00:19:31] S0: So many of our clients have found us via Google search. SEO optimization I'm a huge fan of, but Level found us through the internet. If you're trying to verify income for gig workers, there's a lot of search like verify Uber, gig worker income. You can run search queries against that or ads against that, and that's how they came to us. Equifax doesn't verify gig worker income, so there's this cool whitespace that we completely fell into on accident where, our gig integrations, you just could not get that data through a credit bureau. There was something cool that was just happening there organically. [00:20:14] S1: Were you optimizing for those keywords before you even had a customer in the space, or did they find you a different way and then you realized that was that was a whitespace? [00:20:22] S0: Yeah, gig income verification, those are great keywords. They still work today. If you type that in, Argyle comes up.
00:20:22 · Shmulik Fishman, Pablo Srugo
[00:20:22] S0: Yeah, gig income verification, those are great keywords. They still work today. If you type that in, Argyle comes up. [00:20:31] S1: How did you turn that one customer into a dozen customers? All inbound or did you start going outbound as well? [00:20:36] S0: Yeah. We built out a very small sales team. I also think that, the first 100 clients that we got, I was heavily involved in that. I really do encourage founders stay involved in sales and customer success for longer than it feels comfortable. I still do a lot of it today because I think that hearing from the customer about their pain points, why they're buying your service, what about your service doesn't work, you need that to keep building, and so a lot of the early sales were me. We kept on iterating on the SEO strategy. We found lookalike clients. It just also happens to be that, in this industry, lending, it's a massive space, massive space, and you can start to go out to the largest lenders that leverage Equifax service or a credit bureau service. You can start calling on them and say, hey, I have some results to show you with other clients. Would you like to use this service? It's having these outsized results. That’s how we started – that's how we kept on iterating.
00:21:37 · Pablo Srugo
[00:21:37] S1: You mentioned staying as close to your customers as possible, especially on the sales and customer service side. I couldn't agree more. I actually think that's one of the most common mistakes is hiring this VP sales a little too quickly because you want somebody who's a pro, who's going create a great sales organization, and all these sort of things. In fact, there's this company I saw not too long ago. They bootstrapped to two million in revenue, nine people, effectively break even, raised a few million dollars, and the first thing was VP sales, beef of the team, blah, blah, blah. A year later, they're still doing two million in revenue, right? It just completely flatlined because it was too early. This is maybe a bit too specific, but just to give some – maybe make this point more tangible, do you remember some of the things, anything that you would've learned back then because you were so close to these customers, because you stayed close on sales or on customer success? Some of the things that customers might have told you or you might have gleaned from sales calls that actually – because they're subtleties, right? They're small tweaks that sometimes are the difference between something that sells and something that has too much friction.
00:22:50 · Shmulik Fishman
[00:22:50] S0: I think a lot of why I start – I still stay so close to clients is they know more about income verification than I do, and so my clients have been educating me on this space and how Equifax does it, how we're different, what type of data they need, how they want it organized, how they want it calculated. It's great to get all of that education from your clients because you're hearing their challenges. You're, able to get from them what they wish was different, and then you can just go build against it. I find myself really being a product manager masquerading as a CEO. Just from a product manager's mindset, it's great to hear the client's problem so you can build the solution, and the closer you can get to the problem, the better. You don't want to be disintermediated from that conversation. I think that's the reason why we've kept our sales team really lean. Even today, Argyle does not have a VP of sales. We have this GM strategy where there's a general manager for each one of our key verticals but all in the purpose of keeping ourselves as close as possible to the client.