A Product Market Fit Show | Startup Podcast for Founders
00:23:18 · Yoav Vilner, Pablo Srugo
[00:23:18] S1: They were moving fast. We were obviously – you're starting at a price point where it's not too much of a complicated procurement process with enterprise companies, right? You never stop with a – you never start with a $200,000 ACV if you're a startup company. You always find the right – if you find the right guy within the company, then obviously you can decide together what's a financial agreement that he can move fast with, he can see value, then he can finally expand within the organization and try to go for everything that could get us traction and not scare off their CFOs. We grow our prices from there. I think you have to lose some dollars the first place in order to get those logos. [00:24:03] S0: Maybe just the other thing, I don't know if this came up in conversations, I just am thinking in the back of my head, oftentimes startups are pitching this time saving ROI, whereas with you, I would assume that for a lot of these salespeople who are implementing it, it affected their own KPIs, close rate, and things like that. Is that accurate? Is that how they looked at, well, the demos don't crash, I'll close more deals and that's why it's so important to me?
00:24:03 · Pablo Srugo, Yoav Vilner
[00:24:03] S0: Maybe just the other thing, I don't know if this came up in conversations, I just am thinking in the back of my head, oftentimes startups are pitching this time saving ROI, whereas with you, I would assume that for a lot of these salespeople who are implementing it, it affected their own KPIs, close rate, and things like that. Is that accurate? Is that how they looked at, well, the demos don't crash, I'll close more deals and that's why it's so important to me? [00:24:28] S1: It was a little easier to quantify, I would say, because if you don't have to spend millions of dollars on teams that just build out demo environments, if you don't have to spend theoretical millions of dollars on people communicating inside the organization, can you add a feature? Can you remove a feature? We all know what happens when a salesperson in a B2B company goes to anyone at RND and asks them to illustrate a new feature, right? They're going to kick his ass. It was really hard to – it was really easy to quantify. At first, I think I wouldn't be as ambitious to say we doubled everyone's sales or everyone met their quotas just because they used Walnut. You cannot attach us such a success to any of your tools, not even the most successful one, but we were definitely proud of a set of improvements that they saw within the org.
00:24:28 · Yoav Vilner, Pablo Srugo
[00:24:28] S1: It was a little easier to quantify, I would say, because if you don't have to spend millions of dollars on teams that just build out demo environments, if you don't have to spend theoretical millions of dollars on people communicating inside the organization, can you add a feature? Can you remove a feature? We all know what happens when a salesperson in a B2B company goes to anyone at RND and asks them to illustrate a new feature, right? They're going to kick his ass. It was really hard to – it was really easy to quantify. At first, I think I wouldn't be as ambitious to say we doubled everyone's sales or everyone met their quotas just because they used Walnut. You cannot attach us such a success to any of your tools, not even the most successful one, but we were definitely proud of a set of improvements that they saw within the org. [00:25:17] S0: Then that's the design partners, I guess, you're going back and forth. Did you end up picking – you had, as you said, from startup founders all the way to enterprise as you started off in this design phase. Did you end up deciding to at least from a go-to-market perspective, hone in on one of those company size types or did you scale from there to a million plus growing across the board?
00:25:42 · Yoav Vilner, Pablo Srugo
[00:25:42] S1: The upside of seeing a landscape that you created become clouded and competitive is the market education is on steroids and the inbound leads that you get are also on steroids. You get a lot of leads coming in. The more other vendors are helping to educate the market, the more leads you get coming in from the top company because they see one of the vendors do something nice and then they say, “Oh, interactive demos, that sounds cool.” They research and they see who was the pioneer of the market and then they reach out. It was really fast. Everything happened really fast here. Gartner recognizing it. People raising series A, B, lots of companies in YC in it, and enterprise champions have a demos budget, which it was not a thing before we launched. They were using Loom videos to show product. They were using PowerPoint presentations and they were using just IT oriented demo environments. From the moment everything happens so fast, if things are playing out for you, you get a lot of leads from companies and really tough logos. Then it's just about the value of the product, right? Nothing's going to help you if the product is not valuable. Lucky for us, the first set of clients and design partners we had were that they saw positive arrive from everything. [00:27:05] S0: Was most of your road from zero to one or $2 million ARR really just inbound led or did you do an outbound motion as well at that point? [00:27:15] S1: Between zero and two. I would say it was mostly inbound for sure.
00:27:15 · Yoav Vilner, Pablo Srugo
[00:27:15] S1: Between zero and two. I would say it was mostly inbound for sure. [00:27:19] S0: Got it. Then what about the series – so I believe when you raised $15 million, I think it was mid-2021, is that correct? That was a series A or B? [00:27:28] S1: A. [00:27:28] S0: A, okay. Where were you at that point? Maybe just walk us through how that fundraise even happened. Was that also inbound or did you run a process? How did you do that? [00:27:40] S1: Right, so we extended our seed round, like I said, from two to a six. That extension happened with some pretty amazing investors, mostly from SF, A Capital, and SV Angel, and a couple of others. A couple of months later we did raise our series A was pretty preemptive. It was by a VC based out of London called Eight Roads. Then a few months later we had our series B done. Like you said, everything happened pretty fast within our funding for some of the competition, it was the same. It was going from zero to series B in 12 or 18 months. I think there was a lot of excitement around the problem everyone was trying to solve. I think every VC made their bet on initial traction that teams had. Also, the technology approach is a bit different from team to team. There was also looking at the market and thinking which technology and which product approach can scale the fastest.
00:27:40 · Yoav Vilner, Pablo Srugo
[00:27:40] S1: Right, so we extended our seed round, like I said, from two to a six. That extension happened with some pretty amazing investors, mostly from SF, A Capital, and SV Angel, and a couple of others. A couple of months later we did raise our series A was pretty preemptive. It was by a VC based out of London called Eight Roads. Then a few months later we had our series B done. Like you said, everything happened pretty fast within our funding for some of the competition, it was the same. It was going from zero to series B in 12 or 18 months. I think there was a lot of excitement around the problem everyone was trying to solve. I think every VC made their bet on initial traction that teams had. Also, the technology approach is a bit different from team to team. There was also looking at the market and thinking which technology and which product approach can scale the fastest. [00:28:48] S0: Can you describe maybe just what it felt like for things to move that fast, both in terms of just getting all this money into your company within 12 to 18 months, and then the hiring and the servicing that you need to do to react quickly? What was that experience like?