A Product Market Fit Show | Startup Podcast for Founders
00:00:18 · Keith Peiris, S2, Pablo Srugo
[00:00:18] S0: It's a huge build out. You're working on a small ICP, super churny. And then for you to hold on the best ones, you need to run as fast as you can. And actually that difficulty made us excited because we were like, we'd rather tackle a difficult problem than tackle an easy problem and have like a thousand competitors. I'll give a hot take here, which is that, you know, I think everyone says, keep talking to customers, keep finding what your users care about. I think a startup is a deeply personal thing. You have to build a company, a product and service that you love, that moves you emotionally so that you can work on it every single waking hour. And if you are that obsessed about something, it turns out that there will be customers in the world that are as obsessed as you. [00:00:59] S2: That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is product market fit. Do you think the product market fit show has product market fit? Because if you do, then there's something you just have to do. [00:01:18] S1: You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests. Thank you. Thank you. Keith, welcome to the show, man. [00:01:30] S0: Excited to be here.
00:01:30 · Keith Peiris, Pablo Srugo
[00:01:30] S0: Excited to be here. [00:01:31] S1: Dude, this is going to be exciting one. I mean, man, you just went through a big shift, which we're going to go into here. Company changed names from Tome to Lightfield and you're focused on something different. I mean, today you're an AI first, AI native CRM, right? In a way, you look at the earnings calls like HubSpot, Salesforce, like you're what they're scared of, right? You're coming for them amongst other things. So we're going to talk about what you build, how you're building it, why it's different and all these sort of pieces. But let's start with the product market fit moment. And I'm sure you have multiple because you had the old journey, which you went and you raised a Series B, like a $43 million Series B, only kind of old product. And then since pivoting, you've now closed a $45 million Series A. So multiple PMF moments. But tell me about when, after you launched Lightfield, when was the moment when you felt like, this is worth paving into because it's working so well, there's so much demand.
00:02:24 · Keith Peiris
[00:02:24] S0: So it was actually, I would say the moment before scale, which is to say with our previous company, we got lots of users. I mean, they had like 20 million users. But the thing that was missing was that, you know, it wasn't like an indispensable part of anyone's life. If I asked our customers, what would happen if we took this away? I think they would be like, yeah, be a little sad. I'd go back to Google Slides. With Lightfield, the thing that got us excited was, you know, a CRM is a lot of work. We're nowhere near done. We're like a year, two and a half. And we're still missing a lot of stuff. We're catching up. But we built the earliest version of Lightfield in about three months. And we started asking customers to use it. At the time, it was friends. It was extended network. And even though it was missing like 99% of the features that Salesforce and HubSpot had, we had customers in it every day. And on the flip side, they had a lot of feedback. Just to compare with Tome, with Tome, we had lots and lots of users and none of them cared enough about the product to give us feedback. Whereas with Lightfield, our slacks were lit up, you know, 24-7, 365, about stuff that could be better, stuff we need to fix, stuff that could be different. And we were like, oh, this means that someone cares about this problem. Like our customers are using this all the time. They're hopping mad at us about the things that we got wrong. There's enough care here that maybe there's something here.
00:03:51 · Pablo Srugo, Keith Peiris
[00:03:51] S1: What makes you decide to go into, to just even launch this product? I mean, you've got this other product that has pretty serious growth. Like how do you even start thinking about launching something so different? [00:04:01] S0: Yeah, it's so funny. I could talk to you about like the 20 metrics that I looked at that made me believe that, you know, Tome wasn't working. But honestly, the thing that like we really wrestled with is, hey, this is a presentations product and it's never going to be capable of making amazing presentations. It was just missing the context. It was missing the data structure. It was missing so much that we were like, this thing will never grow up and be used by the people that are incredible at making decks. [00:04:32] S1: Was this like a gamma competitor? Like, is that a fair way to think about it?
00:04:34 · Keith Peiris
[00:04:34] S0: Yeah, yeah. We were actually on sort of similar trajectories and more power to them. They did great work and executed, but we just didn't like where it was going. And I think deep down at a human level, you're like, we want to make pro tools used by sophisticated users and we want them to like rely on it every day. And we just couldn't see a path for Tome to turn into that. What was funny about the pivot to Lightfield was that we went on this journey with Tome being like, all right, how do we turn this into a serious work tool? And we just followed the journey of who makes a lot of decks, who's in the product the most. It turned out it was sales and marketing folks. So we sort of followed them in. We asked them, hey, could we do a pilot? Can we do some discovery with you? And we found our way into probably 10 companies where they were like, okay, you know, you guys are good at making product. You know, Tome is cool. Let's do a pilot. Maybe you can build decks for us. And when we got there, it was so funny. With all 10 of them, within a few weeks, everyone lost interest in us making decks. They were like, this isn't that big of a problem. We all use templates. We just fill them out. We don't know if we care. Maybe you can do some other things. So we sort of got pulled in, you know, doing things like account research, building proposals, responding to RFPs, writing emails. We just got pulled out of the slide space instantly. And that was the first sign of, wait a minute, maybe we can't sell this presentation product into companies. And then when we were there, we started to ask like, okay, to do all of these things well, like proposals and account research, whatever, what do we need? And at that time, I was like, oh, I assume I just connect to Salesforce and we'll have everything we need and we'll be able to do this work. And it turns out that what you need is not in the traditional CRM to do great generative AI work. It's sort of spread everywhere. It's in your call recorder. It's in your email. It's in your Slack. It's in your data warehouse. We found that it was such a struggle to combine these different types of data because it's super inconsistent, right? Like what the sales rep wrote in Salesforce doesn't match what's in the meeting or what's in the email or what's in the data warehouse. And they're all using different entities.
00:06:56 · Keith Peiris, Pablo Srugo
They're all using different paths. We're like, wait a minute, this actually seems like a more important problem, you know, creating like a single source of truth on a customer, you know, inside of a company. And we're like, this seems really important because you're going to have agents all over the place. And if they're a little misaligned, they're going to create bad work. And also companies are getting a little smaller and a little flatter. So it makes sense to build a system where everyone can be aligned and connected to truth. So I think those feelings made us believe, hey, maybe this is a bigger opportunity. [00:07:34] S1: Pivots happen all the time, but you'd raise the series B with the old product, which makes me assume that it was like at a certain level in terms of, you know, number of customers, revenue, etc. Like, what can you tell me about just how far was that business when this was happening? [00:07:49] S0: Yeah, I mean, it was like, it was around 20 million users. It was single digit millions of ARR. And the CAC was super low because there was so much organic demand or like any AI productivity tool was because it was all over the place. The cost of goods sold was through the roof because inference was really high. And the repeat usage was low. And the revenue retention was very low. [00:08:14] S1: Were you still growing top line or was top line also because of those things starting to plateau? [00:08:19] S0: So top line was still growing because you're like, not really paying for growth. It's all like organic. So it's still growing.