A Product Market Fit Show | Startup Podcast for Founders
00:01:20 · Chaz Englander, Pablo Srugo
[00:01:20] S0: Oh, man. Thanks for having me. [00:01:21] S1: I'm excited for this one because, you know, one of the things about startups is regardless of how kind of big they get, you never know how much is skill, how much is luck. But, you know, you look at your background, you've got the first company you started was acquired for, like, over 40,000,000. The second company was acquired for much more than that. And the third company, which is the one we're talking about today, ModelML, is off to, like, start faster than than those other two, just raised 75,000,000. So it's on the right track. So I think there's some magic, some serious skill set to be uncovered here today. [00:01:51] S0: Yeah. I mean, I'm not sure, but we'll see. I don't expect you to [00:01:55] S1: say anything other than than humility after that. But I think anybody looking from the outside says, Kevin, there's gotta be something going on here. So that's what we're gonna try and and pull at today. Maybe let's start with a little bit of background. Right? But but more than anything, like, tell us about, you know, that first company, Fat Lama, started in 2016. What was happening in 2015 just before what was the origin story, and we'll get into that story and kind of go from there.
00:01:55 · Pablo Srugo, Chaz Englander
[00:01:55] S1: say anything other than than humility after that. But I think anybody looking from the outside says, Kevin, there's gotta be something going on here. So that's what we're gonna try and and pull at today. Maybe let's start with a little bit of background. Right? But but more than anything, like, tell us about, you know, that first company, Fat Lama, started in 2016. What was happening in 2015 just before what was the origin story, and we'll get into that story and kind of go from there. [00:02:15] S0: Yeah. So I suppose like a lot of founders, right, like I was, you know, young, I was like obsessed with things like YC, I was obsessed with the concept of building a company. You know, was definitely in that phase of just trying to figure out an idea in my head that I wanted to do, right? So that's kind of where it started and I kind of stumbled across, we did this concept of like lending out items to people nearby and we just like jumped in with two feet, know, self taught and just got cracking and did everything wrong as well, should say. [00:02:49] S1: Where was this by the way? Where are we based? [00:02:50] S0: In London. So at this point, I was in London. Hans, my brother, I built a company with as well. He was in London. We did end up to work with that company, so we got on YC which, you know, in many respects in 2016, that was like very much the heyday and, you know, that was a breakthrough for us, really. You know, we were put on a map. It's like people from England just, you know, wanting to build a software business, to be honest.
00:02:50 · Chaz Englander, Pablo Srugo
[00:02:50] S0: In London. So at this point, I was in London. Hans, my brother, I built a company with as well. He was in London. We did end up to work with that company, so we got on YC which, you know, in many respects in 2016, that was like very much the heyday and, you know, that was a breakthrough for us, really. You know, we were put on a map. It's like people from England just, you know, wanting to build a software business, to be honest. [00:03:12] S1: Things have globalized a lot more lately, but, you know, Bay Area obviously is still kind of the the center of all things tech. And for me, when I started Gym Track 2013, similar vintage, we got into 500 startups also in SF. And it was it was night and day before and after being from Ottawa, which is a, you know, small town, much smaller than... Much less important globally than London. But still from a tech perspective, these are not first tier cities in either case, certainly not back then at least. And so I can imagine kind of what what that would have done to you, like how you look at yourself and how everybody else looked at you back home.
00:03:42 · Chaz Englander, Pablo Srugo
[00:03:42] S0: For sure. For sure. And like, we didn't take any of it for granted either. That definitely made our journey easier for sure. I mean, for what we needed to do, needed to raise a bit of money, know, made a lot of those things easier. I'd say that one of the things that we don't talk about enough was like, you know, between starting and getting on YC, we raised a million pounds. And that was like straight scrappiness. I remember we actually raised two rounds, a £100,000 round and then a a million pound round. And that first £100,000 round, I figured out that it was just like a numbers game. I was like, look, to go out this full time, I'm happy to... Was living off like, you know, £1,300 a month. I was like, to go this full time, I'm just gonna need to scrap and it's gonna be a numbers game. So I kind of figured I was like, look, where is money in London? It's a lot of it is like financial services centric. You know, a lot of those companies are based in Canary Wharf down there. I'm just gonna go down there and I'm just gonna hit people up on LinkedIn. And I mean, looking back on that, I was like pitching for like a grand at a time, like genuinely. [00:04:45] S1: No way.
00:04:45 · Pablo Srugo, Chaz Englander
[00:04:45] S1: No way. [00:04:46] S0: $2 here and there. And I do like 10 pictures of this like to everyone else is like a ridiculous idea as well. Was like, yeah, you're gonna lend out your items to people nearby and you're gonna be okay with that, strangers, you know? So I do like 10 pictures and pick up a couple of grand here and there, the but numbers add up, and then we got a... Got to a $100, and then before you know it, like, we... We're in a position where I could leave my other job and call down at full time. [00:05:10] S1: This is an interesting tangent to go down because obviously raising the first round is always a big deal. And, you know, once you have a track record and stuff, frankly, gets a lot easier. But when you don't, like, in that time, it's... It is not easy at all. How did you even get those, you know, 10 meetings a day? You gotta get 10 meetings a day. It's one thing to do them. It's hard work, but getting them is like a dark side sort of thing. Like, how did you get those meetings every day and and kinda have that volume?
00:05:31 · Chaz Englander
[00:05:31] S0: Well I should say for explaining that as well, right, I do think the playbook in the context of AI has changed drastically. I'll park that a little bit, we can come back to that. But to answer your question, I really believe that first round as a first time founder, if that's something you even need to do anymore, These really small rounds that used to happen a lot more, it's a numbers game. It's a pure numbers game. And for a whole bunch of reasons, need to learn how to pitch, the only way to learn is to fail and fail quickly. Reps. Yeah. So I was, know, hitting people up on LinkedIn and maxing my messages and ads like every single day. Right? Like every day. And the thing is the conversion rate would be tidy. Right? You'd probably have to like connect with a 100 and then maybe message all a 100 and get 10 responses to maybe get one meeting, but it compounds. So I think like the thing that I thought looking back on it that was really useful is although that overall, let's call it a million pounds if that's what it was, I can't remember exactly, probably only five, 10% of that came direct from those LinkedIn messages I was sending. The other 90% was indirectly, almost entirely through that, right? Because, you know, at the end of the day, if you're meeting one person, you're not meeting just them, you're meeting everyone else that they know. And I always said that to myself. And that's how I ended up compounding. We had one or two quite lucky intros, or say lucky it was a numbers game, so maybe it was just statistical significance, I don't know.