A Product Market Fit Show | Startup Podcast for Founders
00:23:00 · Pablo Srugo, Chaz Englander
[00:23:00] S1: I... It's the ultimate test of product market fit. And it's not so much like if you can give them a shitty product and still use it. It's just like, do they care about the optimization piece and like the bells and whistles, or do they just want the thing? Right? In that case, they just want the... They just wanna deliver like groceries deliver. And like, yeah, the thing doesn't look that good and it doesn't work like perfectly, that's fine because I'm still getting my groceries delivered, and and that proves the core thing. [00:23:22] S0: Exactly. But sorry, the point I was gonna make there was like that MVP in today's world would take a day. [00:23:27] S1: Right. [00:23:28] S0: And and so I think that says to a couple of things. I said, I think it's like that thing I mentioned around competition. So like, you know, ultimately, if there is no competition and there's no competition for a while, you probably don't have a market. And the other thing of just like, you should be able to validate concepts just far quicker. Yeah. Say that, I mean, a year ago, vibe coding was great for prototyping. I mean, now I think it's like great for production. So in terms of MVPs, like, the concept of saying I don't have technical resources to build an MVP is just, like, not true.
00:23:28 · Chaz Englander, Pablo Srugo
[00:23:28] S0: And and so I think that says to a couple of things. I said, I think it's like that thing I mentioned around competition. So like, you know, ultimately, if there is no competition and there's no competition for a while, you probably don't have a market. And the other thing of just like, you should be able to validate concepts just far quicker. Yeah. Say that, I mean, a year ago, vibe coding was great for prototyping. I mean, now I think it's like great for production. So in terms of MVPs, like, the concept of saying I don't have technical resources to build an MVP is just, like, not true. [00:23:58] S1: Yeah. No. It's a 100% gone. It makes that experimentation piece so much faster, and it's interesting because I think a lot of the... Especially for the technical founders out there, like, a lot of the building... Was just talking to one the other week, like, is almost a defense mechanism. Like, they're comfortable there building, and so they don't they don't launch it. That excuse is like gone. You know? You can't even say that to yourself. It's like, you got... You gotta go out and launch and see what happens.
00:23:58 · Pablo Srugo, Chaz Englander
[00:23:58] S1: Yeah. No. It's a 100% gone. It makes that experimentation piece so much faster, and it's interesting because I think a lot of the... Especially for the technical founders out there, like, a lot of the building... Was just talking to one the other week, like, is almost a defense mechanism. Like, they're comfortable there building, and so they don't they don't launch it. That excuse is like gone. You know? You can't even say that to yourself. It's like, you got... You gotta go out and launch and see what happens. [00:24:23] S0: Yeah. And also, you know, when you... You're in production these days, anything that was on kinda like, if you're a wine back, if you take the business day, you put it back three years, that nice to have product list now becomes a need to have. There's also like the speed that you need to ship, you know, obviously as the barriers to entry get lower, that means there's more competition, it means like, you know, there's gonna be more products in the market, you know, you just need to ship so much faster. Come back to that point of like, product market fit in the area well, and it's just like... It's just not static. You might not have it and want it. [00:24:51] S1: So just to wrap up the fancy story that ultimately acquired by GoPuff, did they come to you? Did you go to them? And and same kind of idea, like, where was the business at more or less by the time that happened?
00:24:51 · Pablo Srugo, Chaz Englander
[00:24:51] S1: So just to wrap up the fancy story that ultimately acquired by GoPuff, did they come to you? Did you go to them? And and same kind of idea, like, where was the business at more or less by the time that happened? [00:25:01] S0: We were out raising a 100,000,000, so the business in twelve months was flying. That's crazy. We went from zero cities to I think 15 cities in about six months. And even if you just think about that operationally, right? [00:25:16] S1: I was gonna ask, how many people like?
00:25:18 · Chaz Englander
[00:25:18] S0: This is a business where you needed a warehouse to operate, right? So that's 15 warehouse leases like signed and negotiated. You need to stock the warehouse, so every city had to have the appropriate local suppliers. But the demand was there and I think at acquisition I would guess about 70 or 80 people I think, but I'm not a 100% sure around that sort of number. In the head office, obviously if you include drivers and warehouse staff, it would have been maybe even, I don't know, 500 people maybe, maybe more including drivers, unknown, but a big number comparatively speaking. Yes. We're hour raising around and, you know, Arne, he got introduced to the founders of Go Path and they were great and I think the timing for them was great. The nature obviously of our business as well because for those that remember that market, it was very very competitive. Obviously COVID compounded it and you know, people were going out and raising like $20,000,000 c brands. But they were all focusing on like the biggest cities. What we did by fluke was we were a, before anyone else, which was lucky, but we also again another fluke that happened was we were focusing on these smaller like tier two cities where there was no competition. So I think, look, if I was playing it back, know, and I was in their shoes and go puff shoes, assume they were looking, you know, looking for European or UK based company and we had the best numbers by way of size, but also by way of kind of unique economics and retention because we are focusing on cities with, you know, just far, far, far less competition. And look, I mean, came along, you know, I said everyone did very well. I think them as well. I'd hope that if they look back on it, it was really a great decision from them, you know, they they won The UK market because of it, they're the biggest, if not the only now player in The UK market, but it was stressful. I mean, like, the thing is with that is, you know, we're raising around the burn rate of that business was huge just because, you know, you had to really subsidize riders, it was called in that market. You know, you're literally running out of money. I mean there's no two ways. So if you're going out to raise a round and you ditch that, that explodes and you're raising or you're doing an acquisition, you're running out of money and you're running out money fast.
00:27:22 · Chaz Englander, Pablo Srugo
And so it was super stressful, but looking back on it though, it was like, I remember this call that we had with the legal team at like two, 3AM, you know, all the signatures had landed and you know, the signatures have been released and it's like, you're there with like closest group of like, because everyone at the company, you know, we're like, we're our only friends because we've only hung out with each other for like twelve months. That feeling is just like, you know, you do that two or three months all over again because you're there, you're looking around, know, everyone's made a bit of money. Yeah. It just shattered as well. I think like the... As the adrenaline is like coming down, it was was awesome. [00:28:00] S1: Yeah. It's... And did you go work at GoPuff or was it like a clean ending? Like you saw it and and you're kinda done? [00:28:04] S0: So my brother Arne, so he was in engineering there, so he stayed on for three years. He wanted to enjoy it, learned a lot, great business, he made some great friends and stuff. I then stepped out entirely, I was doing a lot of, well off the back of the acquisitions we started to invest a bit, and that's kind of how the next business ended up being started. [00:28:25] S1: Yeah, so now we can dive into kind of what you're doing today, is ModelML, what's the origin story there?