A Product Market Fit Show | Startup Podcast for Founders
00:16:26 · Mark Hughes
[00:16:26] S0: Yeah. I I could not be a bigger advocate for San Francisco, and I think it's really down to the surface area for luck. Like, just being here, being in the room with people, like, how connected the ecosystem is over here. It's, like, it's all very serendipitous. So, like, that example, like, I I gave already about kinda giving the demo, but there's so many other examples being over here of, like, meeting our series a investor while we're doing y c at, like, an Irish meetup event in San Francisco. It's it's really hard to, like, quantify, but it's how I'd say it is, like, it increases your surface area for look, and I always think back when we graduate from Y Combinator on the last day, they just put up, like, all of the the data behind, like, companies who stay in SF and companies that leave SF. Even if you go to New York, like, it just, like, the chances of success are just so much higher if you stay here in person in SF. And, yeah, startups are really hard, so, like, be able to, like, increase the surface area for look and increase the chances of success when you're trying to build a multibillion dollar business. Like, we always talk about, like, even why we picked this office because we wanna build Salesforce terror that usurps solid sort of solid road terror that usurps Salesforce Tower in the skyline and SF. So you will also think bigger by being out here. Like, there's a bit of Catholic guilt working living in Ireland where it's like, oh, you know, tall poppy syndrome kicks in, but you come over here and, like, Emma's like, oh, yeah. Like, I'm a billion dollar business. Like, okay. What revenue are doing? Zero. We're only starting. We're we're building a billion dollar business. Like, great. Joe. I've been
00:17:53 · Pablo Srugo, Mark Hughes
[00:17:53] S1: way more accepted. It's true. A lot less skeptics. [00:17:56] S0: Yeah. 100%. [00:17:57] S1: Let's go a little deeper on the moment where you switched from sales role playing to customer success role playing. Tell me more about how that came about. It happened for you in the way that it happened for you, but I mean, the idea that you have a product kind of works, like could work maybe, and then somehow you see just enough things that you put it somewhere else and it really explodes. Like, that's common. Right? So I'm curious how it really happened for you. [00:18:18] S0: As I mentioned, kind of the kind of earlier customers gave us the reassurance that, like, this is the right ICP to go after. We really then narrowed in on that. So went after, like, heads of customer support, VP of operations rather than targeting. [00:18:31] S1: But did you sell sales and they just pulled you to customer success, or you just, like, luck into or just start trying customer success just because? Like, how do you even how do you even make that transition? How does that start?
00:18:41 · Mark Hughes
[00:18:41] S0: Yeah. It was kinda looked in through that, like, contact center that we initially kinda pitched them on the sales piece, they're like, oh, no. More of our volume is customer support. So we looked out in that regard, and then we were able to kinda narrow ICP. And then I think another kind of big moment was later that year because, like, how we actually scaled our first million dollars ARR came from cold outbound. So we would set up, like, hundreds of email inboxes using Lemlists, pull the list from Apollo. Once we knew the kind of ICP, once we knew the persona in the company, and, like, we're having success with, like, enterprise b to c companies and VP of operations in those companies, like, was, like, that we're having most success. So built out, like, messaging around that, pull lists in Apollo, set up, like, hundreds of email variations in Lemlist, warmed up those email domains. So it'd be like try solidroad.com, getsolidroad.com, we weren't burning our our primary domain. And, yeah, and I was looking at the stats before this, like, even like, we're sending, 500,000 emails. I was looking for, that first million ARR, we sent 500,000 emails. We got 5,000 replies and 250 meetings booked and then, a 20% conversion off those meetings booked, was 40 customers and an ACV of 25 k to get to a million dollars a or more. Like, that's how we work from. And so like and I think one somewhat outlier deal with a higher ACV that we got late in 2024, which was like great for because I'm a big believer. Come from a sales background, as I said. It's, like, it's all about case studies, testimonials, and social proof. So we closed crypto.com and are, like we were an enterprise customer. They're also financial services. So, like, even back then, like, selling an internal training tool using AI, people were very security conscious. And now you look at all the stuff that AI is doing, like automating tasks and, like, even being customer facing. It wasn't like that even in 2024. So getting through, like, security and procurement of crypto and then having them as, like, a reference customer made it a lot easier to close the next deals coming in because it's like, okay. They're a financial service company. If they've gone through their procurement process, you know, they have SOC two type two. They've always owed 27,001.
00:20:50 · Mark Hughes, Pablo Srugo
Like, they're obviously in a good security posture to work with. [00:20:54] S1: Did they come outbound, like, from that 500,000 email campaign? [00:20:57] S0: That was one that came from an investor intro. [00:20:59] S1: We have tens of thousands of people who have followed the show. Are you one of those people? You wanna be a part of the group. You wanna be a part of those tens of thousands of followers, So hit the follow button. So let's walk through, like, for that million dollars, I wanna go deep on on the outbound. You just kind of you went through the the surface level stuff. So and I think I think it's just something that, in theory, anybody can implement, and it comes down to, like, just, you know, execution, right, and doing it right, and you gotta have enough of a TAM that you can send half a million emails. But we'll go through that in a second. Just first, when you're talking about that first million ARR, where the product that you had, which was role playing around customer success, where was it mainly used? Was it a training use case? Like, what was what was the main ROI of the product at that time? [00:21:39] S0: Onboarding, reducing ramp time. [00:21:41] S1: So this is you hire a new customer service rep and you just need to get them trained up, you do the role playing to do that.
00:21:41 · Pablo Srugo, Mark Hughes
[00:21:41] S1: So this is you hire a new customer service rep and you just need to get them trained up, you do the role playing to do that. [00:21:46] S0: Yeah. Because managed attrition is so high in contact centers in particular where they're seeing, like, 100% turnover year over year. They're hiring in batches of a 100 agents at a time. So getting the agent proficient and saving labor costs for every support org, scale support org, you probably have one trainer for every 30 support agents and, like, one QA analyst for every 15 to 20 agents. So we were kinda focused on that, like, the ROI was reduced time to proficiency, like, basically cutting that in half so people were ramped a lot quicker, and then trainer costs. So, like, you wouldn't need as many trainers because this is automating a lot of the role of the trainer. So, like, headcount savings was very easy from, like, our ORWA calculations to show during, like, a POC or a pilot in a couple of weeks, and they were the kind of two things that hit home the most. [00:22:33] S1: So let's do it like this. Like, let's talk about this getting a million in ARR through outbound. Imagine, like, I'm a founder. I come to you. I'm like, Mark, I got this product. I'm telling you the ROI is clear. Like, I've spoken to some customers. You know, they love it. Whatever. I'm ready to go. Take me step by step with the things that you would do to get me to a place where I'm booking, you know, hundreds of demos.
00:22:33 · Pablo Srugo, Mark Hughes
[00:22:33] S1: So let's do it like this. Like, let's talk about this getting a million in ARR through outbound. Imagine, like, I'm a founder. I come to you. I'm like, Mark, I got this product. I'm telling you the ROI is clear. Like, I've spoken to some customers. You know, they love it. Whatever. I'm ready to go. Take me step by step with the things that you would do to get me to a place where I'm booking, you know, hundreds of demos. [00:22:53] S0: Yeah. I think you have to do the manual stuff for the start to kind of to tinker the the messaging. So, like, what I would be telling founders to do is, like, start with social selling on LinkedIn and, like, be as personalized as you possibly can from, like, voice notes to video messages. [00:23:09] S1: Like, true manual. Like, this do this, like, the stuff that doesn't scale. Right? [00:23:12] S0: Do stuff that don't scale. Yeah. And I'd go really deep there to find out, like, what messaging is resonating, who's the persona, like, do a lot of work on finding out who your ICP is. Because as I said, like, now I can tell you, like, our ICP is b to c, enterprise companies scaling past 10,000 support tickets a month that use an outsourced BPO and have an AI agent live. And, like, to your point, like, we still have a massive TAM. It's, like, get, like, really firm on your ICP.