A Product Market Fit Show | Startup Podcast for Founders
00:18:26 · Dane Atkinson
[00:18:26] S0: Totally. We were very lucky. The quality of folks, and then they bet on my gray hair, the eighth kind and a lot of machine that I am. That was the vision, and we’d gotten some really good test data that that was having an impact. But it was having an impact that the customers didn’t care about. An evolution I’ve had along this journey was it is much easier to think of a customer, at least for me. Obviously, there’s lots of different ways you go about product. I have a friend who only can do things on spreadsheets and that’s how they figure out the product market fit. For me, if you pick the customer you care about, it makes it easier to look at the problem that you’re solving is successful or not successful without that ownership. When you come into the startup and you’re like, my idea is I’m going to make hats red, you’re screwed. My idea is like, people are getting wet. I need to solve it. You’ll find a way to expand to what actually works. I love the idea and I’ve owned coffee shops. Those people are such amazing humans try to make their neighborhoods better. They’re basically the founders that you guys deal with on a much smaller scale there. They’re trying to make a better world and no one’s helping them. When we were sitting in a coffee shop in a birch down in Spruce Street, and a vendor walked in with a giant new boat and disrupted everything, or we’re sitting at a coffee shop of Joe’s and the barista is like, I got to go. I love talking about the AI, but we’re out of milk. The milk guy didn’t show up and I’m going to run to the deli. I’ll be back in 20. We keep on talking. It’s like, okay, this clearly is a bigger problem than the hat we’re trying to invent for you. You need a raincoat and an umbrella. You need the whole thing.
00:19:57 · Pablo Srugo, Dane Atkinson
[00:19:57] S1: Was that by design that you’re in these coffee shops, by the way? Were you just there watching or you happened to be there on something else and you saw these things happen? [00:20:04] S0: Again, there’s a lot of different methodologies out there. For me, and this is something that I’ve done through all the companies, Squarespace included. We had customers that we were friends with and we answered tickets. I answered thousands of tickets. There are tens of thousands tickets from his time there. You want to stay very close? I have a rule that I have to have coffee and a coffee shop every day and I’m going to talk to a customer every day. Even now, [unclear]. [00:20:31] S1: Every day, wow. [00:20:31] S0: Every day. This industry’s super easy. It’s not as hard. [00:20:31] S1: It’s true, but it’s still I would have thought every week, you know what I mean, like you sell, but no, every day, okay.
00:20:31 · Pablo Srugo, Dane Atkinson
[00:20:31] S1: It’s true, but it’s still I would have thought every week, you know what I mean, like you sell, but no, every day, okay. [00:20:36] S0: No, because a lot of the best companies out there you can see they drift. They get fascinated. We raised $100 plus million. You get it. There’s a whole different world that you get sucked into. If you drift too far away, it’s really hard to steer the North Star, which is at the scale, my primary job is to hold the vision for the company and try to make sure it still sees that future. But going back to sitting in a coffee shop, and I suggest our customer, everyone out there who’s starting to figure the product makes best friends of a number of their customers and gets a way to be really inside that experience in whatever visibility you have. Whether it’s watching the customers sparkle in the eye and sitting with them, or seeing how their metrics are playing out or something that’s being attached to that very important part of the process. We saw that our system wasn’t the solve, it was just part of a bigger picture, and then had to convince everybody that we’d gone down the wrong road. [00:21:32] S1: What was that like?
00:21:32 · Pablo Srugo, Dane Atkinson
[00:21:32] S1: What was that like? [00:21:33] S0: Horrible. It was rough, and I’m old. It’s not my first time. Actually, all the advice our investors gave at the time was totally true. Like they said, you’re going to screw your multiple, and yeah, sure as hell, screw their multiple. No doubt about it. We have trucks and drivers in 14 cities and <laugh> it’s bananas and it’s tough. They’re like, it’s going to be gnarly and all these things that I think were right. But from my perspective, and the company’s perspective, and even people in the company were like, I didn’t sign up to build software for a driver. I want to build AI predictive models. Even your internal culture was like, why are we swinging so far from this that it made sense? [00:22:18] S1: How many people were on the team more or less back then, like 10, 15?
00:22:18 · Pablo Srugo, Dane Atkinson
[00:22:18] S1: How many people were on the team more or less back then, like 10, 15? [00:22:22] S0: No, probably like 30 at that time. I’ve taken like 15 chokes. Another benefit of being around the block is you can get a couple people that join in yet again. Actually, we made this adjustment during COVID, which is super fun, because our industry died simultaneously to figure out a big model. The way I actually got the model through was just did it quietly, didn’t make a big deal out of it. Told the board I was thinking this worked and I just went and got a truck and got a space with one of our customers. They gave me their keys and I started driving around. Then we got a lot of other people and a lot of our team actually helped. We used our office as a warehouse, and I think the team mentioned something. We carried like 10,000 gallons of Oatly up into our little office space because we’d run out at night. [00:23:06] S1: You decided to take over all of the supply logistics part of the back-end, let’s say, of running a coffee shop? [00:23:13] S0: Yeah, because again, what we realized that coffee shops needed is that they wanted to be part of a franchise without being part of a franchise. That they needed to have the same support that the manager Dunkin’s has, or the manager at Starbucks has with the fact that they actually care about their customer. To do that, Dunkin’s not running to the deli for milk. They got a truck that comes by and loads them up. Again, the VCs try to protect us. They’re like, oh, just use the 3PL. Do anything to get. Don’t touch the truck.
00:23:13 · Dane Atkinson, Pablo Srugo
[00:23:13] S0: Yeah, because again, what we realized that coffee shops needed is that they wanted to be part of a franchise without being part of a franchise. That they needed to have the same support that the manager Dunkin’s has, or the manager at Starbucks has with the fact that they actually care about their customer. To do that, Dunkin’s not running to the deli for milk. They got a truck that comes by and loads them up. Again, the VCs try to protect us. They’re like, oh, just use the 3PL. Do anything to get. Don’t touch the truck. [00:23:42] S1: Hard assets, no, no, no. [00:23:44] S0: Oh my God, you stay away. It’s going to be really crazy. Then we had to buy companies and all. All things that scare the investor community along the way. One of the things that’s tricky for a founder, and this gets very hard too, because in my last company, I just banged my head on the same wall. Knowing when to push hard and be persevere, and knowing when to switch is a delicate thing for our founders. But in this case, my guidance soul is, I knew when the coffee shop owner was walking to their store and they had a picture of their inventory, and they didn’t have to worry about an invoice stack sitting there, and they didn’t have to worry about doing deli runs, you could see the sparkle, which is my indicator. [00:24:25] S1: Did you validate for yourself the economics and how we might look like at scale? Or did you just put one foot in front of the other and say, this is what it takes to solve the problem, let’s see what happens?