A Product Market Fit Show | Startup Podcast for Founders
00:01:05 · Hermann Frank, Pablo Srugo
[00:01:05] S1: I called it the product market fit question. [00:01:07] S0: Product market fit. Product market fit. Product market fit. Product market 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. You have to pick up 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. Herman, welcome to the show, man. [00:01:30] S1: Thanks for having me. [00:01:31] S0: Excited to have you here, man. So you've got a company called Giggs, which is like the OS for embedded telecoms. I mean, the the simple way to think about it is anybody building anything can add gigs into their product and offer, you know, mobile plans to their customers. So we're gonna talk a lot about not just how you came up with that, but but who is using that, who... Who's the best customer, why they would wanna do that, and all those sort of things. You know, you raised your first round, I think, in 2021. You've raised $90,000,000 since then, so off to a great start. Let's start what we always do. For you, what was the product market fit moment? When did you feel like you'd found true product market fit and why?
00:02:03 · Hermann Frank
[00:02:03] S1: So we had several product market fit moments. We... The very first was our first vertical, was kids smartwatches at the time. Very serendipitous, first customer came through one of our advisers, and it was a great way to like find this niche to serve first. They had massive problems with SIM cards, returns of the devices, and monetizing the subscriptions. So we've built a product quite custom to that specific customer vertical, but it allowed us to build the very first version of gigs and the API and integrations into carriers, and paid for our seat in series a. And we kept just going down the list of customers. And about a year in, we ended up powering most of the players in the market. And that kind of showed us, okay, like, there's there's definitely something there, and we we found a repeatable motion. And then the next time was when we started targeting Fintechs, which was our first real consumer primary use case smartphone vertical. And Nubank was the very first customer in the Fintech vertical, and then we kept repeating that again and again with Klarna and Revolut and so on. And it's okay, we're winning over 90% of deals, clearly have product market fit. Once the services started launching end of last year and early this year, revenues skyrocketed. So we kind of understood, okay, we made it again. And now we're going through it the third time with Gixowork, our enterprise product that we're targeting at enterprises that operate either in one or multiple markets, have a few 100 employees or more, and we allow them to embed the phone plan directly into their IT stacks. So when an employee is provisioned on the HRS system, and their Slack, Okta, and Gmail is provisioned, the phone number is provisioned in the same way in real time, and then also disconnected when the employee leaves. And we're in the nascency of that product, but we're now also seeing a repeatable motion, So we're kind of carefully in the early stages of product market fit a third time, and we have a couple more verticals ahead of us. It's a recurring theme that
00:04:20 · Pablo Srugo
[00:04:20] S0: I hear a lot when when I ask about product market fit. Mean, a lot of people describe it as kind of on the scale versus kind of a switch. Right? And I do think there's an element of both a little bit where you kind of tip over at some point, you're like, okay. We have prior market fit. But it's also very true that the competitive landscape's changing, the technology's changing, the market's changing, and so you're never done. You always have to kind of rediscover and reattempt prior market fit. Even with each feature that you launched, you know, each feature can have or not have prior market fit.
00:04:46 · Hermann Frank
[00:04:46] S1: Yes. For sure. I think as founders, we often underestimate, and like, you kind of want it to be happen. It's this magical moment of like, I have a working company now. But I I think the natural inclination of founders is to think that they have reached product market fit way earlier than they actually have. You need to have repeatable sales targeting the same ICP. You need to launch that ICP, you need to retain them. Right? And you need to, like, do that over and over and over again. And so, yes, it's much more of a gradient where, like, you you think you might have it, and then you're, like, repeating the feeling of thinking you might have it, and then at some point, when people are actually staying with your product, and they're not turned off by it after a couple weeks or months, and and and you've you've been able to build a scalable sales motion, then you you actually might have it. But in our case, and I think if there's similar companies out there, we just take it by... Like, we have vertical market fit. We don't... Like, we'll never have entire product market fit.
00:05:52 · Pablo Srugo, Hermann Frank
[00:05:52] S0: So we're gonna talk at the end about selling into enterprise. You're selling to some of them. You have to partner with the telcos, are the biggest, slowest types of elephants that you have to go and and hunt. And then we're also gonna talk about what it takes to craft a vision, especially one that is multifaceted and has many steps to it, and you kinda have to prove along the way, and and you need to get VCs along for the ride with you. It's not a simple thing to do. So we're gonna talk about those two things at the end. But, you know, obviously in the in the middle, let's kinda go through your story. You had another company, right, before you started this one? [00:06:21] S1: Yes. A company called HyperMesh. We started very originally... Like, I wanted to start my second company. I didn't have a precise idea of what to do. But I knew I wanted to dive into an industry that hasn't seen the digitalization that, like, many other industries have seen over the last twenty years. And telecom kind of stood out. It used to be the original tech. Like, the nineties, every millionaire and billionaire, like, was minted in telecom. [00:06:47] S0: I mean, it was like the railroads, then telecom, then then AI. You know? But it was the AI of twenty years ago.
00:06:47 · Pablo Srugo, Hermann Frank
[00:06:47] S0: I mean, it was like the railroads, then telecom, then then AI. You know? But it was the AI of twenty years ago. [00:06:51] S1: Yes. And actually when Tim Altman came up with a statement of like, we need to invest $7,000,000,000,000 into AI infrastructure, people thought he's crazy. But if you look at telecom, just in the last ten years, and it's a mature industry, they have invested over $3,000,000,000,000 in infrastructure. So the overall amount invested in telecoms, like in wireless, since since the nineties, is way higher than what Sam said we need to build global AI infrastructure. So for us, it didn't seem that crazy at all. [00:07:22] S0: And so... And just tell me a little bit about the original business, and maybe just the timeline in terms of when you start thinking about Yes. [00:07:29] S1: So we kind of settled on telecom, and then we decided to look into, okay, what might be reoccurring problems in that industry? [00:07:37] S0: And when was this? Just to kind of get... Have that context. [00:07:39] S1: Around 2000, like, 1819. [00:07:42] S0: Okay.