A Product Market Fit Show | Startup Podcast for Founders
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.
00:07:43 · Hermann Frank
[00:07:43] S1: We kind of looked at everything from like how are networks built, like how are they monetized, like how does distribution work. And the first thing that we saw is, if you look at the world, like only about half of it was really covered with high speed wireless, and the rest was not. It was just like massive wireless gaps, entire continents, parts of countries, even in countries like Germany and The US, you drove like ten minutes outside of a big city, you did not have high speed wireless. And so we like looked at, okay, why is this the case? And it's just like, it's a density problem. Like the the less dense the population is, the higher the costs are. And there isn't this oligopoly of Nokia, Ericsson, and Huawei at the time, and most of the world that still is... They're still running, that if you understood anything about hardware, you saw that they're overpricing these like closed loop systems that they're selling to telcos by about a factor of a 100. Because if you put enterprise wireless hardware next to it, like it was about a 100 times cheaper because they were like open standard white label wireless hardware. And we thought, okay, if we can figure out how to build a cellular grade network with this standardized hardware, not this black box closed loop system, we could make deployment much cheaper, and therefore make high speed wireless much more ubiquitous than this. And that's what we did. Like we we set ourselves a rule, like you need to be able to order this on Amazon or Alibaba, like no other hardware, nothing custom, and then we developed our own software hardware stack. So we put a real telco back end that usually lives on a big data center into a tiny like Intel Mac computer, and we built in our apartment two cells. And then we walk from one to another, and it worked great. Okay. We need a vessel to test this at, like, higher scale at, like, the apartment won't do it.
00:09:39 · Pablo Srugo, Hermann Frank
[00:09:39] S0: And who... When you say we, by way, who... Who's involved at that point? [00:09:42] S1: So it was my cofounder Dennis and I, like... And Dennis and I are now cofounders and gigs. And we had one intern, like a friend that was like helping us. [00:09:51] S0: And are both of you like technical types? [00:09:54] S1: I'd say I'm technical of of the both of us. Like Dennis is... Without Dennis, like, we would not have a a company. Right? Like, I I... We always joke, we could have a 100,000,000 in the bank, and like, nobody wouldn't get paid because I'm just terrible at, like, anything that is administrative and operational. So we complement each other incredibly well. So we then went out and built a WiFi network in Berlin. So we walked from cafe to cafe, and then we asked them if we can deploy this this WiFi inside of their inside of their cafe that basically, like, put together resembled a cellular grade network. And then you could walk through an entire neighborhood and get stay connected on this network. And it worked worked amazingly well. We had like over a million customers in the first year, mostly tourists that were just like roaming around the city. So we basically became the number one public WiFi network in the city. [00:10:50] S0: Did you fundraise for that? [00:10:51] S1: I financed it myself at the point. I'd like... I I was like in it for like to find the one big problem, and then we once we kind of figure it out, and we wanna scale, then the idea was to go out and race. [00:11:02] S0: How many users do you have?