A Product Market Fit Show | Startup Podcast for Founders
00:30:02 · Pablo Srugo, Niklas Lindgren
[00:30:02] S2: That's a good bet. [00:30:03] S0: But yeah, it was a good bet, right? So, he's thinking, I hope he's happy. [00:30:06] S2: Maybe two follow up questions on that. The first one is, you seem to find a massive space, right? This speaks to what you were saying, $20 million seed. Because of how big the impact could be and this is the thing that drives most VCs. At the end of the day is massive, massive markets. Most of them though are competitive, right? You look at law and you look at Harvey and Legora, I mean, and these are companies that have been around for several years at this point. You kind of come into it, you're the only player. You got there by serendipity, as one often does but looking back and thinking back. And imagine you're talking to a founder who's thinking about the next idea, do you have a sense of what it takes to find? It's one thing to find a niche space nobody touches, but then it's like, okay, you're in a tiny little space. To find a big problem that nobody's yet addressed, what kind of has to happen for that?
00:30:52 · Niklas Lindgren
[00:30:52] S0: I think it's hard to just, you know, find something. I think you sort of need to be curious. You need to sort of dip your toe into something because then you can understand sort of how that relates to something else. So looking back at myself, we started in the security industry. which is, you know, part of the construction industry at some point. So we installed these systems inside buildings that were being built, inside data centers that were being built and so on. But we didn't do MAP, but that was also getting installed inside buildings. But the reason we did that, we understood that this is a big one and with them we wanted to do something more meaningful in this space. But I think it's hard to just fall into something, you need to dip your toe into something and then find another way around it. But that's probably part of why this is an interesting case, because not a lot of people have went into this market and understood that this is a gigantic opportunity to transform how we design buildings in the world. And that's like, if we solve that, that's obviously a gigantic outcome. But more on a high level, I think currently the market and many of the VCs of the world want to. They think all services industries that can turn into SaaS companies or AI companies is something that's very interesting and I think the wind is blowing in that direction. So if there's another founder out there listening, I think maybe that's something that you should find. Like. where is there a services industry anywhere in the world that's running on very old systems or is very labor heavy. What can you do there? I think that would be sort of a more of a higher level guidance.
00:32:29 · Pablo Srugo
[00:32:29] S2: I mean, I think the other thing, just to learn from your experience. Something that I've always believed is, I mean if you land on an idea that's massive, that's great. But if you don't, you know, look at your first company, right? Your first company was nothing, let's say, sexy and also nothing that was going to become a trillion dollar company, right? Even a multi billion dollar company, but it could become a big success and at least relative. And certainly relative to you as a first time founder in the 20s, right? So, part of it is, like you said, dip your toes, getting into something that is, for whatever reason, interesting to you. Where there's team market fit, regardless of whether it can become a unicorn. What that might imply for you, not just in that first company but moving forward, is hard to kind of predict up front. But as long as you get something out of it, it could be a win.
00:33:10 · Niklas Lindgren
[00:33:10] S0: Exactly, and I think investors also understand the entrepreneurs that they are working with, like who are these persons. I think a lot of entrepreneurs don't think that VCs don't understand that, but they do understand who they work with and my appetite for risk is very high. I try to control, for controlled risk, it's very high. My appetite to sort of build something meaningful is extremely high. I'm not in this business to be number two or number three. Even though we're still the only player in this field, I'm sort of very, very hungry to win and to dominate in this space, and dominate by orders of magnitude in this space. I think that's also a factor, whatever you get your ass into make sure to win, make sure to not be number two, number three, number four, number five. Because vertical software doesn't really work that way. The power laws are not in your favor if you aim to be number two or three. So I think it's a matter of that as well, like whatever you get into, make sure that you're creating the category winner and that you are the category. The one who is the best in the world of this is Jensen Huang. He creates his own industries and for natural reasons he wins them as well. So, we try to be, I'm not sure if it's too bold to say that we're trying to be a little bit Jensen here. Trying to create a new type of industry.
00:34:36 · Pablo Srugo, Niklas Lindgren
[00:34:36] S2: Well, that's a good segue. Because we have two tech players I want to talk about. One of them is brand and using Reddit but you spent, you said, $300,000, $400,000 on building a brand at inception. Which is not a thing that you normally do. Normally you go out, you get customers, MVP, you prove value, and then later on you kind of, increase everything with brand and investing in brand. What did you spend those first few hundred thousand dollars on, and why did you choose to spend on brand early? [00:35:00] S0: Yeah, I'm almost embarrassed of saying that, but yeah. It turned out well, so I'm not embarrassed anymore. But in the early days, it was really weird. It sort of went against all early stage playbooks of how you should do things. I think YC even have an advice, like don't spend any money on marketing early on or something like that, or a website or something. But we went straight against that. We spent a lot of money on brand, on storytelling, on marketing. [00:35:00] S2: How much would you say you spent, in those first few quarters?
00:35:00 · Pablo Srugo, Niklas Lindgren
[00:35:00] S2: How much would you say you spent, in those first few quarters? [00:35:00] S0: I think we spent maybe $150 something, $150k something. So building the first web, building the first sort of visuals and motion around the product, like before there is almost anything. And the reason why that was really good was that we got in touch with a lot of engineers that were excited about sort of the, at the time, fictional work that we were doing. But we could almost get them to sort of get a packaged feeling of what we were trying to create. More importantly, they can understand who we were as a company, what we stood for and our core values, and sort of who we were. We got an identity for those $150k and that was very, very important for us and it's paid off multiple times after. [00:36:22] S2: What would you say is the most, out of all. Because I'm sure you've tried different things. What were some of the most impactful brand assets that you built and why? [00:36:29] S0: I would say the website, definitely the website. [00:36:29] S2: Did you outsource that? [00:36:29] S0: We did, so there was a great creative agency in Stockholm called EW. They've been doing work for us. I think they did Legora after us, they did Sana. [00:36:46] S2: And what did they get right? I mean, regardless of whether somebody uses EW or not. They're like, okay, I'm gonna spend time, effort. Maybe I have $150k, maybe I don't, on my website. What did they get so right about your website?