A Product Market Fit Show | Startup Podcast for Founders
00:11:27 · Pablo Srugo, Lee Silverstone
[00:11:27] S0: That’s right. That's what I'm saying, yeah, exactly. [00:11:29] S1: Do you remember that? And I was like, hey, send him the safe in the airport on the way there. [00:11:35] S0: I've mentioned this story, but I actually didn't live it. I really want to hear from you and your recollection of how we got into 500 Startups, how you got us into 500 Startups in the first place. It started at the beginning because I almost forced you to not go on this trip. Do you remember that. [00:11:53] S1: Yes, you almost kiboshed it, which in retrospect maybe would've been good for the company. Who knows? Yeah, so I remember we were – the guys at Micrometrics were a New York desk and there was an invest all in this open office space. They were like, hey, we're going to Startup Fest in Montreal. I think you were like, man, what are we going to go to like a startup festival for? How is there any value in that? I was like, it's networking, it's investors, it's whatever. You were like, no, man, that's so stupid. I got work to do. Classic Pablo wants to get things done and done. [00:12:22] S0: One hundred percent Pablo right there. Just to be clear, the work I was doing was getting grants, that was for sure work.
00:12:22 · Pablo Srugo, Lee Silverstone
[00:12:22] S0: One hundred percent Pablo right there. Just to be clear, the work I was doing was getting grants, that was for sure work. [00:12:37] S1: It is still valuable, but I think that's such a Pablo thing to be like, nah man, I'm not going to a networking event, no way. There's no value in that. I was like, cool, like let's divide and conquer. You hang back; I'll go. He was like, all right, whatever and ended up going. To be honest, he was probably right. There was not a ton of immense value in going to network around, but it was fun. It was a good time. I remember there was a group of people surrounding this guy who was, I don't know, wearing a T-shirt and jeans or whatever. My mind, there's no way this guy's an investor. In my mind at that time, but I hadn't worked in VC yet, didn't know anything about VC. That guy was probably a startup dude or whatever. I don't know. He was doing the sound at the event or something. Someone pulled me into the conversation, and they were like, tell this guy what you do. And I was like, oh, we're working on this startup, Gymtrack. We're building technology to automatically track what gym goers do in the gym. I used to – we were talking about this before. I used to walk around with this 3D printed piece of hardware that was this smart pin that we had as part of our product in my pocket. We had it. It wasn't functional, but it had a logo on it and everything. It looked super professional.
00:12:37 · Lee Silverstone, Pablo Srugo
[00:12:37] S1: It is still valuable, but I think that's such a Pablo thing to be like, nah man, I'm not going to a networking event, no way. There's no value in that. I was like, cool, like let's divide and conquer. You hang back; I'll go. He was like, all right, whatever and ended up going. To be honest, he was probably right. There was not a ton of immense value in going to network around, but it was fun. It was a good time. I remember there was a group of people surrounding this guy who was, I don't know, wearing a T-shirt and jeans or whatever. My mind, there's no way this guy's an investor. In my mind at that time, but I hadn't worked in VC yet, didn't know anything about VC. That guy was probably a startup dude or whatever. I don't know. He was doing the sound at the event or something. Someone pulled me into the conversation, and they were like, tell this guy what you do. And I was like, oh, we're working on this startup, Gymtrack. We're building technology to automatically track what gym goers do in the gym. I used to – we were talking about this before. I used to walk around with this 3D printed piece of hardware that was this smart pin that we had as part of our product in my pocket. We had it. It wasn't functional, but it had a logo on it and everything. It looked super professional. [00:13:54] S0: This is the difference between you and I, right? I remember you and I was like that's just a piece of plastic dude. It's literally a 3D printed of plastic that has no value, no function at all. You're like, dude, trust me.
00:13:54 · Pablo Srugo, Lee Silverstone
[00:13:54] S0: This is the difference between you and I, right? I remember you and I was like that's just a piece of plastic dude. It's literally a 3D printed of plastic that has no value, no function at all. You're like, dude, trust me. [00:14:08] S1: Yeah, and I think the point of that was to show people something tangible. Everyone constantly hears stories from people, but that's hard to do, storytelling in a quick little pitch. If you can visualize things for people and put something in people's hands, they can get tangible with something that's different. It's memorable. I remember showing this guy – I didn't know it was Dave McClure – this smart pin that we had. It was just this piece of plastic I'd printed and put in my pocket. He was like, wow, that's really interesting. How far along are you guys? I was like, yeah, we're raising money. He was like, hey, take my card. You guys should move to San Francisco and come do 500 Startups. I was like, oh yeah. I think I've heard of that before. I had no idea what 500 Startups was. I didn't know who Dave was. Then we walked away, whatever. Everyone was like, what just happened? There was a group. They were like, what just happened? I was like, I don't know. This guy said we should go do 500 Startups. And they were like, what? That's crazy. I was like, I don't. I called Pablo. I was like, do you know what this is? He was googling it. [00:15:12] S0: That’s right, had no idea, no idea.
00:15:12 · Pablo Srugo, Lee Silverstone
[00:15:12] S0: That’s right, had no idea, no idea. [00:15:13] S1: We had no idea. Then, yeah, and anyhow, Dave had his cellphone number on the card. I texted him. I was like, hey man, yeah, I'll take you up on your offer, meet up for a drink later tonight. We ended up having a drink. I think he was smoking a cigar. I thought it was pretty cool. I was like, okay, let's go. Let's go to this fire start. [00:15:28] S0: This guy's legit. [00:15:28] S1: Yeah, he's legit. He's smoking a cigar. And that was it. The next day, we sat down in this little investor area. We hammered out some of the terms. We talked to Shane McLean from LaBarge Weinstein on the phone. He was like, hey guys, go and sign the documents. You guys are going to San Francisco and you're in find a new startup. You're like, cool. And that was it. [00:15:49] S0: Do you remember, and I don't know if this played into that or not, but there was a startup competition at Startup Fest that you won. Do you remember turning down? [00:16:00] S1: Oh, and we turned it down. Yeah, we turned it down, yeah. Yeah, we won the startup competition. We turned it down because we thought the terms were bad or something because we were so full of ourselves. [00:16:12] S0: Just by the way, I just – I'm in Ottawa not doing nothing but taking zero risk. You’re out there pitching this company trying to win competitions, and you win it. I have the audacity to be like, dude, those terms are terrible. [00:16:25] S1: You're like, those terms stink. You're like, those terms are terrible. [00:16:28] S0: We're not taking it.
00:16:28 · Pablo Srugo, Lee Silverstone
[00:16:28] S0: We're not taking it. [00:16:29] S1: It's so funny. I remember being so mad at you. I was like, dude, what are you talking about? Someone wants to give us money, and you're saying no. I was like, how am I going to work with this guy? [00:16:38] S0: It was like 10%, like 2 million cap. And then Harley from Shopify took your side. Do you remember that? He's like, you're right. These terms are too aggressive. [00:16:45] S1: Yeah, he was like, these terms suck. And then there's another story I remember of that too. We went to this private investor area because you're a psychopath. And on the call with Shane, you were like, these terms suck on the safe, or the convertible note with 500 Startups. You wanted to negotiate with 500 Startups and you made me do it. You made me do it. You weren't even there. You just were on the phone and you were like, Lee, these terms are unacceptable, go negotiate. I'm 21 years old, idiot. I'm sitting in this investor area and all of the team of Real Ventures is sitting there. All of the managing partners of Real Ventures are sitting there. It's me and Dave, and they're sitting right next to us. I'm this kid. I don't even understand the terms I'm negotiating, but I memorized what you and Shane told me on the phone. Me and Dave McClure are negotiating these terms on the convertible note and he finally gives in or whatever. I don't remember what happens. I think he gets up and walks away. [00:17:42] S0: I think he did.