A Product Market Fit Show | Startup Podcast for Founders
00:15:58 · Andrew Lockhead
[00:15:58] S0: Yeah. For us, it was all about conversion rate. What was your previous conversion rate before? What is a new conversion rate? Are we helping you out, sell more ticket, or actually, are you losing on tickets? Some of them were really stressed out. They're like you're going to purchase two tickets for Justin Bieber back in the days. That's $500. Then you will have to add another $400, $400 for a night at the hotel. Maybe the card’s value will be too high, and people are going to drop off. If it's not the case, they're going to just remove it from there. Good thing for us, actually, the opposite happened, so people were actually booking more tickets with this because now they were able to do just a full package. They're like, okay, cool. I book my tickets. The next thing I need to do after purchasing my experiences is book my accommodation. In our pitch deck, One of the things that we said to investor was the way that travel changed over time. Back in the days, your parents probably just book their flight, or their bus, or they took the car, and after this, once they were at destination, they were finding, okay, what are we going to do now? I dare you to find someone today that's going to book their flight tickets, and they’ll have the tickets for the Super Bowl, to go see the NBA, the NASCAR, whatever experiences you want. This is now the first step, so we managed to find ourself right after the transaction take place. Once your dopamine level gets high, you're super excited. You got your credit card in hand. You just got your tickets. You're like let's do this. I'm ready to spend money without tickets, and that's the reason why your conversion rate went higher because of it.
00:17:15 · Pablo Srugo, Andrew Lockhead
[00:17:15] S1: Maybe just to drill down that, where did you – just to be sure, if I'm buying tickets to Justin Bieber, I can – I make that transaction and then you come up, or I click the tickets, but before I've actually put my credit card in and bought, you come up and say, hey, do you want to add the hotel experience or whatever? [00:17:32] S0: Both, so we do both. We do pre-transaction and post-transaction, so that's why we have an impact on both sides. [00:17:38] S1: In the early days, back then, you also supported both? [00:17:41] S0: Early days, I think we were only doing after the transaction take place, and after this, we started to do before, which was a big challenge because they were afraid. Once they saw the conversion rate go up, it was much easier to sell after this. [00:17:51] S1: When you did after, what was the value prop? At that point, you're not impacting the conversion rate, right? [00:17:56] S0: For after, it's mostly for revenue generation. They book. I'll be able to get more data. Maybe I can call back after this, [unclear], and say you know what? Last year we sent over 10,000 people to book in that specific area. You guys want to do a special deal, a promotion on those things? Data for it was really valuable for them. things. So data for was really valuable for [00:18:14] S1: Okay, cool. You land this first customer. You prove it out. How do you land the next two to five? Did you build out specific case studies, showcase how much you move the needle on conversion, or was it just all zero to one? They all happened at the same time.
00:18:14 · Pablo Srugo, Andrew Lockhead
[00:18:14] S1: Okay, cool. You land this first customer. You prove it out. How do you land the next two to five? Did you build out specific case studies, showcase how much you move the needle on conversion, or was it just all zero to one? They all happened at the same time. [00:18:29] S0: They happened at the same time. We did use some introduction by them, so if one customer was super satisfied with [unclear] out, he agreed actually to give strong recommendation to others. Are you guys good if I put you in touch? He’ll be able to tell you about the pain point, where we're solving the issues we had together, and it was actually your ambassador. It was selling a product for us to competitor of his, which was really great for him. Not everyone agreed to do something like that.point when we're solving the issues we had together. And it was actually your ambassador. So it was selling a product for us to competitor of this , which was really great for him. Not everyone agreed to do something like that. [00:18:53] S1: Why would they do so? They just liked you a lot?
00:18:53 · Pablo Srugo, Andrew Lockhead
[00:18:53] S1: Why would they do so? They just liked you a lot? [00:18:55] S0: No clue. Maybe because as a French-Canadian vibe that we're just being friendly. The entrepreneur, one thing we figured out, the younger the company are, the more the CEO is an entrepreneur that founded the company in first place, the stronger the relationship is versus big platform back in the days think about the affinity of this world, Ticketmaster and so on. Obviously, it's not the founder that's the top of the company. We cannot reach to them. They're not as open, but founders want to help founders. That’s always been super helpful for us. [00:19:22] S1: When do you start feeling – like in that kind of V1 – because we're still talking pre-COVID days. When do you start feeling like, okay, you know what? We got it. This is really working. This is vibing. Revenue's going up. Things feel easier and easier versus harder and harder. [00:19:38] S0: Yeah, probably around 2019. We got a team of about 24 people. Back then, we got that hockey stick growth going, 4X year over year once more. We're killing it. We feel like nothing can stop us now. We're raising our next round of financing. We closed the paperwork in February 2020. [00:19:58] S1: No way. [00:19:58] S0: Bam! [00:19:58] S1: Wow. [00:19:58] S0: Yeah, pandemic hits. [00:20:01] S1: How much did you raise? What was that round?
00:20:01 · Pablo Srugo, Andrew Lockhead
[00:20:01] S1: How much did you raise? What was that round? [00:20:03] S0: It was about two and a half million dollars at that point. Unfortunately for us or fortunately knowing what the story is now, the investors – some investors didn't send their money. They said, “You know what? We don't know what's going to be happen. We don't know how long that pandemic is going to last. We’re not toing to send the cash.” I'm like, “We got a paperwork signed, right? You need to do something about it.” He’s like, “You can sue us if you want to. You will probably run out of money before anything happens.” [00:20:26] S1: Wow . [00:20:26] S0: That's true . [00:20:27] S1: They had signed it . Oh, yeah. Just to be clear because this is really important, they signed – what was it? Was it a SAFE that they were doing, or was it like a price round? [00:20:35] S0: Price round. It was a price round with amount. They had 60 days. [00:20:38] S1: They had signed purchase agreements, all this sort of thing. [00:20:41] S0: Everything was signed up on February. [00:20:41] S1: Oh, my God. They had 90 days to send the money. Wow. [00:20:44] S0: The first investors send their money within 30 days, so pre-pandemic, everything was good. Once the pandemic hit, we had another investor that sent their money, but couple of investors in the end are like seems too risky for us. We're going to wait and dodge. [00:21:25] S1: Goodness.
00:21:25 · Pablo Srugo, Andrew Lockhead
[00:21:25] S1: Goodness. [00:21:25] S0: For myself, even if I didn't want to get those people on my board, I'm like you know what? If you don't believe we'll be able to get through this, screw you. We'll make it without. Because my other investor could have just decided to pick a fight with me and say you know what; you didn't follow your [unclear] and decided to go for the money, I actually had to start a legal system against them. We had to openly sue them and say you know what? You need to send their money and so on. They never send their cash. We just opened up the [unclear] case and decided to move on after this. [00:21:25] S1: Goodness. [00:21:26] S0: You know what? Couple of years later, we decided to ring on the door and say, “Hey, where are we supposed to send the money again?” Yeah, sure, forget about that. [00:21:34] S1: Did they really come back? [00:21:36] S0: Yeah, they got some balls, huh? [00:21:38] S1: Oh, that’s gutless. Wow! [00:21:39] S0: It is a crazy world, and every single entrepreneur of mine told me the same story. Don't celebrate until the money at the bank, but I tell you, we did pop some bottles as soon as the paperwork signed in February. It was like, oh, wow, that's going to be so hard to tell the team. We had to cut people off because the money never came in, so we had to make some massive decision during the pandemic because of it.