A Product Market Fit Show | Startup Podcast for Founders
00:10:01 · Pablo Srugo, Andrew Butt
[00:10:01] S1: Just so I understand, that services business, was that also strictly focused on rebates at that point or you were doing everything? [00:10:07] S0: We were just building but it – yeah, that was a common theme of something we were building but we were building lots of other things as well. It was a comfortable business. We could see it would never be huge because it was just growing steadily and like you said, you have to always worry about where's the next customer and you're selling time so it's finite. Then it was probably somewhere like 2013 where we said, right, we should actually build a product. It was actually inspired by a Silicon Valley tour. My cofounder and I came to Silicon Valley for the first time ever and met companies like Intel, Citrix, Google, startups, DocuSign was an early startup back then. I remember meeting the founder and we thought, wow. [00:10:47] S1: What brought you to the Valley? [00:10:49] S0: We just had contacts locally who had contacts in the Valley and they organized this study tour for usually CIOs, like UK CIOs that would then bring over to meet Silicon Valley companies. That was quite inspiring. For example, we came up with the product name in Silicon Valley in about 2013 and we got a website and a domain name but it still was slow going and we were still mostly focused on the core business. I would say when we actually started writing code was probably 2015 or something – 2014, 2015 and then the official launch date of the product was 2016.
00:10:49 · Andrew Butt, Pablo Srugo
[00:10:49] S0: We just had contacts locally who had contacts in the Valley and they organized this study tour for usually CIOs, like UK CIOs that would then bring over to meet Silicon Valley companies. That was quite inspiring. For example, we came up with the product name in Silicon Valley in about 2013 and we got a website and a domain name but it still was slow going and we were still mostly focused on the core business. I would say when we actually started writing code was probably 2015 or something – 2014, 2015 and then the official launch date of the product was 2016. [00:11:26] S1: Walk me through a little bit more of that Silicon Valley tour because there's people listening from all around the world and it's harder to find but when I went through – I went to 500 Startups accelerator. This was a while ago but, I guess, similar era. It was 2013, 2014. There's something different about the Valley. I don't know how much you remember of that trip but clearly it inspired you at least to some extent. What was it that happened during that trip? What did you feel that was different there versus in your startup ecosystem in the UK?
00:11:26 · Pablo Srugo, Andrew Butt
[00:11:26] S1: Walk me through a little bit more of that Silicon Valley tour because there's people listening from all around the world and it's harder to find but when I went through – I went to 500 Startups accelerator. This was a while ago but, I guess, similar era. It was 2013, 2014. There's something different about the Valley. I don't know how much you remember of that trip but clearly it inspired you at least to some extent. What was it that happened during that trip? What did you feel that was different there versus in your startup ecosystem in the UK? [00:11:57] S0: I guess as a Brit I've always found Americans very upbeat and positive and can-do attitude and so that just struck me in general. I think the approach to building a software company is just totally different here to certainly how it used to be in the UK. I think the UK and other parts of the world are changing, by the way. They're catching up. I think in the UK the approach was, you've got to grow out of profits which always means growth is very slow because if you make $10, you can spend $9 on the products and then eventually you might make $20 and then you can spend 15 but it'll take 100 years to actually build a global company like that whereas the Valley, once there's real belief and conviction and proof points that this has got the potential to be massive, then there's a huge appetite to invest.
00:12:48 · Pablo Srugo, Andrew Butt
[00:12:48] S1: It's similar actually, just that difference between I guess the UK and Valley and Canada and the Valley. I remember back when we went – this is different era, so the numbers aren't the same as today but we were here in Canada raising a $2 million valuation or something like that and we got into 500 Startups and day one was Fundraising 101. What the speaker was telling us was all about just hyper-confidence. It was like, you've got to go home today, you've got to look yourself in the mirror and you've got believe that you're worth $7 million. That was just the attitude of, you've got to be hyper-aggressive which was so different to what we were used to in our ecosystem. You're right, things are, let's say, coming together a little bit more, converging a little bit more worldwide but still, there's just more willingness to just go for it, I think, in the Valley in general. [00:13:39] S0: Exactly. I think that was inspiring but I don't think – I never thought at that point that I would end up, for example, moving here and raising money in the Valley. That never occurred to me back in 2013 but it was just an inspiring visit that reminded my cofounder and I that we must get on and launch our own products. [00:13:55] S1: Just so I understand the scale of it because it's also really hard to give something up that's working, even if it's not exploding, how many employees did you have at that time, 2013, 14, 15? How much revenue were you bringing in on the services side?
00:13:55 · Pablo Srugo, Andrew Butt
[00:13:55] S1: Just so I understand the scale of it because it's also really hard to give something up that's working, even if it's not exploding, how many employees did you have at that time, 2013, 14, 15? How much revenue were you bringing in on the services side? [00:14:09] S0: I would say we probably had, say, $5 million of revenue or something and we probably had about say 40 or 50 people. That was the scale. [00:14:17] S1: Got it. Then you start working. Do you launch this with some customers while you're still doing the services business or just how do you manage that because it's just hard to do – I mean, it's hard to do anything and it's certainly hard to do two things that are very different at the same time.
00:14:17 · Pablo Srugo, Andrew Butt
[00:14:17] S1: Got it. Then you start working. Do you launch this with some customers while you're still doing the services business or just how do you manage that because it's just hard to do – I mean, it's hard to do anything and it's certainly hard to do two things that are very different at the same time. [00:14:34] S0: Yeah. No, very true. That certainly was true. That's why it took so long, really. Imagine we decided in 2013 we wanted to commit and build a real product, not just custom software for rebates. Then we did it on the side so of our 40 people, whatever it was, we had four or something on the side who were – and we were using the small profit we were making from the services customers to then put into this product development. That's why it took us a couple of years to really get to our first real launchable product and we were doing it all at the same time so that was hard. I think what came later, which we can talk about, is when we realized that this thing had huge potential, we did understand we'd have to shut down the services business because we just couldn't possibly do both. That was hard because we were then going from a somewhat profitable business to something which was immediately loss making and shutting off that revenue from services but it was the right thing to do. [00:15:35] S1: Let's go there. I want to go back after but let's just – let's go there because we're already on it. How far along did you get on the product in order to have the conviction to shut everything else down?