A Product Market Fit Show | Startup Podcast for Founders
00:07:21 · Pablo Srugo, Daniel Saks
[00:07:21] S2: Wow. Just the worst feeling. [00:07:23] S0: Yeah, the worst. And in fact, Harley from Shopify came to me a few weeks later saying, WTF, the Bell Business App Store has less traffic than my intern's blog. So it was pretty challenging at the time. But what we did is we learned from that experience, and we were able to figure out the right ways to commercialize on behalf of our customers. And that way, when Deutsche Telekom and AT&T launched, they saw very strong success. And it did take a while. [00:07:51] S2: What was the learning? Because I would have assumed that they would have done some amount of marketing, and as much as it might not have been, let's say, perfectly effective or efficient, it should have been good enough if the value was really there. But it sounds like it wasn't. It sounds like there was really some kind of optimization that you could figure out. [00:08:05] S0: I think what we've learned with B2B technology, and this still extends today, is that businesses want to buy from people they trust. So brands of trust where they have the right to play. And what we found is like telecoms have a lot of good reason to sell telecommunication services, video conferencing, security, but maybe they're not the best to sell zero accounting or something else. [00:08:25] S2: So it was a matter of figuring out what should be, what actual products should be in that marketplace.
00:08:25 · Pablo Srugo, Daniel Saks
[00:08:25] S2: So it was a matter of figuring out what should be, what actual products should be in that marketplace. [00:08:29] S0: Exactly. It's the merchandising strategy. And then the other component is the reason why someone trusts, call it AT&T or Dutch telecom in a business capacity, is that they've worked with them for many years. So the other insight that we had was instead of just believing that you can get people from a billboard to go on a website, the better strategy was to actually enable the sales channels and the relationships that already exist. So once we started training the physical human sellers at these companies, they were able to articulate the value prop. And that's really what drove a lot of the success and the momentum. [00:09:04] S2: And how, the other question I had, we're going to talk a lot about Outbound, like how do you get Bell as your first customer? How does that happen? Yeah. [00:09:11] S0: So we had a chicken and the egg problem. Our vision was like AppDirect. We want to build an app store and sell cloud services to the world. But in order to get the best apps, we needed to showcase that we have customers. So we had this idea of going to the telecoms, because if you have all the global telecoms, then they represent almost every B2B business in the world that's connected. And the way we got into Bell is we did have an investor relationship. We had an opportunity to pitch. I remember on pitch day, we were pitching against IBM and all these bigger companies, Laszlo Systems and enterprise companies.
00:09:11 · Daniel Saks, Pablo Srugo
[00:09:11] S0: So we had a chicken and the egg problem. Our vision was like AppDirect. We want to build an app store and sell cloud services to the world. But in order to get the best apps, we needed to showcase that we have customers. So we had this idea of going to the telecoms, because if you have all the global telecoms, then they represent almost every B2B business in the world that's connected. And the way we got into Bell is we did have an investor relationship. We had an opportunity to pitch. I remember on pitch day, we were pitching against IBM and all these bigger companies, Laszlo Systems and enterprise companies. [00:09:44] S2: And you're pitching a marketplace like they wanted a marketplace and you were one of the vendors or you're pitching a new idea to them? [00:09:49] S0: No, it was actually an innovation day. And we pitched them on the idea of a business marketplace. We came with suits, with printed consulting decks. [00:09:57] S2: It was a different time, mind you. I mean, this is what, 2008, you said? [00:10:00] S0: 2009, 10, 11. We were 23 at the time, 24 at the time, and just went in there and had this conviction. [00:10:07] S2: Tech didn't have the respect that it has today. Do you know what I mean? Like, especially for a big company like the tacos. You got to go and suit up.
00:10:07 · Pablo Srugo, Daniel Saks
[00:10:07] S2: Tech didn't have the respect that it has today. Do you know what I mean? Like, especially for a big company like the tacos. You got to go and suit up. [00:10:14] S0: Yeah, we had to suit up. It was like serious board meetings, long negotiations. And yeah, I remember at Deutsche Telekom, we had a meeting with them and it was like, call it 15 people in a formal board meeting with a suit. And this was pre-COVID, you know, by a long shot, but I was doing the call virtually and I was upstairs. I happened to be in my like parents' house. And just as I was in the meeting, I like had my suit on, but like only boxers on, no like formal pants below. And my mom like opened the door and said, Daniel, lunch is ready. And I stood up. [00:10:48] S2: Oh God. [00:10:49] S0: And like years later, the sponsor at Deutsche Telekom told me like, yeah, they kind of recognized that that happened, but they thought it was cool. They're like, yeah, here's, you know, young guys hustling with Silicon Valley energy and attitude. And, you know, a lot of these big companies at the time wanted to bring the energy of Silicon Valley to these big enterprises. And that was a lot of the wedge that we had in the early days. [00:11:11] S2: I took you off track, but back to that Bell thing, you're pitching against all these people. Why do you think they chose you?
00:11:11 · Pablo Srugo, Daniel Saks
[00:11:11] S2: I took you off track, but back to that Bell thing, you're pitching against all these people. Why do you think they chose you? [00:11:15] S0: I think it was that we had a very concrete vision of how Bell could make money from cloud. And just like today, every business and every board is thinking about how can we make money from AI? What are the best ways to monetize AI? We had a really strong story for how all these different businesses could benefit from cloud. [00:11:33] S2: Got it. You're co-CEO, is that right? [00:11:34] S0: Yeah, I was co-CEO for many years. And then just as, you know, AI and Agentic AI was hitting, I transitioned my co-CEO role to my co-founder. He's running the CO. It's been tremendous under his leadership. I'm still on the board and, you know, couldn't say better things about where AppDirect is headed, but had the opportunity to start again in the infancy of the AI phase. And I think there's a ton of parallels to building in the cloud era and then starting again in the early stages of the Agentic era. And a lot changes, but a lot of the same principles or learning stay the same.
00:11:34 · Daniel Saks, Pablo Srugo
[00:11:34] S0: Yeah, I was co-CEO for many years. And then just as, you know, AI and Agentic AI was hitting, I transitioned my co-CEO role to my co-founder. He's running the CO. It's been tremendous under his leadership. I'm still on the board and, you know, couldn't say better things about where AppDirect is headed, but had the opportunity to start again in the infancy of the AI phase. And I think there's a ton of parallels to building in the cloud era and then starting again in the early stages of the Agentic era. And a lot changes, but a lot of the same principles or learning stay the same. [00:12:11] S2: Yeah, I was going to ask, I mean, you know, just maybe as a segue type question, like what is the AppDirect today? Because obviously that vision of a market, I mean, I'll just give you maybe a stupid example, but, you know, I'll just buy whatever cloud tells me at this point. You know, I'll just interact with it. Be like, let's do this thing. What do you really need? Oh, you really need that? Okay, fine. Buy it. You know, does it have an API? Great. Like, you know, that's the kind of old world of, you know, I log in somewhere and I go into their marketplace and I see these things, like seems foreign to me, but is that still happening? Or is there a new, like, is there a new vision for like AppDirect? How do you think that plays out?