A Product Market Fit Show | Startup Podcast for Founders
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.
00:21:39 · Andrew Lockhead, Pablo Srugo
[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. [00:22:02] S1: It's a once in lifetime thing, but it is reflective of something bigger, which is you're never safe. You know what I mean? This is just the life that that founders choose is just the highest of highs, the lowest of lows, and you're just one thing away from something huge happening and one thing away from something terrible happening.
00:22:02 · Pablo Srugo, Andrew Lockhead
[00:22:02] S1: It's a once in lifetime thing, but it is reflective of something bigger, which is you're never safe. You know what I mean? This is just the life that that founders choose is just the highest of highs, the lowest of lows, and you're just one thing away from something huge happening and one thing away from something terrible happening. [00:22:17] S0: Even with the money, Pablo, I could have gotten the two and a half million dollars and said you know what? Let's keep going. My investor and board could have just come back and said you know what? We don't think you got what it takes. Forget about it. Send the money back to the . It could have been a legit decision, right? They want to protect themselves. It could have been the right thing. Though, we were really lucky with our investor that did send their money. They were like you know what? Just don't burn too much. We don't how long it's going to last. We trust you. Do whatever it takes to get stronger out of this. They have a strong mentality that in every crisis there's an opportunity, and they believe that me and Hamed were able to figure out whatever opportunity we were able to size for the company. That's what happened.