1 February, 2021
This tenth episode titled ”Building Startups the Right Way”, that aired on January 28, 2021, we had Anda Gansca (CEO and Co-Founder of Knotch) in a conversation with Jeroen Corthout (CEO and Co-Founder of Salesflare).
Starting a startup right out of college is not an easy task for an emigrant, even in San Francisco. But Anda did exactly this – after graduating Stanford she launched Knotch, a (then) network that allowed people to connect with each other based on shared interests. A couple of pivots later, and after moving from San Francisco to New York, Knotch, now an enterprise content intelligence platform which raised $35m in venture funding, has turned into a clear success story.
During this live episode, Anda and Jeroen will walk us through the decisions founders have to make in order to build the right product, team and culture in order to succeed on a global scale, especially in a multicultural environment.
Listen to the full discussion on Spotify and on Apple Podcasts too.
3 takeaways from Anda and Jeroen’s live discussion:
►”I think fundraising has a really simple rule, which is ‘You have to raise money from good people’. And if you raise money from good people, you’re fine. Like they know that the reality of the journey is that it changes and, by the way, it should change. Because if it’s not changing, then you’re not responding to the signals that you’re getting from the market. I don’t think there’s a lot of examples out there of entrepreneurs who started with a really clear idea, and continued executing on the exact same idea all the way to IPO. I really don’t.”, Anda, on investors backing entrepreneurs throughout the right journeys and correct expectations
►”It’s a bit like less like VCs. VCs, they have their little clubs, and they, if they go to a conference, they have the little VC dinner, and they all meet each other. Especially when it’s like series A, and series B; like passing deals to each other and I don’t know what. But still, within the angel community, in a country, usually, they’re also connected. They are in sort of groups, and some know each other, and things go from the one to the other.”, Jeroen, on the behaviour of VCs and angel investors regarding the circulation of investment opportunities
►”But I don’t think product market fit is is a one and done. I don’t think you get there and then, you know, you just stop focusing on product and on market and on fit. I think the market always changes, customer demand always changes, your team changes, your assumptions change. And you have to constantly evolve the product. We launched a new product earlier. No, actually last year, and it had its own product market fit challenges. And how does it then fit with our current product? And now we’re actually merging the two products into a platform. And that’s going to have its own, you know, platform market fit questions. So it never ends.”, Anda, on the myth of finding the ‘one and done’ product market fit.
Are you more into Reading? The Full Transcript is below!
Jeroen: I think we’re live. Hey!
Anda: Hey! How are you doing?
Jeroen: Doing well, doing well. It’s a good day today. Weather is shit, but the rest is fine.
Anda: Same here.
Jeroen: Where are you based right now?
Anda: I’m currently in a hotel in Manhattan. And it’s kind of strange to be in Manhattan. It feels like one of those zombie attack movies. You know, where like they have people walking through Manhattan and it’s completely empty. That’s kind of how it feels.
Jeroen: I personally, I was born not far from there, a bit upstate, in a town called Mount Kisco. But I’m, apart from that, fully Belgian and I’m currently in Antwerp in Belgium.
Anda: Got it? Got it. Well, I think you have more of an accent than I do. But I don’t know if I can I can hear it ok, so..
Jeroen: What kind of accent? A Belgian one or?
Anda: I think so. I don’t know. Yeah. I can’t quite place it. I don’t think I’ve heard it before.
Jeroen: No, I have a few colleagues. One is from Virginia. One is from Connecticut. I don’t know whether I’m taking over some of the accents. But anyway. We’re here to talk startups. And I was told you have a pretty interesting story when it comes to Knotch. So maybe it’s good first that you introduce what Knotch does for those who don’t know yet. What do you guys do?
Anda: Yeah, well, you know, what we do has really evolved since we first got started, which is part of the reason why the story is interesting. We are a content intelligence platform. So we work with big companies and medium sized companies, and hopefully soon, small companies as well, to help them understand how their content efforts are impacting their business. And to help them optimize how to create content strategy, content creative media strategies, etc. So that’s what we do – all about connecting content to outcomes. And we have a big vision for what the company could be given the fact that content has become really the new strategy for almost everyone, especially since since COVID. Very excited to be in this space. But it’s been like that since we first started, I’ll say that!
Jeroen: I’m, well, we’re big into content as well at Salesflare. Maybe a little intro for those watching, I think was mentioned probably before, but I’m Jeroen, the Co-Founder and CEO of Salesflare, and Anda is Co-Founder and CEO of Knotch, I suppose. I looked at your website yesterday, because I wanted to try it. But it says get a demo and there’s no pricing. So, for me, as a smaller business, that kind of scares me.
Anda: Yeah, it usually means it’s expensive.
Jeroen: Yeah. That’s what I thought. Yeah. It sounds interesting. We do a lot in content marketing and tracking it better. We’re currently using Google Analytics. And it’s, well, in combination with segment and I don’t know what, then trying to query some stuff in a big query. But it’s very, very hard to track things. Is that specifically what Knotch focuses on? Or?
Anda: Yeah, exactly. It’s really difficult to track content performance because – number one reason is because you have to pull in a bunch of different datasets from a few different platforms, and the data tends to be siloed. This problem or friction point is even bigger in a big company, because you have an SEO team, and then you have a CDP team, have an analytics team.. And so, usually the content team, which is a different team, has to pull in data from everyone. And everyone gives them the data in different formats; the data doesn’t talk to each other. And ultimately, content is not just meant to drive conversion. Oftentimes we create content, because we’re trying to educate people, and we’re trying to build brand awareness, or we’re trying to build an audience, right? Like we’re trying to get people to sign up to newsletters. So how do you map content to business outcomes? And then how do you build measurement frameworks that correlate content to those outcomes? And then finally, how do you streamline the data collection and the data analysis, so that these, these insights, aren’t like, you know, a month later when you’ve managed to put all your Excel together, but they’re actually real time, enabling you to be kind of agile and data driven. We are definitely going down market. So we’re going, we’re focusing on small businesses later this year. But we’ve been, we started with like, the biggest of the biggest, you know: Ford, Bank of America, J.P. Morgan. And now we’re working with Square and Dropbox, and a few kind of – we’re calling them smaller companies – they’re still huge obviously. And we’re starting to think, okay, what’s the self serve product that you could just come to our website and sign up to? So we are now our own customer, because we also make content. So we’re like the guinea pig for the small business offering, and we’re building it aggressively over the next six months.
Jeroen: That’s cool. I’m looking forward to that. Because the main issue we are having is that our content – I mean, a part of it drives direct conversions, but a large part doesn’t. It’s just first contact point with our brands.
Anda: Like that’s the question – and what does it do? And should you be continuing to make it or not? Should we make some of it or not? Yeah, there’s a lot of questions that are currently unanswered, and I think the teams are just just using their gut.
Jeroen: Yeah. Now the going down market is also very interesting. We’re personally going up market. So let’s discuss that perhaps. I’ve marked it as a topic. But first, maybe, the founding story. Knotch wasn’t a content intelligence platform, if you want to call it like that.
Anda: I do want to call it that. I am trying to create that category. So please, please keep using those words.
Jeroen: It’s like Rand Fishkin is trying to call his SparkToro audience intelligence platform. I think you’re trying to do this. But you guys didn’t start off like that. Right? It started off like a social network, sort of..
Anda: Yeah. So we started off as a social network that was connecting people based on their opinions about something. So you could you could come to the Knotch, the consumer app, it was a mobile app, and share how you feel about Trump, for example, and see how everyone else felt. And you could kind of filter through to see the positive opinions, the negative, the neutrals. And the opinions would then start conversation threads. So you would have people, sometimes fighting, sometimes debating. And it was fascinating to see the type of engagement that we got. We, we grew the community pretty quickly. We got featured by Apple as as one of the main kind of apps in the app store. And at the time, that was still a great thing. I actually don’t know if now it gets you any downloads anymore but, at the time, it was a massive thing. And the issue honestly was that it was really difficult to moderate the community and to ensure that we are continuing to host and encourage high quality conversation, safe conversation, etc. And I think that’s what we are seeing a lot of these massive social networks run into now. And also not be able to really have great answers to how they’re going to solve for those problems. But for me, and my Co-Founder, we didn’t feel particularly passionate about that problem. We were data nerds. I’m a data nerd. He’s a design nerd. We built a beautiful app that was collecting great data. But we weren’t necessarily the entrepreneurs that were going to build the next social network. We wanted to just be in the world of data and to empower people to kind of better understand that data and make decisions based on the data. And so, in a weird way, what we now do was really what we always wanted to do, we just took a different start to it. Which happens a lot. I’m seeing you you’re playing with your dog.
Jeroen: Yeah, no, my dog is snoring a bit too loudly. So I had to stop and just hit it with a toy. I threw a little plush toy on her and she’s still sleeping. Anyways, it happens.. So I think you even raised funding with social network, right? How is it to raise funding with an initial idea and then switch it? I know that it happens. For instance, to the founders of Slack – they raised money for a game thing and then turned it into a team chat application or collaboration app. Yeah. How did that work out for you?
Anda: Well, look, I think fundraising has a really simple rule, which is ‘You have to raise money from good people’. And if you raise money from good people, you’re fine. Like they know that the reality of the journey is that it changes and, by the way, it should change. Because if it’s not changing, then you’re not responding to the signals that you’re getting from the market. I don’t think there’s a lot of examples out there of entrepreneurs who started with a really clear idea, and continued executing on the exact same idea all the way to IPO. I really don’t. So, the right investors are going to get behind an entrepreneur, not behind an idea, especially early stage. And they will continue to support the entrepreneur, as they go through their journey of figuring things out. And I’m a first time entrepreneur, and so is my co-founder. So some of this stuff is just, it’s just normal, right? Like, entrepreneurs don’t start companies because they are people who like to learn from other people’s lessons, or from books. We start companies because we like to hit our own head against the wall, which, by the very definition of it, means that we’re going to learn the lessons the hard way. So the investors that are investing in first time entrepreneurs, I think they should expect that that the idea will change, a product will change, the team will change, the market will change etc.
Jeroen: Yeah. And how big was your team when you made that pivot?
Anda: Six to seven people. It was really just me and my co-founder and our early set of engineers that we were we were working with at the time. And we also moved the company from Silicon Valley to New York. So all of us moved to New York.
Jeroen: Wow! And everybody was on board with all that change, or.. ?
Anda: Eventually.. It probably took 6 to 12 months for everyone to get on board and for everyone to to move. I think we had one or two people that continued working with us remotely. And then eventually we parted ways and we continued building the team in New York.
Jeroen: Yeah. Okay. So it wasn’t, it wasn’t too big of an issue. I mean, the move was maybe the biggest issue to overcome. How many co-founders do you have?
Anda: Just one.
Jeroen: Just one? What does your co-founder do? He is, he’s like responsible as a CTO as I hear it.
Anda: He’s.. his background is in design. Both of us have a kind of a deep level of technical expertise that it’s like a muscle that we have, but we haven’t really used in a long time. So we know enough to be dangerous and we know enough to engage In a really productive conversation with the engineering team. But he, he’s the design nerd, and I’m the data nerd. So I run revenue and all the functions that ladder up into that. And there’s growing, we are kind of inventing a new function every like two to three months now. I run Marketing, People, Finance, Operations, etc. And then Aaron, my co-founder runs Product Design and Engineering. And Marketing and People actually reports into both of us. But you know, we cross over into each other’s territory all the time. And he works very closely with our CRO, and I work very closely with the lead engineers, especially on projects that are more data science driven.
Jeroen: Yeah, yeah. So it sounds a bit like the split I have with my co-founder. Also, he’s more on a technical side, more to the product and engineering and all those kind of things, and I do the things that you do. Very similar split. How do you think, by the way then, if you think about responsibility split, how do you think about equity splits? How did you guys arrange that? Did you go for a 50/50 split? Or did you use a more complex formula that is maybe fair in some way? Or?
Anda: Yeah, well, let me speak maybe less about us. We’ve had, we had kind of unique situation, because I actually started the consumer facing product with a different co-founder, and started or restarted Knotch as what it is today with my current co-founder. But in general, I’ve advised many founders, and I’ve seen a lot of friends start companies. And the default is let’s split it all equally. I am personally not a big fan of that, after having seen how that plays out in a few different situations. And the reason why is because it’s very rare that an idea and the passion behind that idea, and the blood, sweat and tears behind that idea, is equally distributed across the founding team. Usually there’s one person that’s really leading the charge – the person who had the original idea. The person who is going to kind of go to the ends of the earth to the world to make this happen. And so I would say that person should have some level of a controlling stake. Whether it’s, you know, if there’s three co-founders having like one to 2% more, or if it’s two co-founders having one to 2% more. I think that’d be fair. Because you never want to be in a stalemate, you don’t want to be blocked by indecision, and recognition as to who’s going to actually make the final call is important in the in the equity split, that’s my opinion. And then the second situation is where you have a founder who, you know, starts the company, raises the money, hires, maybe like an outsourcing team to build an MVP, and then goes out to find a co-founder who’s technical or product, etc. And I don’t think there’s such a thing as an equal co-founder at that stage. I think there’s probably a, you know, a 10% co-founder at that stage. And I think it’s really dangerous to give someone between 10 to 30%. I think you’re either above the 30% with a with a kind of true equal partner, or you’re below and around the 10% with with a co-founder who’s taking a big risk, but by then you already have money to pay them, etc, etc.
Jeroen: Now, what’s exactly so dangerous about 10 to 30% range, you think?
Anda: It’s not dangerous, it’s just that it’s I think it’s kind of wasted equity, because I think the the co-founders who have the passion and the desire to take on the risk early deserve to have almost equal share to the original founders, so to say. And the co-founders who don’t want to take that risk early and don’t have the appetite, and want to get a salary on top of the equity, I don’t think they deserve to get more than 10%. I’ve just kind of seen it play out in a lot of different examples all around me.
Jeroen: Yeah. Actually, to oppose your case, my co-founder and I started together. You know, we got the idea together, we started working on it together, and we split everything 50/50. Yeah, I know that this is a one specific case whereas you are in a totally different one. And there’s something to say there as well. We thought for a moment about how to split equity but in the end we took on the challenge together. We said 50/50 and we went for it.
Anda: I think that works perfectly well. Maybe it’s because I’m Eastern European. I like to think about the worst case scenarios whenever I make big decisions. And I’ve talked to a lot of investors and said ‘Okay, why do startups fail before they get to series A, let’s say?’. And 95% of the time they fail because of people. People just don’t get along. And typically at some level of co-founder dynamic, because when you enter a relationship like that with someone, it’s almost like a marriage. You have to make sure you have the right values that, you know.. You’re going to have children, you’re going to hire people, you have to make sure that you have the right culture. So, you know, kudos to someone who’s put that much thought into it and got it right. And if everything is swimmingly going well, then everything, you know, is perfect. And your your energies are in sync. Great! But I think, most of the time, there’s some level of friction that appears at some point. And so you want to have someone who’s in charge of making the final decision.
Jeroen: Yeah. No, yeah, in our case, we’re sort of like mom and dad, I guess. We are also a bit of opposed. Like, he’s more maybe more into the emotions, I’m more into the rational stuff. He’s more on the technical side, I’m more on the business. And there’s a bunch of other things that sort of balance things out. He sees it big, I like to keep it under control. So all of that creates a sort of a balance. And so far, I mean, we’ve had differences, obviously, but it’s working out still as a proper marriage. But yeah, I know, it’s a, it’s a risk.
Anda: If you ever raised.. I don’t think you’ve raised money, right?
Jeroen: No, no venture rounds.
Anda: Yeah, if you ever get to raising venture rounds, that’s I think when stuff gets really interesting. Because it will force you to have a lot of conversations that you wouldn’t normally have about types of rights that you have, you know, as as co-founders, as executives, etc. And when you start creating a board, there’s an interesting level of kind of conversations that enter. But it’s great. It’s great to push that off as long, for as long as you can.
Jeroen: Yeah, yeah, we don’t have a board. Exactly, avoiding these kind of external pressures. We prefer, let’s say, an internal search for the right solutions and the truth and not focus too much on what other people think. If you want to have a board, it’s probably very important. I don’t have a whole lot of experience with it so far, so.. to find people that are going to give the advice you need. And you need to be very careful with creating one, I think. I know that you do have a board. How does that work out for you? How do you manage it? How much time do you spend? How does your board sort of look? How did you go about… (it’s a lot of questions at once, sorry), forming it?
Anda: Yeah. So I think it’s important to not raise money too early, and to not create a board too early. So so I was advising someone who used to work on team Knotch who’s gone on to start her own company. And she’s raising her, she raised a pre-seed, and she’s now raising a seed. And she said, you know, and I’m going to give this person a board seat. And I said, wait, wait, what, why? Why are you giving a board seed? Or seed seat at seed? It doesn’t make sense. And she said: ‘Well, I know I’m sending investor updates monthly.’ So why are you sending investor updates monthly? Who are you doing that for? Is it helping you? Or is it helping them? So I think it’s really important not to get caught up in the dynamics of investors, boards, etc. And to do whatever makes sense for your business. Because, as a CEO, your job is to prioritise the company, not to prioritise other people’s wishes and what TechCrunch says you need to do. So, for me, I have a simple rule, which is raise money from good people. And that simple rule applies to the board as well, which is put good people on the board. And so our board conversations are actually very productive. It doesn’t feel like, you know, going to the dentist and being in the chair for three hours as they examine everything that’s good and bad. It truly feels like a conversation. And I think it’s partially because of them. And partially because I don’t like surprises in board meetings. So I catch up with my board members, probably on a monthly basis with one of them. I have a catch up every two weeks with another. I probably talk every month with another. I probably talk every three months. But overall, we have a really good cadence of radical candour and really honest conversations. And so when we get to the board meeting, which I just had this week, partially why I’m in Manhattan. When we get to the board meeting, it’s really just about here are three conversation topics that we need your brains on. And I have my two most important executives in the meeting and we’re all just brainstorming essentially. So yeah, I believe in board meetings. They’ve helped me tremendously. It’s a good forcing function because every three months I get together with my executive team and we look at the numbers, we ask ourselves the hard questions, we test our assumptions. And then we, you know, do all of that in front of the board as well.
Jeroen: Yeah. Linking a question from the audience to that. So an audience member is asking: ‘What type of support do you consider the most important for a founder in an early stage startup? Is it financial support, educational support, mentorship one on one?’ So maybe what is the sort of support you look for in in board members? Maybe to link it up to the rest of the conversation? And, and maybe, beyond the board members as well?
Anda: Yeah. So I think for early stage founders, obviously not the board, because I don’t think you should have a board if you’re that early stage. So what’s the most important support you can have as an early stage founder? I think it’s emotional support. And maybe that was not the answer that was expected or intended. But I don’t think we spend enough time as founders talking about mental health, and the importance of having a really good system of friends, family, partners, whatever it is, and other founders, that you can truly be open and vulnerable to. And, you know, I’ve had, I have a lot of friends who struggle and have struggled in many different ways. When I was living in Silicon Valley, three of my friends committed suicide. And they were all early stage founders. So the pressure that you’re under, the chaos, it’s, it’s very intense. I think Elon Musk said that being a founder feels like eating glass while staring into the abyss. And there’s a point, at least once a day, when I feel that way. So I think it’s important to have emotional support, especially in the early stages, when it’s just so everyday feels like a battle for survival. Other types of support, I think, other founders that have gone through this. It’s just incredible to be surrounded by people who can listen and then say ‘You know what, I tried that one and it didn’t work out for this, this and this reason’. And I think I’ve saved a lot of time by having some of these friends and mentors around me. And then finally, I think it’s important to have one to two practitioners. So ultimately, we’re all building products, especially if you’re a B2B, like enterprise software company. We’re all building products for customers. So I think having one to two, you know, real customers that you have around you, that can critique you in a way, and you can bring early ideas to, and get good feedback from, is really important as well.
Jeroen: Yeah, that makes a lot of sense. Actually, I have a podcast, and on that podcast, we try to uncover for founders like what it is they do to stay sane. And it’s a bit different for everyone. I personally spend, give a lot of importance to sleeping. I recently started eating differently as well. Habits and when it comes to splitting up time a bit not not be stuck to the phone all day. And take everything with a sort of we’ll call it stoic per se. So I personally don’t have the glass eating abyss this kind of feeling anymore. Because in initial stages, I must say, very much. When we were always running out of money, and some other thing was, you know, you could see the whole thing crashing before you could pull it back up. Then yeah..
Anda: I go through stages. I went through that stage early on, and then I, and then, you know, it was great. And you kind of, I think when you’re, when you’re growing, you kind of go whoop, and then you go like that, and then you go whoop and then you go like that. And it’s it’s it’s kind of the journey, right? It never goes up like this. It just kind of goes like that. And so I think my, my eating glass feelings really depend on whether we’re on the up curve or on the down curve. But yeah, good for you! I mean, I’ve tried everything from meditation to, you know, journaling before going to sleep, journaling when I wake up. You know, running. I change my diet 50 times. I do intermittent fasting, I stopped drinking, I drank more. I I’ve done everything. At the end of the day, I’m still human. So I have feelings, and sometimes they take over.
Jeroen: Which of these experiments work best? Which is the one you kept?
Anda: All of them!
Jeroen: You kept all of them??
Anda: I kind of.. Yeah, I mean, I still I still journal, I still intermittent fast. I stopped drinking, then I started drinking. I mean, you know, I just kind of mix it up. I wish I could say to you that I think there’s too many people in the world, and too many entrepreneurs, who say ‘I figured it out!’. It’s really, it’s about, it’s about this vitamin C powder. And if you take it once a day, it’s going to fix all your problems. I haven’t, I haven’t figured it out. I’m, I think I’m just trying to adapt, you know, because building a company means everything’s changing all the time. So we all, we all have to continue changing and adapting and being real with each other.
Jeroen: Yeah, that makes sense. I’ll link to this. There’s a slightly more specific question from Adrian: ‘From your experience, what can founders do to vent or cope with the frustration from one experiment to another? And, in general, the fact that their voice is noise background for many years while building a great product?’
Anda: Well, I don’t know if this is gonna work for other people, but I really like quotes. So I take quotes that resonate with me, and I write them down on these little cards, and I have them all around my desk. One of them.. I’ll give you just a few. So one is ‘If everything feels under control, you’re just not driving fast enough’. And this is a Formula One race driver, so he meant it probably in a different way. But I think it’s very applicable to, to me. And I think to the journey of growth. Because you want to feel like you’re biting more than you can chew. It’s actually a sign of something good, and not a sign of something bad, even though our brains are like ‘Oh my god, what the fuck?!’. Another one is ‘Success is the ability to go from failure to failure with no loss of enthusiasm’. And that I think, relates a lot to what Adrian said in this quote. Because you, you don’t learn from other people’s lessons when you’re building a company. You’re learning from your own lessons. And to do that you have to fail. I think you just have to embrace that failure is is an ally, not an enemy. And you have to teach your team, that failure should be celebrated. And I know we hear this a lot. It’s just so hard to do, because it’s not in our nature, to celebrate failure. But I think especially early on, there’s more failure than there is success. Because you’re learning you’re learning so much. So you have to figure out a way to, to celebrate, to celebrate failure. And just to vent. My poor husband has been my, you know, coach and therapist and friend, and everything in between. So find someone you can torture with all of your feelings. It will make it better.
Jeroen: Find someone who can torture, that’s another quote you can put. Maybe I see a lot of questions starting to come in about first customers, sort of product market fit, and all that. Let’s let’s start moving towards that. Maybe because, in your journey, I think you first found money. How did that work?
Anda: Yeah, well, my first money was my own. And, and then I also managed to get my my grandmother on my mother’s side to give me some money. So she was my earliest investor. And then, once they managed to put a really small initial team together, and start paying them to build the product and quit their jobs, essentially, I did everything I could to get connected to investors and to create relationships with them. So one of my biggest beliefs around fundraising is that it’s really a relationship game more than it is a pitching game. If you’re a first time founder, or if you’re working on a really difficult idea to explain, or just a very new idea that few people would understand, investors are like sheep, they work in herds. And so it’s very rare that you’re going to get, you’re going to go into a herd of sheep and go do one pitch, and then another pitch, another pitch and get different results. Typically, they all go either one way or another. So how do you cause a chain reaction that is in your favour? And the answer for me is you build a set of really strong relationships, with two to three investors that you can convert, before going to the herd. I spent a lot of my time building those relationships and getting people to trust me. Because it’s not about the idea. And it’s not about the product. And it’s not about the market. It’s about the person. And it’s a lot of pressure, right? Because you go in front of these people and you say ‘Trust me, I’m going to build a big company. I don’t know exactly what it’s going to be, how long it’s going to take, who I’m going to do it with, but just trust me.’. And, you know, funny enough, it works. That’s what early stage investors do. They’re, they are really good mind readers and personality readers, and they can tell if you’re the sort of person who will give up when it’s tough. Or you’re going to, you’re going to continue going.
Jeroen: Yeah, that’s good advice. I feel about the same way. We did talk to a series of angels before we raised, and did a whole lot of them, but at some point it stalled. Yeah, it all started acting like a herd. It’s a bit like less like VCs. VCs, they have their little clubs, and they, if they go to a conference, they have the little VC dinner, and they all meet each other. Especially when it’s like, series A and series B, like passing deals to each other and I don’t know what. But still, within the angel community, in a country, usually, they’re also connected. They are in sort of groups, and some know each other, and things go from the one to the other. So if you can convert the first, it’s easy to make it sort of roll over to the other ones.
Anda: Right. I don’t know how it is in Europe, but it sounds like it’s very similar in the US, They’re all very connected. Even VCs. They’re all super connected. And it’s almost like I think it should be illegal, because like collusion – collusion is not legal, you know, for almost any other industry. But in, in this particular realm, they literally call each other and they go ‘Have you met this company? Are you going to put money in?’ And then it just causes the chain reaction.
Jeroen: Yeah, actually, in my previous job, I used to work for one of the major business. He was one of the partners in our company, one of the major business angels in Belgium. And one day I was in the office next to him and I heard him making all these calls. He was like ‘I met this amazing company, you should invest.’ He was really like getting all the others to invest as well. It’s really how it works. And then that on the series A. Series B, I saw a really nice video on that this week, is the founder of Social Capital. On ‘This Week in Startups’, he makes his explanation about how it all works, the one investor working with the next. Then offload their investment and make their whatever. You can google, I suppose. Just ‘This Week in Startups’ and then with I think he’s called Chamath, or something, Founder of Social Capital. Yeah, that’s it. From first funding to first customers, how did you go about that? How did you find them? Or how did they find you? Perhaps? I don’t know.
Anda: Yeah. Very similar approach to how I thought about my first investors, which is that you, you have to get people to believe in you. If you’re selling to big enterprises, right? Like that’s big enterprises, that’s, that’s the game. Its founders and C level executives meet, and the founder sells a vision. And the C level executive says ‘I’m going to give you money in the hopes that you can deliver this for my team. And I’m going to give you a year to get it done.’ So that’s what I did. And that’s why we moved to New York. Because for what we were doing and who we were selling into, at the time, it was a much better environment for me to gain traction in.
Jeroen: The big agencies or the corporates?
Anda: No, actually, not agencies. It was the CMOs. So the the big marketing chiefs of these massive companies who have billions of dollars in investments across agencies, social networks, etc. And they make a lot of decisions around their their tech stack now. So the CTO used to be the only owner of the tech stack. And I think now, technology really has seeped throughout the company. And so the CMO actually has a MarTech stack that they, that they work with, and an AdTech stack, and and more and more stacks that are coming up for marketers. So that’s who I was meeting with. And we started working with these, I think it was two to three big companies at the beginning. And then we expanded that to 10. And then we expanded that to 30. And now we’re expanding that to hundreds.
Jeroen: Yeah. And before you sort of started selling, did you test your idea in some way? And how did that work? That was sort of a question from Eduard.
Anda: So, I wish I could say that I did. I didn’t. It’s not because I shouldn’t have. I think I should have. But I think founders sometimes have this bias to go from research to action, and in nanoseconds. Because, I personally at least, lack the patience to properly test and research something. As the company has scaled, so we’re now almost at 100 people, it’s very hard to be the.. As a founder, I could 100% continue being that person. As a CEO, I’m learning how to, how to act not just as a sole captain of a ship, but as a captain with a team that has to move the ship together with me. And in order to do that, actually testing and researching ideas is really important. Because it gives more people on the team investment in the original idea and the ability to get close to it and understand it deeply. To be a part of the testing process, to become invested in the what and the why, and the how. And then finally, when you’re ready to go execute, to all be aligned, and to start kind of pointing the ship in that direction. But it’s a lesson for me. I wouldn’t say that that’s my DNA. My natural DNA is just to get shit done.
Jeroen: Yeah, similar here. I think we started off, I mean we made a deck and a prototype very quickly. And then we started going around and trying to sell it to people, and they would have all kinds of objections. But we didn’t really super learn much. We did then go back and do customer research. I did like 30 – 40 interviews, while we were starting up sort of the functional specs and developments. And honestly, if I would do it again, I would; I mean, if I would start a new company, I would do that first. But do it as fast as possible. And do some, some minimal tests by putting up a landing page, trying some messaging, and do these kind of things in parallel. Because these kind of interviews, you don’t all schedule them in one block in the week or something. They come. So but I would, I would honestly do a little bit of testing more and researching. before starting. It’s, it’s hard. Because you just want to get started. Because it’s an awesome idea. And I don’t know why, but..
Anda: But it’s also a bit like, you know, I think it’s a famous quote by Henry Ford that ‘I asked what people wanted, and they said a faster horse.’. Right? And he built them a car. So I think it’s a question of also like, are you trying to build an incremental product? Or are you trying to build a category? Like a new, a completely new thing, right? So when you said content intelligence platform. That’s why I’m so insistent that, you know, we say CIP, right? Because I’m trying to create something that doesn’t exist. I’m not trying to build something that’s incrementally better on top of Google Analytics. I’m truly trying to build something new. So you have to be a visionary. You have to obviously do a lot more research and testing. But you have to understand when exactly do you do that and how much do you want to trust it. Because I don’t think many times buyers know what they don’t know. And so, I think your role as a founder is having that gut feeling for the market and what product you should go execute on.
Jeroen: Yeah, but I think a lot of that comes from within your research. Not focusing on like, what would you like to have, but rather like what are the issues you have now. And then thinking about it and thinking like ‘Oh, content marketing, we cannot track it. And we don’t know how much it brings us.’ And then you have this issue, which brings you to a state where it’s like ‘Okay, maybe Google Analytics isn’t good enough. We need something totally different.’
Anda: I think our advice to everyone listening should be ‘Don’t test the idea. Rather research the pain.’ Right? Like really ask questions about the pain that people experience. And then you go build your idea, and put it in market, and have an MVP, and see see how it works.
Jeroen: Yeah, definitely. I think How to Web does workshops on this with with Bob Moesta. But he does this kind of ‘Jobs to Be Done’ workshops. Really looking at what is the exact pain, what is the progress we’re trying to make? What is the buying process? And all this kind of thing.. So, surely look that up in the workshops. And moving from there perhaps to the next phase. We have a question here ‘Was there any clear revelation type of moment when you thought ‘This is it. I’ve made it!’?’ This sounds like a product market fit question, but although product market fit – people say that it comes like that, but does it really?
Anda: Well, I think at a high level, have I ever had a personal feeling that I’ve made it? The answer is no. The constant feeling that I have, on a day to day basis, is that I’m failing forward. I don’t know how else to describe it, except to say that my constant feeling is that I’m failing, but somehow, that adds up to progress. So it’s, it’s interesting. But you, you never really wake up and think ‘What a great job I’ve been doing. This is awesome!’. In terms of product market fit, I think there are moments when, when you, when you think ‘Okay, like, there’s something here’. I don’t think you ever think I’ve made it, but you know, when you get someone to pay you half a million dollars for you to do something, I think you have this moment in the meeting, where you’re being very serious, and everyone’s you know, signing documents and agreeing on things, and then you leave the meeting and you think ‘Holy shit, why are people paying me half a million dollars? Like, are they insane? Can’t it just realise that I’m still trying to figure this out?’. I think there’s moments like that. A bit of imposter syndrome, I think, that gets embedded in all of that with, with the entrepreneurial journey. But I don’t think product market fit is is a one and done. I don’t think you get there and then, you know, you just stop focusing on product and on market and on fit. I think the market always changes, customer demand always changes, your team changes, your assumptions change. And you have to constantly evolve the product. We launched a new product earlier. No, actually last year, and it had its own product market fit challenges. And how does it then fit with our current product? And now we’re actually merging the two products into a platform. And that’s going to have its own, you know, platform market fit questions. So it never ends. It’s, it’s a constant changing environment, and the chaos doesn’t end or become any smaller. It just changes in nature.
Jeroen: And do you have any thoughts on how to look for product market fit? Do you have any system there? Or is it just based on general gut feeling? And I don’t know..
Anda: Yeah. So I think it’s not really a system. I can tell you how investors think about it. And I think we can, we can talk about investors and all their downsides. But you know, the thing that they are pretty good at is figuring out when companies have reached certain tipping points. So there’s, from a revenue perspective, there’s a few stages, you have the zero to one or zero to $2 million. And that’s the stage of let’s just throw shit at the wall and see what sticks and you know, you get your initial customers. And then the question becomes, can you renew those customers? Can you go find more customers like that? Do you have the team to really support the growth? Is the product ready to scale? So you go from ‘I have a product, and I don’t know if someone’s going to buy it’, to ‘I have a product, I know some people are going to buy it. Now, how do I support that? How do I scale it? How do I, you know, build the team around it, etc?’. So that’s the zero to two. And that’s, I think, usually, when companies raise a series A. Then, you have the kind of one to five, or one to six or seven, depends really on your ACV. But that’s I would say the stage where you go ‘Okay, well, I can sort of think about how I support it, I can sort of hire a team. We can sort of scale the product.’ And that’s when you raise your Series B. Is to is to say ‘Okay, we’ve come longer, we now feel like we have the initial product market fit. And now we’re going to raise money to hire an executive team that has done this before.’ And all they do is come in, take the kernel of an idea, and just scale it out. That’s, that’s actually – I have found that to be a really difficult stage because you have to create a new foundation for the company, and for the product, and for the go to market strategy. And then when you have that team really come in, you start scaling, and you see the kind of, you know, 10 to 100 million kind of growth. And you probably have one other stage around 30 to 50 million when you may have to do another team change, you may have to rethink your processes, because things tend to break at those levels. So you break after one, you break after five or six, you break after 30, and then you break around 100 again, and rebuild.
Jeroen: Yeah. I think most of the foreigners listening to this are probably rather early stage founders. So what, what advice would you have for them regarding finding product market fit like don’t do this or do this?
Anda: Yeah. I think don’t don’t waste time trying to push a rope up a hill. I don’t know if everyone’s familiar with that. It’s, it’s an American saying. Well, you know how if you’re trying to push a rope up vertically you can’t, cause it bends. So oftentimes, because we are very ambitious, diligent people, we will find a customer and say for sure they’re going to want what I have. And you have a meeting with them. And they say ‘Oh, this is really interesting. You know, you should meet my innovation partner. There’s this innovation budget, we’re going to give to this.’ And the first thing is innovation budgets are bad news. You don’t want to come out of the innovation budget, because that budget is not replicable. Second, if you if you don’t go if you don’t come out of a meeting, with people nodding their heads and saying ‘This is a pain, and I really need you to solve this’, then it’s still – you haven’t found product market fit. Even if they give you money, even if they’re ready to trial or experiment something. So don’t confuse that with real data. And I think just keep going back, and iterating on your pitch, and iterating on your product until you come out of a meeting and everyone’s like ‘I desperately need that.’
Jeroen: Yeah, well, yeah. The people you’re targeting at least. I think that the founder of, I’m forgetting now, the emailing app. Do you know what I mean? Well, you think..
Jeroen: Again, mailbox? No, no, it’s another one. A newer one where you pay a subscription. It doesn’t matter. He thinks about it that way. If I think 40% of your target markets would not be able to live without your product, they would be very disappointed, then you have found product market fit. But there’s two ways of doing that. It’s adapting a product, or it’s adapting your markets. Because it’s product market fit after all, and it can be if you just focused on very much on the right markets, then you could find product market fit that way. Thinking about it.
Anda: I think it’s hard. I think you you research the pain, and you start with the pain. Right? So if people in my case, they would say to me ‘Content is just really hard to measure. It’s it’s just really hard.’. And then you say ‘Okay, how and why? And how do you measure it today? And tell me more? And how are the data flows going from this data to this other team? Does anyone make decisions around it? You know, do you believe content is an important driver of business?’. Like you just ask a lot of questions. I don’t think you necessarily have to change the market once you found the pain. But make sure you find pain before you build a product. And then once you found the pain, just really get very curious about the pain.
Jeroen: Yeah, yeah. Linked to that, linked to the questions you just asked. And hypothetical person. Corina asked the question ‘How should startups go around investing in branded content? And how about established SMEs versus larger businesses?’ Maybe we can enlarge this discussion towards not just branded content, but content marketing. When should startups start thinking about investing in content marketing? And well, how should they think about it?
Anda: First of all, this market is so early that branded content and content marketing could be the same thing, it could be different things. So you know, different people have different definitions for branded content and for content marketing. So I think of any content that is created by a non editorial news organisation, as both branded content and content marketing. So as long as the content is coming from Knotch, that content has a commercial purpose. We’re not making content to tell the world about the latest thing that happened in Cluj, but we’re telling them about content intelligence. And our purpose is commercial. We want eventually to get buyers to understand more about content intelligence, and eventually buy Knotch. So I don’t think.. I actually think you have to start as soon as you can. In the early early stages, you have existential problems. Like you need to figure out how to survive. You have to find a co-founder, figure out your equity split, you have to figure out how to, you know, eat and have money to eat. You have to, you’re just dealing with stuff that’s bigger fish to fry, so to say. But I think as soon as you have your initial team and you have some level of stability, content is the secret weapon and a strategy that a lot of disruptors have used to build a loyal audience, and the loyal following, that eventually becomes a customer base. And then even after they become a customer base, we are seeing more and more companies continue to create content in order to further attract that customer base and keep them engaged. So even when we work with Dropbox, they are deploying our technology on presale content, so really high level content that they’re doing with the New York Times to just raise awareness. They’re deploying us on educational content. They’re deploying those on product content. And their actually also deploying us on there developer guides, which is post sale content. And in that way, we’re able to follow the entire journey and understand the inflection points in that customer’s journey with Dropbox, based on the content they’re consuming. So I think it’s, it’s really good to start early. The barrier to entry is so low. You can, as a founder, you can just start writing LinkedIn posts, you can create your blog, right? And drive people back to your website. And use your content as an acquisition mechanism. And I think it’s important to be opinionated about what you’re building and create a thought leadership brand for your company. Because ultimately, we’re all trying to disrupt someone else, right? And so creating authority and credibility on a topic is super, super important.
Jeroen: Yeah. Maybe to contradict you slightly. Just two different opinions. We try, we have an enormous amount of content marketing right now. But in the very first, I think two years or something, after we started, we had zero content marketing, I always stayed away from it, because I knew it was an enormous amount of work, at least if you if you want to go for it, really, it’s a lot of work. So I really focused on making sure we had the right product, selling ads and all those kind of things basically surviving, it’s only after we started sort of going from a very manual sales process to slightly more self guided when we started launching online. Like that you could start a trial. It was then we started switching to content marketing. Now we have content marketing all across the funnel from very top of funnel content, that drives a lot of traffic but doesn’t convert very well, to very, very close related content to the product. Like if you if you type ‘how to send a mass email’ in Google, you’ll find it somewhere, and then it’s explained how you do it with Salesflare. You know? And it works really well for us. But I wouldn’t I wouldn’t start too early, personally, I don’t know what I would do if I would start over again actually. And by the way, for those interested, on our blog, we have a startup funding masterclass. If you Google ‘startup funding masterclass Salesflare’, you’ll find it. And we also have a content marketing masterclass. Just type ‘content marketing masterclass Salesflare’ in Google and you’ll find it. And you can go way deeper in the topics that we discussed today. How do you guys use content? As a content intelligence company, what is the advice you can give? Is there any secret nugget you have that you can now share with all the rest of us, and it’s not secret anymore? Or?
Anda: Well, I think our biggest secret weapon is that we use Knotch. But, and you know, coming soon. So stay tuned, for everyone to have access to it. But I think it’s important to have, as you described, to have a content strategy that aligns to your customer journey. And I know it sounds simple, but actually, a lot of people don’t do it. Even in the really big companies who have, you know, 50 person content teams. You ask them ‘Why do you make content?’ And sometimes, most of the time actually, people don’t really know what the answer is. So knowing that you are creating a set of content assets that are meant to educate people, and measuring them against that, not conversion, because you’re really just putting them out there to have them at the top of the funnel or the beginning of the customer journey. And then set of content assets that are meant to drive conversion, and measuring them against what they’re what they’re intended to do. But I don’t think, I don’t think there’s a secret sauce. I think, really, just creating high quality content to separate from the noise is the most important thing.
Jeroen: And if you if you create top of funnel content, what are some of the best tips to to actually make sure that these people come back? Like, because if they’re reading that and they won’t to convert, how do you make sure they get the actually convert at some point?
Anda: Yeah, I think it’s really important to to not just create content for SEO purposes. I think a lot of small companies think that if they win at the SEO ranking game, they win at everything. SEO is just getting people to your content. The real question is ‘Are they getting value out of your content?’. So, I mean, that’s really a big part of what we do, is figuring out, you know, are they getting value? And are they likely to come back? But ultimately, you just have to put yourself in the shoes of your customer and have a lot of empathy for what they actually would like to read. Not just the title they would like to kind of land on. Yeah, I know we only have two minutes and I saw a question come up, and I just wanted to quickly take it, if you don’t mind.
Jeroen: Go for it. What’s the question?
Anda: So Radu said: ‘How many times did you think of giving up and what made you not to?’ And I actually want to ask you first. Have you ever thought about giving up?
Jeroen: Really giving up? No. I mean, feeling like ‘Oh my god’. Sure. But I have not thought yet about actually saying like ‘Okay, I stop today. This is it!’
Anda: So you’ve never done it. But have you thought about it?
Jeroen: No, I’ve never thought about ‘Okay, this is the day. I’m going to think about talking to my co-founder or whatever’, no. So I think we’re at zero. But what made me stick with Salesflare, it’s the fact that we’re building something. And that, despite all the steps backwards, I can see us going forward, like you said earlier, failing forward. And the fact just that we’re building product, we’re building a brand, we’re building a team. We have customers on board that are really hoping we succeed, because they put all their data in our CRM. So it’s really all that that keeps me going. And a team that is on board, that has a job, that enjoys working together, tight knit sort of little community. That makes that it’s not just about me anymore. It’s a, it’s something bigger that I cannot just just drop from one day to another. So it’s, it comes with with responsibility, I would say.
Anda: Yeah. Yeah, that makes sense. I’ve always said that I think there’s one simple rule to entrepreneurship, which is that companies don’t fail, people give up. And so if you want to succeed, just never give up. And to that extent, I don’t even think it matters how many times a day you think about giving up, as long as you don’t give up. And I think what keeps you going is different for different people. Sometimes it’s the team, sometimes the product, it’s the mission, it’s, you know, it’s your dog. Whatever makes you not give up. Latch on to that thing and just don’t give up and eventually you will succeed.
Jeroen: Oh, I think we can end with that. Because we’re on the hour now. Never give up. So guys keep going, keep going, and see you on the next How to Web Live.
Anda: Cool. Thank you so much for interviewing me and for having a great chat today!
Jeroen: Thank you for being a great guest!10
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Welcome to How to Web Live! The show you need to watch to find out the latest news and trends from who’s who in the tech industry. Every other Thursday, log in on Crowdcast and get inspired! This tenth episode titled ”Building Startups the Right Way”, that aired on January 28, 2021, we had Anda… Read more »10