Cello: How a Scrappy MVP Became a 7-Figure SaaS with 7M Users – with Stefan Bader [445]

This is a machine-generated transcript.

[00:00:00] Omer: Stefan, welcome to the show.

[00:00:01] Stefan: Thanks, Omer for having me.

[00:00:02] Omer: My pleasure. Do you have a favorite quote, something that inspires or motivates you?

[00:00:06] Stefan: I do. Which is also pretty related to what we're doing at Cello. So the the quote is from Charlie Munger. One of the greatest investors of all time. And it goes, probably many of you have heard it.

[00:00:17] Stefan: Show me the incentives and I'll show you the outcome. Fantastic. Quote it true in so many areas of life.

[00:00:24] Omer: Yeah. Yeah, that's a great one. So tell us about Cello. What does the product do? Who's it for and what's the main problem you're helping to solve?

[00:00:32] Stefan: Yeah, so Cello is the first all in one referral platform that allows software companies to launch their own referral programs within hours and on autopilot. So basically everyday users and partners are being monetary incentivized to recommend the products they're using and to get a personal monetary incentive by doing that at the time where customer acquisition costs are rising pretty quickly and at the time where legacy acquisition channels are reaching the end of the S-curve. Cello provides a an alternative to acquire customers virally and and cheaper.

[00:01:09] Omer: Yeah. I think where it really landed for me was when you were telling me earlier that I. On the one hand, you can have these referral programs where, people get a referral link and they can go and use it and maybe there's some kind of, financial incentive or the kind of the B2C space and the Dropbox example where people are getting more storage for referrals.

[00:01:30] Omer: But you get into this really weird space where it's no, it's the users of our customers that we wanna. Incentivize. But how do you do that? They're not paying for the product. It's like, where did this even actually, before we get into that, 'cause that's probably a deeper conversation, just help us understand like where you, where are you currently in terms of the size of the business in terms of revenue, customer size of team.

[00:01:57] Stefan: Sure. Yeah. So we're 19 people spread across Europe and Asia. We're at around two and a half million in ARR. We have, yeah, around 150 customers, close to 7 million, what we call monthly enabled users. So monthly active users of our customers that, can on a monthly basis engage with our product inside their tools.

[00:02:20] Stefan: We have and are very proud of, customers like Miro and Typeform, Veed, Playo, so the best SaaS tools out there, and we help them to grow via referrals.

[00:02:31] Omer: Awesome. So the business was founded in 2022. Tell me what were you doing prior to that? And actually probably the story goes further back because this is something that you experienced firsthand trying to build yourself.

[00:02:45] Omer: But just explain what were you doing before you started this business and where did the idea come from? What I know a lot of it was from your own personal experience and pains and exactly what were you seeing?

[00:02:58] Stefan: Yeah, so maybe I go back to the very beginning and talk a little bit about the inception of Cello.

[00:03:04] Stefan: So I, I started my first company run about 12 years ago in automotive very hostile place to, to start a SaaS company. I can tell you we, we sold the company after five years to Continental. I stayed a few more years. For the Post Marge integration and then became chief Revenue Officer of another SaaS product.

[00:03:23] Stefan: Basically what Square does in the US but focused on, on European markets. So I moved out of automotive connected services into the beautiful world of SaaS and we, we had many users that, were introducing us to new prospects. So referring has new customers. And at some point in time they always, came to us and asked what's in it for me?

[00:03:44] Stefan: If I bring you a few more customers I would also like to get a piece of the cake. Otherwise, I just don't bring you anymore. I. At the time we we didn't have any infrastructure at shore in place for that. We decided, okay, let's maybe get some get some infrastructure in place.

[00:03:59] Stefan: Let's get a referral program up because it's a beautiful customer acquisition channel. And I sent out my growth team just to, do some research and a vendor analysis in order to pick the right the right vendor for that. They came back and basically said, sorry, there is nothing out there that, you know, that we can use for that.

[00:04:17] Stefan: All the tools we were able to find are all like affiliate and influencer type referral platforms, but nothing you can integrate into your product. Nothing that that allows us to pay out users personally and not a business. And it was like an aha moment for me. First of all, I I did a re, I did research myself because I couldn't believe it.

[00:04:35] Stefan: It came to the conclusion their research was pretty buttoned up. And then I thought about building it ourselves because it, it, it used to be quite a, quite an interesting channel for us. But my CFO told me that there isn't, there is no chance because it's too complex. It would require us on the finance side to invest heavily in order to get this to work.

[00:04:55] Stefan: That was basically, the inception story of Cello. I quickly after that I played a little bit around with the idea and then I decided to quit and start this company. Obviously after more research and talking to more founders and growth operators, but. Everyone had to, or seemed to have the same issue.

[00:05:10] Omer: So one question that you get asked a lot, I'm gonna ask as well, if this was such a great idea, why had nobody built it?

[00:05:19] Stefan: Actually, this was the most asked question, especially during our pre-seed fundraise. And at the time I didn't really have a good idea. I think with more time there are a few things that led to, no, no one actually was building that. So first of all, PLG product like growth is a go-to market strategy that hasn't been around since ever, it got more and more adapted in the last five, maybe 10 years. So buying behaviors have changed dramatically. People insight companies are deciding to buy and purchase tools, and then it's being adopted by the team and eventually by the company.

[00:05:54] Stefan: And before that it was just buttoned down. Top, top down, decided by one, one person. That is like a shift in buying behavior. And then it's actually quite a complex product to build, not necessarily because of the technical side also, but also because it requires different compliance layers in order to pay out users personally as a business is quite a non-trivial.

[00:06:19] Stefan: Business transaction. And we had to overcome this not just in one market, but in, in many markets, even with the first customer, because their user bases are usually spread across the world. And therefore, like the first barrier to entry for our product was pretty high from the beginning.

[00:06:34] Omer: So you mentioned you talked to founders, operators you got a sense of what was going on. And this was a pain, that it wasn't just something that you were experiencing personally, but a lot of SaaS companies, B2B SaaS companies were having these challenges. When somebody, at this stage, when somebody's starting to build a product or an MVP, we know the usual thing, right?

[00:07:03] Omer: There's this maybe it's a lightweight, maybe it's a clickable prototype. Maybe it's a user interface, I don't know, whatever. But get something visible in front of customers. But interestingly enough, a lot of your focus was on things like scalability and compliance and all of this stuff. Can you just explain why that was important for you from the start?

[00:07:31] Stefan: Yeah. So as an infrastructure product you have to pay attention on features and details. Many non infrastructure products don't have to pay attention to. As we are, like a, as we become a functionality inside our customer's products it needs to be super reliable that nothing breaks if we're there, right?

[00:07:52] Stefan: It needs to be scalable because in terms of users our scaling has been probably much faster than other SaaS companies would see it out there just because we're like bitty piggybacking on. On our customers, users in terms of compliance, like we had to take a lot of check boxes in order to make the whole process of attribution and rewarding, compliant across multiple countries.

[00:08:15] Stefan: And therefore we had to do many things that require a lot of resources and and attention at the beginning. In order to ship quickly, in order to iterate quickly we were basically sacrificing other things that if you would just ask your customers that these faults would see as must haves, but in the end, they're not necessarily must haves.

[00:08:36] Stefan: So one example I can give is, at the very beginning with the first customers we launched we didn't have a portal to log in. We didn't have a a portal to log in where they would see their analytics, a portal to log in where they could, change the settings of their referral program.

[00:08:51] Stefan: All this basically was either automated and provided via notion, like via notion pages we were just sharing with our customers, or we were asking them about like how the program should behave and what the program parameters should look like. We were like behind the curtain setting everything for them up and running scripts in order to make sure everything is according to their needs.

[00:09:15] Stefan: But we heard like a few times at the beginning, this is not a product, even though we had like an end-to-end working product that does that. Does what? The version one we thought should have. And then over time, obviously we built everything that in addition to that was expected. But we came quite far or we got quite far with that absolute minimal viable product in the end, which helped us to iterate on the areas where we thought there were most important and a referral program in the first place needs to be on, needs to acquire more customers and needs to acquire more revenue. That is like the single most important goal of referral program besides it shouldn't obviously break the product experience and so on, but all the other bells and whistles even though they might be considered if you ask your customers straight away if it's a must have or not, a must have.

[00:10:05] Stefan: They don't really matter at the beginning.

[00:10:07] Omer: First of all, were you charging these customers, these early customers?

[00:10:10] Stefan: Yeah we believe in the alignment of incentives and we also believe in there should not be any roadblocks in order to get something started. What we have therefore, we decided for a freemium success based. Pricing and success in our world means referral ARR so everyone gets through the door for free. And as soon as the program is performing, we're basically charging for that. So even the first customers signed off. On that deal. And then over time, basically we were charging them as soon as the success kicked in.

[00:10:45] Omer: Okay. And so you were using Notion for a dashboard just sending them a link to something that they could look at. You were using like this Wizard of Oz, MVP through Slack where they could, they were getting onboarded and set up and you were writing these Python scripts in the background.

[00:11:00] Omer: And then presumably they had to do some work on their end to embed the solution into their product. A lot of founders would be terrified to get that in front of customers because you're right. It doesn't look like a product. It just looks like a hodgepodge of different things. And how did you navigate that?

[00:11:25] Omer: How did you try to set expectations with customers because I think there's probably a really valuable lesson here that if you can, if more founders could take steps like this to focus on the solution, rather than being overly worried about how beautiful and perfect and complete it looks. You can probably make faster progress, but there's always this thing that you're going to disappoint customers.

[00:12:03] Stefan: That's a great question. We were heavily leaning on selling the value of the product and not necessarily the features and the value of the product is something that you know. Sold or like partially sold one of their biggest issues, which is distribution and customer acquisition at reasonable LTV CAC or sustainable levels.

[00:12:23] Stefan: We also at the very beginning sold via our own network or like direct or indirect network. So therefore we had a certain level of trust with the first customers. I would say and. The overall appearance of, let's say the website and also the sales pitch I can talk a little bit later about that.

[00:12:43] Stefan: I think was pretty, pretty solid and buttoned up that as soon as they entered onboarding I think they were overly convinced that it's gonna be the right solution for them. And then, throughout the onboarding process at the very beginning they found that like just some pieces are not there, but we could convince them that it's not really necessary to have this at this point.

[00:13:03] Stefan: And we will obviously build this over time, which we obviously did did by now. So everything I'm talking right now is like very early and scrappy days of Cello and. As soon as they got it live and they saw the performance. It didn't really matter anymore. It didn't matter if they had to visit a notion page to see the the signups and purchases flying in, or if it would be a, if perfectly crafted dashboard.

[00:13:30] Stefan: They could sign in.

[00:13:32] Omer: Yeah. I think I was gonna say the ultimate lesson here is that we have to remember that customers aren't buying the product they're buying the outcome and sometimes it's easy to get confused and worry about the wrong thing. When we were talking earlier, and I, about growth tactics and how you built the business got into seven figures and beyond.

[00:13:58] Omer: You said to me, we really think about this as a growth system. And explain to me like what you mean by that and was that something that you were very intentional about early on, or is that something that has evolved over time?

[00:14:17] Stefan: First of all, we're building a product for growth managers in the first place.

[00:14:22] Stefan: Some companies don't have growth as a function that it's marketing, but we're. We're come or we're selling into an area where, first of all we had to build up a lot of knowledge about the topic more than, for example, technical founders w would have to do. So we understood our own go to market.

[00:14:40] Stefan: We think about it probably more as growth managers as of classic marketing managers and therefore. We believe that what we're building is like a, an compounding growth system with growth loops at the core, and then linear marketing activities that accelerate those loops.

[00:14:57] Stefan: And if I talk about growth loops what I mean by that is it's basically compounding, compounding input AC activities that lead to a certain output that, again serve as input for the same for example, acquisition channel. So at the core of our growth system is what we call on, what is called in literature casual contact loop, which is like by far the most, the most successful and strongest driver of inbound for us. It's called casual contact loop. And this is this little powered by branding that you will see on our widget. And that, for example has been pioneered by, let's say, intercom or superhuman. So many, companies out there get in touch with us by just casually checking out the referral program of, let's say a mirror or one one of our customers. And it's not just important for us to create, to create new touchpoints with customers, but also very important for the user of a mirror of a Typeform in order to have a first casual contact with Cello. Because in the end, if they're sharing and if they're successful in that referral journey they will be paid out by our platform.

[00:16:02] Stefan: So they know that if something is being paid out by a via a Cello, they know where this is coming from. So therefore we have a quite, quite a nice symbiosis of creating value for the users, but also having a very, impactful acquisition channel for us and all the other growth loops we're building basically around is core growth loop and also all the marketing activities we have lead as accelerator for the growth loops.

[00:16:28] Stefan: We, we have in that system. Some companies out there that you know, heavily lean on marketing campaigns, let's say, where you have a one-off peak and then after the campaign is over it, it dies out. We strongly believe in building, like always compounding systems where we just add more and more to that system in order to make it spin faster.

[00:16:48] Stefan: And I think that's like a more reliable and sustainable way to acquire customers, which makes it also pretty repeatable in, in, in a way. And. It's not just that we're like building this for us, but the division of Cello goes far beyond referrals in the end. So the vision of Cello is to create a growth operating system where we productize different growth loop in order to provide it to, to our customers, whereas user and part of referrals are just the first two growth loops we've built.

[00:17:18] Stefan: And there are many more growth loops that are coming in over the next few months and years.

[00:17:22] Omer: So just explain to me a little bit about this powered by the casual contact that you talked about. So people see this somewhere in, in the product that they're using, it leads them to discover Cello or whatever.

[00:17:37] Omer: So just explain to me one, how that's turning into a potential referral. And then secondly, maybe give me an example of. How you are, like an example of the compounding piece. Like how are you maybe driving people there.

[00:17:55] Stefan: To start with explaining what casual contact loop is? Maybe I start with a more renowned example.

[00:18:00] Stefan: Let's say Intercom, this little chat windows. If you click on that, bubble on the bottom right corner, it opens up intercom, and then at the bottom of that widget it says we run on intercom or something like that. If you click on that on that little button, it leads you to the Intercom site.

[00:18:16] Stefan: So as a user, interacting with this chat window. You will find this little branding and if you click on a branding, you land on the Intercom page and therefore you understand like this is the infrastructure provider for that chat tool. And we basically adapted that and did the same for our referral widget.

[00:18:30] Stefan: So if you click on a, usually our customers use like a gift icon somewhere, place inside the product. If you click on that, our. Referral widget will open. And it also says at the bo at the bottom, share and earn with Cello. If users click on that, they will also land on our website on a, by now, on a monthly on a monthly basis, we have with close to a million users like opening our widget.

[00:18:57] Stefan: And therefore like many eyeballs which leads to quite a decent amount of inbound because we are offering something that hasn't been out there. Hopefully solving a problem. They see, and this is just like at the very core of our engine and around this we're building, additional growth loops and linear activities in order to drive that. What I mean by that is, so if you think of that loop, let's say user clicks on gift icon user opens our widget clicks on that Cello branding lands on our page, signs up as a. Signs up as a customer or like launches Cello inside their product.

[00:19:33] Stefan: More users are being exposed to that widget because all their users can see the referral program in inside their company. And then the loop starts again, right? More users can see it. Their users might be also interested in something like Cello. They become customers and then the loop continues to compound.

[00:19:50] Stefan: And our inbound from referral from casual contact loop is basically pretty linear to the amount of users we're adding to our platform, which is an exponential curve. So it's a pretty. Pretty nice flywheel in itself. And then in order to accelerate this, for example, we obviously also dog food Cello.

[00:20:12] Stefan: So we also use Cello for referrals. If we close more customers via referrals we add more users to our products and therefore more eyeballs on casual contact loop and it also helps compounding the casual contact loop for example,

[00:20:25] Omer: It sounds too simple, right? It's just like in, in the, obviously it's very thought through, but ultimately it boils down to the more people who can see this powered by, logo or whatever in the widget, is ultimately gonna lead to more people discovering Cello, signing up for the product, which is gonna lead to more of their users seeing Cello and ultimately some of them.

[00:20:54] Omer: Becoming customers and if we just keep doing a good job at getting the right people to see this through everything we're doing this exponential growth that, that comes from that

[00:21:08] Stefan: Not every product has a possibility to offer something like this. Like some products are just more closed.

[00:21:14] Stefan: Think of an accounting tool like it's gotta be difficult to implement something like this. But the products that have the possibility to have casual contact loop or, they're more loops out there. Where we will also be shipping products for for example, user generated content. It's beautiful because it.

[00:21:29] Stefan: It compounds it grows exponentially and usually to like very little or even no costs because it's like an organic growth loop. But yeah, it's in the end, everything is more complex than it seems. With our model, we also need to make sure our customers are not just somewhat happy with our product but are actually financially successful because the way we price.

[00:21:53] Stefan: And therefore we, our goal is basically to ship a product that works across different industries that makes our customers financially successful in order for us to to monetize.

[00:22:04] Omer: Let's talk about how specific growth channels that have helped you to go from, the first 10 20 customers to going to the first million in ARR.

[00:22:19] Omer: And I know you invested some effort in content collaborations as a way to do that. Many founders would default to content being, I'm gonna write blog posts, I'm gonna spend time building an audience on LinkedIn, which is not a bad thing to do, but it's also a very slow and painful thing to, to build your own audience.

[00:22:52] Omer: You did that a little bit differently. You found people who already had audiences and you started to build some relationships there. So let's talk a little bit about that.

[00:23:00] Stefan: It's exactly what you said, like you can create content and you can hope that it indexes at some point in order to bring you to like drop feed you leads.

[00:23:08] Stefan: We decided very early on for a different content strategy where we were not so reliant on the Google algo, which I think looking back was quite a good idea with Google crushing everyone's traffic with their AI summaries. So what we decided on is to. Work together with the best content creators in our field in order to create awareness for the problem, but also for the solution in combination with our brand linked to it.

[00:23:39] Stefan: And in order to do this successfully, we are of the opinion that you've gotta start or you gotta aim very high in order to to make it successful. So if we, for example, would've started with a mediocre or with mediocre, type content creators or just content creators that are not so renowned and maybe newer in the field, it would've been more difficult to, from that level get to a higher level.

[00:24:04] Stefan: It's always easier to start very high. And as soon as you work together with the best out there, everyone else is or is gonna be more interested to work together with you. And therefore we aimed as, as high as possible. I got in contact with Kyle Poyar, who is for people that are not so much into growth and and yeah, SaaS pricing for example.

[00:24:23] Stefan: He's like the OG of growth in, in our industry and. As I was anyway, in touch with the VC fund he used to work with, I just asked for an intro. He used to be operating partner at at that VC firm and working together with like founders on a daily basis. And I just asked him like if he would be interested.

[00:24:41] Stefan: Luckily he heard that. He had questions from founders around referrals experimenting with new acquisition channels before, and he just couldn't give good answers. So at the time I was just pretty lucky. He was interested in, in, in writing together a piece where we would deliver proprietary data points and just insides, no one else would have.

[00:25:00] Stefan: And he on the other side would, provide his feedback and expertise, but also obviously his audience, because it was published on his substack, it got sent into tens of thousands of inboxes, which for us was like a kickstart which you usually don't get from like writing content.

[00:25:16] Stefan: And that strategy we we kept doing with other amazing folks in the content space out there. Which led to long form content that also ranks on Google, but also short form short term spikes in terms of inbound because it it's being distributed via subec and via email.

[00:25:35] Stefan: And we then were like recycling that content. Of course also on, on social media which works quite well with our automated outbound motion. What we did there is we go after certain industries that we, for example, have already customers and customer success stories with. We connect via people that are relevant to us with my profile on, on LinkedIn and if they're interested straight away, right? Great. We jump on a call. If they're not interested, it's also fine. But then we're like creating relevant short form content around growth and like closer topics to, to our product. Not directly, but like valuable content. And through that short form content, we're also like nurturing tho those leads over time by just being helpful and creating valuable content and that combination of long form and recycled short form content in combination with our automated outbound motion is like pretty powerful. And yeah, since the early days were like hammering on that and iterating and optimizing it.

[00:26:35] Omer: Kyle has been a guest on the show and I think he's done a great job building a,

[00:26:40] Omer: a pretty big audience in the last few years. Even. He didn't charge you for the content that he created. There was some value exchange that you wanted to get people in your space, educated about this problem and a solution that you were offering, and you had this proprietary data that helped Kyle come up with some good answers and insights to questions that he was already getting asked by founders.

[00:27:13] Omer: So I think there was a good fit there. Was that the same kind of value exchange you worked with other creators? Did you have to pay for content? In principle, it's a great model, right? Go and find people who are the audiences and do this. But a lot of those people are getting overwhelmed by all kinds of pitches all the time.

[00:27:36] Omer: And often if you're going for the relationship angle, that takes time to build. How did you, what were the things that worked well for you to be able to make a breakthrough with some of these creators?

[00:27:52] Stefan: Yeah, so starting with Kyle as said might be a lucky coincidence.

[00:27:57] Stefan: Basically we're breaking up the market for us in terms of collaborations with other relevant content creators because it seems like. Everyone is admiring him and everyone feels better if their content pieces is next to his. So that makes made it way easier to get into the second and third, like unpaid completely organic content collaboration that worked basically across the same along the same lines.

[00:28:20] Stefan: My advice is aim as high as possible. Everything if you don't aim completely high at the beginning, it's gotta be more difficult to climb up again. We also tested with paid collaborations but the results were. Not the same just because of the, it says sponsored and it also has a different vibe.

[00:28:38] Stefan: And I think, people are somewhat or become somewhat blind to to commercials or like advertorials. And so therefore, like the organic content we're, we are creating or we're creating with content creators by just providing like a lot of value to the piece and like our unique insights in an area that.

[00:28:57] Stefan: Is not Red Ocean has been valuable enough that people were actually investing also in it in order to create something valuable for the community. So that is if you can find content, if you can convince amazing content creators out there to collaborate on this everyone benefits.

[00:29:13] Omer: And was the proprietary data the main sort of value exchange that you were leading with when you had these conversations?

[00:29:21] Stefan: Yeah I would say so. Proprietary, like data points and metrics, but also insights in like what, what works, what doesn't work. What we have seen out there to an extent where many companies were scrambling around maybe with their own approaches or ideas, and we were indexing that across like multiple companies in order to come up with like real insights.

[00:29:43] Stefan: Also benchmarks, obviously. So I think that was very helpful because in the end it's difficult to create like a valuable tactical piece if you can't back it up with data. And I think that is what we mostly brought to the table.

[00:29:54] Omer: So you had the content collaborations. You talked about dogfooding your own product and using Cello and referrals and so on, but you're also doing sort of network sales, right? What was all that about?

[00:30:07] Stefan: Network sales was was very important for the beginning of Cello before we had like other other growth loops and channels up. At the beginning we were like heavily leaning in, in, into our network. We were even for our pre-seed rounds, expanding the route in terms of like how many parties we let in.

[00:30:26] Stefan: So we we got six micro funds on board for our pre-seed and quite a couple of angels that were functioning as as design partners for early Cello. Then also obviously via those micro funds in their portfolios, but also via our angels. We were heavily leading on, on, on network sales at the beginning, which is I think the way to go at the very early days.

[00:30:50] Stefan: Later on as we got a bit bigger we. Layered other waste ways to ac acquire customers on top of it. So network sales now has become maybe, I dunno, 5%, where at the very beginning it was, at the very beginning it was a hundred percent, and then it it shrunk over time.

[00:31:09] Omer: So just explain to me a little bit break that down.

[00:31:10] Omer: Like what, how were you, what were you doing? How were you figuring out who you were gonna sell to? Just help us understand that next level of detail here.

[00:31:23] Stefan: Think about us as a, as a pre, pre-seed company, no product, but a vision and a slide deck. I was reaching out to basically people in my network and in order to get them committed to implement Cello, I basically offered them a a little ticket in our pre-seed round, like they were, at, to some point.

[00:31:47] Stefan: Excited and convinced about. If it works it's gotta be pretty good. And therefore, like those commitments helped us also to to close the round because we had like first design partners lined up and those commitments also helped us to build the product in the early days, because even though not everything was was perfect they had shared incentives because they were also investors in, in, in the company.

[00:32:08] Stefan: And those first customers helped us also to convince like the next customers and the next customers. So we basically leveraged our pre-seed funding round in order to get like really strong commitments from first customers in the end. And then like indirect networks we had micro funds that have like tens and hundreds of sales companies.

[00:32:30] Stefan: So obviously it's easier to sell some to someone where you get an intro compared to blindly and called outreach and that helped us at the very beginning a lot.

[00:32:40] Omer: So you were very intentional about who you were, you who you were like identifying as potential investors who you would, who you were spending most of your time and effort trying to reach out to, because there was a, it was not just about the investment side, it was also about the fit and the additional potential value that comes from that type of relationship.

[00:33:07] Stefan: Yeah, a hundred percent. I think especially for early stage companies, they should always leverage funding rounds in, in order to also think about sales and in order to build that pipeline.

[00:33:17] Stefan: And the earlier it is, the more, the bigger party round can be that it's also meaningful for angels because at a later point in time, let's say post series A the tickets will be so big that not many, angels will benefit from participating in such a round. So it's really about the pre-seed and seed rounds where you can apply this tactic.

[00:33:37] Stefan: And I think you should always have this in mind when raising in the earlier rounds.

[00:33:40] Omer: Cool. Okay. We're gonna have to wrap up soon, but I want to ask you one question before we, we do that, and it, I think it in many ways reflects the way that you guys are building this business and the people around you that many founders, the first or second hire.

[00:34:03] Omer: You expect it to be a developer. Your background as a CRO, maybe the first or second hire is a sales guy. I don't know. But your second employee was head of people. Like why?

[00:34:19] Stefan: Yeah. I get this question asked a lot. If people hear about that and is I think it goes against everything you will read in any book.

[00:34:26] Stefan: I would say most founders would agree that, their team, their people are the most important asset. And if you can't make sure to to hire and retain and enable a great team you will basically not be successful. While saying that people related topics always fall short because there, there are more urgent topics on, on, on the founder's plate.

[00:34:47] Stefan: If it's sales, if it's investor relation, if it's onboarding a customer, fixing a bike, whatever and I made this ex experience before. So what we wanted to make sure that whatever comes, whatever the, me and my co-founder will be busy with or think that is more important than people topic topics.

[00:35:03] Stefan: We have someone that is super passionate and skilled about making sure to identify and hire and retain the best talent out there and create like a great like performance culture at Cello. Because even though I want to do it I just, I'm after doing it my second time, I'm like self-reflected enough that it won't work like this.

[00:35:25] Stefan: So therefore we decide very early on to, to hire Philip as as head of people with a special profile though. So Philip is is a, is an amazing generalist with a t shape and a strong skillset in, in, in the people area. But he's also in times where we, for example, don't hire people or don't have enough work on the people side as, for example, we, if we, if you free freeze hiring, for example, he's journalistic enough that he helps out in other areas, which I think is also like an important part of the story.

[00:35:56] Stefan: But therefore we can make sure that everything around people is just. At the highest possible bar. We can think of. And I think this is we believe this is really paying off. But on the other side he can also give hands on, on, in, in other areas where he's supporting and even owning like a whole, whole other areas.

[00:36:13] Omer: That makes a lot more sense. The idea of a team of three and you've got a head of people who is there enough for this person to be doing at that point. Unless you're hiring like hundreds of people, it's gonna, but that makes, make more sense. Okay. Let's let's wrap up. I got let's, seven quick five questions for you.

[00:36:30] Omer: I just try to answer 'em as quickly as you can. You ready? Sure. Let's do it. What's one of the best pieces of business advice you've received?

[00:36:36] Stefan: I think I go with an old school advice, do things that don't scale, that helped us a lot in the past.

[00:36:42] Omer: Or actually in your case, do the things that need to scale and also do things that don't scale.

[00:36:47] Omer: Pick your battles. Yeah. Yeah. What book would you recommend to our audience and why?

[00:36:53] Stefan: For everything getting into Go to market and for me becoming zero I picked the acceleration formula from Mark Roberge. Big fan, and I think generally for managers multipliers.

[00:37:05] Omer: Great. What's one ca what's one attribute or characteristic in your mind of a successful founder?

[00:37:11] Stefan: I would pick perseverance, but I think it's being mentioned too often, so I would go with having a reality distortion field.

[00:37:18] Omer: I love that. I love that. I think we need more of that in many ways. I think as founders, you try to be such realistic, such realist that you talk yourself out of some of these crazy things.

[00:37:30] Omer: What's your favorite personal productivity tool or habit?

[00:37:34] Stefan: Walking meetings. So if you don't need a screen. Do it at least once a day. Leave the house and do it just while walking. It's like active recovery.

[00:37:42] Omer: What's a new or crazy business idea you'd love to pursue if you had the time?

[00:37:46] Stefan: LLM, SEO.

[00:37:49] Omer: There's a lot of conversations going on about that right now.

[00:37:51] Stefan: Yeah, I think it's a hard topic.

[00:37:53] Omer: What's an interesting or fun fact about you that most people don't know?

[00:37:57] Stefan: Starting my first company, my entrepreneurship professor wanted to talk me out of continuing and like building the business, which is odd.

[00:38:06] Stefan: It's 12 years ago. Things have changed, but yeah I thought, nevermind. I just keep going. And finally, what's one of your most important passions outside of your work? I'm a big football fan, file of bi card if anyone have has had that football club before.

[00:38:22] Omer: Awesome.

[00:38:23] Omer: Stefan, thank you so much for joining me. It's been a pleasure. If people want to check out Cello, they can go to cello.so. And if folks want to get in touch with you, what's the best way for them to do that?

[00:38:34] Stefan: LinkedIn.

[00:38:35] Omer: Great. We'll include link to your profile in the show notes. Awesome. Thank you so much. I appreciate you taking the time to chat. And sharing some of the lessons and struggles that you've experienced along the way of building this business. Hopefully we provided some other founders with some ideas, some insights some inspiration to go and apply to their own business.

[00:38:57] Omer: And I wish you and the team the best of success.

[00:39:00] Stefan: Thanks Omer. Thanks for having me.

[00:39:01] Omer: My pleasure. Cheers.