Street Group: Bootstrapping a SaaS Business to $9+ Million ARR
Heather Staff is the co-founder of Street Group, a UK-based B2B SaaS company that's modernizing the real estate industry and the process of moving home.
Heather and her co-founder (and brother) Tom founded the business in 2016.
When Tom realized how much manual work his father was doing to run his real estate agency in the UK, he decided to build a software solution.
The only problem was that Tom didn't know how to code. He bought a book to teach himself PHP and started figuring out how to build a solution.
What Tom created for his dad was pretty basic. But it made a huge difference to the business and saved his father a lot of time.
After seeing what Tom had built, Heather decided to join him and see if they could sell the product to other real estate agents in their area.
Today, their business does over $9M in annual recurring revenue (ARR) and they have a team of 85 people. And the business is 100% bootstrapped.
In this interview, you'll learn how Heather and Tom went from zero to over $800K in monthly recurring revenue, some big mistakes they made along the way, what Heather would do differently if they were starting over today and why they chose not to raise funding and bootstrap the business instead.
I hope you enjoy it.
TranscriptClick to view transcript
In this episode, I talked to Heather Staff, the co-founder of Street Group. A UK- based B2B SaaS company, that's modernizing the real estate industry and the process of moving home. Heather and her co-founder and brother Tom founded the business in 2016. When Tom realized how much manual work his father was doing to run his real estate agency in the UK, he decided to build a software solution.
The only problem was that Tom didn't know how to code. So, he bought a book to teach himself PHP and started figuring out how to build a solution. What Tom created for his dad was pretty basic, but it made a huge difference to the business and saved his father a ton of time. After seeing what Tom had built, Heather decided to join him and see if they could sell the product to other real estate agents in their area. Today, their business does over $9 million in annual recurring revenue, and they have a team of 85 people, and the business is a hundred percent bootstrapped.
In this interview, you'll learn how Heather and Tom went from zero to over 800K in monthly recurring revenue, some big mistakes they made along the way, what Heather would do differently if they were starting over today and why they chose not to raise funding and bootstrap the business instead.
So, I hope you enjoy it. Heather, welcome to the show.[00:01:49] Heather: Hi, thanks for having me. [00:01:51] Omer: Do you have a favorite quote, something that inspires or motivates you, or just gets you out of bed that you can share with us? [00:01:56] Heather: I think one of my favorites is actually from Ray Daleo, where he says, “In order to be successful, you have to be an independent thinker and bet against the consensus”. If that makes sense. And that's something that's always sort of resonated with us because when we started the business, a lot of people said, what are you doing to make any sense to me? And then you have to back yourself thinking. Yeah. Okay. We might be in the minority, but you know, independently thinking you'll hopefully strike success. [00:02:25] Omer: So, tell us about the Street Group. What does the business do? Because it's not just one product. Who are the products for, and what's the main problem that you're helping to solve? [00:02:34] Heather: Okay. So, in the Street Group, we've got three main products. We've got two prospecting products. So we build tech for estate agents in the UK.
So prospecting is basically a marketing tool. So, it's tech to help them market themselves. And then we have a CRM or a estate agency software, which is called street.co.uk. So, we have a prospecting systems which are Spectre Sales and Spectre Lettings. And then we have streets.co.uk, which is the CRM.[00:02:59] Omer: And can you give us a sense of the size of the business? What are you doing in terms of revenue? What's the size of the team? [00:03:04] Heather: Yeah, sure. So, we're doing, uh, just over 600K MRR at the moment, actually slightly higher across the group now. So probably closer to 600. And we've got 85 people at the moment with quite a few in the pipeline due to join soon. [00:03:18] Omer: The 600K MRR is pounds. [00:03:21] Heather: That's pounds. Yeah. [00:03:22] Omer: So, let me just do my quick conversion. That's about 800,000 in US dollars. The interesting thing is that you founded this business with your brother, Tom, and you basically put no money into this to get started. So tell us about, like, how did you come up with the idea for this business and then how did you go about getting started?
Okay, cool.[00:03:46] Heather: So yeah, me and Tom are brother and sister. And I guess the first thing to say is that both of our parents had their own, and one of them still does have their own estate agency businesses. So, we sort of grew up, had our entire childhood surrounded by estate agents basically, or real estate agents you call them in the US. So, we knew the industry inside out I'd spent every summer when I was a kid and, you know, through university working in my mum and dad's businesses, and I sort of followed a different path and ended up going to work for KPMG for 10 or so years.
Whereas Tom was always, you know, the set up various businesses and did a few things. And Tom spent some time in my dad's business, doing some consultancy work for him to try to implement tech, to get them basically into the 21st. And it's while he was there, he spotted something that they were doing manually, which was basically marketing in a very, very manual way to try to attract more business.
And in a nutshell, Tom thought, pretty sure I could develop it into a product. So he spent his evenings essentially teaching himself to code and built what is now Specter, which is the prospecting tool. And yeah, he built that tool himself in his evenings and on Christmas I was home for Christmas and he showed me what he's built.
And I thought, oh my God, that's brilliant. That's absolutely brilliant. It's going to save hours of somebody's time every day. And I was like, yeah, can I, can I come on board? I think this is going to be huge. So, it's almost like, yeah. Okay. Let's do it. And as you can imagine, everybody in our lives, we're a bit like built for who to do what, but, but it was brilliant, and it worked.
And we obviously had the luxury of being able to test it and our dad's business. And we knew it was generating him instructions. And that's what matters for estate agents. You know, tech that works easy to use that generates some more business.[00:05:28] Omer: Had Tom built anything before this was the first time he decided to go out and learn to code and build a product. [00:05:35] Heather: Yeah, he's just got one of those brains. It just bought a PHP textbook and thought, I'll give it a go and did it. And I mean, he looks back now and he jokes about how awful it is and you know, it's not been essentially rebuilt. I'm not sure there's much of his code left, but he did do it and it worked and it was very simple system, but it generated results. [00:05:54] Omer: How long did it take him to build that, that first version of the product? And what was the experience when he started using it with your dad's business? Was this like something that immediately, I mean, if it automated what they were doing manually, there were some benefits there. I'm trying to figure out at what point did this become, oh, here's a tool for dad to run his business better, to wait a minute. There's a business opportunity here. [00:06:17] Heather: I think they tested the concept basically at the start using Excel and a few of the things and, well, yeah. Okay. I could actually automate some of this started building it, got it to run and then generated it actually generates letters.
The prospecting tool, the end product is letters and postcards. So, he did that. It works. And then as soon as we knew it works for one agent, that was absolutely no reason why it's not going to work for every agent. So, at that point we sat down and we wrote physical letters. We just picked some agents in the Northwest of England and wrote to them and said, look, we've, we've developed this tool. We've tested it. We think it works. What would you like to beta test a new product?
And an amazing amount of proportion of those agents actually came back to us and said, yeah, we would, we'd be interested. And that was essentially the start. And then yeah, looking back, it was, you know, version 1.1, it wasn't the most sophisticated, but we quickly built on it and how it on building.
And as with every tech product, what it looks like now is very different, but that was the version one, basically.[00:07:15] Omer: How do either of you run a business before that? [00:07:18] Heather: Tom had run an inventory business, which is related to the property industry. So he'd been doing that for a few years and we'd both set up sort of little businesses once we were at university but nothing particularly serious. So this was the first one where, you know really took off. [00:07:33] Omer: Now most founders, when they build a product like this, and they're thinking about how to go and get their initial customers, some of them are going to build a landing page and try to get Google ads to drive some traffic there. Or they're going to build an email list and try to do cold outreach or a whole bunch of other things.
I think nearly all of them wouldn't think about doing direct mail and handwriting letters. So why was it that, that was the route that the two of you decided to take?[00:08:02] Heather: Yeah, I think that's fair question. Well, the first thing is it was a new product and a new category. So, it wasn't like I stayed at agents were Googling, how do I automate this?
Or they were doing it very manually. They literally, most agents back in the day used to have people who would drive around the streets, and they would spot estate agency for sale boards, and they would write down the address and then they would manually mark it to those properties, which probably wasn't great for the moment either, but that's what they do.
So we knew the agents went searching for a prop tech or a tech tool to replicate that because it probably, well, it didn't exist until we built it. So, Google and the traditional avenues, we knew weren't going to be as effective for us, but also we didn't want to choose a channel, a marketing channel that was already saturated.
Like there's a famous book called Traction, which is all about trying to pick channel that your competitors or other people in the industry aren't doing and direct mail at that time and seven years ago, people all about digital. And we just thought, you know what? We'll just do a handwritten letter and hopefully it'll catch their eye.
And the beauty of our state agency is most estate agents are small, independently owned businesses. And so if you write to the owner at and address and hopefully get into the hands of the decision maker and that's exactly what it did, and we just spent hours and hours instead of night, you know, handwriting these letters and sending them.
And then once we knew we got the response rate that we were hoping for. Then we, I remember it was a massive decision for us to try and buy an envelope stuffing machine, which we call it the dragon. We found one on eBay. We went and we picked it up from somewhere like two hours away, drove it back. And that was the first big purchase we made.
But it enabled us then to send out a lot more letters and we were getting, you know, around a 5% response rate, which if you think about the cost of a latter, it's barely anything. So, we just covered on doing it cause it was working.[00:09:48] Omer: You weren't building this product in the 1990s, right? This was like 2015, 2016. So why do you think this was still market opportunity to like, why hadn't anybody going out there and tried to solve this problem before? I mean, obviously I don't know what the right answer to this is, but what's your opinion on this? [00:10:07] Heather: My view is that the state agency industry, as a whole had been a little bit neglected from a technology point of view because you don't get a lot of agents like the crossover and skill set between a state agent and a developer is actually pretty rare.
So. There weren't a lot of people in the industry who I think had the skills that were in that industry to, to then go out and build a product to automate something. So, I think that was part of it. And then I also think the estate agency industry has got a bit of a bad rep, or it's definitely got a bad rep in the UK.
And some of that comes from people thinking that industry is simpler than it actually is. Estate agents good ones do actually do a lot of work and cannot material amounts. The amount that you get for the sale of your home, which is typically somebody's biggest asset. So, I think there were a lot of people who were sort of outside the industry, looking in thinking I can build tech to solve this problem or this problem without necessarily knowing what it was like for an agent day-to-day on the ground.
And that was something that me and Tom knew inside out, grown up with it. And seven years ago, almost half the number of people that put their property on the market switched a estate agent before they managed to sell. So even that most people outside the industry wouldn't have any idea that was a thing that people did, but we knew that it was really important for good estate agents to keep in contact with people who were on the market, because if their agent let them down, they probably would look to switch.
And that's, again, something that you have to sort of be in the industry to know. So I think it was being in the industry and knowing what agents needed and then having the expertise with Tom to actually build something, to solve that problem.[00:11:41] Omer: I think the UK is a very unique market in terms of real estate. And now I've experienced that in buying and selling a home in England buying and selling a home in the US and they're completely different.
So I think even a US company that's in real estate would have a hard time figuring out how to navigate through some of the differences and challenges that you get in the UK.[00:12:02] Heather: Absolutely. It is complicated. And you do want somebody who knows what they're doing to manage that for you would be my advice. [00:12:10] Omer: So, once you got this response from these handwritten letters that you were then using this dragon to, to send them out, what would you do next?
If somebody replies and says, yeah, I'm interested. How many people did you start getting to beta test the product? Did you charge them right away or let them use it for free? What was that process that you went through it?[00:12:31] Heather: We talk to them straight away. And we were actually really expensive because what we did. So, we went out and the first few we met them face to face and we sat down with them cause they were all near where we were based at the time. So, we sat down and we showed them the products and then you could visibly see them getting excited about it and you'd walk out. And I remember the first one I ever did was actually in London, and I'd walked out, and I'd never felt so happy.
And you know, we build something, and somebody's get excited looking at it. I don't remember meeting a friend in the pub and I was like, “I can't believe it, they absolutely love it, they just signed it off”. So, we knew we were onto something from the reaction of the agents seeing it. And then we used a strategy of being exclusive to one agent, one agent per area, basically.
So, if you were the agent, and you saw Spectre, you could secure your area straight away if you signed up and started paying straight away. And because we were bootstrapped, that was incredibly important because, A) we were able to charge a premium price, B) the sales cycle was incredibly short, you know, they would hear about it.
They'd see it, that most same day, and they could be paying an hour later. And that's typically what they do. And some of them would land grab. They'd be like, oh, well, I'm planning on opening a branch in the next town. So I'm going to get that as well. And so that just fueled this huge growth for us, which came with its problems further down the line.
But that's how we grew initially, basically getting in contact with agents via direct mail. And then a lot of it came from well, word of mouth. So, you know, go out and we were exclusive. So one agent would say to another agent in a noncompeting area, oh my God, you need to have a look at this because you want to secure your area before somebody else does. So that word of mouth actually spread pretty quickly.[00:14:05] Omer: How much were you charging them? [00:14:07] Heather: So, we charged back in the day 39 pounds per postcode sector per month. And a postcode sector is a small sub-sector of a postcode. So, a typical agent would have probably 10 or more sectors. So, you'd be looking at 390 ish pounds a month for them to skill their area. And that was seven years ago. [00:14:25] Omer: Got it. This sounds like a very low-tech operation. And I love that because in this business of building products and software, we have this, a lot of founders have this tendency to over-complicate things and the hand lighter approach is great. But then when it came to actually getting payments, how are you doing that? [00:14:46] Heather: Well, yeah, I guess in one way you could say we were low-tech for their marketing, but everything else we employed, every bit of tech you can imagine. So, we automated everything we could from a back-office point of view, we obviously used things like Xero, we from day dot, we integrated with GoCardless. So, everything was paid by direct debit.
So when the agents signed up, they signed up to a direct debit. The payment is taken automatically. They're paid monthly and advanced which again, from a bootstrapping point of view, funded everything because payment and advancement, we could fund the growth.
So all of that was automated. The invoicing was automated. Collections were automated. Once that signed up, it was a case of giving them their login details and doing it. Yeah. And I was trying to call it off they go. So, and then we used as much tech as we possibly could in the background. So yeah, everything we could to make sure that we had as few people as possible, and we rely more and more on tech as we grow.[00:15:38] Omer: How long did it take you to get your first 10 customers? [00:15:40] Heather: Probably about two to three months. I would say maybe two months. [00:15:44] Omer: That's a pretty strong signal, but you're onto something there. [00:15:48] Heather: One of the first ones was a huge age and actually that has 16 branches and they're still a client today. And, we'll never forget that because he took a massive gamble on such a big company. So, we've tried to look after medicines.
Okay, so you got[00:16:01] Omer: to your 10 customers, you've been taking this manual approach with your marketing, the products clearly resonating with people. You're getting a good response rate. Did you just keep doing more of the same to get to 50, a hundred customers? Was it as straightforward as what you experienced with the first 10? What did that trajectory look like as you went on the first ten customers? [00:16:23] Heather: We covered on doing direct mail. We always have, we still do to this day. But we did branch out into different things. And so we started doing industry E-shots through the industry press. We went to the trade shows and exhibited, and we went for very, very different type of branding than every other company at the time.
So, we really stood out. We were dark branding with what we call Spectre which was before the James Bond film, that people actually hated that, it was a good or a bad thing. We did get a cease-and-desist letter from them MGM at one point. Yeah. Thankfully we won that. So, it, yeah, only because we had business insurance that covered our legal fees to fight that.
Thankfully we were covered, and we fought, and we won. So yeah, we can use Spectre, but yeah, so we did the usual thing. So, trade shows, industry E-shots, cold emailing, cold calling. Not that much cold calling, to be honest, but we did a bit of it. I walked into some branches sometimes and just said, hey, I'll talk to you about product we've built. And that worked. So, we did a little bit of everything. And then as we got a little bit more sophisticated, one of the most successful marketing campaigns we did was actually we sent boxes to agents’ brunches and inside the box, it said the game has changed. And then there was a poker chip, and the poker chip had a unique number on them.
We said, head to this and enter in your poker chip number. So, they did, and then there was a bespoke page for them and we'd linked to all up to the area so they could see all this really great detailed data about properties on the market, in their area, and it's personal to them with their competitors and all this.
And it was just that, and that worked really well. We got, we used a marketing company actually, who came up with this and came up with the idea for us, and that did get an enormous response.[00:18:06] Omer: So today you're doing, what did we say? About 800K US so over 9 million ARR, how long did it take you to get to your first million from when you launched the product. [00:18:18] Heather: Good question. Probably a couple of years, I would say. We, we had a, I mean, we grew very, very quickly with the exclusivity and the premium price, but after about a year and a half, we reached saturation pretty quickly in terms of, oh, you know, it was inevitable, and it funded the rapid growth and got us out there in the market.
But there came a point where we were like, oh my God, we've now got competitors or copycats coming into the market. And we really are punishing ourselves because we've limited our growth. So, we had to make the really painful decision to get rid of the exclusivity, drop our prices and communicate that to our clients, which obviously was not fun at the time, but had to be done.
And we did it in the best way we could give them loads of advance warning. Said, this is how much your invoicing is going to come down. This is why we're doing it. And we were really transparent about it and said, there's other people coming into the market, trying to do what we're doing. So the exclusivity that we're offering you is only really exclusivity with those where there are other products out there and explained everything and gave them enough warning as possible. And we only lost one client off the back of it. But that obviously meant that in that month, when that dropped out, MRR dropped significantly because we dropped our price by about 35%, I think, 40% maybe. So we took a hit on that month, but then obviously we very quickly after that going forward, so painful decision at the time, but best thing we ever did.[00:19:42] Omer: So, there are two issues that I had. They, one was, this was effectively a new category when you started out and after a couple of years, you're seeing these copycat competitors coming through. Let's talk about that one just a little bit, because some of these were like literally copycat competitors. Yeah. [00:19:58] Heather: The first one we ever had, I was actually out for a meal at the time and one of our clients emailed me and it was a really not nice email and said, I can't believe you're charging me for exclusivity where you've clearly rolled out another product and just changed the colors under a different name. So, I was like, what are you talking about?
Of course, we wouldn't do that. And then he sent me the link to this website, and they had literally copied and pasted all the wording from our website, the look and feel of our website, the screenshots of the software itself. It was laid out identically with the same menu. Literally just different colors.
Yeah. And it was one of those moments where you're just like, oh my God, who is this? What are they doing? And we just went straight to the lawyers and move on. Is there anything we can do about this? Or we got virus are involved and all sorts. So desperately tried to find it. And we did get some victories.
So she had to change her wording on the website and she had to change various things, but fundamentally she could carry on doing what she was doing. So that was the first time we were like, obviously people now who are going to try and do the same thing.[00:21:01] Omer: Yeah. Tell me a little bit about what you went through emotionally when something like that happens. I think a lot of founders have this fear that what's going to happen with competitors. And especially if you're into, a new market and new opportunity, a new product category, it's inevitable that it's going to happen at some point. But when it happens, it's still not a very pleasant experience. [00:21:24] Heather: It was all fun. Like. I think every business owner has failed us because you do feel things personally and you can't help, but let it affect how you feel and you remove the emotional side of it was, is really tough. I mean, there was two things with that. Firstly, I thought, oh my God, our clients are going to think that this is what we're doing, because that was the first instance that we'd heard about this other website.
And I was thinking, oh my God, I really hope people don't think that is what we are doing. And that we like the integrity of actually doing that because we'd, we'd actually had approaches by that time from other companies who said, look, I'll just buy the data from you, but I'll buy it with my mortgage arm. So, you're not selling it to other estate agents, and you can just get around it that way.
And I I'd said, well, no, because that's not what we're about. And I understand what you say technically, yes, we could do that, but that's not who we are. And I remember his exact words and he said, fine but I think you're being frankly uncommercial and to this day I remember it cause I was like, yeah, but at least I'm acting with integrity, whatever.
And then this happened, and I thought, oh my God, this is major. And he can't help but feel it. So, you've probably reacted any one word and it was like, we're going to fight. We'll go to the lawyers. We'll get it shut down and then over time, you realize that no, you can't and you just gotta deal with it and compete on your own merits.
And whilst our system looked simple from a user interface point of view in the background, by this point, it was actually a very sophisticated system and we'd had a good 18 months, two years of learning and developing behind the scenes in terms of the integrity of the data and the accuracy of the data which is incredibly important with a product line like ours.
So, after a while you got used to it and you just thought we've had so many competitors cut spring up over the years and they'd come up and then they fade away because it is more complex than it looks from the outside. So, I've got used to it now, and I don't feel it as personally as I used to, but it definitely did at the time.[00:23:14] Omer: So, this was one sort of dynamic at play here where you've got these competitors coming along. But even if that hadn't happened, I'm guessing at some point growth would have plateaued anyway, because offering this exclusivity meant that there was a ceiling that you were going to hit at some point, and you couldn't go go beyond that.
And I'm assuming that offering the exclusivity at the beginning was probably because, hey, here's a great way to further incentivize people to be able to charge more of a premium. Was it also because maybe you and Tom were not really sure how big this business could be. So, if you could get a hundred estate agents to sign up, that would have been a great place to be.[00:23:55] Heather: A hundred percent. I think we look back and where we were back then we thought, is this going to work? How big could it get? And then we're like thinking, well, if we reached that saturation, God will be laughing. You know, that was a nice problem to have ha ha and then actually get, say anything actually as a problem now. So, we are going to have to do something about it.
And I think that's one of the biggest regrets that I think I have or biggest mistakes that we've made was thinking quite small in the early days, because we were bootstrapped, I think. It was our own money. So, we were like, we'll target this area first. And then we'll go into this area necessarily. Or in hindsight, we should have gone nationwide, and we should have done it straight away and we should have hired people straight away, but we didn't.
And we were very cautious and considered with our growth. And I would definitely not do that if I was doing it again. And once you want to one, you might just want to pick. And yeah, definitely what you've just said, I think is spot on. I think we had a smaller mindset than we should have done, and that's why we had the exclusivity.
What I have, not the exclusivity after I did it again, I'm not sure cause it did make us go viral if that makes sense with very little marketing.[00:24:58] Omer: Right. So, there was scarcity, and it was like, you know, people buying like .com domains. I don't know if I'll ever use it, but I'll buy it anyway. It's the deal here. [00:25:06] Heather: It was exactly that. Yeah. Which worked really well for us. So pros and cons, I would say, but I would definitely have still grown faster if I did it all again. [00:25:15] Omer: Okay. So yeah. I want to talk about the growing faster, but when you started to communicate to these people who had bought into this exclusivity, you said you lost one customer where people, even the ones that stuck around were people upset about this? [00:25:29] Heather: Yeah, we did have some emails back to say that they were disappointed, and this is one of the reasons I signed up. We just tried to over-communicate because we thought we can't shy away from it. We're going to have to hold our hands up here that we are changing. So, we wrote basically a letter, and it was an email, but in the style of a letter signed off by me and Tom and we just tried to be as transparent as possible.
This is why we're doing it. We're now, unfortunately not the only product in the market, which was a risk in itself. Like we didn't really want to highlight that there were the products coming in, but that was the truth. We weren't an exclusive product anymore. But here's what we're going to do because our hand has been forced.
We will reduce your price and we hope you can understand, and we're giving you, I think it was three months warning. So, if you don't want to continue with, as we totally understand and blah, blah, blah, and then it was only one client who really spies.[00:26:21] Omer: Okay. So, let's go back to what you just said earlier about if I was doing this again, I would have done this a lot faster.
Now you bootstrap this business. You've never raised any money and you are pretty close to hitting eight figures in terms of 10 million ARR, what do you think you would have done differently to grow faster than you did? Because it doesn't seem to have hurt your business?[00:26:40] Heather: I think in hindsight, we open all. We left the door open for competitors to come in and enter the market because they were thinking, okay, here's this business it's clearly doing well, but you know, they're not everywhere yet. And that's probably quite appealing to people on the sidelines who are looking in. Whereas if we would have, if we had have grown faster and would have just gone for it, recruited faster, spend more marketing, stop ton signing letters and just done it.
And I think we could have tied up the market a lot quicker and made it more difficult because there are certain things when people talk about the moat that you get in certain things. And one of those things for us is that the end product of Spectre the prospecting tool is physical letters and postcards, more letters and postcards that we send the better, the postage rates we get.
So, you know, the volumes that we were doing meant that we could pass on enormous savings to agents, but their marketing. And we could have made that so difficult for somebody else. That actually, maybe would've we would've had fewer competitors now. It might not have been the case, but a hundred percent with what I know now, I would've grown significantly faster, recruited earlier, recruited more, spent more on marketing and just go for it.[00:27:49] Omer: But as you and I were talking about this before we started recording in hindsight, that's a lot clearer or when you're in that situation and it's your own money, it's much harder to actually pull the trigger and do those things, right? [00:28:01] Heather: That's exactly right. And I think there are, there are obvious obviously benefits of bootstrapping and that we've retained all the equity, but that's the downside.
When it's your own money, you think about things a lot more, and you're a lot more cautious with what you do. And there were downsides to that as well. And it is that if there was somebody else's money their early doors would we have been as cautious? Probably not. We would have just gone for it. So, I think there were pros and cons and that was that's the con of bootstrapping is that you are much more cautious, hope we were.[00:28:30] Omer: Why did you decide that you weren't going to raise any money? Because potentially the business is in a great place right now, bringing in some VC funding could help fuel that growth even faster. And maybe you'd look back in another five years' time and say, oh, maybe I should have grown faster, but, but what's been the driver for you to stay as a, as a self-funded business instead of going out and raising funding? [00:28:54] Heather: I think the honest answer is that we've not had that need for the cash because of the way the business is structured, you know, monthly recurring revenue paid in advance high margins, particularly in the early days, we didn't need the cash. We, we weren't thinking, we weren't consciously thinking we're not growing fast enough, or we would be growing faster if we had more cash.
So, it was never something that we thought we need to do. It's not something that I'd say we'd never do. And it depends on because obviously we've got streets as well now, which has got enormous potential. So, I'm not saying we would never, ever do it, but whilst we haven't had that burning platform, that isn't something that's been a high priority for us.
And the other thing is we've got a great culture and I'm not saying VCs or PE would change that, but there have been certain advantages to just being me and Tom running the business in the way we want to run it. And there have been certain times where we've pivoted, we've changed direction really, really quickly.
And it's definitely been an advantage for us. So, for example, that new competitor springing up on the scene and just deciding to get rid of the exclusivity. And we were able to do it, make that decision within a day and implement it. Whereas I imagine if we had people that we need to sign off such a fundamental decision with it, it would have taken a lot longer and they might have said, absolutely not. Don't do that.
There's been other things as well, like in the middle of lockdown, we'd outgrown our office and we desperately needed to find an office that was big enough for us all. So, we started looking around offices and Manchester couldn't find anywhere. And then she found somebody who was looking at that 15 grand a month rent, ended up having a conversation with the landlord who owns the building that we're in. And he basically said, look, if you buy this building off me before March, because he thought there was going to be a big capital gains tax change coming in and said, I'll give it you a discounted rate. And we made what could turn out to be really bad decision but at the moment, it feels like a brilliant decision to buy the building that we're in and refurbing it plenty of space for us all and paying less in the mortgage repayments. And we would be if would have taken a building that we were going to in terms of rent. So, you know, things like that, we're able to just make quick decisions of the things that we spent a long-time last year, building a freemium product.
And we were just about to roll out and we felt this was the year before last month. Property market's looking a bit weird. Let's just hold off. And then the property market in the UK has been, I think it's the same in the US has been crazy for the last 12 months. And thank God we didn't make that decision.
So, there's just certain things that I think just be me and Tom will be able to make quick decisions changed direction if we needed to. Buy buildings, if we wanted to, that served us quite well, but that's not to say we wouldn't look to raise in the future we may well do that.[00:31:27] Omer: So, we talked about the challenges of the competition and the copycats. And we also talked about how some of the difficulties you went through in terms of moving away from this exclusivity to help grow the business and be more competitive as the market changed.
As a founder, what was one of the hardest parts of building this business and a business that grown pretty rapidly. It was only a few years ago where you hadn't run a business before and now you've got a team, you know, nearly a hundred people.
So there's been a lot of changes going on there. And what's been one of the biggest challenges for you over the last few years?[00:32:03] Heather: We've touched on not growing fast enough. I think we've covered that. I think the other thing is, I think we made mistakes along the way. Hiring the tech experience or technical experience in growing the team where they were, we prioritize that, but whether they'd be a good cultural fit, and I guess everybody goes through this and you know, maybe it's one of those things that you do have to sort of live through and make those mistakes to learn from it.
But yeah, picking the right people early doors, we got really, really lucky with some people, but we made mistakes with others. And then you have to go through the pain of undoing that I think the emotional ups and downs for any founder is, is always. The highs and the lows are amazing, but the highs are amazing.
The lows that, you know, a painful, when it's your own business and things like copycats coming up and competitors entering the market, you just have to get used to it. But yeah, every time you do feel it a little bit, I'd say those are the hardest things.[00:32:52] Omer: So, one other question, in terms of product strategy, we often hear founders focus, the one thing, all of that stuff, and you guys decided we're going to build effectively three products.
So, one, like why do that? Why not focus on one thing? And then secondly, why are they even marketed as three products? Why isn't there just one uber product that does all of the things that, that you offer today?[00:33:22] Heather: Yeah, I think that's a really valid question. And I think truthfully, we have made mistakes with certain things here because Spectre grew, and it grew really quickly.
And the first product that we then started to the second product we started to make with Spectre Lettings. So, the first product was all to do with sales market. And one of our biggest clients. In fact, the biggest client we had at the time and a very well-known top end of the market estate agents said to us, why have you only built this for sales?
We want it for our lettings team. And we feel like lettings is always like the forgotten child of a estate agency. And we'll help you build it if you build it. So, they forced our hand with that one because they offered us time with that director of lettings to shape what this product would look like. And so that's how the second product Spectre Lettings payment to being.
And that, again, like one of the best things we've ever done, because it's a different market, we have the sales market, and then we developed this product for the lettings market, helpful, one of the best agents in the country. And that worked very well. So that was natural, but we did make other mistakes. You know, we made the mistake of trying to launch a product into a different industry because we had this data that we knew was really valuable and we were only selling it to estate agents basically.
Well, I was with, well, actually there's loads of other industries that would get enormous value from this. So, we set up this new product, we had a different name and we hired different people and it was just, it just didn't work anywhere near as well. Massive diversion of our time, massive destruction and waste of time, ultimately.
So, we did make mistakes along the way as well. Then we did another product called Hello Again, which was all about helping agents, keeping contact with their past purchases. So betting, repeat business basically. Launched that should have been massive. It was a brilliant product and it worked really, really well, but just didn't grow anywhere near as how we, how we expect it to.
So, we then made the decision to move that product into Spectre Sales and just have it as a new feature Spectre sales. But again, for we've done that from the offer to say it a lot of time, marketing FX, expense admin, blah, blah, blah. So, we did make mistakes, but then one of the biggest things that we basically in this industry, there's lots of little prop tech suppliers.
You know, grown up in the last 10 years that are solving niche, independent problems for estate agents. And Spectre is one of those things, but over time, and this is almost from day one, me and Tom were getting increasingly frustrated that there was no warning or innovating in the space of the software that they're actually using to run their business on a day-to-day basis.
And that's when we made the decision to start to build Street which was an enormous investment. It took us three years. This is another benefit of bootstrapping by the way, because if we'd have gone to a VC or a peer and said, hey, we've got this product it's doing really well. It's growing really fast.
But actually, what we want to do is sink three years into building a new product. It's going to cost us millions of pounds. Can we do that? That I imagine most of them would have been like, no, absolutely not stick to what you're doing, but we just saw that the future was that somebody has got to take the space and build a product that's fit for today and tomorrow.
And if you looked at the incumbents, they were, they hadn't innovated for a long time. So, we made that decision. We started to build street.Co.uk for agents, which builds, which makes them incredibly more efficient. It's modern technology with an open API. So, it can plug into all the other tech suppliers, if we want.
And, but crucially, it also has an interface for the consumer. So, it makes moving a lot easier for home movers as well as for estate agents. So, you can log in, you can do the things and see the things that you would want to do when you're moving house, which let's face. It it's quite a daunting prospect for most people, because it's a big thing.
So actually, having some transparency and help and guidance through that process and being able to do things online is, I don't want to say a game-changing because it's overused, but it is a game changer for this industry because it's not been done before. So, it was a massive project for us to do, but naturally we've launched it and it's gone down incredibly well.
So that's growing really quickly and the power of Street, the CRM and the property software with the marketing tools, Spectre is, is amazing. It's like HubSpot buy, you've got your CRM and marketing and one tool, but it's this, but for estate agents and specifically for this industry. So that's why we did it. And yeah, we have made mistakes with certain products along the way, but other products have done really well.[00:37:39] Omer: And I think it goes back to where we started this conversation, which was where you said this idea of being an independent thinker, that sometimes not following conventional wisdom and instead following your intuition or your gut and what you believe is the right opportunity. Even if everybody tells you you're crazy, or what the hell are you doing?
Maybe that's often the right way forward, but it's, it's always hard to innovate if we're just doing what everybody else is doing.[00:38:05] Heather: I honestly think that there's not many industries left where pretty much everyone can identify the pain in this industry and how painful it is to move or to rent or to go through that process.
You don't normally find somebody who says, yeah, I had a really nice, easy moving experience. And unfortunately, I think that citations got a lot of the flack for that, but actually they, they often don't deserve it. Sometimes they do. I'm not saying all of them are perfect, but a lot of them are trying to do this with very old technology.
I mean, on-premises tech that is like looking at some sort of eighties submarine. Whereas what we're doing is introducing building technology that the consumer loves, it guides them through the process. You get that transparency, get the help doing what you want to do. And I think there's a genuine opportunity to make a difference in an entire industry, but also for every single person that ever has to buy or rent or let or sell. So, yeah, it's exciting.[00:38:57] Omer: I remember when we sold our place in London, I can do thousand. I don't think anything was happening over email or online. It's mind blowing that it's an industry that's kind of lagged for so long. [00:39:11] Heather: It has, and I think one of the reasons for that is because who is going to build this technology for our estate agents.
It's, it's complicated. You do need to understand the industry and there's lots of parts to it. You know, you don't just have the estate agent part, you have the whole sales progression part to sell, which is complex. So, you know, other than us where we had the luxury of having a profitable product and all the relationships with estate agents and a good reputation in the industry, it would be very difficult for somebody outside of the industry to come in and say, hey, I'm unknown, but I've built this product. So, estate agents, do you want to trust me and put your entire business on it because they'd send them out and say, absolutely not. Who are you? And then within the industry who would have had the luxury of spending three years and millions of pounds building a product to the point where it was ready, because in tech with Spectre, we definitely had an MVP, minimum viable product, but with Street, we couldn't do that.
We said it had to be a minimum lovable product because you couldn't have issues with the software that estate agents use all day, every day, that is absolutely mission-critical for what they're doing. So we did have to take our time with that and we had to get it perfect.
So we've recognized that opportunity. We recognize that we're very few people who could come in and actually build this and genuinely make a difference to this industry, but we had that platform, so we decided to take it on.[00:40:27] Omer: Awesome. And on that note, I think we should wrap up and get onto the lightning. So, I've got seven quick-fire questions for you.
Just try to answer them as quickly as you can. Okay. What's the best piece of business advice you've ever received?[00:40:43] Heather: Read books read lots of books. Why learn from your own mistakes when you can learn from somebody else's definitely, definitely do that. [00:40:49] Omer: What book would you recommend to our audience and why? [00:40:52] Heather: Best sorts of people management book I've ever read is Radical Candor. Recommend that to anyone really, really good in terms of how to manage people, how to talk to them and get the most out of. From a SaaS point of view, Predictable Revenue. God, that helps us loads in the early days. And there's still some principles of that, that we follow today. So yeah, those would be my big two. [00:41:11] Omer: Right. What's one attribute or characteristic in your mind of a successful founder? [00:41:15] Heather: I think, striving for the next thing. So you are never happy with what you've got you looking for the next side and the next opportunity, you know, you can't ever be happy with standing still. You've always got to be thinking about the next thing. [00:41:29] Omer: What's your favorite personal productivity tool or habits? [00:41:31] Heather: I think I've tried every single productivity tool that is going, and I always come back to a physical to do less, but one thing my mentor told me that I've used and it stuck with me is have a column on your to-do list, where every morning you scan down the stay list and literally write the initials of who you can delegate any of those things to and do it.
And you delegate cause I think that's one of the biggest issues I have is I would just not delegate and that's exactly what I did. And so physical to do less, but a little delegation column.[00:42:04] Omer: What's new or crazy business idea you'd love to pursue if you had the extra time? [00:42:08] Heather: Oh, you know, I, this is actually a really stupid one, but, it used to really annoy me wanting to go out and, I got red wine stains on my teeth, so I started doing some research and see, could I, could I come up with a product that would get rid of tiny stains on your teeth?
And I did it, I developed it. This isn't always in uni. And then when I was in Japan a few years ago, I saw that they are a thing. So, I'd like to bring those things to the UK. They call wine wands.[00:42:33] Omer: Love it. What's an interesting or fun fact about you that most people don't know? [00:42:37] Heather: I would say that I used to play for Manchester United girls’ team. Most people don't expect that. [00:42:43] Omer: Yeah. You've got, you got some interesting facts there. Like the MGM thing. That was a pretty fun one as well. And finally, what's one of your most important passions outside of your work? [00:42:54] Heather: I think the biggest passion I have is actually learning. I love reading business books, any sort of books, so I can learn from other people.
I think that has become my passion over time, which might be a bit sad, but it's true, unfortunately. Learning new things and implementing them.
Love it. Alright, Heather,[00:43:11] Omer: thank you so much for, for joining me today and sharing your story. I think there's a lot that's happened over the last six years of building this business.
I think it's also really useful for people to hear how you've gone on this journey and some of the non-conventional things that you've tried and not following conventional advice in terms of how you build the business. I think that's really always useful for a lot of people who maybe just need to think a little bit differently to get that next breakthrough.
So, so thank you for sharing those lessons with us. If people want to find out more about Street Group and all your products, they can go to streetgroup.co.uk. Is that the best place to send people to?
Yeah, and they can[00:43:52] Heather: see all of our products from there. [00:43:54] Omer: Right. And if folks want to get in touch with you, what's the best way for them to do that? [00:43:59] Heather: Just heather[at]street.co.uk. [00:44:01] Omer: Wonderful. Thank you so much, Heather. Yeah, it's been my pleasure and I wish you and the team, the best of success. [00:44:08] Heather: I really enjoyed it. Thank you. [00:44:09] Omer: Cheers.
- “Radical Candor: Be a Kick-Ass Boss Without Losing Your Humanity” by Kim Scott
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