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The SaaS Podcast

Brett Martin (Kumospace)

Kumospace: From $1M ARR to a Pivot Driven by Churn – with Brett Martin [384]

Kumospace: From $1M ARR to a Pivot Driven by Churn

Brett Martin is the co-founder and president of Kumospace, a virtual office platform that helps remote teams to collaborate in real time.

In 2020, Brett was running a venture capital fund and hosting monthly in-person networking events. When the pandemic hit, he was forced to use Zoom for these events, which he felt wasn't a great experience and kept thinking to himself that they're had to be a better way.

So when long-time friend and former co-founder Yang said he wanted to launch a startup, Brett suggested solving this video meeting problem and initially advised on the concept. After seeing early traction, Brett soon joined as co-founder.

They launched in the middle of the pandemic and quickly attracted hundreds of thousands of users. When they started charging money the following year, their revenue skyrocketed to over $1 million ARR in just 2.5 months.

But their celebrations were short-lived.

Churn spiked to 40% in a month as customers used the product more for one-off events than daily work and so had little reason to renew their subscription.

This crisis forced the founders to make the tough call. They scrapped their initial model, losing much of their revenue, and pivoted to a virtual office platform.

But growing revenue was much slower and challenging this time around.

However, fast forward to today, Kumospace serves millions of users, generates 7-figures in ARR with a team of just 16 people, and has raised $25 million in funding.

In this episode you'll learn:

  • What led Brett and Yang to pivot their business model so drastically despite their rapid initial success.
  • How they've successfully used TikTok to acquire customers and how they've used it to gain more traction from it than tradition B2B channels.
  • How the founders have integrated product-led and sales-led strategies and figured the best timing for sales involvement.
  • How influencer marketing has helped them with cost-effective B2B customer acquisition at scale.
  • Why living inside your own product is critical for founders to identify friction as well as opportunities.

I hope you enjoy it!

Transcript

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This is a machine-generated transcript.

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

[00:00:01] Brett: Great to be here. Thank you for having me.

[00:00:03] Omer: My pleasure. Do you have a favorite quote, something that inspires or motivates you, you, that you can share with us?

[00:00:10] Brett: I, I think that there's plenty of inspiration in adrenaline and startups. So one thing I try to remember is one of my favorite quotes is we have to learn to want what we have, not have what we want.

[00:00:24] And so, you know. There's ups and there's downs, and it's easy to take it personally and, and you know, I think sometimes we just have to be grateful for what, what we have.

[00:00:36] Omer: So let's talk about Kumospace. Tell us what does the product do, who's it for and what's the main problem you're helping to solve?

[00:00:43] Brett: Yeah, so Kumospace is a unified communications platform for. Built for remote and distributed teams. So the idea is that you have all of your people and all of their conversations and they're all in one place. And so every day people get up, they enter Kumospace, and there they have essentially it's like all in one slack plus.

[00:01:06] Zoom plus loom, plus Otter. It's kind of like, if you think about like what HubSpot is to your sales and marketing stack for SMBs, Kumospace, is that for your communication stack and focused on remote teams?

[00:01:19] Omer: Can, can you give us a sense of the size of the business? Where are you in terms of revenue, number of customers, size of team.

[00:01:26] Brett: We've got a few million users. We launched in in 2020 and we are, you know, seven figure business again, which I guess we'll get to that. We were we got to a million in ARR in two and a half months the first time around, and then immediately had to throw away that business. Start again. Happy to talk about that.

[00:01:48] We also, we're, we're only 16 people trying to keep it as lean, as lean as possible.

[00:01:54] Omer: And I think you've raised $25 million to date.

[00:02:00] Brett: Yeah, we're, we're really lucky. We had a bold start venture from New York City. At Sim and Elliot as our seed investors that are old friends of ours. And, and then we had Lightspeed with Paul Murphy lead our series A.

[00:02:14] Omer: So the business was founded in 2020. I wanna start with like where the idea came from, but maybe can you just tell us like, what were you doing at the time? Because, you, you, you do a lot of stuff and you've got a lot of plates spinning. So what were you doing back then, and then sort of where did this idea come from?

[00:02:33] Brett: Yeah, so I hear you're, you're alluding to I also run a new York based pre-seed, seed stage, venture capital fund called Charge Ventures. We write sort of 250, 750 million dollar checks into companies just getting off the ground. Really focused on New York City. And I had been running that with my partner Chris Habachy since 2015.

[00:02:54] And so that's still going. We actually besting out of our third fund out, but it was, you know, it was 2020, the pandemic had just hit. I was doing a million Zoom calls a day, and I was thinking to myself like, there has got to be something better than Zoom. If Zoom is the end of communications, then this is a very bleak feature indeed.

[00:03:17] And, and so I used to run a basically a monthly in-person networking event for Charge and the idea was to get a bunch of you know, middle age farts together and, you know, share deal flow and, you know, angel investing opportunities. And when the pandemic hit, everyone said, you know, oh, why don't you bring that online?

[00:03:37] And I was like, well, I don't really wanna give a Zoom presentation to 50 of my friends every month. That sounds pretty terrible. And so, kind of realized that, wait, this is kinda weird. It's, and even in 2020, there was no technology that enabled multiple people to congregate in real time online and have multiple different conversations in the same place.

[00:03:58] And so my co-founder at Kumospace. This guy Yang Mou, we've been friends for over a decade. He engineer went to Princeton. We had built two companies together, so he built the Android app at my first company, Sonar. And then we were co-founders at second company Switch. And then he was just quitting Oscar.

[00:04:19] He'd run all. Tech basically consumer facing technology at Oscar Health, which is a billion dollar insurer, tech-based insurer out of New York City. And he was quitting in the middle of the pandemic, and he was sick of it. He was like, gonna start a new company. And I was like, well, here's this problem, people can't be online in real time and have multiple conversations at the same place at the same time, you know? And then he said, oh, okay. Two weeks later, he came back with a prototype. And you know, as a VC I see a lot of nascent technology, you know, and usually you have to kind of squint at it really hard and say, well, maybe if it had this, or maybe if it you know, had a million users on it.

[00:05:00] There might be something more interesting here. But in the prototype that Yang built, which was, you know, a very bare bones version of Kumospace it was just pure audio. It didn't even have video at the time. We could tell that there was something about this idea of spatial audio, which was this idea that, you know, if you're in proximity to each other in virtual space, you can hear each other.

[00:05:19] And if you're not, you can't. Which is sort of how physical spaces work. And so, you know, at the time, yang was just gonna run in and I was happy he was gonna have the idea and then I was advising and then I was gonna Angel invest, and then I was gonna invest from the fund, and then the fund was gonna lead.

[00:05:35] And then, you know, right before things already had traction and it was moving yang's, like, you know, why don't you just get more, really more involved? And so I felt very honored and was excited to do it because it had been 10 years since I had. Built a company and this was the first opportunity that got me excited enough to get back off the bench for, and get back into the arena as an entrepreneur.

[00:05:56] Omer: So you mentioned earlier that you, you guys got to the first million in ARR in, what was it? Like two, two and a half months. How much later did that happen? From the time that. Yang had built this initial demo or prototype and, and secondly, I want to dig into like, how did you get that kind of growth in, in just a couple of months?

[00:06:21] Brett: Yeah. We Yang built the prototype in May. We launched, it started, you know, I think we first started discussing it in May, and we, you know, launched into the market in August, so pretty quickly. Afterward and it just started growing organically. You know, that's the nice part. It was inherently viral product.

[00:06:40] People would share it. They were meeting, it was also during pandemic. No one had anything to do. So they're all excited about new things to explore online. And we raised our seed round that fall, basically kind of Thanksgiving timeframe. So pretty quick, you know the Bullar guys I had known for.

[00:06:59] 10 years, I'd always wanted to work with 'em. And they were really, you know, great guys, very well respected seed investors. And you know, frankly at the time, Kumospace wasn't even a SaaS box. It was really a consumer application. I mean, you know, we had weddings in Kumospace. We had wakes in Kumospace, we had graduations and college recruiting, and people were using it as offices and lectures and, I mean, all over the place.

[00:07:24] So they, we just picked them because they were. Very, we know that they're the most founder-friendly investors in New York. And so then we built that next year and kind of, we really figured out customer acqui customer acquisition by the summer. I. We am happy to share about that. But you know, we had, we noticed we had a huge uptick in traffic one day and we were like, where does that coming from?

[00:07:48] We're like, oh, that came from TikTok. Wow, that's kind of weird. How do we replicate that? And so anyway, we figured out customer decision, we were gonna grow and we were growing, adding hundreds of thousands of maus a month. And at that point, that was going into the fall and we kind of realized, well.

[00:08:03] Let's throw in the afterburner and you know, wow, we're hyper scaling. Let's turn our revenue. And so we turned our revenue and you know, yeah, in two and a half months we were over a million a RR. And that's, you know, when we fundraised, you know, everything was open to the right. I think there's always a bit of a gamut when you're trying to fundraise, right?

[00:08:22] Because we sort of saw the made customer acquisition figured out, and we stepped on the gas and we just. Started investing and you know, we had early raised $3 million seed round, but we started, you know, at one point we were spending $80,000 a month on customer acquisition to, you know, to scale. Which is kind of scary at the, at the, at the time.

[00:08:42] But you know, that's how you do it. And the problem was that we didn't even see it, is that we turn on subscription product and. People were using us to host virtual events as particularly at the end of that year in Q4, 2021. And they were hosting a lot of holiday parties in Kumospace. And the problem was, is that it was an episodic use case.

[00:09:05] It was not a, it was not a daily use case. And so as fast as the revenue came, so, so came the churn with, with, with and Crazy Fury. I mean, I think we Churn was like 40% churn or something in a bot. And so we thought about keep growing. 'cause we had figured out the growth mechanism, but we were like, what is the point?

[00:09:25] You know? So we actually ended up having to, we shut down the events business, you know, a few months later. And then I. Sort of pivoted the business into the, you know, what, what we call virtual office business that, that we have today, which is basically, you know, a productivity suite for remote distributed teams.

[00:09:44] But that, that, that definitely sucked.

[00:09:47] Omer: One, the, the first thing I wanna understand is like, you're, you, you get to a point where you've hit seven figures and you can see that there is a potential problem which is getting bigger and bigger with this, you know, like you said, like this episodic use. How easy or hard was it to make the decision to pull the plug and say, we're gonna do a reset?

[00:10:13] I imagine that most founders, especially if this is their first time, that's gonna be an incredibly, incredibly difficult decision to make. So was it just as hard for you, or do you guys feel like. This wasn't the first time you were building a company. Maybe you kind of had a cooler heads and were more rational about the decision.

[00:10:37] I don't know. You wanna just understand that a bit more.

[00:10:40] Brett: The, the problem is that initially we were growing that fast. You don't actually you can't actually tell, like the churn is hidden at first. Is, is part of the problem. So we didn't even notice it immediately. Right. Because we were growing so fast that the fact that some people were churning was not, it was not obvious, right. It was, you know, it took a couple months to realize like, oh, okay. And, you know, we're pretty nay and vir just, we just launched, we, you know, the, the, all the metrics weren't as tidy as they should have been. And or as you know, they'll eventually we'll get to, but, but I think once the churn came, it was pretty obvious.

[00:11:16] I mean, I, I don't even know how business, like, you know, hop in. How they keep pushing on growth. I mean, they must have had just such demand that they, you know, could ignore the churn and then keep growing. But it's, you know, when, when your bucket is, it doesn't even have a floor in it. You know, if you're, if you're trying to, if you're trying to bring water back home with, with a cylinder it's gonna be pretty tricky.

[00:11:40] So I think for us, we had the balance sheet and, you know, we we're also lucky to have very supportive investors. I mean, I think they realized these. A guy, you know, Paul Murphy is an entrepreneur himself. He built and sold a company called Dots and Gaming, which is like very focused on, you know, customer acquisition and retention.

[00:11:58] And I think he, you know, he knows well enough that like there was no. That was a game of finding someone to hold the bag. Right. You know, the only way that would've worked is a quick flip, and that was not what any of us were in it for. So I think as soon as we realized the problem, it became pretty obvious that we had to do something else.

[00:12:17] Omer: So you, you, you go back to the drawing board and you said, you, you talked about this kind of, this virtual office. W was this like mainly like a positioning thing or, or did you have to like fundamentally change the product?

[00:12:32] Brett: Well, so what happened was we actually were going to have, we, we had been a fully remote company and we were scheduled to have our first offsite.

[00:12:42] You know, we're all gonna meet in person. Maybe there was kind of us at the time and we were already very excited about it. It had been, you know, a year and a almost two years into the company. And this was right after we raised the money and we, everyone got covid. Everyone got omicron. And so we were like, well, that's a bummer.

[00:13:01] But, you know, luckily we were very well positioned to throw a virtual offsite because, you know, we build. There you go, virtual bet software. And so we threw a virtual offsite and we sent out a survey to the team beforehand and we said, you know, what do you like about working in Kumospace? What do you hate about working in Kumospace?

[00:13:22] And so what they said they liked, they were like, we love working remotely. We love the flexibility it adds for our lives. We love our team. You know, we love. Shipping code, you know, shipping code building fast and you know, moving fast spring things. And what do we hate? Well, we, find cross-departmental collaboration and communication.

[00:13:46] Really challenging. And we don't know our coworkers as well as we wish we did, and we don't know, you know, it's hard to know who's around. And we kind of realized we had this sort of stupid epiphany moment where we said, wow, we have all the same. Problems is every other remote company out there in the world and we make virtual event software.

[00:14:10] And so we said, you know what? We're just gonna live in the product. We're gonna literally live in Kumospace. And so then we just started dogfooding it. And that worked out pretty well because we immediately realized, okay, well here are all the problems to using Kumospace as a virtual office. And so that was the first six months of 2022 was just kind of like.

[00:14:30] Fill in table stakes, which is like, you know, doors which enable privacy, private conversations and, you know, statuses. So you know, you know, if someone's gonna be there at their desk or not, or, or available and, you know, kind of table stakes stuff. And, and that's actually how we kind of transform the product was by, you know.

[00:14:50] May forcing ourselves to use it in a certain way.

[00:14:53] Omer: Got it. Okay. So you mentioned TikTok as, as an acquisition channel and it, it kind of made sense when you were talking about the first version of the product and kind of being very consumer focused and you know, people doing weddings and whatever. But is TikTok still a, a growth channel for, for you today with the product as it is.

[00:15:14] Brett: Yeah. So this is actually funny because we have experimented with a bunch of different, so what, okay. So what happened initially was we were monitoring our traffic and we had this crazy spike in traffic and we realized, oh, wow. S we went viral on TikTok. We said, oh, what if we can manufacture that?

[00:15:33] So, you know, influencer marketing, we got some influencers and we realized, wow, like this works. But it's really labor intensive to just be finding, reaching out to a bunch of influencers, negotiating with them, signing them up, getting them papered, getting them to create the content that we want. Expecting that post, getting 'em to post that content following up and then, you know, paying people, right?

[00:15:58] And so we were like, wow, we don't, we actually need some tooling to do this. And so we that one of our portfolio companies that charge is called gr and they're a CRM for influencer or marketing. That basically helps that whole process that described. So we started using them and we were able to scale up our influencer marketing from, you know, maybe five posts a month to, I think at one point we're doing.

[00:16:19] 60 or 70 with, you know, one person managing it. And what we realized is we had tried advertising, you know, on LinkedIn and LinkedIn ads, and that's where you would think about doing marketing. But what we, what we realized is that everyone's on TikTok. Like it's the same people, the same people are using TikTok and LinkedIn.

[00:16:41] It's just the only difference is that. Buying that, getting in front of that person on TikTok is a 10th of the cost as it is on LinkedIn. Right. And so, you know, we had all these. Prospective customers, CEOs of, you know, SMBs and startups and VPs at big companies. And they were, you know, saying, where do you find us?

[00:17:02] And they'd say, oh, they're on social media. But they didn't wanna, they didn't wanna say TikTok, but they were on TikTok. And so we realized it's like, well, if you can just create content for that audit person on TikTok, you know, you'll, it's, I I think we think of it as like B2C to B to. B2C, two B marketing, right?

[00:17:20] Like you get in front of that consumer and then they bring you into their business. And so that's, I think something that a lot of, we're coaching a lot of our portfolio companies in charge on how to use that technique. I think it's pretty effective.

[00:17:33] Omer: Okay, so two questions about that. That's like super interesting.

[00:17:35] Number one is like what type of content you're creating that actually worked on TikTok. It's gonna be very different to the kind of thing that I imagine you would, you would try on LinkedIn. And secondly, how do you target these people? Like on LinkedIn, it's pretty easy, right? You can target by company, by job, by whatever.

[00:17:58] But how do you do that on TikTok?

[00:18:01] Brett: So it's funny, the, it's kinda like the answer is the other question. So I. I'll do the latter first. So you don't need, so you target by, based on the content that you create. So you create work content, you create interesting content about work or, you know, because if you're a professional, you know, you can laugh at a, a joke about the office or about your Zoom culture you know, anywhere.

[00:18:26] Like, it's just black humor for a lot of us desk jockeys. And so we would create, you know, content with people wi with about, you know, working about the ridiculousness of it or, or all just about the productivity of Kumospace or about as an alternative to being in the Brady Bunch box of Zoom. So we would just create that content.

[00:18:46] And it's nice because Kumospace is a video chat product. That's a big part of our, our product. And so the video nature of our product showed really well on TikTok, right? Because it's, it's a video medium and we have a video product. If I told you what a virtual office is, it's pretty hard. You're like, what is a virtual office?

[00:19:04] I don't know, but I can show you on video very easily. So there was a very nice product channel fit. Right. I don't think people think about that enough, which is like, okay, what is the right channel that my product shows off its best attributes? So we're a video-based product. That's an advantage over us.

[00:19:22] Google Space is far more interesting and engaging product than most SaaS Box. Most SaaS Box probably wouldn't show well on video. Right, but Kumospace does. So it was a way for us to actually express the product way better than we could in a sales call or, or in an email. So I think there's great print product channel fit there.

[00:19:40] And then in terms of targeting, that's the nice part about TikTok, right? 'cause everyone's like, oh, you know, do you have to have the right influencers or do you, you know, it's the right, well, that's not how TikTok works. Actually. TikTok works by having a the for you page, which is. Perfectly algorithmically generated.

[00:19:56] And it's based on what that type of content that user likes, right? So if the user is engaging with work or focused content, right? TikTok will get our work-focused content. If it's good in front of that, we don't have to worry about that.

[00:20:13] Omer: I didn't realize that. So it's in, in many ways, it's like what you just said at the start of this, it's like the targeting is really about creating the right type of content, algorithm take care of the rest.

[00:20:29] Brett: It's, it's very counterintuitive. 'cause I think a lot of people my age, right, you know, millennials, they are so stuck in this like social network kind of mindset and they're like, oh, it's about, you know, their followers and who their fan, you know, their followers, their fan's like, well, TikTok doesn't care.

[00:20:44] Omer: Yeah. Yeah. That's super interesting. Okay, so you, you mentioned also earlier about the. You know, the tailwinds with, with the time around covid and, and people going crazy and looking for all kinds of tools. And then how that helped you grow the first version of, of Kumospace when you kind of went out with this, this virtual office product.

[00:21:09] I'm, I think it was probably like on the timeline, like probably late 2022, I'm guessing and probably. Things are changing, right? I mean, things are sort of calming down. People are doing maybe a little less online. Some people are starting to head back to the office. How did that affect you guys?

[00:21:33] Brett: Obviously we launched and we had the full tailwind of pandemic, right?

[00:21:37] Everyone, you know, all the internet stocks were getting pulled forward and you know, every, we realized so much was possible, right? I think before the pandemic you realize, wow, I could run my old business off, you know, online. That's crazy. I would've never expected that to be possible. And then sort of people were surprised to the upside, and I think a couple years into it.

[00:21:57] Everything was working, but there's kind of this nagging feeling from a lot of people, you know, that maybe something wasn't working or there was kind of a long-term cost of running your business, you know, fully remote. Right? And so you have all these kind of managers that have nice houses that buy the office in the nice part of town that we're bringing everyone back to the office.

[00:22:18] Oh, miss the office, you know, we missed, we missed the. The brainstorming or the, you know, conviviality of the office and, you know, I miss the visibility of seeing my team and the mentorship that young people have when they can see their boss and get connected with them. And the quick collaboration that you can have and you can tap someone on the shoulder and get an answer to your question.

[00:22:37] And you know, the culture that you know you can create when you're having multiple interactions with people over the course of the day, right across your organization. And so. In 2023, I think it was like, okay, we're going back. It's return to the office. And so 23 3 was all about this narrative about return to the office, which obviously was challenging for, for Kumospace, right?

[00:22:59] Because you know, if they're return to the office, why do I need this, this tool? And so I'm happy to report that, at least for us, that that didn't happen. So, you know, 2023 was all about people trying to return to the office. Turns out that didn't happen. You know, commercial real estate utilization is stall 50% of what it was pre pandemic.

[00:23:19] And it's stubbornly not, not budging. People are working, you know, still working from home, 30%, 40% of the time. You have the, you know, hybrid arrangements, which it turns out that people, you know. One of the reasons people were so productive during the pandemic is because it's in the indisputable fact that people get more, they work longer and they get more IC work done during, when they're working from home, right?

[00:23:44] 'cause they're not bothered by, you know, people all day, every day, and they don't have the commute. So they end up, you know, working from their desk, you know, at different hours, different times. And so what, what I think everyone realized is like, oh crap, they're not going back to the office. And so actually at the tail end of last year, people started realizing.

[00:24:01] Oh, or you know, this isn't happening, maybe I should just actually fix the problem instead of trying to just revert time back to what it was. And so we actually had, you know, our best quarter ever in Q4 23, I think because people kind of realize, okay, we actually have to. Get some dedicated tooling and technology that solves the problems other than just forcing everyone back into this suboptimal solution and putting them back into a box.

[00:24:27] But, but to your question earlier, you know, I, I, you actually were saying, Hey, you know, was it hard to make this decision to cut this business right when we had churn? Well, that wasn't hard because it was very obvious. What was far more challenging was, you know, the second half of this year where it was like, crap, like.

[00:24:45] You know, is this even a thing? Is, you know, is remote work gonna be a thing at all? Particularly when all the headlines were saying everyone's going back to the office. That was a much more difficult decision. And having beliefs that like, you know what, I, we know that this is better. We know that this is a better solution even if people, you know, had been hesitant to try it beforehand.

[00:25:06] 'cause they thought everything was gonna go back there. It was, we, you know, that, that took actually discipline to, to stay the course.

[00:25:12] Omer: Yeah. So what, what do you think, I mean, I mean obviously I know. You may be a little biased about this, but what do you think the future of remote looks like in, in the next few years is like, are we still gonna have companies and managers like trying to get people back into the offices or, or are we kind of getting to the point now where people are just accepting that this is the new reality and, and you know, maybe some companies like such as yours, you know, you might be a hundred percent remote and others are gonna be more of a hybrid type.

[00:25:44] You know, a situation and you need to, you need to kind of plan and optimize for both rather than, you know, expecting everybody to be in the office a hundred percent of the time.

[00:25:54] Brett: Yeah. I, i, I, there's no, there's no going back to nine to five. I have five days a week. I, it's just not happening like people.

[00:26:02] Appreciate and value the, the flexibility far too much. And so the problem is that you know, your best employees are the ones that can and will work from anywhere when it, when they want to. Right. So, you know, if you're a gigantic. You know, hyperscaler and maybe you have the leverage, or if you're a finance firm and you can literally pay people five x to typical salary to, to come to the office.

[00:26:25] Like, sure, those, those companies might drag people into the office. They tend to be small, you know, human capital, you know, small with very well-paid people. But for the everyone else, the truth is that the vast majority of our job can be done. From our computer anywhere. Right? Like, and I've been, you know, working on the internet for 20 years and one rule is that anything that can't be done on over the internet will be done over the internet over enough time.

[00:26:52] You know, we thought selling books sounded crazy 20 years ago at much less selling cars and hiring people and working, you know, not fully from, you know, anywhere in the world. Right. But that's all come, so I'm not betting against that. I think you said it correctly, like the world will be hybrid for some time to come, but the truth is that there are already large departments in companies that were already, already remote. Like we see this all the time. You know, I talk to all these financial companies, big banks and their IT departments have been remote and distributed for 20 years. Right. They've been taking advantage of this. And so I just think that that will continue along accelerated, accelerated process and you know, any function that can be spread all over the world for various costs and resiliency reasons, it, it will, it will be.

[00:27:44] Omer: How, how do you describe Kumospace to somebody like, 'cause it's not a Zoom, it's not a, you know, like some of these other products and I think that's maybe the first thing that people maybe assume when you talk about, you know, virtual office and, and you know, kind of a, a kind of a video product. But what is it like, is this, is this a new category? Is this like, how easy or hard is it for people to understand? I mean, obviously if they're watching these TikTok videos, probably they, they get it quickly. But how, how easy is it to, to position and sort of articulate the message about Kumospace to somebody if you're talking to them or, or maybe looking at another platform?

[00:28:28] Brett: Yeah, I think, you know, that is one of the challenges I think of a category creation, right? Is that you are. Trying to describe something that someone has never seen or, or, or experienced. We therefore don't try to sell features so much as, you know, some benefits or a new way of working. And the nice part is that all those things I just described to you, which I would say vis, you know, visibility, accountability, collaboration, realtime collaboration, and kind of culture.

[00:29:01] So the reason you use a virtual office is actually the exact same reason that you might have returned to the physical office, right? It's to get those back, those benefits and features. The only difference is that we are. You know, a software solution that costs the 10th as much and has all sorts of benefits like software, which is that you can remodel our office in a few minutes.

[00:29:21] You can add an additional floor for, for $0. You can get analytics about your team and who's around and who's connecting, and you know, knowing who knows who and who to ask the right question to instantly, and a bunch of benefits that you could never get. In, in a, in a physical office. So I think that the world has been given this false dichotomy of, okay, well you can either be really productive and, you know, in an office, but miserable and have a commute and, you know, don't get to see your kids and see their soccer games or, you know, you can have good lifestyle and, but you can't really get stuff done and you can't be productive and you can't be high performing.

[00:30:01] And, and I think we just, you know, believe in a third way, which is. Waking up and going surfing and then, you know, coming back and being at your desk at eight 30 and you know, closing, closing that deal. Right. I, I just don't see that you, it's not, Ray Dalio has a nice thing. He's like, yeah, anytime.

[00:30:20] You know, I was presented with two options. I didn't like, I just looked for a third.

[00:30:23] Omer: Yeah. Love that. Now, aside from TikTok, how else are you acquiring customers today? What's. What's working for you? I think when we were talking a little bit earlier, you mentioned conferences. Like, is that, is that a way that you're, you, you use, you're you're acquiring customers today?

[00:30:40] Brett: We tried to get pr. We, we had, we had hired, you know, three different PR agencies trying to figure out, okay, how, help us, you know, how, how can we have someone to help our get, get our word out, get press, this is a new, innovative solution, you know, how do we get this? And, and honestly it was a disappointment every time, you know, they just.

[00:31:00] A lot of talk, a lot of creating empty documents and not getting anything done. And then, you know, to my marketing team's credit you know, true Moffitt heads, our marketing. And we've got some other great folks in there. You know, they just sort of took PR in-house and, you know, PR is, it's kind of a hustle game.

[00:31:22] And so, you know, we got pretty good at stacking our pr, so we would get one. You know, speaking gig. And then we would basically send that to a bunch of other, anyone else that was having a conference. We'd get a list of conference people people hosting conference. We built the conference. We'd reach out to all of them.

[00:31:40] Then we'd reach out to everyone else who was speaking at that conference and ask them if they had another, you know, if they needed someone else on the panel. And then once we get one, you know, speaking event, we would try to get another, you know, we get on another panel and then once we were speaker, then we could reach out to all the other speakers.

[00:31:58] And particularly the ones that are potentially interesting customers. And then we would set up meetings with them. And so whenever I go to a conference, I, we basically, my marketing and PR department is essentially acted as BDRs and I go there and have 30 minute meeting for eight hours. So, you know, 16 meetings a day for the conference just lined up and you know, then making sure that those get passed back to our, you know, sales team and they could pick up the baton and that.

[00:32:27] Is that, you know, it took us a while to get there, but that is an effective way of running a conference playbook. And then, you know, you kind of set up some dinners with prospective customers, you know, at, at, at night or breakfast in the morning and, and for two days that, that you get pretty good bang for your book.

[00:32:44] Omer: You know, I think when most people think about events we go into like, okay, do we need a booth? How are we going to promote our product? And so on. But actually just thinking about it as a way just to. Set up meetings back to back. It sounds like so obvious when you think about it.

[00:33:01] Brett: I feel like, you know, people talk a lot about hustling and startup Atlanta. I think hustling just means emailing people you don't know, right?

[00:33:07] Omer: Yeah. I want to talk about product-led growth and your views on that, and then we will wrap up and get onto the lightning round. So, yeah, I mean, I, I know we, like you and I, were having a little bit of a chat about PLG before we started recording.

[00:33:21] How, how do you think about that? How is it working for you? In terms of Kumospace,

[00:33:25] Brett: I think product-led growth is obviously amazing. It's been a bit idealized by the venture capitalists, you know, talking about it. And you know, we all have Dropbox and Slack examples, but I think there's this full dichotomy between, okay, I'm either product-led and the product is just selling itself, or I'm sales-led and you know, it's all outbound and.

[00:33:47] And you're driving pipeline. And the reality is this is most things in business. It's not, it's not so clean. And, you know, I think we realize is like we, you know, we have a highly viral product. We had people coming in, you know, from TikTok and marketing and people signing up and using the product and, and so it's like, you know, very easy to say on the superficial level, oh, this is like a PLG product.

[00:34:08] Right? But I would say we learned pretty quickly that, you know, Kumospace is not a perfect PLG product for a number of reasons. We, you know. The end user might pick us up, but honestly, the sale goes through the team manager or a lead or VP or C, you know, CIO or CEO or COO at a, at a smaller company. And so it's, you know, a bit of a top, it's a top-down sale, right?

[00:34:31] So it's, I think true PLG product is like the end user. Used it and is willing to pay for it themselves and put it on their card, you know, their personal credit card and their corporate credit card. And then you get a bunch of those and then, you know, you meta size the side, the business, and then, you know, you try to roll up, right?

[00:34:50] Like, so I have pretty, I think a lot of people try to fit themselves in the PLG because that's what venture capitalists want, but in reality, that's actually not what they are. And so in our case though, it's a, it's a hybrid. Right. In the sense that we are good at getting marketing distribution, we're getting getting in front of users.

[00:35:07] We're great at getting people to sign up for accounts, right? But the question is, when does the sales motion begin? Right? And so, you know, we had to move where we put our sales. Touch points in our funnel. We had to, we tried all up and down our funnel before we settled in just the right place, you know?

[00:35:26] You know, we started off just putting the product and having sales, bring in beta customers and drop them in, and we didn't even wanna think about distribution because, you know, we just wanna build a core product. Then we said, okay, we wanna be PLG, so we're gonna put sales at the very bottom underneath product.

[00:35:42] You know, once they basically have already signed up, you know, salespeople will help them. It's like, well, that didn't work at all. Then we were like, okay, wait, maybe we need to. Our sales assist customers are, you know, spending more money and are higher length than closed. So we said, oh, well, let's just make it so you have to talk to sales.

[00:35:57] You can't even use the product before you come in. Well, that was a disaster because people didn't understand our product, like for the reasons I said they needed to at least see it. Before they even knew if they wanted to talk to sales. And so we realized that the perfect place for us was right after people create a account in Kumospace.

[00:36:16] We realized that that was the best time to talk to them, but talk to them in Kumospace, not with an email, not with a lifecycle customer email, but actually go and meet them. Our product. And so we call this drop-ins and that's when people, you know, cite up for a space, Kumospace. And when they're in their Kumospace, we get a little slack notification and then we drop, and then we see that, and then we send our BDR, well actually our product specialist in, and he just knocks in their space, says, hey.

[00:36:46] You know, this is Phil from KU Space. Just checking in, seeing how you're, you know, enjoying your, your KU space. Can we help you get set up? Is there any, you're having any challenges with that? And that is, you know, a very native channel. Again, you know, this is sort of product sales channel fit, right? And so it's like, what's the right.

[00:37:08] Channel and touchpoint for your salespeople to connect about your product. So it turns out for us, it's in the product, obviously, and that took some time, but you know, it's been highly effective. Customers are very grateful when they're getting to get this personalized service, you know? Right. Even from a company that has millions of users.

[00:37:24] Omer: It feels like a bit of a strange experience.

[00:37:26] I mean, when you describe it, it sounds so obvious, and again, so organic and, and, and natural. But then I wonder, like if I was signing up for similar Pro, let, let's go back to like Zoom, like people understand Zoom, right? And so if I was like signing up for Zoom and I get online and suddenly some dude at Zoom is trying to start a meeting with me, I'd just be like, what the, how, how, how have people reacted to to that?

[00:37:49] Brett: I mean, look, it definitely felt uncomfortable to us too when we started, but the truth is that. Meeting people in your product, if you have their best intentions and you are trying to deliver value to them and you're trying to help them get the most value, you know, we have a new product that people have never seen it before, anything like it before.

[00:38:07] So like, of course they're gonna need help. Of course it's, there's so much, imagine setting up an office. A physical office, there's so much goes into that. It's not a one-man job, right? And so we gotta provide the people who cared enough about us to sign up, create an account, create a space, we wanna be there for them and give them as much support as possible.

[00:38:27] And so I. I think it all depends on the relationship that you, that you have, you know, with your, with your customer. And I think, you know, meeting them where they need the help is, is really the anecdote and meeting them in the most natural way that your, that shine, you know, makes your product shine, I think is what's important.

[00:38:45] Omer: Love it. Love it. Okay. We should wrap up. Let's get onto the lightning round. I've got seven quick-fire questions for you, so just try to answer 'em as quickly as you can. What's one of the best pieces of business advice you've received?

[00:38:57] Brett: Time kills deals.

[00:38:58] Omer: What book would you recommend to our audience and why?

[00:39:01] Brett: Endurance, which is the story of Shackleton's failed attempt across the Antarctic is my recommended book. If you are in a low time in your startup and you don't think you can go any further, break the glass and read endurance.

[00:39:16] Omer: Great. Recommendation.

[00:39:17] What's one attribute or characteristic in your mind of a successful founder?

[00:39:22] Brett: Empathy for customers.

[00:39:24] Omer: What's your favorite personal productivity tool or habit?

[00:39:27] Brett: I think I have to say Kumospace, but in Sierra.

[00:39:29] Omer: Well, what's a new or crazy business idea you'd love to pursue if you had the time?

[00:39:33] Brett: I think that generative AI for new social applications to mediate not mediate, but enhance connections between real humans is a big opportunity.

[00:39:45] Omer: I agree. What's an interesting or fun fact about you that most people don't know?

[00:39:49] Brett: I'm learning how to climb mountains, but I'm afraid of heights.

[00:39:53] Omer: And finally, what's one of your most important passions outside of your work?

[00:39:56] Brett: Well, I'm calling you from Costa Rica, where hopefully I'll be surfing later today.

[00:40:01] Omer: I'm jealous. Well, thank you so much for joining me, Brett. It's been awesome. I know it took a little bit of time and effort for both of us to get this. I. Set up. So I'm grateful that we were eventually able to do it and have this conversation. If people wanna learn more about Kumospace, they can go to Kumospace.com and if you wanna check out Charge, you can go to charge.vc.

[00:40:25] And if folks wanna get in touch with you, what's the best way for them to do that?

[00:40:28] Brett: Yeah, just hit me up on LinkedIn and, yeah reference Omer's podcast.

[00:40:33] Omer: Cool. Well, thank you so much. It's been a pleasure. I wish you and the team the best of success and enjoy the surfing.

[00:40:38] Brett: Thank you, sir. Wishing you the same. And let's get after in 2024. Cheers.

 

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