Omer (00:09.280)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I talked to Tony Sternberg, the co founder and CEO of Prosper Stack, a SaaS product that helps companies reduce churn by using a better cancellation flow.
After spending 10 years working for a B2B SaaS company, Tony and his two co founders decided to start their own SaaS business.
They launched with the basic MVP product, but quickly realized that it was too basic and didn't work as they had expected.
So they went back to the drawing board to try and build a better product.
When they finally released their new and improved product, they hit another roadblock.
They weren't able to get enough people to sign up for the product and the ones that did were often the wrong types of customers.
So despite charging just $29 a month, they decided that a self serve SaaS wasn't going to work for them and switched to providing demos and then manually onboarding new customers, which they still do today.
The company is still in its early stages and has grown from 0 to to 6 figures in ARR over the last 18 months.
In this episode we talk about the lessons the founders learned about building the right product, self serve versus high touch customer onboarding and how they've increased their pricing almost 7x since they launched.
So I hope you enjoy it.
Tony, welcome to the show.
Tony Sternberg (01:43.570)
Hi, thanks for having me.
Omer (01:44.490)
Omer, do you have a favorite quote?
Something that inspires and motivates you that you can share with us?
Tony Sternberg (01:49.610)
Well, I'll be honest, I'm not, I'm not the biggest quote person out there, so I wouldn't say that is, but I know really what drives me is just wanting to create a successful business with a culture that is really conducive to employees and growth and responsibility and doing the best service I can to the company along the way and growing it to its fullest potential.
Omer (02:05.610)
So tell us about Prosper Stack.
What does the product do, who is it for and what's the main problem you're helping to solve?
Tony Sternberg (02:11.050)
Yeah, so Prosper Stack is a cancellation flow that helps subscription companies learn from and ultimately reduce churn.
You know, who are we for?
We were for obviously subscription companies, but within that realm we look at a few different types of subscription companies.
In particular, my background is more in the SaaS side, so that's what we tend to focus on right now, so SaaS is a big type of customer.
There's also a big box subscription market out there that we're looking to get a little bit more into.
And then also digital content.
Think of all the newspapers and magazines out there that are really just providing subscription content for you to go in there.
And then within those realms, you have customers that generally have a high amount of churn on the low end, you know, over a hundred a month, but up into the thousands.
And then on a price point that really lends to automation.
So something that you're gonna be making this process a little bit more seamless.
So it'd be, you know, probably sub $100 a month or so, maybe a couple hundred dollars a month on average per user or per account.
And that's kind of who we're for and who we're after.
Omer (03:02.260)
Okay, you launched the business probably about 18 months ago in April 2020.
Tell us where you are in terms of revenue and customers today.
Tony Sternberg (03:10.660)
So, yeah, we founded the company April 2020.
We launched kind of our MVP in the summer there.
So yeah, it's been year ARR.
We crossed the 100,000 threshold not too long ago.
And in terms of customers, we're approaching about 20.
Right.
Omer (03:23.930)
And what's the size of the team?
Tony Sternberg (03:25.450)
Size of the team is five employees.
So it's myself, my co founder, Graham.
And then we also have in business development and sales, we've got a few employees as well.
Omer (03:32.890)
So before we get into how you came up with the idea and you, you've built this business, I think it's probably for context, to start back in 2008, I think, when you were working as a recruiter and then you joined a company called Cats, which has an applicant tracking system.
So tell us about your journey there and what you were doing at the company.
Tony Sternberg (03:55.140)
Yeah, so like you said, I started working for a company called Cognizo in 2008 and it was actually a sister company to Cats.
It was one in the same.
It was a recruiting firm that was building its own applicant tracking system.
So it was a really unique part to be.
I've always been pretty technical, so I was doing technical recruitment, a lot of developers, things like that, but we were building an applicant tracking system that I was using to do my job on the side.
So even as I wasn't really part of the software side of the business, I had a lot of influence and a lot of usability with that product.
And we built it as we needed it and then ultimately realized there's a market beyond just our own recruiting firm for that particular applicant tracking system.
Omer (04:31.880)
So you and your co founder Graham were both working at cats.
In fact, there were three co founders to start with.
Tony Sternberg (04:39.520)
There were?
Yeah.
So all three of us met and started working together at Katz about 10 years ago now when I crossed over from the recruitment side into the software business, as that started to taking off, Graham and Aaron, my other two co founders, were both pretty early employees there as well.
Omer (04:54.260)
Yeah, because you spent a good part of a decade working there.
Tony Sternberg (04:58.980)
Yeah, yeah.
It was quite a journey being an early employee.
You get, I think a lot of that experience that could be beneficial down the line if you're going to be a founder or have desires to be a founder.
You wear a ton of hats, you have a lot of responsibility, a lot of control over what you're doing.
Access to the owner and the decision maker is always a big plus for sure.
Omer (05:15.960)
Yeah.
So tell us more about like how did you guys come up with the idea for Prosper Stack?
Tony Sternberg (05:21.320)
Yeah, so Prosper Stack, really the idea was working at a B2B SaaS company.
We were pretty self service in how we acquired customers.
We had free trials.
They come in, put their credit cards in if they want to buy.
We didn't really have a traditional sales team there.
So we had a similar problem at the kind of end of the funnel where people would just cancel and drop off.
And we really didn't have great insight into why because we didn't talk to them from like a success standpoint.
This was because of a more transactional type business.
So we saw like a big gap there in terms of the feedback that we weren't getting.
And then we weren't really doing anything to try to incentivize them to stay or even taking that data that, that we're getting when they're leaving and leveraging it to try to win them back later if we're able to overcome a feature gap or overcome a service issue, things like that.
So that's really how the core of the product was born.
Omer (06:06.430)
You guys see this problem, but why didn't you just solve it for the business?
Like why did you guys decide you were going to go off and build a product?
Tony Sternberg (06:14.240)
Yeah, I mean there's always a million things to do that were core to the applicant tracking system product that just never lent the resources to be able to build something as flexible and robust as we envisioned it, we wanted it to be.
So that was really the main reason.
And then ultimately after 10, 12 years and really growing to trust people that you view as a CO FOUNDER we just saw it as an opportunity to really start our own business out of that.
Omer (06:37.040)
And then how did you validate the idea?
Did you go out and start talking to potential customers?
Like, what did you do to figure out whether this was a problem worth solving?
Well, it's a problem worth solving, but is it a problem worth building a solution?
Tony Sternberg (06:52.450)
Yeah, a problem worth solving that people will, you know, ultimately pay money for.
Omer (06:55.690)
Right, exactly.
Tony Sternberg (06:56.490)
Yeah.
So.
So we obviously looked at the market.
We didn't see a lot of competitors or options out there.
So you could look at that in a couple different ways.
But we, the way that we looked at the, the opportunity to solve this problem is that we looked at different billing platforms and the maturity level of them.
So the stripes and the charge bees charge ify's recurlies of the world have these really robust platforms now have APIs that are well documented that we could build on top of.
So we envision this as a really low code solution for companies to be able to plug in with minimal development effort and then just have a super robust platform to be able to build that kind of customized tailored cancellation experience on top of it.
So that was something we looked at in the market.
I will say that we probably relied a little bit too much on our own intuition early on, and I definitely have some thoughts around that and what, you know, I would do again if, um, we were spinning up an idea from the ground up.
Omer (07:39.700)
Yeah, I guess we can talk about that when we get into some of the problems that you guys faced.
So you guys have identified a potential problem with solving.
You've had some firsthand experience of churn and trying to reduce that yourselves.
How did you guys get started?
What was that first version of the product?
What did it do and how long did it take you to build?
Tony Sternberg (08:00.500)
Yeah, so I know I just mentioned that we were, you know, ultimately built like a low code kind of implementation, but our first idea was, was really no code, but we still looked at like a stripe as the platform to really build on because so many subscription businesses are on there or a subscription management platform that works with them.
But so we, the original version of the product was really just like a delayed survey that would use that feedback to then email and incentivize them to stay or reactivate the subscription.
The huge mistake we made in that was just underestimating how many people actually would engage with that survey and ultimately see that there's an opportunity to come back, whether it's a discount or a different plan or a service level or something.
Like that.
So it was pretty quick after we launched that and kind of had our like, oh no moment when we found out that on a Good day about 2% of the people would actually interact with those surveys and responses.
That we decided that, you know, in order for this to be effective, we actually need to be the cancellation process and we need to intercept and gather that feedback from 100% of people as they're going through that process to cancel.
Omer (08:58.760)
Okay, so let me just make sure I understood this.
So initially it was just basically a form that asked them why they had canceled.
Tony Sternberg (09:05.960)
Exactly.
Yeah.
We would hook into Stripe, so then we know when their subscriber cancels.
And then we would just send an email off that says, you know, hey, we'd love to know more about why you've canceled.
And they would, you know, click that link.
It would go into our product, survey them and then use that data and feedback.
And our customers would set up rules.
You know, if they, if they say it's a price issue, they could maybe hit them with a discount or if it's a, like a service issue, maybe they could route them into a support intervention.
But that was really what the, how the product launched.
And like I said, we found out soon that we just didn't get enough interaction with people in that manner for, to make it viable.
Omer (09:39.240)
Got it.
Okay.
How many customers did you have at that time when you hit these issues or realized what was going on with the survey?
Tony Sternberg (09:46.200)
Yeah, so by the time we built that and launched it, we had gotten a little bit of our initial traction by being on the front page of Hacker News and then somebody did product Honda.
So we had, you know, some eyeballs coming in there and through those eyeballs and people checking us out and contacting us.
We were getting, you know, feedback on that.
Had a few people, I would say just a few customers that were really using it and trialing it out and a couple that were paying us on our early pricing plans that then it didn't take us long to figure out that it just wasn't going to work at the level we wanted it to.
So it didn't take long.
It was just a few.
Omer (10:15.430)
What did you start charging?
What was the first pricing.
Tony Sternberg (10:18.550)
Yeah.
That you launched?
Yeah, it was again self service model.
I think it was around $29 a month.
Omer (10:26.050)
And then today your pricing starts at about what, 200?
Tony Sternberg (10:29.650)
Yeah, about 200amonth.
Obviously the product is completely shifted from what it launched at and then has come quite a long ways since those early days, which is always fun to look back and look at how your MVP was.
Omer (10:40.370)
Okay, cool.
So you've launched your mvp, you got a little bit of interest, but then you've also realized that the product is a bit too basic and actually doesn't work that well.
So where did you guys go next?
Tony Sternberg (10:52.310)
Yeah, so then we realized that we needed to be the cancellation process and actually embedded within our customers applications.
So, so we had hit the pause button on what we were building and launched.
I think that was in June.
And at the time, Graham, my co founder, then the, our other co founder at the time, Aaron, really just put their heads down and built for about a couple more months.
And I think it was just early September of last year when we, I almost say relaunched the product or put version 2.0 out.
And that was really the process where they would have to embed the cancellation flow into their own application.
And then when they click the cancel button that calls Prosper Stack up and then we take over and do everything from there.
Omer (11:27.680)
Got it.
So tell me a little bit about like the tech stack, like what have you built Prosper Stack on?
What does that look like?
And then also I want to then dig into what the integration involves and what happens in the backend.
Tony Sternberg (11:41.120)
Yeah, yeah, I know.
And obviously not the cto, but I know a little bit about the tech stack.
We're hosting AWS.
It's on a platform called Hasura, so it's all JavaScript and built with React.
So that's our tech stack as it, as it pertains to the front end.
And then when they embed it, it's just a little JavaScript widget essentially.
That's a few lines of code that they embed to hook into the cancellation button on their own app.
Got it.
Omer (12:03.050)
Okay.
So they can, once they've taken the JavaScript snippet, added it to their site, when somebody is going through the cancellation process, they click the cancel button.
That fires some kind of event off to you guys.
And then what kind of things were you doing beyond just the survey?
Tony Sternberg (12:21.630)
Yeah, so we look at the cancellation flow.
It's a step by step process that has different components to it.
And what components are used is definitely dependent on our type of client.
But you know, we look at it as an opportunity to try to reiterate your value proposition throughout there and remind them not only of what they'd be missing out on, but you know, why they bought it in the first place.
And there's a balance to strike there.
You don't want to be too intrusive, you don't want to be too basic.
There's enough friction there where you need to get useful data, but then customers are also happy to provide that data as long as they're able to self cancel.
It's a lot better than the alternative of calling in or trying to go through that process.
So yeah, there's different stages in there.
Core part of it is definitely the survey, but it can be conditional.
You can segment your customers off and treat them differently, what plans are on, how long they've been customers, really anything that's plugged into your billing platform or even custom.
And then ultimately we take a combination of the segment of customer and the data they're giving you during that survey and then generally try to, you know, offer them incentives to stay.
And that could be in the form of a coupon.
It could be a pause or a break plan change.
It could be a trial extension if they're still on a trial.
Really anything that they can dream they can think of that's relevant to their business, that could be an incentive for their customer to stay.
Can be implemented with Prosper Stack.
Omer (13:29.640)
So this new functionality you built into the product, was this based on the feedback you got on the mvp or again, was it you guys like saying, okay, we don't have a huge amount of activity right now and basically moving ahead on your own gut instincts on what, what else you needed to build into the product?
Tony Sternberg (13:48.810)
Yeah, I think it was definitely a combination of both.
We had an early customer that, you know, just incredibly valuable in terms of the feedback that they gave.
And I remember like at the time you'd write eight emails in a row, I'd just get like, ding.
My inbox would just ding, ding.
But it was just all amazing feedback on what he thought the product could be.
And a lot of that lined up with our longer term vision of it.
And just knowing that we needed to shift in order to provide the most value to our clients, we needed to, you know, shift our strategy from being just that delayed survey into that platform that powers your cancellation and your user offboarding.
It was yeah, definitely a combination of intuition and customer feedback early.
Omer (14:22.130)
So that was one challenge that you guys faced that you built the first version of the product or the MVP and realized it was basic, but maybe too basic and wasn't really solving the problem well enough.
And then so you guys went away and figured out how to improve that and become the cancellation flow for your customers.
The other thing that we talked about earlier was that you guys had come from a self serve product or a background and you tried to build a self serve model here with Prosper Stack but you realized that wasn't working either for you and so what was going on there?
Tony Sternberg (15:02.720)
Yeah, I think our background to that.
I think in a perfect world a lot of people want to have a self service product because you like buying self service, especially if you're on the more technical side.
And it's something that we wanted to be at first and I think in the initial iteration of the product it definitely could have worked out if we wanted to be a really low cost but not very effective in my mind product but and then growing out of that, realizing that we needed to be the actual cancellation flow.
That also introduced a little bit of a development component too, implementing our products.
So when we get new customers on board they have to bring in their development teams and plan it out, put it in their sprints and releases and all that stuff.
It takes a little bit more to get going with it now.
It's not a ton of effort but it's something.
And I think being self service in that space it was at first a challenge for us because we didn't.
You'd have to invest heavily into like a really well done automated self service platform because it can be done.
Other businesses that have similar requirements do it but being so early it was just way more valuable for us to be working with them on the phone with them, finding out where the challenges were during implementation.
So we shifted from that self service model into more of a step by step, call it like a hand holding type process to get going and onboard for us.
So that worked out better for us.
Yeah.
Omer (16:12.720)
So like today if I go to the Prospess Stack website, there's no sign up button.
All I can do is request a demo and so tell me what happens once somebody submits that form.
Tony Sternberg (16:24.840)
Yeah, generally speaking we just like to learn a little bit more about their needs and why they're looking for a solution like this.
We know at this point who it works best for, the types of businesses, the amount of volume that you need, especially if it's going to make sense from a cost perspective.
We are experimenting with some more basic level self service plans.
So we do allow a 30 day trial on our kind of grow plans, our lower plans.
At the moment that's just kind of part of the whole experimentation with pricing and trials and plans that I think goes along with any SaaS business because we haven't ruled out ever going going back to that at some point.
It's just for right now we feel like the best use of our time and the way that we can improve the most and do a better job is just by doing more of a consultative approach to onboarding and getting started.
Omer (17:03.760)
So a lot of founders want to try and get to the self serve utopia as quickly as possible, but it's not always the right thing to do for every type of business.
And maybe for you guys, somewhere down the road you'll figure that out and how self serve can work and you can scale that and so on.
But there, there are a number of benefits here both in terms of sure, the giving demos for a product that's not an enterprise type solution, you know, it's probably something that you can't keep doing forever, but there are definitely benefits there in terms of you are still at the early stages and you get to know every customer a lot better and keep keep figuring out what their specific needs questions are which then ultimately can improve your marketing and sales and messaging and so on.
And then also this on its own without even using Prosper Stack is a great way to reduce churn because you're only onboarding customers that are presumably a much better fit for the product.
Tony Sternberg (18:06.090)
Yeah, I think all the above is absolutely true and I'm a big believer in that, especially as a founder.
When you first start, I think founders need to be sellers and even if you're not a trained salesperson or someone who's had sales experience in the past, I think your founder passion comes through as genuine and you might not consider yourself a salesperson, but it'll definitely work.
And you need to do that in order to really validate your idea and just get the feedback from the people that are actually using the product.
Get to know them better, find out what struggles they're having.
What what they're telling you is basically what you can use in your marketing later on.
You know, the pain points that they're having and communicating at that time are can help you craft the messaging that's really going to speak to your audience down the line.
Omer (18:43.970)
So in the early days you were doing all the selling.
Where did your first 10 customers come from?
I know you mentioned Product Hunt and Hacker News.
I think you said were the two places where you got some visibility.
But were those also the channels that got you to the first 10 customers?
Tony Sternberg (18:59.650)
Yeah, yeah, that was one of the channels for sure.
The second was the main one in to date is still our main channel is just really through direct sales called outreach.
You know we went out there and we sent the first few emails in June and they were horrible emails.
And we didn't get much of a response.
And when you haven't done that before, you, you quickly figure out what works and what doesn't.
And we ended up settling on a strategy where we, we utilize a lot of video in our outreach and try to make it really personalized and tailored to who we're reaching out to because we do it in a very specific targeted manner now that we have a pretty good idea of who our, you know, our deal customer is.
And so we utilize a lot of video and that's resulted in probably 90% of our business now.
And we've also gotten a little bit from partner, I would say partner sites, like when we for example, work Stripe Verified Partner and they have a directory of partners and we're listed in there and we do get leads from those kind of directories as well.
Omer (19:50.150)
So tell me a little bit about the video, like what do you actually send them?
Tony Sternberg (19:54.150)
Yeah.
So I think we have a little bit of a unique advantage in how video can work for us because I think at its core we can show exactly what our product does visually and I think that's really interesting.
And we can tailor it and customize it to our potential customers by adding things like their logo in there, talking to them directly with their name.
But yeah, we can basically show how the cancellation flow works and talk about it in about a 30 second clip that really conveys our value prop to them.
So we can say, here's how it works.
The really great thing about this is you can use it as a retention tool and actually based on the feedback you're getting, trigger different offers and incentives to stay instead of letting them churn out.
So it's at a basic level, it communicates exactly what we do and creates.
If there's interest in learning more, it's a really perfect way to start that conversation up.
Omer (20:40.870)
So you've been doing some other marketing and exploring other channels, but it sounds like the vast majority of your revenue today has come from outbound and still.
Is that right?
Tony Sternberg (20:53.530)
Yeah, that's definitely fair on how we're doing it.
We're also investing in marketing content and search engine optimization and just producing content that can be useful and valuable to people that could potentially become our customers one day.
So we're investing in that now.
We know that's a longer tail, so we hope to see results of that in the coming month.
Omer (21:10.010)
And if the product is actually delivering on the promise, then you're giving people a 30 day trial anyway.
So it feels like a pretty decent offer.
If all I have to do is add some JavaScript to my site.
Your team is going to help me get it set up.
So it's not completely self serve and I've got 30 days to actually see whether I'm going to reduce my churn or not.
Tony Sternberg (21:42.560)
Yeah, exactly.
So, you know, we, we like to say at a basic level it takes about an hour of development work because it's just a few lines of code and you basically do a direct connection into your payment platform and then the rest is handled by Prosper Stack.
But in terms of building the cancellation flow and experience itself that we give a default template to start out, which is a template built of best practices that we've come up with by just looking at the industry and actually studying probably over 100 different cancellation flows out there and the best practices overlapped into what we think is a great approach and then they can customize it from there.
So it is self service in that aspect, but a big value of what we can provide.
Leveraging data that we have and strategies that we know have worked and offering that as like consultative advice to companies that we're working with to help them optimize their offboarding experience for retention and data collection.
Omer (22:29.820)
For people who aren't completely familiar with the sort of cancellation side of things.
When we were talking earlier, I asked you about whether you were basically helping with dunning and so just tell us what does that term actually mean and what does Prosper stack do in relation to that?
Tony Sternberg (22:47.200)
Yeah, yeah, great question.
It's something that we do talk about a lot and clarify a lot.
But in the churn world you have two different types of churn.
Essentially you have a passive churn and an active churn.
And passive churn is really what we call is also known as dunning.
So it's when your credit cards expire, payments fail and customers fade off in a more passive way that's not intentional for them actually going to click a cancel button.
So there's a lot of solutions out there for dunning that are really good, different approaches.
A lot of payment platforms have basic dunning features built in and that's the side of the market that is covered the most.
I would say on the active churn side, which is where Prosper Stack comes in, is that's really just dealing with intentional cancellation.
So when someone actually goes into your app, goes to your billing section and says I want to cancel my subscription, but you because of, you know, the type of customer you have and whether there's a legal reason or even just because you want to let them off board in an automated way because it doesn't make sense financially to do otherwise.
That's the automated process that we provide.
So we're always working with customers for the moment are more intentional about their desire to cancel.
Omer (23:48.400)
I also want to talk about pricing because you mentioned earlier that you started out charging around $29 a month and today you're starting at around $200 a month.
And yet you told me you guys were reluctant to race your pricing.
So just tell me about some of the hesitancies or difficulties you had in increasing your pricing.
And then how did you get to a point where you in the last year have I guess 7x the pricing?
Tony Sternberg (24:16.220)
Yeah, yeah.
It's a combination of a lot.
But coming and starting in self service, I think generally in self service you are a lower priced model.
It makes sense for that because it's an easier product to go maybe to get started with.
It's, it's something you don't have to spend to have potentially a sales team or an outbound driven team.
You can do things in that way.
But as we discovered the best value that we could provide our customers to act was actually be the cancellation process.
We realized that we provided much more value to that.
But with that value came a little bit more complexity and implementation, a lot more value in the consultative aspect of what we can provide.
It's more of a direct relationship, a very hands on relationship, especially in the first 90 days of onboarding.
I think you're battling a few things there and I think as founders and as startups, you're probably your own biggest critic.
You're like, is this good enough?
Because I know I can do better.
So you always have this ability to look at yourself and think that you can do better.
So therefore you can't charge as much yet.
I think one really big takeaway that we've learned in the last year is as our product improved exponentially since when we launched it and now in the manner we're selling it and the amount of value we can actually provide with this new approach that you can't be afraid to charge based on the value of your product.
So if you're providing real dollars to their bottom line that is tangible to measure and the ROI is there, don't be afraid to up your price accordingly.
And it's a win win for both parties because you're obviously charging more for your product.
They're getting the 3x5x10x return out of it.
That is, that is clear as day, especially in something that can be correlated right back to dollars like what we're offering.
Omer (25:41.340)
I noticed that you have a nice ROI calculator on your site, which for any business, even one that's not generating a huge amount of revenue, it probably 200amonth, probably becomes insignificant once you realize how much you can recover.
Is that ROI calculator, is that getting a lot of usage?
Do you find that that helps in converting people, or was that kind of an idea that you put out there?
But actually it looks cool, but isn't being used that much?
Tony Sternberg (26:05.830)
Yeah, no, yeah, we actually do use it as part of our, like, you know, discovery process and sales process.
A lot of times people stumble into it and then contact us after because it really is just a useful tool for any subscription business to run their data through.
And then it can just show them how Churn is affecting you and how basic changes and improvements in your Churn can affect your bottom line over time.
And then whether you want to do something on your own to improve those things, or you want to use something like Prosper Stack or maybe a more passive Churn solution like dunning, all those strategies apply to that ROI calculator still.
So it's definitely an objective look at how reducing Churn can affect your bottom line.
And if you find that helpful and think that Prosper Stack can help with that, we're happy to talk.
But yeah, we've definitely gotten leads from that as well.
Omer (26:46.970)
I also want to talk about the situation with your founders.
So we mentioned earlier that you started out with three founders.
Now there's only two of you, which is not uncommon.
It happens in the early days of building any, any company, and often it leads to quite a lot of pain because people didn't really think that sort of fully think through what would happen if, whether there was, you know, know, a fallout or an amicable departure.
What happens to vesting and all of those kinds of things?
You guys had an amicable kind of departure, but.
And also you didn't have an issue with vesting.
So tell me, what were some of the lessons that you.
You learned from that helped you to be prepared for this type of situation?
Tony Sternberg (27:29.410)
Yeah, so I think we did a few things early that really helped us when that situation come about, because obviously when we started the company, we never thought that would happen.
Whether it be that soon or any point, we all go in there with the best intentions.
But life changes, desires change, the product and the company itself changes.
And not everyone wants to go along with that change.
So we were fortunate enough that the three of us had worked together for almost 10 years and we really trust each other, respect each other, and just thought this was the perfect team that we wanted to start with.
And I'd say about eight months in, we did lose Aaron as a co founder, but like you said, it was amicable.
The best thing that we did early on was just talk about our goals and what we all wanted to do and how we saw the company growing.
And we were on the same page as that.
And we said something to the effect of if it ever becomes to a point where you think you're not as vested into this or as gung ho as the others are, then it would be the right move to step aside.
And Aaron's split from us was amicable.
He's awesome.
We were still really good friends with him.
We actually kept him on as an advisor for the company because he's an amazing designer and gives us tons of really good feedback on there.
But he just has different goals and passions that he wanted to explore.
But we set everything up from the start with an understanding of how things would work and then legally structured things where as founders, we don't.
We didn't invest any of our equity until a year in.
So technically speaking, none of us had any equity at that point anyway.
So that's the right way to do it.
It's.
It might seem like it's not, but it is.
And you'll eventually get all that equity anyway, so don't worry about it too much.
It's four years.
It seems like a long time.
Omer (28:56.600)
So how did you guys figure out how to set things up correctly?
Did you try to figure this out yourself?
Did you hire an attorney?
What did you do?
Tony Sternberg (29:03.800)
Yeah, we did have an attorney early, but we actually set the company up with Stripe Atlas.
They have a lot of, you know, the legal paperwork and filings done ahead of time for you, and they give you just a path to do it.
And in my opinion, it was the right way to do it.
So we, we utilized Stripe Atlas and then had an attorney that we could use to supplement the areas where we needed it, especially when the breakup happened, just to make sure we were handling everything in the correct manner.
Omer (29:26.920)
So you guys have only been a year and a half into this business so far, but you've got to six figures in ARR and seem to be doing all the right things.
We talked about the product and what you learned from the super basic version of that and how you involved and improved it.
We also talked about how self service hasn't really worked too well, so far.
And how you're taking a different approach to selling and onboarding customers.
I want to go back to something that you said earlier where you kind of said, well there's, there's things that I would have done differently if I was doing this all over again.
So as you reflect on, you know, the, the last 18 months before you guys have gone through on this journey, what are some of those things that you would do differently?
Tony Sternberg (30:16.110)
Yeah, and I think it's pretty easy to, to say I would do things differently and Hindsight is always 2020, but I think we probably could have gotten past our idea of that initial MVP and version of the product.
How we did it with more of a delayed approach in that approach by just interacting with customers first.
So we should have gone out, really reached out to our network which when you work in SaaS for 10, 12 years, you tend to know enough people, you've been to trade shows, you meet owners and people that could definitely give you that kind of feedback that you're craving.
And we probably could have figured out earlier that before building it, that approach wasn't work.
I think we relied a little bit too much on our own intuition right away.
People that could be potential buyers.
It's super worth it to go back and before you even build to just get their thoughts on what you're doing and say, hey, if I build this and it does what we're just talking about, is this something you pay for?
And then ask them how much they would pay for it.
So you're validating the product, the idea and the value of it there.
And I think we could have done a better job of that before we had launched that initial mvp.
And that's just, that's one of the main things that sticks out to me.
But not a lot of regrets.
Omer (31:18.090)
Yeah, we'll get you back in a few years time and see what else hopefully.
Okay, great.
Let's move on to the lightning round.
I'm going to ask you seven quick fire questions.
Just try to answer them as quickly as you can.
Are you ready?
Tony Sternberg (31:30.790)
Yeah.
Let's hit it.
Okay.
Omer (31:32.110)
What's the best piece of business advice you've ever received?
Tony Sternberg (31:35.030)
I think establishing a group of people or advisors that can act as a sounding board for you is hugely valuable.
When you're making decisions in a vacuum, it's never a good thing.
And even if you have a co founder, it's best to just have people from an outside perspective to soundboard things off of.
Omer (31:49.590)
What book would you recommend to our audience and why?
Tony Sternberg (31:52.790)
Sure.
When it comes to reading, I love biographies, but one that has stuck out with me through the years is I read a book called the Design of Everyday Things by Don Norman.
It's not really you think it might just be a book for designers and I'm not a designer by any means, but I just love how it makes you think about when you create things, whether it's a physical device or it could be virtual like on a website that the need and concept around human based, human centered design is hugely important.
And that book itself, I remember that like spurred one of my first startup ideas to create like a user testing platform, you know, on the web that would do recording for companies and everything and that's since been launched and hugely successful.
First regret there not jumping at that point, but that's one of the books that sticks out.
Omer (32:34.060)
What's one attribute or characteristic in your mind of a successful founder?
Tony Sternberg (32:37.660)
Problem solving.
No matter the idea, the startup you're running, you're going to run into roadblocks and you need to figure out when those problems happen and when they hit and then find solutions to them.
Omer (32:46.620)
What's your favorite personal productivity tool or habit?
Tony Sternberg (32:50.110)
Yeah, since it launched I've always used Trello as a basic kind of organizer to do my like daily to do doing done type things.
But I am looking to get into more specific like getting things done apps at this point.
But I've always used Trello.
Omer (33:01.710)
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Tony Sternberg (33:05.230)
The idea is definitely come and go quite a bit but right now just because I'm ingrained in it but there's a lot of news around it but something about building like an alternative app store payment solution for the Android and Apple ecosystems that are more consumer and business friendly in terms of processes and fees.
Like I said, there's a lot of talk about this lately.
I think that there's a lot of change coming.
It might not be immediate, but I think there's a big opportunity there.
Omer (33:24.860)
What's an interesting or fun fact about you that most people don't know?
Tony Sternberg (33:28.540)
Yeah, I'll say that I'm an avid Taylor Swift fan, have been since she launched into country music like years and years ago.
Been to a lot of her concerts and so I guess I consider myself an original Swiftie.
Omer (33:39.340)
And finally, what's one of your most important passions outside of your work?
Tony Sternberg (33:42.550)
Yeah, the last couple years I've really gotten into barbecue actually.
So I just love the process of trying to chase perfection at it.
So many factors go into, you know, the process of doing it.
The kind of type and quality of meat.
You have the smoker you have, the location, the geography where you're cooking it.
There's so much change than difference, even in the same spot that no two cooks are the same.
And I just love doing it.
Omer (34:03.910)
Awesome.
So if people want to find out more about Prosper Stack, they can go to prosperstack.com and if folks want to get in touch with you, what's the best way for them to do that?
Tony Sternberg (34:13.469)
Yeah.
Yeah.
You can send me an email, tony, prosperstack.com or find me on LinkedIn.
Tony Sternberg and I'd be happy to chat.
Omer (34:20.189)
Awesome.
Tony, thank you for joining me.
And I wish you and the team the best of success.
Tony Sternberg (34:25.549)
Appreciate it, Elmer.
We'll hopefully be in touch again soon.
Omer (34:28.269)
Cheers.
