Whale: The Realities and Struggles of Building a SaaS Startup
Gary Vanbutsele is the co-founder and CEO of Whale, a knowledge transfer and training platform that helps businesses onboard and train employees.
In 2018, a couple of friends in Belgium decided to build a SaaS product to help small business owners monetize courses. Everyone they spoke to told them it was a great idea.
So Gary and Bram spent over a year building their product. They were both excited to show their prospective customers what they had built until they realized that no one was interested in paying for it.
They hadn't validated their idea properly and had spent almost a year and a half building something that nobody wanted.
A few months later, Gary had an idea to build software to help with training and onboarding employees. He had experienced these problems firsthand with the IT company that he owned and knew it was a widespread problem.
This time Gary and Bram did things differently.
They validated their idea and even pre-sold their product idea to a couple of customers before they started building the product.
Things were looking great and everything seemed to be coming together this time. But little did the founders realize that their struggles were just beginning.
In this episode, we talk about the realities of building a SaaS business and the endless struggles founders face trying to find product-market fit.
We also dive into some big mistakes the founders made and the lessons they learned from those experiences including:
- How to pre-sell your product idea
- How to differentiate your product when it's not a unique idea
- How to use partnerships to grow (and how to find and recruit partners)
- How to avoid early hiring mistakes
I hope you enjoy it.
TranscriptClick to view transcript
In 2018, a couple of friends in Belgium decided to build a SaaS product, to help small business owners, monetize courses, everyone they spoke to told them he was a great idea.
So Gary and Bram spent over a year building their product. They were both excited to show their prospective customers what they had built until they realized that no one was interested in paying for it. They hadn't validated their idea properly and had spent almost a year and a half building something that nobody wanted.
A few months later, Gary had an idea to build software, to help with training and onboarding employees. He had experienced these problems firsthand with the IT company that he owned and knew it was a widespread problem. But this time Gary and brim did things differently. They validated their idea and even pre-sold their product to a couple of customers before they started building it. Things were looking great and everything seemed to be coming together this time. But little did the founders realize that their struggles were just beginning.
In this episode, we talk about the realities of building a SaaS business and the endless struggles founders face trying to find product market fit.
We also dive into some of the big mistakes the founders made and the lessons they learned from those experiences, including how to pre-sell your product idea, how to differentiate your product when it's not a unique idea and plenty of similar products exist, how to use partnerships to grow, even if you're in the early stages of your business and how to find and recruit partners and how to avoid making early hiring mistakes, which in Gary and brand's case led to them having to rebuild their initial team and hire from scratch again. So I hope you enjoy it.
Gary, welcome to the show.[00:02:23] Gary: Hey, Omer, thank you for having me. [00:02:25] Omer: Do you have a favorite quote, something that inspires or motivates you or gets you out of bed? [00:02:30] Gary: Yeah, it's actually a lyric from a Belgian wrapper, which kind of stuck with me. I'm not really a quotes guy, but what part of his lyrics really stuck with me and, and the original language in French, it goes like “la vie n'est qu'une façon de voir les choses” which translates to life is just a way of seeing things.
And so when I feel down or when I feel challenged or when things are not going my way. I tend to remind myself that life is just a way of looking at things like I could stay in bed and be sad about it or let it ruin my day. But in the end, if I look at everything that I have with my family, my business, my coworkers, I can decide how I feel.
I can decide how my life is going to be. And so just that small part, I don't know if that's what he really intended to say in his song, but that's my interpretation and it helps me in tough spots.[00:03:28] Omer: Yeah. I think that's super important having that kind of mindset, especially as a founder, when you're going to have a lot more of those down days that we don't often talk about, it's definitely helpful to have that kind of mindset.
All right. So tell us about Whale. What does the product do? Who is it for? What's the main problem you're helping to solve?[00:03:45] Gary: Sure. So Whale is a, is an online tool that allows you as a business to capture all of your company's processes, procedures, policies, how has them in one central place and then really put that information into play.
And what we mean by that is leveraging it to better onboard your new hires. Ramp them up more quickly, train them on the essentials of their job and basically support them in their day-to-day task and make sure that they feel supported, that they can be successful. And we do that in a, quite a unique way where we don't just offer like an onboarding and training flow, but Whale is really there to support you throughout your career. Make sure that you just have all the knowledge that has to be excelling at your role.[00:04:34] Omer: Can you give us a sense of the size of the business in terms of revenue, number of customers for a large part of the business was bootstrapped. And then you raised a seed round fairly recently, but give us a sense of the size of where you are right now? [00:04:47] Gary: Sure. So being on the market for about 12 months, we're now at about 25K MRR, about 120 customers who are dispersed around Europe, North America and Australia. [00:05:01] Omer: Okay. Great. So, let's talk about where the idea for this business came from. You launched the original iteration of the business about four years ago, 2018.
So why don't we start there? Just tell us, like, how did you come up with the idea? What was the original idea for this business?[00:05:19] Gary: Sure. So, four years ago, which started off as a hobby project because I was in the midst of running my previous business. I'm someone who likes to jump from one challenge to the other, like after four to five years, I like to do something else.
So, I was about five years in with my first business. And we decided to build a tool for small business owners to monetize their courses. So, we wanted to offer them a solution where they can develop an online course and then sell that to their audience and monetize that content. And so, we did things kind of backwards.
We started building the product before validating the idea through. We did speak to a lot of companies, which we felt would be a good fit and they all kind of got very excited about the idea up until to the point where we had an MVP, and they were still very excited until we asked them for money. And then it was, well, it's not that big of a challenge and I'm not so sure if this is actually going to be a good fit.
So we spent about a year and a half building something people were not ready to buy.[00:06:29] Omer: So, this was you and your co-founder Bram. [00:06:32] Gary: Yeah, he's he's my product owner. So he came up with the product and so I think we just fell into pitfall that a lot of startups then to end up in is building the product before validating the idea.
And so we decided to give it a rest for a couple of months. And around that periods, I had grown my previous business to about 20, 25 employees. And so we were onboarding like four or five people every six months at that point. And I felt like all I was doing was training new people. And at the same time putting out fires, like I felt like I was the only one knowing how to do things in my business.
I was always running from one issue to the other and I got like not burned out, I would say, but I got bored out. I was like, I'm not enjoying this anymore. I keep doing the same stuff. I keep repeating the same stuff. And so I kind of wanted to transfer my brain, if you will and all of its business insights into something that I could share with my team.
And we did what a lot of teams do, we turn to like a SharePoint kind of solution, but we documented like a whole bunch, a bunch of stuff, and then realized that nobody went into SharePoint to find that information. And so at that point we decided, Hey, let's build something ourselves that's going to be more intuitive, that's just easier to use. And so came the idea of Whale.
And so this time we decided to learn from our previous mistakes and actually validate the idea and validated all the way through. So, we pre-sold the tool to a couple of businesses. We had about five to seven businesses who wanted to buy it before the product was ready.
So we felt like that was validation enough to build the MVP which we did in about six to nine months time. Again, everything was happening after hours, since we all had full-time jobs. And at that point we felt like, okay, there is an audience out there. There's this challenge that is worth resolving. And that was at the time where I was about to sell my business, which has been sold, now, and I was ready for something else. And so we raised our seed round at that time and 12 months later, here we are.[00:08:50] Omer: Tell me about how you pre-sold the product this time around. How did you find those customers and what were you showing them? [00:08:57] Gary: It's a sales deck with like a couple of prototype imagery that, that my co-founder had built. So really more of a concept than anything else. The way, the way we reached out, to these people. I started in my own network kind of look at, okay, what kind of businesses would this be a good fit with for, and what naturally happened is even though when we spoke to some businesses and they were like, this is not necessarily something that we could use right now.
By just asking who would be interested. A lot of people like actually brought on that next connection I could speak to. And I think by the time I was going through my own network and being able to speak to their connections, we had spoken with over a hundred companies. Maybe we started off with maybe 15 companies from our own networks.
So that effect of just asking like, Hey, if you're interested or even not, who could be an people tend to be, if you ask them, they, they tend to be generous with their connections. If you're upfront, you're transparent about what you're doing. And so that helped us follow data, true with a lot of businesses in different industries. And yeah, we felt like that was a good approach.[00:10:14] Omer: What was the offer that you put to these people was like? How much are you going to, how much did you charge them? And then when did you tell them you were going to come back with something? Right? Cause that's always the problem with pre-selling is that how much do I charge people?
There is basically vaporware. I don't have anything. Then how long is it going to take me to go and build the product? You know, there's all of these kind of logistical things to work out. So how did you, what was the offer that you felt helped to convince enough of these people to, to spend some money with you upfront?[00:10:48] Gary: So, if I remember correctly, we asked about 5k, which in turn would get them a 36 month access to the software, whatever we were going to build in those 36 months, they would always have access to all of the features. In all honesty. I don't think we made commitments on timing.
I think we just like, Hey, we're building this if you're interested, you can get on our early birds. I think program is what we called it. And in turn, I don't think it was really about like the discount, because we said we're going to market at this pricing and you're going to get big discounts. It was more about. We really want to get your input fairly early on.
And so being that select few, that pre buys this product, you're going to have a lot of input on how we're going to make that evolve into a final product. I think that's what got people interested in. Like, oh, okay, we can mold this into some of our specific needs. At all times we kept our vision, obviously as well as sometimes it came to.
Like, well, it's something we agreed on, but needed to be like modify a little bit to still be in our vision. But I think that's really what got those pre sold companies excited, like having a hand in how the product would turn out to be.[00:12:12] Omer: Yeah, I think was interesting. I spoke to a founder yesterday who had the opposite experience, where he went out with an idea. He pre-sold it and was pretty excited because he had more than 10 people who sign up and paid. And then went off and spent six months building the product. And then when he came back, it was like, nobody was really interested. It was almost like they were like, Hey, does this seem like a lot of money? Let's just, you know, we'll see how it sort of turns out.
And so he went the opposite way that after that he decided, well, I'm not going to pre-sell, I'm going to focus on the problems and see if I can solve it that way. So you had a good before-after experience. It was, we were going to go on and validate this idea. And we're going to try. And at least, even if we're not going to pre-sell, we're going to, we want to get to the point where we just feel that this is the right problem that we're solving, and then we'll try to sell this thing why she was a little bit different because you built the product first. Right?
But, and then this time round, you were like, no, I'm not going to do that. I'm going to presale this thing. Make sure there's some commitment before I go in and move further. When you look at those two things, what was different this time round that helped you make better progress? And so one of the things that I think immediately sort of came to my mind was even the presale piece is.
A lot of founders. We, we know that the pre-sell thing can work and asking people for money is a very, it's not a guarantee, but it's actually a pretty good way of getting gauging how much interest or commitment, how much they care about the problem and so on. But I think there's still this reluctance, this fear to ask for the money.
It's like, it's nice just to be able to do a customer interview. And they say, yeah, this is great. And you're like, okay, that's good enough. I'm going to go and build a product. Now I don't want to ask because they might say no.[00:14:01] Gary: Exactly. You don't want to know. And it's just easy to have that conversation and, and to sell your idea. And people automatically, if you bring your story with passion, they kind of resonate on that passion. They're like, yeah, this really sounds like an awesome idea. Yeah. I could definitely use this up to the point, like, okay and, and are you ready to pay me for that idea and then there's an entire different stories.
It's just easy to go with you until like, okay, we need that hard proof and I agree. It's easy to not ask those hard questions, but in the end, it's, that's where you're going to get real validation. If people are not willing to pay money for your idea unless you have this free plan, like business concept and where you're monetized in a different way for, for a typical suffer as a service business, like get getting the money and them actually paying it because we also had that experience where people committed, they pay and then like about two months before we were ready to actually launch the product, they were like, Gary, can we get our money back? Because reason X, Y, Z, and this actually happened twice. And so that really is, that's really not a fun place to be in because you're using that money to like build the product, that kind of stuff.
And them pulling the rug underneath you is not a great experience. But again, the big difference was like this time around, we asked that question. We still had a lot of nos, obviously, because 5k still, I believe a lot of money for a business to commit to, even if it definitely, if it's a small business, but we were more confident, like, okay, there's at least a couple of businesses.
If like five businesses are willing to pay 5k, we can assume that there's another 50 out there that are going to do the same thing. And so it helps us built that confidence to move forward and decide, okay, this was the right pivot.[00:16:05] Omer: Now the idea with, Whale in terms of helping to, you know, there's knowledge sharing on boarding employees, no, these are the things you mentioned.
It's not a unique idea. There are other products out there that solve the problem. And, you know, in, in various ways, what was it about your sales deck, your pitch, your idea that differentiated the idea enough that somebody was willing to say, I'll give you $5,000. I'll wait, whatever time to get this, rather than, you know, just going out there and using a product that's already there.
Yeah. So[00:16:42] Gary: what we saw and you're right, there's a lot of solutions that commit to that proposition. What we saw though, is what a lot of companies ended up with yet, again, was a silo where a lot of information sits and where you expect people to turn, to, to be trained, to find information.
And the reality is that, inherently people are lazy. And so they're always going to find the shortest route. And today the shortest route is not opening an app and finding like a piece of knowledge. It's probably just hitting the slack channels hard. It's asking the person next to me. And so we felt like building another silo where people needed to go to, to find information has got to move them forward.
It's not going to do the trick. And so what we decided to build is a place where you can house and centralize all information, but then have multiple ways in having it flow towards the people that need it. And so one of the concepts, if which we brought to life was having information show up in people's existing tool stacks.
So imagine that you're a sales rep, you're using Salesforce, to manage your leads and follow up on them. Instead of having to open another tab and find like, Hey, how do I manage leads in Salesforce? Again? What are our best practices will allows you to contextually have information shop in Salesforce based on what you're doing.
If that person is in the leads module of Salesforce is going to get relevant, contextual training or knowledge delivered to him without even having to search for it. Without having to know that there is information out there to help him. Whale's got to do that automatically.
So we really talk about having information flow to the relevant people in their moment of need. And people felt like this is a difference. Like why we would buy whale if it's just going to be another Google drive type situation where people don't go to. And so having that reverse effect of having information be connected to relevant people was what people got excited about and is what our customers are raving about.[00:18:57] Omer: So how much of that idea came from your experience with trying to do this manually and put everything on SharePoint and then figuring out that, that actually doesn't work that well in practice. Was that the, sort of the seed of where you realized the, kind of the complexity of the problem, and then the idea came from that, or was the idea sort of more from talking to customers and then figuring out okay. These are the things they've struggled with, and this is the angle that we need to take. [00:19:30] Gary: It's both, we experienced it ourselves. And so yeah, we use that SharePoint environment. We had documented like basically all of our business processes and so everything was there to be used and to be referenced. For us to use for onboarding and training purposes.
And what very quickly happened is it became that graveyard of information where nobody turned to a, it wasn't dynamic felt static. It was like you had another document that you just don't want to read through. And so. At a time with when that ID came up of looking at it differently, we were in a peer network group.
And so it allowed us to talk to a lot of business owners, share thoughts, and like we came together every quarter and then discuss challenges we had. And like every company, each quarter talked about same challenges. And one of them was like, how do I make sure that people execute in a consistent basis? How do I systemize my business to make it easier to grow?
And so everyone just used those tools that are already out there, but felt like it's not doing the trick. So that was just extra validation at that point. Like we're not the only one with that challenge. We just need to figure out what their good solution is going to be like, how it's really going to help resolve that challenge.
And so, yeah, I think like just talking to as many people that you can throughout the entire journey. Still today I tried to talk to each customer, like at least once really understand, like, what are you trying to resolve? What are, what is the biggest challenge and what is the biggest impact you're trying to make is so valuable in all stages of the journey.[00:21:16] Omer: So you did the pre-sale I think you mentioned you had somewhere over five customers, a payout. So that's a much stronger signal than you had with the first, first time around. Tell me about the first four or five months, because everything seemed to be going very smoothly. [00:21:33] Gary: So, so you would think, right? So now there's this running joke between my co-founder and myself. And this was a, when we were still working on the first idea. We jokingly in the beginning sets we charter, like we worked through or three months in, and we had spoken to a lot of customers and they were all super positive and like, they were connecting us to other leads and we said to each other, Hey, this is going super smoothly.
There's no walls at all. We're just sailing right on through. And the moment that we said that to each shutter, like I think the week after that first wall, like rose up and since then, it's been basically just one wall after the other. It, I don't believe it's ever a smooth process.
The issue I'm seeing today is that all of my social feeds are filled with success stories like one startup after the outer raising huge amounts of money, being super successful, being unicorns and overnights. And it just feels like they're just breezing through everything. Like they have no walls, there's just nothing stopping them. And there are some cases out there, but like it's such a minority.
And I feel like the, the common journey that we are in is just one wall after the other. And it's about finding that sledgehammer to break through that wall. And sometimes it just takes a couple of hits and sometimes you feel like you're chiseling at this wall for months on end before breaking through.
And so, no, it's definitely not as smooth process. I was speaking with another co-founder earlier today, who is stressed at the beginning of his journey. And I said to him, like, how are you doing? He said, like, it's really hard. And I understand like why so many startups fail? And it's true. I really truly believe for the majority of us out there.
Like the key to success is persistence, it's just powering through. It's expecting to see that next wall. Once you demolish the previous one and keep going and finding the team to help you break those walls as well. You cannot. Yeah, you cannot demolish them all yourself, you might not have the strength, the expertise to know how to break through it.
Then you just need a lot of people for you to keep going. And I don't feel like the walls are getting smaller either. Like there are different walls, basically. There are different challenges. And I don't expect them to disappear in the next four or five years. Like it's, that's my mindset. It's just one wall after the other. And it's just about finding out how to break through as yet.[00:24:23] Omer: Yeah. I interview founders at different stages of their business. You know, I like talking to people like you who have bootstrapped the business and are in sort of between that, getting to that first million ARR. And then I'm also talking to founders who are doing over a hundred million dollars ARR.
And there's some interesting dynamics at play when the company gets to that size and a whole different set of challenges, the challenges don't go away. It's just different types of problems. But I think even, even with some of those stories, I don't think it's the founders necessarily portraying their story in a way where, Hey, we didn't have these problems and everything went fine.
Whatever the way their stories are published may be presented that way. But sometimes you find, or I find that even once you get to that point, you forget what the first few years were like. Right. So it's hard to look back 10 years ago and say, oh my God, this pain and this problem and whatever, because you've evolved and you've got a whole new set of challenges.
So I think, you know what we're talking about here. I think that's relevant to everybody because you need to get through this period before you can do those. And while you're in the middle of it, it's the best time to talk about, right? Because it's fresh in your mind.[00:25:37] Gary: Yeah, it kind of made me think about, I've got two small kids at home and after the first one and we were talking about the second one, we forgot, we had forgotten like how hard it is that first year where they don't sleep well, they're not eating at regular hours.
And it's kind of the same thing with like your startup journey. Like you forgot how hard it was like in the early beginnings. And like after two kids, I can say, I remember very well, like there's no third child on its way and I don't want it anymore. Like the second one really ingrained in my brain, like how hard it was, but yeah, I agree.
Like you evolve and you're just consumed with our challenges and you're always looking forwards while sometimes we would benefit from looking backwards and say, Hey, look at all the walls that we've power through. Like, I really tried to do that with the team on a regular basis, like celebrate our wins because we raised money.
So there's this expectation of hitting goals and growing at a certain pace. And you're always looking at that next story the next month, that next stage of MRR. And we tend to forget about, Hey, but look at that journey. I love this book called the what's it called The Gap and the Gain, from, I think Dan Sullivan, which really resonated with me when I was reading it.
And it states that we tend to live way too much in the gap. And the gap is the place where we had a specific expectation and where we actually ended up with. The thing we didn't achieve in life, we tend to keep focusing on the thing we didn't achieve the missing piece while that's not bringing happiness, right?
Like it's always focusing on what I'm not having. While if you focus on to gain the thing you actually achieved on where you started and where you are today and celebrating that brings a complete different mindset, but it's hard to like consistently focus on the game. When you took money from VCs who have expectations and yeah, you tend to focus on the gap way too much. And it's a challenge to keep that right mindset as well.[00:27:58] Omer: I think I had something similar from Vishen Lakhiani who's the founder of Mind Valley built a very successful business, not a, not necessarily a software business. And I think he, he shared this idea of the reverse goal, where he said, we're always thinking about the goal of where I want to be as an entrepreneur, five years, 10 years, whatever.
But sometimes having that kind of reverse goal idea where you look back at the last five years, where was I five years ago? Where am I now? Right. It's easy to dismiss that and forget about that stuff. But often when you take time to do that, you realize that you have made progress, you have grown, you have added value, you have improved people's lives, all these other things that, you know, often we're just like, oh, I haven't hit my goal or I'm, you know, whatever.
Yeah. Anyway. Okay. Let's so we did the presale, you've got some customers. How long did it take you to build the product? And then what happened when you took that product and put it in front of these customers?[00:29:03] Gary: So I think it took about about a year. Again, this was done after hours, so like the developers at the time, we're also just doing this after their full-time job and sometimes on the weekend.
So it took quite some time to build what we felt was a robust MVP that offered value. Reality is that those, when we presented through those customers, they had like a lot of ads changed that was not necessarily a priority for them anymore. And I tend to think that like your early customers, when you're still giving your idea like a specific, you're still shaping your idea, right? Like your proposition, the value, the challenge at resolving. So between us selling the early birds and actually delivering the product. Like even the product had morphed into a couple of different things and how we had pitched it. And so I'm not sure to be honest, like how many of those early stage customers are actually still using it.
But I would like not a lot, to be honest, it's not going to be a lot. And I think that's fine. I think like it was a validation of the core idea and your core idea is going to evolve as you go. I felt like we took two years to really understand what we were selling ourselves. Like I talking to a lot of customers and asking them like, Hey, what impact do you expect this to make for you?
We started to understand it was about or things then how we pitched it early on. And so the more we understand what the real value was that we were offering the better. We could find those customers that were going to be a good fit. And like our board members, they said the same thing, like expect your first 20 customers to probably churn in the next two years.
And they were right. Like a lot of them that churn, but all of the other customers that were brought on afterwards, we're a much better fit. We much better sold it to them as well. Like beforehand with your early bird, like you're going to try and sell it any way possible. Whereas like when you've got a better understand and you're going to sell it more properly, you're going to find better matches and you're going to be happier on both ends.[00:31:24] Omer: Okay. So I want to just don't understand that point. So the product you've got the product in front of those customers, how many of them started using it? [00:31:32] Gary: They all started using it, but after a while, It wasn't necessarily that specific challenge that was top of mind or a priority anymore at that point.
And so I feel like if you take quite some time, like we did about a year to build a product between them at that point saying, yeah, this is a great idea. We probably, the one we sold it to, that was a priority at the time. By the time we reached that point so much had changed, so also on their end. And maybe this wasn't a perfect match anymore.
And so there's still from those five or seven. I forgot how many it actually were there still, probably two or three, really are using it to its full potential. The other ones it's either they've churned or like they're not really doing what it was intended to do. And it was just another learning journey for us to have those early conversations and then learn from, okay, this is maybe not the way we need to present this to the next hundred customers.[00:32:33] Omer: So you mentioned that you, two customers asked for a refund, was that it, did anybody else ask for money back after the product? [00:32:42] Gary: No. [00:32:42] Omer: Okay. That's good. [00:32:43] Gary: Yeah. Well, no, to two of them before we had shifted, maybe it took too long. They were kind of vague on why they wanted some money back, but we felt like we're not going to be the ones who are going to like, hold you captive and say, you paid for it's at tough luck.
Like, Hey, if you don't believe in, in this solution or idea anymore, that's fine. Here's your money back. We'll find other people who are interested.[00:33:08] Omer: Yeah, I think you're right. A year is a long time to sell somebody an idea and then deliver on it. And so many things can change in between. And obviously once you've taken money from somebody, you mentally feel that there's a bar that you need to hit.
Like you don't want to deliver a product. And then they say, is this it? Yeah. Right. But if you could go back, what would you have done differently to try and shorten that window from selling the idea to delivering something to the customer.[00:33:44] Gary: What I would probably have done differently is hindsight is easy right? It's like moving this quicker from a hobby project to just committing full time. It's also something where we raised money. Obviously there was this expectation that we would commit full-time because up to that point, we were still treating this as a hobby project. So looking backward, I would still sell it as early as I can.
But as soon as you have that validation, I would look at like dedicating way more resources to building their product than we did. I would ship it much quicker, probably seven months in. We could have shipped it and it would have been fine. And we would have actually learned quicker about some of the things we only learn about later on.
And there's always. You're right. There's this expectation that you build up in your mind of what they are going to expect. And it's never good enough. Like still today I have this like, ah, if only this would change the price, really be at a point where we're going to be super enthused about, but it's never too early to ship. Never.
I think like the sooner, the better, even if it's clunky and there's issues and bugs. That fellow sedation and feedback is so important to have, and you can always improve always, but you'll probably improve on the things that matter more because the customer is telling you what's important than what you have in your own mind.[00:35:16] Omer: Okay. So the product has shipped. You've got people actually using the product. Now tell me about how you got to this first 10 or 20 customer. Yeah, I know. Initially you said, you know, you worked your network, but when did we start getting to unaffiliated customers, people outside of your network, where do those people come from?. [00:35:35] Gary: Yeah, what worked really well for us was turning to partners. And partners for us is consultants, business consultants that work with business owners on building systems, documenting processes, and just making them ready to scale to the next phase. And so, leveraging someone else's audience or customer base was a growth lever, which worked very well that first year and still is working very well because we failed miserably to building an inbound engine.
At first year, we're still struggling. I was still something that we're working on heavily. And so turning to that alternative channel, where we could leverage that existing audience and those existing partner relations really made a huge difference. And I think that is maybe like a small nugget of information that a lot of startups thing that maybe that partner challenged something we need to look at later on.
If you can find the right partners, even if it's a handful, because we still only have like five to 10 intensive partnerships, which brought on like the majority of our customers today, that's huge for a startup. Looking at who could be a partner in your niche, reaching out to them because they are going to have a lot of valuable feedback as well and leveraging their audience and customer base is I think, a huge growth lever.[00:37:05] Omer: How did you find these partners? [00:37:07] Gary: We roamed LinkedIn. So we just did a lot of research on LinkedIn. We connected directly. We said, Hey, we're building something here. I think is worth looking at. Do you want have a conversation. In all honesty, we spoke with, I think, 400 partners in a year's time of which 10 resulted in very good partnerships.
So it does take a lot of time and dedication to talk to all of these partners. And again, the same thing happens from those 400 conversations. The absolute majority was super excited. I was like, this is a great idea, Gary. Like, yeah, I definitely see my customer base benefiting from this. But then there's still this only small subset of people who actually turn their words into actions.
And so it's about finding those that actually do something about it. Same thing as with that first time around where people were super excited, but when it was time to pay, they kind of disappeared the same thing with partners.[00:38:07] Omer: So, reaching out to 400 odd partners signing deals with about 10 that's, what like two, 3% conversion on that. Who is doing the outreach was it you?
Yeah, I was, I was. And so, I had four or five conversations a day. I think what we didn't do well was. We pitched the idea to them the way we would pitch it to a customer, which is not as same. They are looking at this completely differently. They're not looking at this. Hey, this is going to solve my issue. They are looking at that from a perspective, like how can my business benefit from this while also offering benefit to my clients?
And so what we learned along the way was a probably way too late was we need to explain what's in it for the explain that, Hey, this. Not only kind of add value to your customers, but potentially this isn't until an additional revenue stream for you. This is a way for you to showcase your expertise in a different way.
This is for you to affiliate with a tool that might give them a competitive edge. And so selling them on that story is something we learned along the way and which we're doing now much better, but again, it's a lesson learned and it's just another challenge you need to go.
Yeah. I don't know why when we talk about it, like now it's so crystal clear, isn't it it's like the customer's pains and needs are very different.
Most of the time to a potential partner. And yet it's so easy just to start talking about the stuff that we talk to customers about, but I think there's an art to building these partnerships. And probably now that you've spoken, the more and more you talk to, and then you start to build. You start to see that, and it becomes much clearer in terms of how differently you need to talk to these people with the, how the pitch is different, the kind of maybe tools that you need to provide them to help them be your champion with the customer, right?
It's almost like they're the sales person for you, right? So you need to enable them to be successful. And at the same time, you've got to think about how is this benefiting them? How is this helping them grow their business? How does this help. You, I do all those things. So it's definitely a challenging thing.
But one thing I'm curious about is like, what was the general structure of the deal? Was this some kind of affiliate type arrangement that you were building with them that if they got and sell, you're going to you're going to share X percentage of recurring revenue with them?[00:40:42] Gary: Yeah, we did the typical affiliate slash partnership program where they got a percentage of the lifetime revenue generated through their leads.
And in all fairness for a lot of partners when we brought that up, they were saying like, that's not really why I would do this. It's nice. It's an added benefit. What really mattered to them was being able to position themselves towards their customer in a better way than they would have done before, like using our tool.
To have that added value to differentiate themselves of the competition and saying, Hey, we've been doing this way all this time. Like I've got a better way and I've got the software for it as well. And typically what they would say like, Hey, if you're going to offer that commission, you know what, give that X amount to, as a discount to my customers.
And so we opened that up as a, as an option that we were upfront, then some took the commission and others were like, no, just pass it on for me. It's about positioning myself as the experts. And to go back to your point about like the way we pitched to partners, being different to salespeople, looking back, what we, what I should've done is hire someone who knew that.
Like hire someone who had built a partnership program who knew that we need to position this differently than in sales. Because my entire career also in my previous business, I mainly had focus on sales. And so my mindset was always sales driven and so way too late, I realized like this is a different pitch.
And so. Getting people on board early on that have experience and things that you lack as super important that we learned that the hard way, because we had the hires in the first six to seven months, about six or seven people to join our team. And we hired all the wrong people. We hired either people who had no experience in the fields in which we had hired them or were just fresh out of school.
And we were expecting them to take on the responsibility of leading a specific area of our business. We realized afterwards that we needed to have a structure to coach and train these kinds of people into these responsibilities, but running a startup, you just don't have the time. And so. Unfortunately, we decided to kind of start over with the team, hire daughter, people with way more experience, they are more expensive, but in the end, they, that the return is much higher.
And so that's really a lesson learned for us. At least that billing, that core team needs to be people that add something extra to the table. Something you're not good at, or don't have expertise. And, and not something that you still need to train and coach on things. Maybe you're not the best at that.[00:43:37] Omer: Had you raised money when you started hiring those people? [00:43:40] Gary: Yeah, so we had just raised our rounds. We had a team in mind of people that needed to join, and we lost a lot of months hiring the wrong people. We realized it, I think about six months then and decided to change strategies where we hired fast, but kept people on way too long and giving them like 2, 3, 4, 5 chances, and then only then realized like it's not going to work.
And now we take way longer to hire, but we also decides much quicker if it's not going to be a fit. Like after two months, we often know like this is going to work.[00:44:19] Omer: What was the motivation for hiring more junior people? Was this religious, Hey, it'll give us a longer runway if we do that? [00:44:29] Gary: I think it's part of it. So you, you see that money show up on your bank account, then you're, you've got that budget in mind. And so you tend to think, okay, we need to stay in budget. And if I can go below budget, if this longer runway we can use or spend in other areas, but at the same time, it was also hiring on purely personality.
We saw someone, we liked, it clicked on a personal level, which is great. You want that as well, but when it came to it, like the work that needs to be done, they were not at that level in which they were gonna help us put one step forward or get a step forwards. And so we learned very quickly that personalities, not everything, like I could be your best friend, but that doesn't mean you're going to be a great fit for the phase we're in.
And so a lot of the hires that we did and at early stage would probably be great fits in a second phase, but they weren't building the teamwork and that first journey.[00:45:33] Omer: Now you guys are obviously based in Belgium. Where are the majority of your customers? Are they locally there? Are they from around the world? Are they in the US? [00:45:42] Gary: The majority is from the US we found a couple of markets in which we do very well through those partners. And that has been a challenge as well, figuring out the time zones, early days, when I was doing all the calls, I stayed up till 10:00 PM. Just being able to speak to enough people during the day, after a while, my wife kind of was like, okay, you need to find a different solution because you're not seeing the kids.
And, and I'm not seeing you. Obviously that was something I felt like I need to do for a short period of time, figure things out and then hire people locally. And that's what we did. We hired someone on the West Coast. We hired someone recently on East Coast and we've got a team here in Belgium, which allows us to cover most times zones for the customers we have in North America, Canada, Australia, and Europe.
But that's a challenge as well, like building a remote team very early on has its benefits. Obviously being able to hire these people without ever seeing them and giving them a tool stack to, to be able to do what they need to do. But the culture side of things, building that out is very hard because just as an example, but doing a team event is super hard.
It's like the difference between where we are and the west coast is nine hours. Like, how can we make a team if at work where everyone is there, if there's nine hours of difference. And so we're still struggling with that. Like how do we maintain that culture through mainly an online communication and it's figuring things out, like it's small things that we've built out like on Friday.
And did they here in Belgium early morning in the US we do like a half an hour pain and gain where everyone shares, like where did you fail at this week and where you win at? And like having these small check-in moments really helps connect on a different level. We had at the beginning of the week, we try to also get together and share our personal best wins the previous week and personal business wins.
So building that out as you build a remote team, I think is important, but culture is hard when you're not sitting in the same office.[00:47:58] Omer: Yeah. And I think also across geographies, right? It's one thing for a US-based company to hire remote people around the US. It's another thing for a startup in Belgium to hire people in the US and then think about culture and time zones.
And because there are lots of differences and personally, for me as well, I found that growing up in England and coming to the US there are a lot of cultural similarities but there's also a lot of disconnects and, you know, in England, the sense of humor for example, is very different to this sense of humor in the US and those kinds of things you can pick up on when you're face-to-face with somebody possibly more easily, when you're having to do it remotely, a hundred percent of the time, it can create challenges there as well.
So the business, I think you said about 12, 18 months is reall where you've come out from the pivots. Did the presale this time and have been able to be more successful the second time round. The partnerships sound like the it's one of the channels that you figured out and as has helped you to grow and generate sales fit efficiently.
Give me an example of why inbound hasn't been clicking for you. Just what's been the problem there?[00:49:20] Gary: Same thing as where we fail that earlier on not having the expertise I would say is why we're failing. And so, six months ago, we started experimenting what inbounds I extreme my co-founder, the product owner, just self-thought himself.
Like with listening to like hours of courses in content, he could find online and then just started experimenting. And there were some successes, like we attracted some customers, but then really building an engine that you can fuel and grow on. It's just something we've we couldn't get to. And so for us, it was really about attracting again, the right people to make that work, which we still haven't found.
Like it's a struggle to find a talent everywhere. Also in Belgium, there's this, we started to look at people across the world and then. You see these enormous wage expectations that you could just never match as a startup. And the problem is that there's scale ups out there that will pay that no problem.
And you're no match to those wages that they can offer. So, what we decided to do in the meantime, this is just a decision that we made a month ago is to hire an agency. And say, hey, we don't have the expertise. There are multiple things that we've tried. We've had some successes help us build that foundation.
And in the meantime, we're going to keep looking for that higher. And hopefully by the time they join, that foundation is going to be there for them to further work upon. And so again, it's about getting the relevant people onto your team and differentiating in a, in other ways.
Like one of the things that we decided to do is offer people as much time off as they wish, like we might not be able to compete with wage, but like, we're going to offer you all that flexibility. And so it's looking at things from a culture standpoint, other benefits that you can potentially offer and finding the people that believe in your purpose and your mission.
And I would say the second time around that has really worked well. Like getting people to really understand what you're trying to do and get excited about that. And then adding that expertise at the table seems like a good approach to hiring.[00:51:38] Omer: That's great. All right. We should wrap up. So let's move on to the lightning round. I've got seven quickfire questions for you. So just try to ask them as quickly as you can. Are you ready?
What's the best piece of business advice you've ever received?[00:51:54] Gary: Do what you love because you'll be working long time. [00:51:58] Omer: What book would you recommend to our audience and why? [00:52:00] Gary: I still really love, “How to make friends and influence people”, which is just a classic, but holds so many truths that I feel a lot of people have forgotten about. And I would advise to read it in whatever role you are. It has so many nuggets of like pure goal. [00:52:20] Omer: What's one attribute or characteristic in your mind of a successful founder? [00:52:24] Gary: Never give up like persistence. If you're going to see those walls and get motivated, instead of motivated to bring them down, I think you're going to fail. You're just going to give up at the second, the 10th or 20th wall, and they're just going to keep coming. So, persistence to keep going. [00:52:41] Omer: What's your favorite personal productivity tool or habits? [00:52:44] Gary: It's a tool that allows us to organize our meetings in a very structured. So we've got team meetings. So we've got a piece of software that allows us to align on like specific topics each week and allows us to be super productive in shore to the point meetings. So, it's something we've saw a lot of benefit from, meetings .io. [00:53:07] Omer: What's a new, crazy business idea you'd have to pursue if you had the extra time? [00:53:10] Gary: I would love at a certain point when I've like built up more expertise and creating kind of like a startup studio like offering businesses with a lot of great ideas, but gaps in expertise offer that expertise and guide them from going from zero to one, basically. [00:53:29] Omer: What's an interesting or fun fact about you that most people don't know?
I started my career selling toilet brushes really about three months in. I decided like this is not what I'm going to do the rest of my life. And not a lot of people know that.
And finally, what's one of your most important passions outside of your work?[00:53:47] Gary: Probably very cliche, but the family, like whatever spare time I have, I spent with the kids or my wife and with the very short amount of time that remains I'm passionate about whatever is like cutting edge, like NFTs web three pro no, crypto has been on my radar for a very long time. That kind of stuff. [00:54:09] Omer: Awesome. Thank you for joining me. Thank you for having a chat and a great conversation about the realities of going to zero to one. If people want to find out more about Whale, they can go to usewhale.io. And if folks want to get in touch with you, what's the best way for them to do that? [00:54:27] Gary: Just LinkedIn is probably the best channel. So Gary, the other Gary V as they tend to call me here in the team, but like just Gary Whale you'll find me.
We'll include a link in the show notes[00:54:39] Omer: to your profile. Great. Well, Gary, thank you so much. Probably time for you to head back home now. I think what is it? 8:00, 9:00 PM there? [00:54:46] Gary: 8:00 PM, yeah. [00:54:47] Omer: So, yeah. Thanks. Thanks for joining me. I wish you and the team the best of success, and we'll definitely have to stay in touch and see how you progress with figuring out those next few or unlocking those next few growth channels. [00:54:58] Gary: Absolutely. Thank you for having me. [00:55:00] Omer: It's my pleasure. Cheers!
- “How to Win Friends and Influence People” by Dale Carnegie