Episode Transcript
Speaker 0 00:00 <inaudible>
Speaker 1 00:03 <inaudible>
Speaker 2 00:08 come to the breakout growth podcast where Sean Ellis interviews leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here's your host, Sean Ellis.
Speaker 3 00:24 All right. For this week's episode, we're going to do something pretty different. I just returned from Vilnius, Lithuania and I led a pretty incredible panel discussion there following my keynote presentation. So I was excited when the organizers decided to let me use the recording from that panel discussion for this podcast. So the panel included four panelists. Um, one of, one of the panelists sold this company to Shopify after only a couple of years. Another one has built a company to nearly a thousand employees. And probably the, what I got most excited about was that the panel also included a CEO who led a turnaround for a company that has reached that $1 billion unicorn status. And so the company's called vinted. We dig into a lot of details about what they did to drive that turnaround. So that's super interesting, but there are a ton of great lessons in this discussion. So everything from the challenges of starting and running a company in Europe and you know, some of the benefits of doing that as well as why some, some companies succeed and other companies are, have a lot, a lot more challenges getting out of the gate. And so, yeah, we did, we covered a lot. So let's go ahead and get started.
Speaker 3 01:44 I'll start with an introduction. Um, so, uh, Yonas, uh, he's the cofounder of Tessa net and um, if you didn't know it already there, they're a really successful company here and, uh, I'm excited to welcome him. And if you could give us a brief introduction to test a net what you guys do.
Speaker 5 02:05 Yeah, so testing at once was a small startup and now it's a big startup. Uh, actually we tested is an accelerator for different products and projects and <inaudible> invest money in other startups and companies. And uh, yeah, uh, the company is now quite big and, uh, we have almost a thousand people right now. Um, yeah. And uh, one of the focus of, of, uh, areas, uh, is cybersecurity.
Speaker 3 02:33 All right. And then <inaudible> left. We've got, I'm going to need some help on your last name as well. So JB, doc Gunyah, how do you pronounce it? <inaudible> JB is from France. Uh, but he's, he's based here, uh, with a company called Zevon 70 ventures, which is a revenue accelerator for B2B startups. So welcome. JB. Do you want to give us a little more of an explanation of what you're doing? Sure. Uh, so glad
Speaker 6 03:00 to be here. The, the long story short is I'm a sales guy. Eventually I became an entrepreneur and today I'm an investor and the short story of what I do is I start my day by eating SAS for breakfast and I have B2B sales for lunch and I finish it with data for dinner and um,
Speaker 7 03:18 <inaudible>
Speaker 6 03:18 and eventually how we help startups from the very beginning. We help founders to repeat what they have been successful at and putting them in front of customers who is a specialized sales team that will basically sickly for leads the same way the founders will look for them and book meeting for them. So they are only on the founders only spend time on the part of the B2B sales process that add value. And it was very interesting to look at how you do growth hacking because we do tons of testings and we value data over opinions a hundred times.
Speaker 3 03:46 <inaudible>. So, uh, and then we have next to JB, we have Thomas slam us today, probably slim us. Okay. Hopefully you guys will all all know that I'm butchering that cause he's the, uh, uh, the second Lithuanian on the, on the panel here. So, uh, Thomas is the CMO and cofounder of Oberlo, a company that was founded here in Lithuania and pretty quickly got acquired by Shopify. So congratulations on that. That is awesome. And so now he's also a director of online marketing at Shopify. So welcome. Can you give us a brief introduction to what you guys do at Oberlo and the problem you solve? Sure. Gotta be here.
Speaker 7 04:25 So, um, our Barolo is now parts of Shopify and together with Shopify, uh, we help, uh, entrepreneurs start their businesses and grow with them, uh, and we support them for author's journey. Um, okay, good.
Speaker 3 04:43 All right. And then finally we've got, uh, Thomas <inaudible> almost last. All right. Um, so he's the CEO of vinted and I'm really excited to have Thomas up here because I think there's a really unique story in invented, um, it's, uh, a company that was founded here in Lithuania and it's a unicorn status. So there's a, there's the, that that's a hard status to get to you. But I think what's particularly interesting is that Thomas came in as part of a, a turnaround effort there. And so to be able to help drive a turnaround to build a unicorn company, I don't care what country you're in, I have not heard about that. So that, that is super exciting. Can you give us a little bit more details on what vinted is all about? Yeah,
Speaker 7 05:30 pretty simple. We, uh, we sell second and close, so we really know well how to sell your clothes. And that's about it. I don't know. I mean, we can talk about all kinds of stuff, but practically that's what we do. Well. And since 2016 we kind of found out how to do it because before it had, there was like a really nice idea and people loved it. But then we found the economical model on how to make it scalable business. Fantastic. Well,
Speaker 3 05:58 um, we will definitely dig more into that story as we go on, but I wanted to start by just, you know, looking at it from, from the local angle here. Um, there's, there's some huge advantages to being based in Lithuania. Um, but there, I'm sure there's some challenges as well, especially relative to being in say, Silicon Valley where there's a big network for startups. Um, I, I'd love to get some of your thoughts on, uh, and I won't have much to contribute here since I've not been based here, but some of your thoughts on sort of the advantages and disadvantages of being based here in Vilnius. Anyone want to take first shot at it? Let's try.
Speaker 5 06:34 Uh, so of course it depends, you know, uh, on area I think because if you want to start business in, uh, in to have basketball business, uh, probably, you know, it's the best place on there. On the other hand, you know, he should want to achieve something in soccer. It could be a bit difficult, but being more serious. Um, actually I, I, you know, I never thought about, you know, pros and cons being based in Lithuania because, you know, we are all Lithuanians and just started business here. But, um, uh, the most important thing I, uh, I believe is, uh, people because, you know, we have so many great, talented, you know, curious, uh, hardworking people. Uh, so it's actually the best place to be. Uh, of course. Um, our market is quite limited because, you know, we have fewer than 3 million people and if you take into consideration kids and elder people, it's even more a fever. Uh, so, uh, but yeah, and uh, maybe, you know, if you need some money or you think about venture capital area and a trendy venture capital companies, it could be quite difficult because, uh, it's not a secret that, you know, not everyone, uh, knows Lithuania because probably we need more unicorns, not only one. Um, yeah. So my thoughts,
Speaker 3 08:01 so what about, you know, you've mentioned that there's a 3 million ish population here that, that probably most companies that would start here would be looking externally right from the beginning that that maybe would be a bit of an advantage. Would you agree?
Speaker 7 08:18 I dunno. I think I'm sounds small. 3 million middle. On the other hand it's big enough, you know, uh, you got a thousand people. So, you know, in the bigger context of things <inaudible> guys around the corner, people are easily moving around through the Baltics or from Poland to here. I don't see that much as an, as a constraint. I met more as a, as a target consumers outside of Lithuania, so, so consumers don't try to search them in Lithuania because it doesn't make sense at all. I mean it, it's so small, you'll just like, you're gonna make a product with a language that is as difficult as Chinese and then you have a target population that is so small now, so, so definitely build something that is scalable around Europe or us or whatever it is. I mean, I think that's one of the beautiful things, you know, both of you guys have have done here.
Speaker 7 09:09 Um, but in terms of, of people, it's, it's absolutely an advantage to be here. I mean, they're there, the population is very well educated. People are working really hard. They're not just working for money, but they want to show that they can make something from here, which is a different driver emotionally, that that makes people do things that they will never do when they're from Berlin or from London office have Cisco it just, just to a point where we were at a company firing half of the company. The other people that stayed, they actually stayed. I mean, try to do that in Berlin. You saying like, well, you know, guys, our revenue is declining. The rest of the money, they are left leftover. We're going to burn on television, I'm not going to cut out some half of all the revenue streams and we would love you to stay over for a couple more months to see if it's gonna work like in Berlin, everybody, would it be an out of the door the next day, right here, let you in. And people are like, hell yes, let's give it a try. You know? And that's, that's an attitude that comes from, uh, having a driver to build businesses here that is more than to make money. And I felt enormously attracted to that. I felt at home in that. And, and it makes teams do a, or things that I've not seen him do in Berlin or in New York. And I think, I think that's a massive advantage that we have here. Awesome. I love that.
Speaker 8 10:28 I could, uh, I could second that. I do agree with what Yannas and Thomas said. Um, I would just add the nuance here is that, uh, due to the lack of optionality in this market, because it's this very small, uh, people have less experience in, in, in, in, in, in their kind of, uh, disciplines. And due to that they are more loyal because they have less, uh, optionality. Um, uh, not only more loyal, but they are also more excited about opportunities because there is less optionality and then they require from the company a little bit more kind of guidance, education, et cetera. So that creates all of this kind of environment where, uh, companies invest in. People like Testnet invest heavily in people. We invest heavily in people who've been, Ted has, has invested in telling people, and you invest a lot in people because they bring less, uh, experience.
Speaker 8 11:13 And, but that in turn brings more loyalty and I think that's a very good dynamic. Whereas in Berlin, the relationship is very much transactional because you can get employed at any other company next month, but also they can bring some, uh, some, some good power. Um, I guess we're, the disadvantage of Athena is, is, is, is the English language, uh, where like in order to sell to outside of Lithuania, which we all do, uh, you need to tell the story really well for your ass, for your creative, for your sales message. And if you, uh, if you don't, uh, if you don't, you know, kind of, if you haven't employed the craft of English language well and, and you can sell
Speaker 7 11:54 it, then I think that'll will be a problem. So I think that's kind of a big disadvantage. And that's the reason why many of us employ marketing teams in Berlin, for example. Okay, that makes sense. But, but if you think of it, like the difficulties of localization, uh, is, is way smaller than the difficulties of building an actual company and a product, right? So building your actually product here with people here and then fine tuning the Combs and marketing from Berlin, I think it's actually fantastic combination that is easily done. Right? And that's, and, and some of that is there's pretty easy to outsource on the, on the kind of communications and marketing side of things where most of the rest of the stuff is pretty hard to outsource. Anything you'd add JV?
Speaker 6 12:36 No, definitely. And I mean I'm super glad to hear a lot of stuff I can relate to about, you know, the people and the energy you get there. And I mean I've lived in Walkerton, in the UK, in Denmark and also in France. And I mean you talk about English level. I mean, have you work with French people before?
Speaker 7 12:52 Hmm.
Speaker 6 12:56 I think you guys are doing
Speaker 7 12:57 comrades.
Speaker 6 13:00 Um, but like back six years ago, on maybe almost seven years ago when I started to interact with the ecosystem here, uh, there was just the first VC coming to town. So the ecosystem was just blooming, just getting started. And I remember bringing my friends here to talk at a login and to do some workshop from Copenhagen from like the B2B SAS scene. They were like, this is great. I mean almost telling me that this is cute what we are doing here. And that we are like, Oh, five, six, maybe seven years behind. And I was like, we don't have time to, we don't have seven years to catch up. And like what's the options? And then of course we could expand and many companies were doing this opening in London and so on. But also many companies decided to invest back into Donaldson and they're seeing what all the ecosystem I've invested, we go 10 times back. And we are definitely a head in now in some kind of niche comparing to, to the competition. Especially if you look at FinTech. Uh, I think LA Fe footwear put in this direction and we have some great FinTech companies. Uh, but then also I'd like to say that, uh, when it comes to, um, product and, you know, building a technology here, like we are definitely the underdogs. Like no one expects you, but then, you know, you can kind of get beaten in the ass. And that was Lithuania.
Speaker 7 14:12 Right. Awesome. So, so Thomas, when you, uh, when you came to Lithuania, did you know much about Lithuania before you, before you decided to be part of this turnaround? No. First I confused it with Latvia. Painful, very ignorant. And um, they booked me. I came at night in this super, they booked me in a super old Congress hotel or something like that to where like the carpets are reds and the carpets go up to the wall. That's the place they put me actually. So I came in at nights from New York and I'm like getting into this, out of a cab into this. I'm like, Oh my God, this is going to be Sophia all the way. So, so, and then the next morning I woke up and there was like elderly people having breakfast. It was like a German elderly tourists or something in my hotel. I was like, Oh wow. But then I walked out and I saw it's actually a beautiful city. Then I met the guys and, and that's where I met the people at, at vintage. And I saw with how much passion they were working. And I don't know, I didn't, it didn't matter anymore, you know, so, so, so it's, it's all, it was all different than I expected. And, uh, you know, I stayed because I love it. So very quickly I realized it was a great place to do business and to live actually. So.
Speaker 3 15:27 Wow. So, um, let's, let's dig in a little bit more to what you actually did because the, again, that was, I was, I was so excited when I saw I was going to be on the panel with you given, given that story. So what, what, what was the problem that was holding back growth and what were some of the key things that you guys did to,
Speaker 7 15:42 to turn things around? Yeah, so I think, uh, I, I came in at the beginning of your talk and, um, a couple of key points that you laid out where exactly missing and, um, one of the elements that you said, for example, what is the value that you deliver to customers? So the first thing that we did is I mapped out, okay, what's our value proposition towards customers? So we looked at, okay, what are we doing? We're selling clothes. Okay, where can you sell your clothes? Okay, let's look at eBay client on XY again. Quanda we put down all the propositions, looked at what their offer was. Then we did tests like how fast you sell clothes there. And it practically became super clear, like we were the most expensive and you sold your clothes the slowest if you were even lucky to sell it.
Speaker 7 16:28 And so that was the first thing like, okay, our value proposition is not on par with the rest. So how do we add more value? Well, we need to make become the cheapest I need to sell the fastest. Okay. Sell the fosters. That means ourselves for rate needs to be within a certain point. So you looked at what our success metrics while Northern star is unique sellers. So we need to build the biggest community with unique sellers. How do we do that? By making the time to sell as fast as possible. So we need to reach a certain seltzer rates within certain days. And to be very honest, that was actually it. So, so it was really driven from how do we give value to people when new day are happy with us and how do we reach as a fast as possible and then just turning every arrow in your company towards that breakfast is what we did. That's fantastic. It's so, so cool to actually follow on from what I was just talking about.
Speaker 3 17:18 And, and here kind of, I mean talk about things being a a before and after test. So, so much of my experience was sort of customer zero opportunities where I went in, you know, with Dropbox there was eight people when I was there and you know, customer zero at log me in and uproar. And so I didn't really have that contrast of the before and after in doing a lot of these things. So it's, it's amazing to hear when you went in and just added this, that it made that big of a difference. And of course I'm sure that there's a lot of operational things and other things that you brought to the
Speaker 7 17:50 table. But that's, and I think like constantly still, even now I think even when things are going well, you need to constantly ask yourself what is the value that we actually add? Are we not getting out paced? And and w O one of the elements that we figured out later, it's like, Hey, we can play with the shipping pricing for example as well. And we brought again another growth loop into the game. Like, Hey, we're not just a UX marketplace. We actually aren't a full funnel of this. And I, and I think if we, if we look at where our marketplace is moving, and I think you can even tell more about that is that actually we went from being marketplace that was practically from Twitter, certain product that made you sell. And now we see that actually the verticalization into shipping payments, customer support, trust and safety products.
Speaker 7 18:33 Really finding an each of these elements, growth loops and verticalizing and building businesses within that is every time when you practically need to apply these growth hacking tactics that your <inaudible> talks about today. Because each of these elements are actually business within your ecosystem. And we're going from let's say for tech companies where just a deck surface supplying some kind of elements to becoming like full service companies that really own all these parts. So I think even along the way, not in the beginning, it stays relevant to test yourself towards these things. I think people miss that so often with growth that they assume it's just about getting more customers. But if you mess up those touch points, those operational touch points throughout the business, you can't keep the customers, you're, you're just, you're not going to be able to drive sustainable growth if you think of that.
Speaker 7 19:22 Right? So if you are, if you are constantly just focusing on that's how can I get a better conversion rates to LR or to buy or whatever. And that's anything, that's your job. You know, that's not what Jeff vessels did when he built build his marketplace. He was selling books and he ended up with a Kindle. Right? So, so you need to think like, where's going books next? It's not about just the conversion rates, it's about really understanding the whole element of reading books. Like how can we do that better? How can we service all these elements in there? So, yeah. Awesome. Well, I have to set the record straight on something. Uh, the hotel that they put me up is one of the nicest hotels I've ever been in, so I'm not in the same place. So I will, I will transition to Yonas now. So tell us a little bit on, on Tessa net, I'm in it to be pushing a thousand employees now. What, what did you get? Like what, why did you even decide to start the company and, and what, what were some of the important things you did in the beginning that put you on that kind of a trajectory? Yeah.
Speaker 5 20:23 Oh, you know, at the beginning we, where we were thinking about global warming, uh, poetry, uh, you know, huge scale of conflicts, uh, Wars and uh, the lack of education. Uh, but actually no, you know, we were always driven and we are still driven by no curiosity to do, to do something online, you know, to create a new business, uh, uh, just to try
Speaker 3 20:48 to get an rate and know some traction to do those projects. And, you know, we, we are only know grow hackers from the very beginning. Uh, you know, so nothing special I believe, you know, just to know, uh, inside, you know, some, something inside. Yeah. Well it's, I mean, I'm hearing this kind of theme of curiosity come up a couple of times. Do you think that's, that's something that's pretty natural to the Lithuanian culture is, is having curiosity or just people in general? What do, what do you think GB?
Speaker 6 21:23 Actually, we have a seven values that we check when we hire talent. And one of them is curiosity. And we hired a hundred people in 10 months
Speaker 3 21:33 here in Lithuania. So, so there was at least a hundred people who had it. And what was the, uh, did you have to talk to 10 to find one that fit or I actually am not in charge of that part. You assume?
Speaker 6 21:46 Well, no, but, but I, I still believe, yes, of course there is a lot of curiosity in the market, but now we also say that sometimes, and uh, I would say people are naive but in a good way, like, uh, you know, trying and not being afraid to fail it at, at, at stuff they want to experiment. And I guess also like walking with the first or the second generations that is looking West and not East a year is a kind of driving and fueling this curiosity that even if you are the first company selling, you know, secondhand online in Lithuania, you will be the first to do this formally to Ania, right? Like selling whatever product online on whatever. And that's just creates a lot of drive that is linked to curiosity. I've went on that. I think it's pretty great.
Speaker 3 22:30 Well that, that is great. So let's, why don't we transition to sort of your, your expertise, uh, in, in the B2B side of things. Uh, when you, when you look at, so what you just heard about vinted there and some of the things I talked about, um, it was more more B to C focus. What do you think are some of the biggest differences in B2B that people who are focused on B2B should be looking at?
Speaker 6 22:52 I mean it's just that in the type of B to B business where I work, we have a much more, so like you said with Dropbox and Slack, it's very close to consumer with the self service experience where it's heavy on the UX and the marketing side of it. On the product marketing, I guess if you've got it like that and in the, with the type of B to B companies we work with, it's more what we call the SMB or entreprise market where you have this every human sales touch in the process. And so that's the key difference that impacts the sell cycle. But then as well, what is very similar still is we focus on always start with the ideal customer profile. Um, and I guess you also walk with personalized in, in B2C that you want to target, you know, the ideal customers.
Speaker 6 23:34 And the main difference in B to B is that we have more stakeholders. So we'd have the decision makers and influencers and the bigger companies, the more of decision makers and influencers you might have in the process, you might even have several layers of influence, circle champions, whatever. So I guess that's the key difference that, uh, you need to keep in mind. But at the end of the day, uh, what we always say is that even if it's B to B, people still buy stuff for personal reason. And the personal reason they would buy it is you will help them to reach their KPIs faster. And of course, you being in industry for let's say 10 years might help to have people picking up the phone when you call them. But at the end, they will not buy it because they know you, they will buy it because you help them to reach their KPIs faster and they might get a bonus or might just get to keep their job or would nose matches, get home on watch more TV. Uh, but at the end, it's your personal reason.
Speaker 3 24:21 So what would you say is the most common mistake you see when you get involved with a company?
Speaker 6 24:26 Uh, companies were in love with their products and don't talk enough with customers.
Speaker 3 24:30 Huh? So they just, uh, they, they feel like on B2B maybe that they, that they just come out with a solution and maybe don't need to do as much customer research as you would on
Speaker 6 24:39 yeah, most likely. And I think this is just a problem of, uh, the, uh, with human beings, we just tend to go more where we get a positive and, uh, feedback or compliments and what you get from customers is not always that, uh, but that's just how you grow.
Speaker 3 24:55 So how, how do you overcome the risk? I've always had this assumption that, um, you know, with B to C if you're growing, there's, there's a pretty good chance that you have product market fit. But with B2B maybe you've got really good salespeople who are, who are selling a dream and the product just does not deliver on that. And so you can be growing. How do you
Speaker 6 25:14 yeah, and that, that's a very good point. And actually you mentioned, uh, well, um, how this North star metric is important according to revenue and have been with companies and part of sales floor where we just oversell it and we are super fucking good at closing. Right? Yeah. Uh, and then eventually we get churn. Uh, because you know, we have the new business team that just has a new big target bringing new business, new revenues. Then we give it to the customer success team and like guys, we've done our job and they cannot deliver and they saying, and that's one of our other seven key values delivery. It's actually on the top and why you need to align on the why. I think if you focus so much on the personas and making sure that you align on that you are going to create value because you're going to help them to reach their KPIs.
Speaker 6 26:01 You can help a lot. Actually one book that I mentioned a lot when I train salespeople is um, delivering happiness, uh, by the guys from Zappos. We actually said that whenever a customers cannot find the shoes they are looking for on Zappos customer success or customer support, whatever, we look for shoes on whatever it else, a website and send them the link and they believe or they believe that this is how they deliver value and that people will come back to Zappos because they still found the solution on Zappos. And I think it's very important as well for salespeople in B2B to be able to do the same. Like, if you find out that the solution the customer is looking for is not yours, you still, and if you can of course suggest something else and you will still deliver value and next time you reach and the pain they have matched your product, which is a painkiller, then they will still look at you like, Oh, this guy delivered value to me already. Right. So they can do it again. And then you have the trust to be able to connect. Exactly. Yeah. So Thomas, let's, let's talk a bit about Oberlo.
Speaker 8 26:57 How, how long did it take for you to sell to Shopify from the time you started the business? And it was two years, actually. Two years. That's it. That's amazingly fast. So what was it that you, what was it that you sort of saw as a market opportunity that, that just, how did, how did you know to go after that opportunity in, in a way that you would get enough traction to be an attractive acquisition target so quickly? Sure. So we never planned to sell. We actually tried to hire a Thomas <inaudible>, but it didn't work out. Um, so I, I think it, it, it links to the experimentation and to what you've just talked about, or maybe actually before that when I said about Levine's, don't speak English, I think we speak really well, better than many other European nations. Absolutely. What I was referring to is what was more like a, uh, to, to write a copy of that <inaudible> requires excellent knowledge of language and that marketing speak that we don't know.
Speaker 8 27:56 Uh, and it was so, uh, Y how Oberlo grew and how it links back to the growth and growth framework that you've proposed, uh, or talked about is, uh, I think what's very important is actually the mission and the purpose before any experimentation. Because I mean, if, if, if Facebook didn't have an objective or a mission, um, you could easily increase the daily active users by just sending more notifications on a mobile phone. Um, so all the KPIs that were very easily played, especially in bigger organizations. So I think it's very important to kind of nail down why you're doing what and how does that help users and why are they using that product. Um, so we launched a Barolo is Albion portrait. It actually helped people import products from our express, which was a very kind of, um, technical, uh, transactional relationship where we're like, we, we help.
Speaker 8 28:45 It was like a feature more so than a business. Um, how we grew actually, uh, links to this, uh, us understanding why we exist and how do we bring value to the merchants. Um, we basically ask them, why do you use, uh, Oberlo or, and, and how, how do you find it? What problem does it solve you? Uh, we basically talked with our customers and um, and what they said is, uh, they didn't use Oberlo to complete the F F kind of complete the task. Uh, they used a Barolo to start the business. And for us it kind of unlocked all of the marketing opportunities that, Hey, maybe our users are not the people who are looking to import products from somewhere to somewhere maybe our users. There were people who want to earn more money and travel the world. Right? That's a much bigger audience than the people who are actually starting kind of importing products from one place to another. Um, and I think w once, once we, once that wasn't locked and it was all qualitative data, there was no data there, which is, you know, it doesn't sound great, but it's just like us thinking about our business and, and what, what is the value that we are bringing in? What is the opportunity out there? Uh, and then from there we've grew and then that caught the attention of Shopify. Fantastic.
Speaker 3 29:54 And, um, clearly Shopify as like one of the hottest rocket ships on the planet. So what, what did you learn about growth from Shopify? Because clearly they've got something figured out over there.
Speaker 8 30:08 Yeah, Shopify has grown quite a bit. We've just talked, but, um, I think what you would find a job is unconventional thinking if, if, if, you know, all of these companies are following like pre standard framework of growth and how people come in and how they get activated and move on. I think Shopify is unconventional in a way that, um, it really went after the low end of the customers. If, if, if a traditional way of, of, of growing your, uh, kind of revenue or customer basis is you look at all the segments of your customers and, and you identify who are bringing the most money and where you have the most, the biggest ROI and it would double down on them and you would bring more of them. I think what Shopify did, they looked at all of them and said, we are going after the low end, even if they are not bringing any money because the reality is everyone starts somewhere, especially in the services that Shopify does. And so all the Kylie Jenner's, uh, all the gym sharks and all of the other kind of unicorn e-commerce tours started a small. Um, and when you start with Shopify, it's pretty hard to switch places. So, um, I think it's similar to AWS. Like it's a default starting place for many startups and it's very hard to switch your hosting solution later on. So I think Shopify did that, which is unconventional. And I think that is just one of the many examples of how, um, differently Shopify thinks in the rest of the folks in the industry.
Speaker 3 31:30 Yeah. I actually heard the same thing about Zen desk that they, they got, uh, Airbnb and the really early days and, and uh, and then it turned into a massive client for, but, uh, there was, it was kinda not a, not a big client when they joined there. So I think being able to, yeah, being able to serve companies and scale with companies can be, can be a really good strategy for getting rolling. Um, so clearly I think for, for, um, definitely for a Tessa net and, and probably for everyone that the difference between running the business in the early days and then later on when, when you have lots and lots of people and all the challenges with that. What, what is, uh, how, how is it significantly different now than, than it maybe was in those early days from, for both of that kind of operational and also continuing to serve customers and not become over siloed and keeping people focused on mission. Anyone want to take that?
Speaker 8 32:27 Yeah. So, uh, then your big, uh, it's uh, let's say easy to think about growth because you know, you have a lot of tools for that. Uh, you help money, you know, do invest, you have talent
Speaker 5 32:40 around you, you have experience, you have users base. Uh, you can even think about, you know, acquiring your competitor. Um, but then you a small, you know, uh, you are quite limited so maybe your creativity works a bit better. So I personally believe it doesn't matter you are big or small or you know, you have to always think about growth and um, yeah, you, you should always look for opportunities in product or marketing. Doesn't matter.
Speaker 4 33:12 <inaudible>
Speaker 7 33:15 I think you, he kind of want to replicate like little little companies within, within your companies, like little teams who, who have that similar drive and culture as you had when you were sitting with a smaller group together in the beginning. And that's, that's a bit tough. But on the other hand, if you do it, it creates so much more fun because you get all these little groups who are like solving their own problems, running their own businesses, their jobs become more interesting and their output becomes better. And the impact on businesses is beer. So I think that's like, I just always try to think like, how am I going to get these group of people into having an exciting, fun job? And, and I think that, you know, trying to, to, to, to stimulate that type of behavior helps a lot because actually what he, what he says is very true. You, you can very easily get lazy and thinking like, well, let's just buy these competitors out and let's move on with this bullshit. But it's much nicer to, to set up a team to kill that competitor and come up with all kinds of creative stuff to do that. And I think it's just more exciting and, and I think that's a hard thing. Of course, obviously when you're a thousand people or, or even more, it becomes more and more difficult.
Speaker 3 34:26 Yeah. And so it's interesting, I think that the, the, the kind of trying to get people passionate about the mission and, and, and you, you mentioned like the, the fun of success and the challenge of that and then you compare that to the number of companies that feel like, Oh, we need to, we need to bring in ping pong tables and do things to kind of create a fun culture where it just, it seems foreign to me that, that, that, that the pursuit of success would not be fun in and of itself. So it's a, it's an interesting contrast
Speaker 5 34:59 and you know, it's fun. Then you can buy your competitor faster than two years.
Speaker 3 35:06 I think. I never <inaudible>
Speaker 8 35:08 that is that over time, uh, people start focusing more on the internal things rather than external. So when you're a very small startup, everything you hear about is how to get more customers, what customers are telling about you, what is the calc, like all these opportunities out there. And as you grow, people just care about internal stuff. Like what tools do you use? What are the procedures, who's reporting to who and how does that work? And I think if in line with kind of building small teams or staying creative, I think it's how do you keep everyone focused on the external size because all of the
Speaker 7 35:38 opportunities of growth are out there. It's not actually within. Um, so I think that is a, an extremely important point. I love that. And you should not hire people who care about a ping pong table because that's like they should become professional ping pong players. Like you should hire people who are passionate about building stuff and building it together with you. And I think filtering out that in the beginning, especially when you're like cool company like this or that, and you get big events and everybody's like, well that's nice. They'll probably have good pancakes at breakfast than I does people. You need to make sure that they don't join your company. And the guys who are don't give a, Oh sorry, don't, don't care too much about doing the unsexy stuff, but really love to build things. Those are people who are actually, I think similar to us. And, you know, we'll build a company that, that, you know, can afford ping pong tables. Right? So I think that brings us to a pretty good transition of, uh, what is the difference between companies that just achieve this breakout success and, and so many other companies kind of languishing and go out of business. What, what do you think some of the key factors in, uh, on the, on the two binary outcomes that are, if we knew we would be incredibly rich, we wouldn't be CEOs of these companies who would run the world.
Speaker 7 37:01 So, so in other words, maybe luck. I think luck's a big factor, but it's also like having teams that work really hard for it. And, and I think there's so many different successful companies that, you know, if there was a very simple five points to point out what to do, eh, you know, that it would be very clear. But I think to nobody that is, and I think all of us are very different stories on how we reached in different times success. So I think, um, the only thing that you know is that nobody knows. And then you have to try a lot of stuff. Why do you talk about doing so many experiments? Because nobody knows and, and you just try a lot of stuff. You work really hard, sort of pointing time, you hit something. It's like, Oh my God, this is working well, let's try something similar again and let's see, that builds up. Right. So I think you need to just work hard and try a lot. Yeah. And yeah,
Speaker 5 37:54 be fast learner every time because, you know, we saw an examples like examples, like a Yahoo or Nokia, uh, they were at the top, you know, and uh, I thought, uh, it's impossible to beat companies like, like this, but actually when you are a fast learner, yeah. You're curious so you can achieve whatever you want. Uh, but yeah, hard work also, uh, comes together and um, other stuff
Speaker 7 38:21 <inaudible>
Speaker 5 38:22 yeah. And I guess the pattern I see working with so many successful entrepreneurs is maybe brutal honesty. So to have this capacity exactly. When you run no care to say, are we brutally honest yourself right now? Are we
Speaker 6 38:36 really passing on whatever? Right now we are so big. Right. And I think that this kind of mindset of being always brutally honest with yourself on the team, uh, is help to keep probably, and maybe it's one of the pattern we've seen successful companies. Yeah.
Speaker 7 38:51 Right, right. I like the brutal, honest, uh, peace. Eh, what I would add to that is that it's, it's pretty hard to see what you can see. And I think that's where, uh, kind of that diversity comes in in terms of your building a company and making sure that there are people who understand things that you don't understand. Um, so to grow a successful company, you really need a representation of everything. And if you are, we kind of talked a lot about a lot about this lately, but you really need a representation of, of everything within the company that will help you find all these blind spots that you can't see. Because, um, I think kind of the folks at the FBI were at Nokia and, and other companies that they basically didn't see what they did and see. Right. Which is, you know, how, how could you solve for that?
Speaker 7 39:41 Yeah, it's a, it's a scary lesson for a lot of people. Hopefully it's, uh, it's, it's one that that keeps people's eyes a little wider open when you see big, big giants like that fall there. There are more examples like brand lists, all the SoftBank investments, the pizza delivery truck and, right. Man, we work in others. So, yeah, absolutely. So even, yeah, perceived hot new companies sometimes are a little more smoke and mirrors than they, than they may seem. So I do think though that, um, you know, one of the things that Thomas you had mentioned was the, uh, you, you went in and, and the team hadn't really articulated what the value was at vented. I think a lot of times that, um, and I was kind of joking when I said, is it just luck? But, but I do think that in creating value in the first place, there is a little bit of luck involved there that, that you mean, it starts with, it's not that hard to validate that a problem exists, but to get the solution right, that, that addresses that problem is pretty tough.
Speaker 7 40:42 And if you listen to these things, because I agree a lot with what they're saying, actually what you hear is like, how do I increase my probability? So luck, right? I'm gonna take a lot of different people that look at this problem from a different angle. So I got like many different ways to look at it, which increased my probative seeing it. I'm going to be very honest about what doesn't work because then I can write off a lot of stuff. I'm not going to lie to myself pretending so are there and then I'm going to try effortlessly to, to do that. And you know, if you look at it, those are all ingredients that you know, tries to, you know, gamble with that luck because in the end, all those things that you are building, usually they've not been built unless you're a rocket internets and your company working model, it's, it's actually a good approach because you eliminate a lot of that luck there. But, uh, um, so, so I think in those cases it's a lot about, you know, how, how can I increase probabilities and being humble about it, that, you know, many of these things are luck, you know, and, and when you got something, then really try to operate on that lucky bits really well. Yep.
Speaker 3 41:45 Yeah. So once you, once you've, once you've created that value, work hard to understand that value, understand how you create that value, understand all of the elements that, that build on that value and then just turn it up as much as you can. So there's that execution and hard work and building the right team.
Speaker 7 42:02 Yeah, exactly. And when you found that luck, realize it's luck, right? Because don't think you're super smart. Like you're not. And I mean, if you look at the SoftBanks success, that guy who had the thing, he, you know, he got very lucky with his previous investments in China, specifically one company that it really well doesn't mean that every time you troll a bunch of money at something, it's going to work. You know? So, so really realize like, okay, I got lucky this time, I'm going to keep on doing the same thing of being humble and trying a lot of stuff to make sure it is luck keeps on running instead of seeing, well we were so smart, you're not so smart. We did wind up artists. That's how big versus right. No, we're not men. We got lucky a couple times and we were willing to continue to, to invent on top of that.
Speaker 3 42:46 Yeah. Reminds me when I, uh, when I left log me in, so much of our growth was, was buying intent. People were looking for remote access solutions because we had a competitor who was spending hundreds of millions of dollars building demand and charging a lot for a product that we gave away for free. So we would just buy through search engines. Yeah, same thing but free. So we didn't even focus on differentiation. It was just like harvesting all of that. And then they get to Dropbox thinking, Oh, that playbook, I can't wait to do it again. And nobody was looking for Dropbox. Nobody knew what the heck a Dropbox was. And so it was just, it's that, that when you think you've got to figure it out, being able to recognize pretty quickly that like, you know what, I got to figure out a new playbook cause this one's not gonna work and uh, it can be a little scary.
Speaker 7 43:33 Yeah.
Speaker 3 43:34 Cool. So any, any parting words that you want to share with everyone out here? And I'm not sure if we are supposed to open up for questions, but, uh, but we'll, we'll have some parting words and then, uh, maybe questions over beer afterwards. What's the one recommendation you would give someone who's, uh, who's, who's trying to make their business a success?
Speaker 7 43:57 Yeah. So, uh, I would, I really liked the way to look at it probabilistically to your success. So it's not binary, it's not the failure or success. We are all kind of working on something that has a chance and your goal is to maximize that chance. Um, and, and I think one important thing, which is kind of my takeaway is, uh, when you're looking at it probabilistically, you want to kind of make sure that, uh, the upside is really big because you multiply the upside by the probability to get the expected value. And, and then if your upside is, you know, taking over Lithuania, that's probably probability of 10
Speaker 8 44:31 over free million people, which is a very not exciting thing. Um, so you really, you really have to ask yourself a question now, not a whether that that's going to work, but if it's gonna work, how big it can be. And I think that's a huge takeaway that we in Lafayette especially sometimes tend to overlook. We, we really focus on kind of just the local market. So really I'm big because I'm kind of, the success will be a eventual kind of the function of probability and and and dev side. Yeah, I would, I would take that and say anytime you're doing any individual tests that that being able to have a lot of upside on any individual test is, makes it more likely that if, if it's successful, it can be a game changer in your business. So, yeah. Um, any other parting words?
Speaker 6 45:18 I guess based on that and what you were saying earlier about, you know, uh, figuring out in one place and then it doesn't work necessarily the next time is probably also set expectations that he show about to start something already walking for something. Don't look for shortcuts. There are none and that's a sad, sad reality, right? That you just like, and they see many salespeople or founders trying to kind of copy paste some playbook. It's like playbooks are therefore inspirations for you to kind of tweak on, but you cannot just copy paste it and assume it's going to walk. And that's going to be your shotgun to market. Maybe walk with Bitcoins back in the days. But yeah, that was the exception to the rules.
Speaker 5 45:59 Absolutely. I would suggest, uh, not only look for a huge improvements, but for small ones as well because you know, when you have 5% conversion rate improve increasement, uh, per month and when you combine, you know, all these improvements and you can see in the end of the year that it's 80%, for example. So yeah, and when we, you know, divided our business into very, uh, uh, into a lot of different, uh, small parts and try to improve each of each of those. So, you know, uh, after one or two years, you know, we saw 500 or 600% improvement. So, um, you can be very successful if you, you know, try to look for growth in every part of your business. Love it.
Speaker 8 47:00 So I agree with those points and I think to the point of, uh, of, of Thomas from the Thomas corner, then I think, uh, um, I really liked the point and I think when you make those bets in the beginning and you start thinking about, we re really realize and don't be ashamed about the fact that you're going to fail like 10, 15 times before you really want to find it. So don't, don't, don't feel shame in, in, in failing. Be honest about it and be done. Be thinking about, you know, it's going to be a sexy, you can kind
Speaker 7 47:30 of be go founder are going to be CEO, I'm going to all this sexy stuff. No man, it's the unsexy stuff that make the business work and that means failing 10 times. And I think all of us at least filled the dental 15 times before we got something working in it. And I think if you put that mindset on and you put it in a probabilistic stuff and realize these things that small changes mattered and all, all of that together, you know, might get you there. But, but realize it's just going to be tough. Like I think all of us have gone through super tough periods and, and many of our teams as well, and it's not a sexy, right. You know, get ready for that if you want to start doing this stuff
Speaker 3 48:06 right. Absolutely. So the one thing I would, I would leave a on top of everything else is just figure out what matters right now in your business. Figuring out that thing that matters the most. And so for some it might be, do we have any value at all? That's the kind of product market fit. Do we have a product that anybody wants? Once you know that some people want it, then it might be how well do we articulate it? How do we start to get enough people in the door? And then eventually maybe it's how do we start to find massively scalable channels and how do we fix the support problem or whatever it is. But just putting a lot of energy behind the thing that matters most in your business at any given time. It gives you the highest likelihood of actually being able to.
Speaker 7 48:51 Excellent. Well, thank you guys. That was, that was fantastic. I really appreciate it.
Speaker 1 48:57 <inaudible>
Speaker 2 49:02 thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform, and while you're at it, subscribe. So you never miss a show until next week.
