The Exchanges

Q And, um, so how did you finance it? You know, bootstrapping is always a fascinating topic to me, which is maybe weird because I'm a VC, but, uh, like, how did you, was that services, or, like, how did that, how did you manage to do it?

A Uh, so it's obviously a very constrained environment, right? Um, the good news is it didn't take us long to build the first product. And I think that's a lesson, right, that has been also taught by many people, but I think it really, we really felt it, like the first product we built in three weeks. And I still remember I was there, I was contributing a little bit, and then Martin, who is our, is our key engineer, he's our CTO, was writing most of the code, and then Basti was bringing us beer and pizza, and we were literally in the office for three weeks, and we had our first prototype. It was not very sophisticated, but kind of did the job. You could do demos, and then we went out, and we tried to meet with customers. We, like, used every One of our friends who did an internship in some company to get like an intro and get a meeting, and then in the first year we found, I think, five or six customers that were sort of willing to, I don't know, pay us 20 grand for a pilot or, you know, 30 grand for a POC, like some, you know, not like huge projects, but like real, you know, money. So, um, so, so we had some money to hire our first employee and, you know, Buy out our first booth at a conference. I mean, the first conferences we went to, we couldn't even afford the booth. We just went there and talked to people, right? Bit awkward, like, hi, I'm the guy with the business card, an…

AI assessment note: “we sort of worked our way there through funding customers”

Q That's me. All right. So switching gears to, um, the product itself. Uh, so at, at, at pretty granular levels, but how does, how does that work? So you, you basically have a platform that has little tentacles in every repository and tracks the data or how do you, how do you get the data into the system so you can mind the processes as you define earlier?

A Yes. Perfect. Great question. So, um, so we basically, there's different types of data sources, right? So one there's the transactional systems, SAP, Oracle, Salesforce, et cetera, and you typically connect to either to the database or through an API, right? Um, so you, like, if we connect to SAP or if we connect to Oracle, we pull thousands of tables from, from these systems. And so, so we have also, we have Over a hundred pre-built connectors, uh, to, to, to, to transaction systems. You know, we've sort of really built, um, standards around this, so it's, it's easier for customers to get started. Uh, then there's task data, which happens on a user's desktop and is not, uh, actually recorded in any transaction system. That would be, you know, opening an email or looking at an Excel sheet. And we can also track that data through basically little tentacles that we have into the desktops. Anonymize the data, you know, Get rid of all the private data automatically, and then pull it into our system to complement this transactional data with task data. And then, uh, there's some extra day that we might pull from a Nielsen or like an external data source. You can pull that into B through API. Yeah. Benchmark data between our customers, you know, so that's easy because the data is already in our cloud. It's a fully cloud-based platform. Um, but, but, but I would say the data extractio…

AI assessment note: “connect to either to the database or through an API”

Q And the people that interact with the system on a daily basis, are they in operations or are they all over the company?

A So there's usually like a center of excellence, some people that get really deep, right? And they analyze, they serve sort of as a hub for the adoption of Solonus within the company. And then we, you know, but, but ultimately this observability can be used by anybody in the company, right? So there's business users that access dashboards and, And monitor their processes on an ongoing basis. And we can even bring the insight to you. So if you use Salesforce, we can show insights in Salesforce, right? So you don't even need to go to Salonis UI. We can, we can show a trigger, or hey, you, you should focus on this customer, or you, you have a problem here proactively to people as well.

AI assessment note: “ultimately this observability can be used by anybody in the company”

Q So, that feels like a good place to start. Process Mining is both this super important area, but also somewhat unknown, uh, except for people that spend time, uh, and obviously for customers. Uh, how would you define it?

A Okay, so, I think, Um, one of my predecessors here in Sage said, like, who doesn't know vector databases? So I'm gonna do it the other way around. Who knows process mining? Who heard of it? Well, that's more than I would have expected. So, um, it's still less than 50% of the people in the room. So, um, process mining, look, Um, obviously every business, um, is running a lot of processes, right? You're selling to customers, you're invoicing customers, you're serving customers, you're, uh, you know, responding to product requests, you're building products, all those things can be expressed as a process. So our model for looking at businesses is they are these really complex, you know, they run on these really complex set of interconnected processes, right? And what process mining does, and process intelligence, it uses all the data that's generated, because obviously, you know, through digitization, um, a lot of those processes are based on actual IT systems, right, so you, you know, you don't book your invoices on a paper anymore, you don't send faxes around anymore, you, you know, you have IT systems to do all that, to keep a record of all your customers, to keep a record of all your suppliers, of all your orders, right, and, um, And, and Salonis will be like a huge vacuum cleaner, like soak up all that data and then show you how your company operates very visually, right? What…

AI assessment note: “soak up all that data and then show you how your company operates very visually”

Q Ok, great. Alright, so let's dig into the product in some detail, if you will. So, um, I jotted down a few parts of the product that I'd be interested to discuss them, you know, one by one. So process intelligence, so different components of the platform, I guess. So process intelligence graph, process analysis, process improvement, and process monitoring. What do those different parts do?

A Right. Um, a lot of process in there, right? I mean, as a German company, I guess we have to stay on brand. Um, um, so the process intelligence graph is something we introduced at our last user conference, and something we're very, very excited about. It's really the foundation for our future. And the process intelligence graph, before we always looked at individual processes, it was case, it was called case-centric. So you pick a case, I want to track the order. And then you can track the order. I want to track the Jira issue, and then you can track the Jira issue. I want to track the customer service request. Track the customer service request. Obviously all those things are interrelated, right? Like those processes are all connected, right? Like one of our customers is GE Healthcare. If GE Healthcare wants to ship an MRI machine, they have to build the MRI machine, they have to ship the MRI machine, they have to make sure there's a, you know, electricity at the, you know, hospital. These are huge machines. They have to make sure the building is ready. I mean, there's lots of processes that sort of are interconnected. So the process intelligence graph basically marries process mining and a lot of the theory behind graph databases and graph technology, and establishes a foundation that allows you to represent all of a company's processes in one connected data model and data st…

AI assessment note: “allows you to represent all of a company's processes in one connected data model”

Q Um, go ahead. Like, I mean, I'm actually, well, since, since, um, one of the questions I have is actually, uh, Alex provided the perfect segue into it. What, what, what is the, the, the self model, um, I just, I mean, is there, Is it, is it, um, all like a driven with, um, you know, SDRs and BDRs, like a full-on enterprise sales force?

A Yes, it's a full-on enterprise sales force. Um, we have introduced digital channels, you know, where, for example, you can go on our website, and by the way, everybody should do that. Um, uh, sign up for Solana Snap for free and just use the product, right? And then you can go into pay tiers and things like that. But you know, if you, if you are from a big company, there's a chance that somebody might give you a call. Um, and, but, but you can test our product. It's very easy to, to sort of onboard. And even for covert, we launched some rapid response apps to help customers out that are free on our snap platform. So there's a digital nature to that, but, but it's an enterprise and we sell to the enterprise and it's an enterprise model. Yeah.

AI assessment note: “Yes, it's a full-on enterprise sales force.”

Q And how did you do it? Were you able to do, uh, through this university project, find customers early and your work?

A So here's what happened. Here's what happened. The CIO of this company saw the prototype that we built and he's like, I want to become your customer. And we're like, you know, we are three students. Uh, you know, we don't even have a company. We just put this prototype to, and he's like, yeah, I want to be your customer. And then, We saw like we said, okay, now we've got to start a company. So we started a company with no idea how to run a company or build a company like zero, right? We, we weren't even like, if you had asked us two years before, a year before, three months before, would you ever start a company? The answer would have probably been no, you know, it's like, it's a, and, and, um, and, um, you know, we started a company and then something incredible happened, like they really improved. Like within three months, they got their resolution time for, for tickets, right? That's a very important metric to measure. Down from five days to solving over 80% of their tickets in zero, like in the same day. Without firing or hiring a single employee. Just through working more efficiently. Based on this data that we would provide. They got, you know, tremendous leaps in productivity and customer satisfaction, et cetera. And, and the CIO became our first customer. And then he called up a bunch of CEOs that he was friends with and they, um, they, you know, we signed up like the f…

AI assessment note: “he called up a bunch of CEOs that he was friends with and they”

Q to build companies, maybe walk us through how your overall go to market evolved. So you have the, the blessing and the curse of being very horizontal, like basically any industry can use the product. How did you go about it? Do you have a, at some point more of a cluster of customers in a specific vertical and how was your go to market organization structured to address that?

A Right. So, who, who's in enterprise software like broadly? Ok, it's a lot of people. So, I mean, First of all, one thing I've learned is that the go-to-market is highly dependent on your product and also the target segment, right? So, um, a lot of people, I think, think about go-to-market in two generic ways, but something very specific for the company. Um, so first of all, it obviously matters a lot whether you sell to big enterprises or whether you sell to, sort of, SMB, right, which is more product-led motion. Big enterprises can be product-led motions. Usually, product-led motions start with smaller companies, but not for what we do, because you have to connect to all these data sources, you have to, you know, get executive sponsorship, et cetera. Um, so then, if you have an enterprise go-to-market like we do, which I also know most about, is, it's very, gonna be very reference-based, very use case-based, right? So, you need to, even if, even though you have a platform that can theoretically address anything, you need to build some, like, core use cases, That you can, you know who you target, right, I target the head of shared services. For example, for us, a lot of big companies have shared service centers, and that's usually a great place for us, right, because they have a lot of process work, you know, they, they, they have to optimize, they have to save money every year…

AI assessment note: “we found that it's a good sweet spot for us”

Q How did you, um, how did you scale yourself as a, as a leader? Obviously the, The job that you do today versus the job you needed to do back then, and probably a couple of jobs in the middle, are all very different. How did you figure it out and get yourself to the level you're at now?

A Well, it's still very much work in progress, so, um, I think the most important thing is that you have to have the ability to listen. And really, you know, surround yourself with people that are going to be honest with you. And, and I think if you do that, you're going to learn a lot, right? But, but I think you really have to have this realization that yes, you have a lot of advantages over like other executives because you know the product very well, you have, you know, you would have tons of passion, right? You, you have seen a lot of customers from the early days, et cetera, but at the same time, you also, you haven't run big teams before, you know, and, and you're going to make mistakes. The best way to do it is, is to really surround yourself with people that are going to be honest with you and, and, and listen to them, right? Um, the other thing I think that I'm a huge believer in is mentorship. So you wouldn't believe like what kind of people you just email. Hey, can you get on a call with me to, you know, to, you know, I'm trying to do the startup and, you know, I, I want to learn something that actually are going to mentor you and help you. So find other founders that are maybe a little bit ahead of you. I always had mentors to this day that have been ahead of me. They can always call and say, Hey, I have this problem. How to figure this out. It's a safe space. I can …

AI assessment note: “I always had mentors to this day that have been ahead of me.”

Q And that's based on benchmarks, like across all your customers, you know, that best in class looks like this, or how does that work?

A Basically, um, first of all, this process data, you can think of it as objects and events. So objects are things like invoices, customer service complaints, orders, customers, people, et cetera, and then events are things like, okay, a new customer puts in an order, or we ship an MRI, right? So we are very good at finding these objects and events in databases and application logs and all sorts of representations. And then we bring it together and we see, okay, where do things get delayed? Where do we have a lot of loops? So it's some generic, um, understanding that we can get. And then we also have a wealth of knowledge. So we have this knowledge layer of, hey, we know that it's not a good idea to pay the same invoice twice, right? It's not a good idea, right? Just paying the same invoice twice. Uh, we know it's not a good idea to leave your customer when they have a new call, Hanging for five days, right? We, we, we know, so, so we, we know it's not good to promise your customer, like you've always bought something on Amazon and you get really annoyed when they promise you we're going to show up on Wednesday and they're going to, they should show up on Friday. We know that on-time delivery, not being on time is a, is a really bad idea. So we, we have this knowledge built in. You can load a completely Process that we've never seen before will still give you some really strong i…

AI assessment note: “we have this knowledge layer of, hey, we know that it's not a good idea”

Q talk a little bit about the international expansion. So how do you go from, uh, you know, a Munich based company to, um, a company, a global company. And, uh, I think you, you now, all of you in Germany today, I think you live in New York, uh, if I understood correctly. And, uh, what, what did that take? And, uh, you know, some lessons learned along the way.

A Yeah, no, happy to, to, to talk about it. I mean, you know, we, once we had sort of built, I think the first thing in every company that you need to do, and then you'd be like super serious about in the early stages, building really strong product market fit. Right. And I think people sometimes underestimate it. Yeah. They say like, You know, if I, if I talk to a VC, I always have product market fit, of course, you know, you guys will hear it all the time and it's fine. You know, you need to raise money, but, but as an entrepreneur, you want to make sure that you start really scaling once you've actually will product market fit, right? Meaning you, you know what to sell, who to sell it to, they're willing to pay for it. They're willing to use it. They're willing to renew and you really figure that out. And once we figure that out, we said, okay, now we're going to, it took us a few years to do that. Now we really want to make this, you know, a bigger, bigger, much bigger company. And it was clear to, and I think the first thing we noticed is that, you know, we have this principle as long as we call FISA, focus, invent, simplify act. And it's really about sort of focusing and, and, and simplifying things. So, so first thing we learned about international expansion is you've got to be extremely focused on, on, on how many markets you go into, how quickly, right? So, so it's bette…

AI assessment note: “first thing we learned about international expansion is you've got to be extremely focused”

Q and that, uh, you know, it's always a question for startups. At what point, uh, do you start working with larger companies? And typically the answer is like, you're typically too small and you need to be of a certain size before a partner, a large partner. One will accept working with you and two that, that partnership will make a difference for you. Were you at the right moment?

A Well, I think first of all, like partnerships, Often don't work. Like, 90% of them don't work, right? So, so, and we also tried many and, you know, many didn't work. Um, I think the first thing that, that a company has to figure out right out of the gate is product market people fit, right? People talk about product market fit isn't just about product market, it's also your team, right? Like you need also people that fit that opportunity. And, um, and this product market fit, I think before you have that, you don't really need to Think a lot about hiring sales team or building a partnership or going into new markets or, you know, doing anything fancy like that. And I think one of the challenges that I've noticed is that a lot of companies fake this product market fit.

AI assessment note: “partnerships, Often don't work. Like, 90% of them don't work”