The Exchanges

Q Okay. So that's sort of how you get things going. True, true co-founder this time around. We'll see how it works out. Tell me about the first customer. How'd you land them?

A Yeah. So the good news is we did have a little bit of a network. So the first customers came through investors as we were pitching, uh, sort of telling them our product is being launched. Our investors started sort of asking their portfolio companies. So the nice thing was we did have companies really, as soon as we tuned the product on, we had, you know, a handful of companies using it. Um, we're still super early, so we're still definitely iterating on, on the feedback of those early customers. And then, you know, the next few dozen that are, that are using us and paying us now. Uh, but it's, it's fun. It's, it's, it's moving way back to the beginning of the, of the spectrum where it's, you know, really learning and understanding and really diving into the use cases and the little intricacies of the product.

AI assessment note: “the first customers came through investors as we were pitching”

Q but I think like when you came on, I, I mean, you were like, like, I don't know, like three or four million in 2017, I want to say. And then you'd more than doubled, I think in 2018 to like eight or nine million. And you were pretty, you were pretty capital efficient. I think you'd only raised like five million or six million bucks. Is that all right?

A Yeah. So we, we actually only, we raised under three million. And so we, we were capital efficient. I think You know, looking back, I think it was a little bit of burnout, to be honest, uh, for, for me and just the team, I mean, we pushed really hard and, you know, I think we outworked a lot of competitors. Uh, you know, we sort of a motto to do more with less. Uh, and I think it catches up with you. And I think it, as a team, I think we were, uh, really close knit and, and super proud of everyone and they did a great job. But, uh, I know personally for me, I was, uh, I, I think I was kind of burnt out myself just pushing so hard for so long. And, um, so it was, it was, I think it made sense at the time instead of sort of raising more money and like even doubling down again was to sort of, you know, move on. And we found, we found a good home, uh, and we thought it was a, you know, really great partner. And, um, so that was sort of the way we went.

AI assessment note: “Yeah. So we, we actually only, we raised under three million.”

Q Yeah. Okay. What do you, so you also, you know, eight, nine, 10 years ago, we're getting your first 30 customers at ambassador. You approach those 30 probably different than you're approaching the first 30 at On board. What's the biggest difference? Are you listening to all the ideas they give you? Are you being more deliberate?

A So the, really the biggest thing for me, there's really two, two specifics. One is it was a problem that we actually faced this, this time. So with, with ambassador, it was much more of a concept and idea that I had that I thought would make sense, but it wasn't something that I actually lived in. I was, I was never an affiliate marketer at a, at a, at a business. I had like an affiliate little side company that, that I had. So I had some ideas, but I didn't really feel the pain with onboard. We felt this pain very clearly. Uh, me as running a team and trying to mitigate churn and understand how do we grow our, you know, top line, but also how do we grow our bottom line? Like our, you know, how do we keep customers longer? And Will, uh, was, you know, he, he was also in charge with making customers happy, right? And keeping them, retaining them and onboarding them as quickly as possible and keeping our onboarding team efficient. So we, you know, we didn't have to hire new employees every time we closed a new deal. Uh, so this was a pain that we felt Really closely, right? Being a super, um, scrappy and capital, uh, capital efficient team. Uh, so that's, that's first and foremost. And then second was, you know, we are focused on sort of trying to, to hit a niche as, you know, B to B and maybe software and maybe even more narrowly SaaS versus trying to solve all things for all pe…

AI assessment note: “really the biggest thing for me, there's really two, two specifics.”

Q I'm assuming you're doing seven, 800, something like that now. I mean, you could easily be raised, you haven't raised, like you said, 20, thirty million bucks. You've chosen not to do that. Let me ask you though, Cap table questions. So do you give kind of being in Detroit, do you incentivize talent to stick with you by, by giving it each person, a little part of the company?

A We do. And it's rare. So it's interesting. Most companies, In our area don't give equity or stock options, right? Um, we do. It's, it's one of our values is own it. And, and to me, it means, you know, we want people to act like owners, but you have to actually let them have some ownership, you know? So every single person who's ever worked here has equity options. Um, obviously the typical vesting schedules, uh, but every, but, you know, we have many, we have everyone here, you know, even, uh, you know, the office You know, manager, coordinator has, you know, she has options as well. So it's, it's important for me. I think it makes, you know, to me, it's one of the actual great things about being in a startup is that you do tangibly have ownership.

AI assessment note: “We do. And it's rare. So it's interesting. Most companies, In our area”

Q Okay, and, and, uh, I'm just going back here a second. Tell me what you were doing. I'm curious, Chef, what were you doing before Get Ambassador?

A So I was actually in law school, uh, looking for something to do. Uh, didn't want to practice law and I actually started an affiliate marketing company. So that was my first taste of affiliate marketing. And I saw the power of kind of referrals and friends referring, uh, kind of at scale, which was, which was an epiphany for me. Um, so before, before ambassador, I actually had that company. I had a couple smaller, I wanted to do something on my own at a couple of smaller businesses and wanted to start an affiliate program in house. Uh, I couldn't find technology that would do that. So I built Uh, ambassador. It was originally called Zferl as a way to have an affiliate program for a different idea that I had. And I realized that this Zferl was actually a better idea. And then Zferl became ambassador.

AI assessment note: “I was actually in law school, uh, looking for something to do.”

Q Why do you let them? Why'd you let them in?

A So, so, so my, when we raised money in 2015, it was one of those situations where we were cash flow positive, and it was my understanding and my, my, my thought was that we weren't going to raise money and that it was, and that we didn't need to, and so I met Pat, uh, Patrick Wienan from Arthur Ventures, And I was really just blown away. He's, he's an awesome guy. Um, and their, and their thesis was, which is pretty interesting as they don't invest, they invest, you know, they've, it's kind of the middle of the country, although it's, it's mostly just non Valley, right? So they invest in the best companies. Across, you know, across the U S but outside of the Valley. Um, and they are in some really great companies, Leadpages, When I Work, um, uh, Ionic and, and, and lots of other ones. And so they, to me, they were really impressive of attracting great companies, but also having, not having the growth at all costs mindset that many other VCs have. And so for me that, that, you know, founder investor, uh, fit was there. And I think Um, if it wasn't, we, we might not be around, you know, I mean, it's, it's pretty easy to blow through a couple of million dollars. And if you don't hit the met your metrics and no one will give you money. Um, and, and I, and I told him that I wasn't willing to leverage the business to, to maybe become a billion dollar company that I'd rather build a s…

AI assessment note: “not having the growth at all costs mindset that many other VCs have”

Q Yep. Have you ever considered doing things that are non-dilutive just to have additional cash to, to invest in growth stuff? Like I'm sure you've had debt equity conversations.

A Yeah. And we do, and we do, and we've, we've been, we, we're always looking. So we have a couple where we actually have ongoing conversations about that. It's, it's, we haven't found a definitive need where we can't, that we, that we think we need, you know, we haven't, you don't know how you spend the money. Yeah. The money's there if we need it. Uh, and we don't have like a million dollar capital, you know, capital expenditure that we need to need to do in the next X amount of months. So, um, you know, we have enough cash in the bank and between that and, and opportunities, um, it's something that absolutely think about. I think it's a great alternative. That's again, it's not pushed by typical, you know, VCs aren't typically telling people to do that, but it's, it's a really great option for companies that are sharing enough capital where they don't need to worry about being diluted. It shouldn't be diluted. It's a, it's, it's, it's expensive.

AI assessment note: “we have a couple where we actually have ongoing conversations about that.”

Q And had you already accepted, like, had you already practiced kind of law or were this, was this right out of school?

A It was a few years after. I actually never practiced a lot. I took the bar. My mom was proud. Uh, and then I, I actually, uh, was, was looking for something to do. I was like investing in real estate. I was doing a lot of different things. I wanted to be, I've always been entrepreneurial, but I didn't really, for me, it was even before, like kind of, uh, startups were, were mainstream or popular, especially in Detroit. So I was interested in a tech company, so to speak, but I, I was, it was a very small, if, if at all the, the kind of tech scene locally. So I was I was kind of part of that early scene, but I didn't even know what it really meant. It was, you know, before lean startups and before these podcasts and all those things that are now really easy to find as someone who wants to be an entrepreneur. It was, it was much different for me back then.

AI assessment note: “It was a few years after. I actually never practiced a lot.”

Q So let's stay focused kind of on December, 2015. You know, you did 320 grand in revenue that month. So you've got obviously a super healthy run rate. What about, uh, what about things, other unit economics like a churn when someone signs up with you guys, do they stay?

A Yeah. So, you know, churn is, is a, is a, obviously a tricky and probably one of the most important things to think about from a SaaS perspective. And for us, you know, we, we found as we moved up market, our churn went down significantly. So one of the things that we did was, you know, we, we wanted to find companies that were investing in our technology. So it was, it wasn't a two person company because it just, they're too busy doing too many things. Um, so one of the things that we really learned was actually most people would think this is counterintuitive, but actually charging more and going up market Significantly reduced churn. Um, and because of that, we could also invest in people's success. So what we do is now we require onboarding for every customer and we spend a ton of time, uh, dedicated time with our team, with their team, making sure that they're successful from the get go.

AI assessment note: “we found as we moved up market, our churn went down significantly.”

Q All right. Listen, we haven't chatted on anything since the Ambassador days, but my gosh, I'll tell you what. There's so many SaaS founders I interview and they say our number one channel, it's affiliates, but it's always difficult to manage the affiliate model. So you played in that space and ambassador, close that story out for us. What happened?

A Yeah. So, uh, it was a, it was a great ride. Um, in, in 2017, late 20 17, we decided we were going to think about like selling, uh, the business. And so ran through a process and, you know, we could talk for hours and hours about how that went, but ultimately it was, it was a pretty successful outcome. Um, it was, you know, bittersweet of course. Uh, but the great news was everyone, uh, you know, did fairly well. Obviously all the shareholders were, um, you know, they, they received sort of a really nice, Sort of, uh, sort of surprise for, for many folks, uh, from, from stock, obviously. Um, and many of the, many of the team ended up moving up and joining, uh, the acquire, which was West corporation in, you know, various capacities, but ultimately, uh, could move it throughout the organization and of course, move up inside of ambassador as well. So it was, it was a win-win, um, But you know, it was, it was bittersweet and it was, for me, it was time to, to focus on something else after about a decade.

AI assessment note: “joining, uh, the acquire, which was West corporation in, you know, various capacities”

Q Okay. And, uh, give me more of the backstory here. When did you launch the company? What year?

A So the company was founded in 2010. It's been around a while. Uh, my background, uh, started, it was super SMB focused, premium, uh, you know, do everything wrong. And so we learned to, to build the company that can scale as, you know, charge more money and, and, and, um, you know, find great people to help build, um, you know, the product and then build the success team and then, You know, market and, and, and, and sell and all those things. So, uh, it's been a, it's been a long road. It's, you know, again, it's almost, it's eight years now. So it's, it's, it's flown by for me, but, um, the, the company itself has changed quite a bit. You know, again, we were very SMB startup focused. We've moved, continually moved up market as we found a success, uh, into some of the biggest brands in the world. And then as, as an organization, you know, we, we raised a little bit of money and we built teams.

AI assessment note: “So the company was founded in 2010.”

Q talk to me, you obviously have a good understanding of the numbers. If you're, if you're dealing with an AD or a 1.25%, um, uh, you know, monthly kind of gross turn, a customer is staying with you on average for about 80 months, depending on how you're measuring that. What, what are you, and so, you know, lifetime value, what are you willing to spend to acquire that customer?

A Yeah. So the, the one thing I would say is, is, is lifetime value is, is a tricky metric. And one of the things to that, again, we've been hearing from investors where some of them have been said, we don't even care about that number right now, because literally if you're doing annual contracts, you guaranteed basically a year, some contracts are two or three years. Um, so I, so it, it doesn't always work to eight months, but I think, again, we've seen, obviously many companies have been with us since the day we started and we've migrated them from Z for L to ambassador. So we've seen success there. And, and, uh, So, so that's good. Um, so to be, to be fully honest, we're not, we're, we're, we obviously worry about customer acquisition costs, but it's not the primary focus from a marketing perspective. First and foremost is where are the best customers coming from and how can we get more of them? When we figure that out, I think I would say better, we'll then worry about driving down the cost. So what we would really pay, I mean, to be honest, we would pay hundreds of dollars for a demo, which is, you know, probably what we pay in, in some, you know, paid channels. Um, Through our own referral program, we pay 25 dollars if you refer a scheduled demo. So if someone schedules a demo and, uh, completes it, then we'll give you a 25 dollar gift card. They become a customer. We'll gi…

AI assessment note: “just on our own referral program, we'll pay 525 bucks.”

Q How do you calculate? Tell me how you get seven grand.

A So, so we, we actually did a, so we, we, we calculated a few different ways. We kicked around some ideas, but we basically tried to do like the most fully loaded version, which was a portion of, it was, it was all of sales, a portion of success, and even a portion of engineering. So it was like a pretty, and then obviously like marketing too. So it was a pretty fully loaded, um, analysis. And then so that, you know, again, There's a lot of ways. I mean, one of the things I've learned is as we're, you know, getting more advanced with our metrics, there's so many ways to, uh, to kind of play with the data to make the numbers look great. So, you know, you see people spouting out different metrics and at the end of the day, just, you know, I think for us, what, what is the most telling is that if your company is making more money than it's spending, then it's actually scalable and sustainable. Um, so that's kind of, you know, that's what we've been driving toward, of course, but from a, from a, you know, CAC perspective, we, you know, we're pretty happy with where we're at.

AI assessment note: “all of sales, a portion of success, and even a portion of engineering”

Q Yeah. And, and when did the transition from SMB to enterprise really start in terms of your product roadmap?

A So, From a product perspective, it's funny. Some things have changed, but it was more really in the way that we ran organizationally. So the product itself can still, I think, easily work with small companies. Well, we found that we just wasn't, it wasn't an effective from a business perspective. And for that, for us, that means, you know, we wanted to spend more time and make companies more successful. We cared about having companies long-term versus having them, having lots of people in the door and then You know, fraction. So exactly. So for us, it was focusing more on churn, uh, bringing in companies, spending more time with them, making sure that it's something that, uh, they'll be successful with. And for that reason, we just kept, we kept moving up market and seeing where we could in fact be at really add as much value as, as we thought we should.

AI assessment note: “it was more really in the way that we ran organizationally”