How to Build a Successful Startup From Scratch with Dom Einhorn, Spencer Fry & Thomas Petersen #193

In your opinion, what do you think are some of the best places, countries, or jurisdictions for startups to launch? Obviously, maybe you're biased towards being in France and where you are, but what do you think?

Highly biased, but it's an intellectual bias and an emotional bias at the same time, so I'd say, first of all, I've worked in at least 30 different countries in the last 28 years. Clearly, What drove me early on in my career was the US. I worked in Latin America, in Central America, in other parts of Europe, and everybody has their opinion on that. So clearly I'm going to be subjective about what I'm going to be saying. Uh, we as a team did a lot of research in 2017 prior to deciding on France, and we had 4 or 5 candidate countries in which we wanted to settle. And we ended up settling on France after Emmanuel Macron became president of France and radically changed the landscape for startups, coined the term, English term for France, the startup nation, created the French Tech label, et cetera, et cetera, et cetera. I would challenge anyone today into a debate as to which country has done the most and is offering the most for early-stage startups. And I would challenge him and probably come out and win. I'm a former fighter. So either way I'm gonna win, but in this case—

What were the 4 countries before I, before I say that, what were the 4 or 5 countries that were on your list?

So in Europe, you definitely need to look at Estonia, right? Very proactive. Everything is decentralized. You can create a company within 45 minutes, et cetera, et cetera. But if you're looking to raise money, there's always gonna be, oh, former Yugoslavia for those of us who are old enough, right? Question mark, right? Small country. If you're building something for the Estonian market, can you really scale it across Europe first, then the rest of the world?

Right.

That's an issue. I would say even a small country like Macedonia, 2 million people, right? Very proactive, highly skilled engineers coming out of top engineering schools at a low cost, which is important. But all things considered, France is a sizable market. 67, 68 million people.

Yeah.

It is the second largest economy in the EU zone. It has tremendous startup incentives. If you look up French tech investor visa, you have talent passport visas. For example, it took me 2 weeks to get my Panamanian engineers to France, quote unquote, import them. The day they came, the next day the kids were in school. They were still jet-lagged. They came with 5 kids, 3 and 2.

Right?

So a lot of the barriers of entry, because if I mention anyone to the US right now or Canada, you have to go to France because they're all the French bureaucracy, et cetera, et cetera, right? To a certain extent, that is still true, nowhere near as much as it used to be. And what we do internally at Unicorn, we take care of it all. So you don't have to worry about it. We hand you the keys, here's your desk, get to work.

In terms of growth levers, you know, which helped you kind of grow your business, do you have any recommendation for other SaaS entrepreneurs Maybe for who have similar markets as you, similar kind of target audience in the B2B kind of B2C space, what have you seen work really well for you guys?

So the really interesting thing about our business, and I think this is true for all businesses, is that the marketing channels change over time. In those early days, you can do a webinar with 50 people and make enough sales where it actually moves the needle. So early days, we were doing lots of webinars. We had an affiliate program that worked pretty well, getting our customers to refer their friends, that sort of thing, getting people to blog about us, create YouTube videos about us, etc. But in the backbone of all of that was our content marketing machine. So we now have 5 people whose full-time job is to create articles, videos, guides, tutorials, tools, etc. for us. So content marketing has been a big source of customers and leads for us. And that was really important for me when we started that about 3, 4 years ago was, you know, SEO and content takes a lot of time. And, you know, this is a business that I want to build over the next like 100 years. Obviously I won't be here, but over the next 100 years. So like I needed to establish that really early and I wanted to be the sort of leading voice for the creator community. So I think like for any SaaS business, content is just killer. Um, and you, but you got to start it early and it can take, you know, a year or 2 years to really build up. So that's kind of been mostly where we focus most of our time. But in the last few years, we've actually been spending a lot more money on paid marketing. So paid marketing wasn't working for us in the first few years, but now it's a huge source of new leads for us.

It makes sense. Have you, uh, have you, what would you say, you know, maybe the biggest failures in your growth strategies? I know you mentioned like you've done some product launches, You know, maybe not a failure, but have you done any kind of other experiments that you said, you know, you thought would work and maybe isn't worth it for your business?

Yeah, yeah, definitely. But I would say, um, that one of the important things to do is, you know, the thing that didn't work last year could definitely work this year and could definitely work the following year. So we're constantly like retesting on things that haven't worked for us. As example, paid marketing didn't work 2 years ago for us. Um, so similar things like we launched a podcast, we spent almost $50,000 producing it. Did a whole season that really was a bust. Yeah, I think like we didn't have enough distribution probably. And I think we got under 1,000 listens per episode, which is fine, but I think we were hoping to at least maybe break even on it or something like that. So that was something that sort of failed for us a couple years ago, but I don't necessarily think— I think we could revisit it in a year or something and maybe it will work. What else? You know, we've had things that we, like, for example, we ran an online conference last year, which more than broke even, but we're really excited about running it again this year and using all the things that we learned from that original conference and making it better and, you know, hopefully making it even more profitable for us. But yeah, we're, you know, constantly revisiting every growth strategy.

No, no, it makes complete sense. And what would you say are some of the biggest challenges right now, you'd say, in terms of Growing or scaling your Podia?

So I think, you know, there's a bunch of different ones across, you know, every department. In the products and the development department, the biggest things for us is that, you know, we have a very technically complicated product. We've got a lot of things going on behind the scenes. So to continue to make it really simple for our customers to use, but also to continue to add additional features and functionality to it, there's this very big balance that we're having to sort of weigh. Like, you know, we add this new feature that makes the product more complicated, but also makes— has higher impact, you know. So there's this big product development balance that we're facing right now. But it's been going great. And I think we've sort of— we're treading the line very carefully. You know, in terms of sort of more of the business as a whole, you know, we're hiring a bunch of different positions, mostly lots of developers right now. But it's hard to find great talent in tech. It's just difficult.

Sure.

And especially for us, we were a fully remote company since day one, and it was very easy for us to differentiate ourselves in the hiring market because if you want to work remote, come work for us. But now every company is remote and a lot of companies are going full remote. So there's way more competition for job postings. But we have a really great place to work. So we do get a lot of like good applicants. And then on the marketing side, it's really just about, you know, continuing to scale all of our channels and, you know, seeing better numbers this quarter than last quarter. Of course.

Yeah. Cool. So if anyone's listening and looking for a job, you know, reach out to Spencer. They're hiring.

Rails developers.

Rails developers. Awesome. Who is the ideal profile of someone founders that you're partnering with? Like, do you have a specific skillset or experience that you look for that, you know, you found to be working best and end up succeeding better than others?

Well, yeah, you know, it's funny, like one of the biggest tells for me normally is if somebody is very secretive, then it's normally like, it's a sign that they're gonna be very hard to work with, because I think that, like, it's one thing to come with me and say, I have the cure for cancer, right? If you have that, you shouldn't even talk to me. Just go patent it and you'll be fine. There's some ideas, they have the market waiting for them, right? Most other ideas that we all get, they're kind of lame, and then there are some of them that have some potential to be good businesses, some to be amazing businesses, some to be really, really big century businesses, right? But one thing that I always found as an early warning sign, but who I don't want to work with at least, is somebody who thinks that they come with their encrypted PowerPoint file, right? Where it's very hard to even get in and you have to do NDAs and they're really, really, really secretive. Because that also means that whatever they've tied the whole thing up against and the success of something, it's very fragile. Because the idea is never gonna be the thing that's gonna make it successful. It's always gonna be how it gets treated and how it gets nurtured, as I said, right? And so that needs to be open and free and people need to have access to that, right? Otherwise, you know, you can't actually do much with it. Then you'd be holding that idea so amazing that it's gonna go up to the sky. So that's definitely somebody I'm trying to avoid. Another one that I'm generally kind of— that we're kind of trying to avoid are people who are— how can I put this in a nice way? People who come with a preconceived notion exactly about what it is that needs to be built and just think that we're an agency, right? That's the other kind of people that we don't work with because they basically become a problem for a lot of different reasons. But one of them is that, you know, that our kind of, you know, the reason why somebody should partner with us is our ability to look at your idea and look at what works and what doesn't work and kind of help you massage that into something that is then useful, right?

Makes sense.

The best people we work with is, there's 2 types of people that I really love working with. One is the completely like, I've never done this before, but I have a great insight or I have this idea that I wanna do. I'm not exactly sure how to do that. That's a perfect example of something that's really good to work with because there, a lot of our experience can really help them very quickly take this insight or idea or—

Idea.

or kind of business market they wanna attack and really quickly establish something and get it out there. And then the other one is the very numbers-driven, you know—

Analytical.

Numbers-driven sales guy, right? That just looks at the numbers and it kind of doesn't really care about being secretive and all these other things, but just like look at metrics and it's really good at measuring. It has a good, has a very good intuition around how to approach this. They can look at something, they know what to derive out of that. They're almost— I think that they're probably my favorite to work with because they're very opposite in many ways of the kind of person that I am. And so that complements each other really well because I could then take some of the more fuzzy parts and add to whatever they come up with. They provide the insights and the analysis of The data, and then I can kind of help them, or we can help them basically, you know, approach that, right?

Yeah, so don't be, uh, don't be closed-minded, folks. Don't be secretive. Come in there with an open mind. And, uh, yeah, I have that same problem. I'm very analytical, so I look at, you know, numbers, data-driven decisions. That's a lot of my things. So I like to partner myself and be around with other, you know, uh, I would say creative folks such as, you know, Alejandra, producer, to help kind of balance that out. And I find that helps a lot. Um, do these, do these founders, are they coming to you with the idea and say, hey, let's do this, Or are you also going to, you know, validating the idea with the corporations? You talk to Skype and say, hey, Skype says we have this problem, and then you go out and find the right entrepreneur to say, hey, can you execute on this with some cash, here's some equity, and a team around you to go and execute? Or is it, uh, yeah, which one is it?

Or is it both?

It's actually, I mean, to be quite honest, like, obviously one of the first things that you need to do, whether you build a, you know, a VC or a venture studio, especially venture studio or VC, or if you want to be an angel investor, is that you need to build— to make sure that you have the right people come by you and introduce you to a lot of ideas. So the first thing that we've been trying to do, obviously, is to make sure that if people have these ideas, that they know where to go. And that could be one place, could be to go to us, obviously.

Mm-hmm.

So that's the first thing. And then obviously after that, it becomes a question of who do you work with? You know, they have, as I said, like an insight from an industry. It might be recruitment or something like that. They might have an insight there. So they'll come to us, they have an initial idea, we help them look at that and say, okay, is this the right way to approach this? Is there another way we could be doing that? Other times, as I said, they might have a market they wanna attack and they understand the market really well and they know what is required to build something in that market. Also there, I would say that our primary function with them there would be to basically help them build stuff that can be, how do you call that?

Right.

To basically help them build stuff that could be done in a way that very few other people can do because they don't have this kind of background that we do to approach these kind of products.

Makes sense. And then kind of just adding to that last point of where we were talking about, you know, some underrated growth strategies that maybe people don't think to apply to their startup and they come to you 'cause you have those 2, 3 skills, you know, keep it simple, really good copywriting, you know, with a nice design. Is there anything else that people can, look at when they're first starting off that could make the big difference?

To be quite like, it's basically so like, if you want to start a marketplace, for just as an example, one of the things, you know, we normally suggest is start a mailing list, right? There's like some really simple ways where you can very quickly get up and validate whether you even have a business. I think that's one of the first things actually that, that, you know, a lot more people should be thinking about. You know, you don't necessarily need an app to begin with. You might just need a website for that matter, right? Or you might be able to do your whole service just doing text, right? So there's— to begin with, it's like what really matters is you're trying to figure out whether there is a business here or not. Whether there are some people who's willing to either spend time or spend money to participate in whatever it is that you're trying to build, right? And so if you can validate that very quickly, then you can figure out whether it's even worth going to the next step. So I would say that's one of the primary pieces of advice I would always give is don't just assume you need an app or a website or something like that. Figure out what you're really trying to solve here or optimize or figure out, and then find the fastest way you can do that without even having to come to someone like us. You don't even have to do that, to be quite honest.

Mm-hmm.

If you approach this, Weekend Hacker, which is this kind of place for people to exchange skills. I'm a designer, I have design skills, but I need some development skills. That was started literally by, I posted something on Hacker News, right? And then I had a mailing list set up, and before I knew it, I had like 8,000 people on the mailing list, right?

Yeah.

And then after that, we turned that into a website, and we probably even did that too early, to be quite honest, right? But there's many things you can do because a lot of, at the end of the day, especially if you're building marketplaces or social networks, stuff like that, it's really about putting people together, giving them a forum to basically be in. When it comes to other types of businesses, tech businesses, stuff like that, again, it really comes down to, as I said, clear communication, to be quite honest. And that could be done many different ways. Obviously, one of them is design. Another one is, you know, make something extremely easy to use. Avoid what we call empty dance floor, you know, which is basically that when you log on to a service of some sort, you know, that you don't feel that there's nobody there at all, right? But there's something to get you started or something that keeps you engaged. There's a bunch of things you can do there, like when it comes to onboarding, where I would say that could help you tremendously, you know, experiencing growth at least. And then, at the end of the day, build a company where you understand why you built it, right? Where you can kind of, your intuition works for you, that you can make right decisions, which I think is often underappreciated because it's always about finding that market opportunity you're looking for, for a specific market. But some people we work with, some companies, they came to us with one idea about wanting to do an advertising engine for the real estate world, right? And it was like an architect company. And then we started talking to them. It was like, well, what's your background? Do you have any technology background that allows you to build this ad tech thing you wanna do? And no, they didn't, right? And so we ended up saying, well, what can you guys do, right? What do you actually have? What are your superpowers that nobody else have?

Mm-hmm.

And then we basically worked with them towards something completely different, right? Which is like, they had a lot of connections to a lot of different types of experts. And that actually allowed them to kind of build a referral network for these types of people in the real estate world. So again, there's always these simple things that works really well. And then there is some clever things, the growth hacks that we all know about that Airbnb did or Reddit and stuff like that, obviously. But I think often it's like, keep it extremely simple and figure out if there's even a signal, if there's even somebody who wants your stuff. And then, you know, if you find that, which is one person, then find 2 people and then find 4 people and then find 8, you know? So that's, I think, would be my basic advice there.

So final question from my side, and I think it goes back to those early days of being an entrepreneur through hustle and trying to figure it out with very limited So I think constraints are super important and it helps you kind of, you know, forces you to make decisions a lot clearer and faster. So 2 things, you have a financial constraint and a time constraint. It's just hypothetical. Let's say you have, you know, $1,000 and you don't have your existing network of these corporations you can speak with and validate your idea. You need to build an MVP of your product. It could be very, very simple, but you have 2 weeks to go out there and get your first customer. Just one customer, you said, right? One, then you get 2, then 3. Just number one, where do you allocate that $1,000 and time? Where are you focusing your time and money to make that happen?

Oh, so, well, time-wise, well, again, obviously it depends on what kind of business, right? But so I would actually come back to my initial, uh, like Weekend Hacker example, right? Like, that was, as you know, basically setting up a mailing list, uh, and then, and then when it went out, it was— I didn't spend a dollar on that until I had to basically start paying Mailchimp for having too many people in my mailing list. So I would probably start with something like that, to be quite honest. If I only had 1,000, I would find the cheapest way to establish a user base. That would probably be something like a mailing list. And then I would try to figure out what could I connect people around. And then spend a little bit of time setting up a website, but even that kind of stuff today, again, most design is solved, right? It's not like that there is some unique way to have people be onboarded to your website. A lot of these design patterns are already established. So I probably would even be so lazy as I would go out and find an existing template, to be quite honest, of something.

Yeah.

Just change a little bit, have a logo, maybe change some colors, obviously do some work with the With the text and then, yeah, I would figure out whether I could convince people. Maybe I have $500 left, I would spend them on Facebook ads and Google ads and see if there's any givers and takers there. I think that's the way I would probably approach that.

Nice. So build a simple page, get some email list going on, and then find a way to drive traffic, paid $500 through Google ads and see if people are subscribing and engaging.

Something like that. That would be the right way I think to approach that. And that could— because you can pivot 1,000 times with this, right? Exactly.

Thank you all for watching this episode and joining SaaS District today. Don't forget to like, subscribe, and hit the bell for future episodes where we interview top leaders in the SaaS industry. If you're a SaaS company looking to grow and unlock the true value of your business, get in touch with us at Horizon Capital and myself or one of our consultants We'll provide a free assessment to help you get there and hit your goals. If you have any feedback or suggestions for this podcast, please comment down below and help us improve our content for you all. Thanks again, and see you on the next one.