The Do’s and Dont's When Creating a Product | With Expert Murali Satagopan

So before joining Freshwork, you co-founded a startup called, I think, Brig? Brig? I don't know how to spell it.

Bridge. It's the actual bridge. It's the Latin word from where the origin was. pronounces it right, don't worry about it. It was a terrible mistake on our part to spell it like that. But the idea was to sort of take it back to the roots to be able to build that product. And I was very young and I'm— you look pretty young too. So I'm guessing we have a fairly active lifestyle. When at that point of time I was in the city, I did not have enough things to do and people of common interest to be able to meet. There were Facebook groups, there were meetups, but it involved bringing communities more than bringing activities together. Think of it like tomorrow morning, you'd like to play, say, touch football with, with 8 guys around the block. You can't really instantly find people. We want to be able to solve that problem. So anybody could create activities, put it up, and other people of interest will get a notification saying something like this has come up. Think of it like a Bumble date, except there's no girl and there are no dates. You just meet other people and have fun.

Sure.

People started joining in. People used to do fun things like go on long motorbike rides. People used to play sports together. People used to do tree plantations and charitable campaigns. So that was the agenda with which we started, and it was received very well in the early stages.

Nice. So you raised some funds, you built it up over, I think, 2 years or so. Then you say you ended up with an unsuccessful exit. Can you share that story of what that unsuccessful exit meant and what What does that mean?

Absolutely. So it's every founder's dream to say, hey, I'm a serial entrepreneur, 5 of my companies have been acquired, I have like X million dollars in cash. I would have loved to say that story too. Unfortunately, life works itself out differently. We were young and we were really charged up by this idea. And when we pitched this idea to people, everybody liked it. And I told them, hey, who do you play golf with? They were like, sometimes my friends are available, sometimes I'm bored. I'm like, how— if you could find other such people to play anything with or connect with or do things with, wouldn't you like it? And they loved it. So we scaled to about 100,000 users very quickly and people were constantly doing activities. But the thin line in that was things were free, right? As long as they were free and people could do stuff, they were doing it. Now we had a very difficult fork in the road. We could go down the ads path where we put ads there and people could find this slightly an hindrance in experience, or we go down the paid experiences path where people have to start paying. Now that also becomes very touch and go because who would pay for it? I'm creating an activity to find other people. Why do I have to take the brunt of paying for this? So we weren't able to break the— that much-needed fork and decide which way to go. And at that point, we had put in quite a bit of money to put this product out there, which we'll discuss a lot more about in terms of how money has to be spent. We put a lot of effort in putting this product out there and people had received it well. Now, as the activities started going up, we had to find ways to back how money comes in for us to get our next round of funding. And 100,000 users is a very dicey spot. It's neither a million free users, neither is it 5,000 paying users. It's 100,000 free users. So at that point, we were finding it very hard to raise our second round. We already raised the first round. All the people who invest into young entrepreneurs who had you know, been very established in the industry. They loved the idea. They said, I want something like this. Most of them signed up for it too, the investors themselves. But the second round was very difficult. So what we did was we went to quite a few companies to say, this is a product with a great infrastructure. Could you use it, you know, to build something on top of it in a very different way? Would you want to use it as an office, internal office connecting platform or something else of that sort? One or two companies were interested, but this wasn't something they wanted to actively pay for and acquire, right? So at that point, FreshBooks was one of the companies where the founder was genuinely interested in saying, hey, I like the energy of you guys. I don't know if the product is of any use to me. Would you like to interview with us and see if you'd like to fit in? And at that point I said, you know, I really liked the concept of something called a salary. I haven't seen that in 2 and a half years. So let me see if that's something up my alley. And I interviewed with them and That evening they offered me a job and that's how I came into this job.

Wow. But then how did that exit happen at that point? Were they the ones that acquired it or somebody else? Or is that what you mean, you just kind of shut it down?

Neither, actually. Very interestingly, the investors were like, they were very good investors, young people who loved young energy. They said, if there is a way, even after you've taken this job, to find a way to pass on this infrastructure to somebody to be able to make some money out of it, We don't want any of it. If you guys could take it, because we hadn't taken a salary in 2 years and life had become very difficult in those 2 years. You know how the early years of entrepreneurship is. So they were like, if you could make some money out of this, do it. So we kept it on hold. We continued to run the Amazon servers for another year and a half. At one point the investors said, you know, just pay us a dime each and take the complete ownership off to you. It doesn't matter. I think you guys have really given it the hard effort, but just they say, don't drag a corpse too far. You know, you know that you guys have gotten jobs and you've settled in. So go on with your lives. So when I say an unsuccessful exit, we have passed on the infrastructure to another company for them to build something on top for no payment whatsoever. The reason is we at least wanted somebody to benefit from the good work we'd put in. And, the reason why I proudly use unsuccessful is I think we need to admit our failures as much as we admit or talk about our successes because I learned quite a bit from the fact that I was a pauper trying to build a pretty cool app for 2 years.

Sure, yeah. Yeah, I think it's the same with growth marketers out there, like the initial story you were talking about. So, marketers go out there and they talk about all their wins and all the great case studies they've built. But, if you look at the data, I was speaking to the Growth Hackers CEO. And they were saying 75% of experiments fail. We don't see that 75%. We always see that 25%. So yeah, you're right. So it's nice to hear what the real story is, right?

Yeah.

Yeah. So I guess adding to that, knowing what you shouldn't do and focus— where you shouldn't focus is equally or maybe even more important than executing and building a business because you need to know where to focus and being crystal clear on that. Looking back, what are the things you think you wasted resources on? And what wouldn't you do today if you were to start over again today, going back to that same company?

2 things I would say. I think marketers don't make, and I don't want to say it this way, don't make for great CEOs if marketing is all they got, because you got to have a guy with a great product heading in your mind. And, you know, I swear today by the logic that great products sell themselves. Freshworks has taught me that, that you build a badass product, you could do a little bit of sprinkling of marketing and it'll go all over the place. The vice versa is very, very difficult because the product is not good enough. The gas will, will, will give out at some point of time.

Exactly.

So I'm— I wouldn't say that our product was gas, you know, because it was solving a very specific problem, but the way the product was built, it had to not just solve the problem, it had to eliminate other people from ever building something like that. But Facebook was constantly innovating. I'm sure somebody must've spotted something like this. They had built out events by then. Meetup was diversifying to be able to create real-time events as well. Everybody was trying to shove us out of the market. So we spent a lot more marketing dollars to put us in the market. Now in this fight, what we should have put into creating a product that helped keep users together, we were trying to market to get more new users. In this little struggle along the way, we'd run out of cash. And, you know, the popular term they use, runway, was very, very short. And we needed more marketing dollars. And despite every investor— and every investor said this— if I gave you money, I know you guys will be able to market this great, but I'm worried this may not be my best investment. Instead, if we built a great product that had 10,000 really, really active paying users, trust me, I would be doing something very different today.