Zero to $1m/ARR with Kris Rudeegraap - CEO and Co-Founder - Sendoso

Foreign.

With me today, we have Chris Rudigraph, CEO of Sendoso. Chris, welcome to the show.

Thanks, Andrew. Glad to be here. Yeah.

So we've known each other for a bit. The first time I remember I heard about Sendoso, ironically, we were at a coffee shop. Do you remember this? We were at Starbucks and you told me that you had created, you had created a Salesforce application to send coffee to prospects. And then I turn around and then now you have this enormous company. But what I wanted to focus on today is, you know, I know your story has so much hustle and just drive and that's always been a part of you, but you started at zero at one point.

Yep.

You know, you started ground zero. What would you say the hardest part, getting to, you know, 1 million in annual recurring revenue was for you?

Yeah. I mean, even just getting to $1 was, you know, a big feat if you think about it. So, you know, Sandosa actually started as coffee sender.com so not as many people know that. But that was really the side project that I was hustling on as I was sales rep at a company and I wanted to send out Starbucks gift cards. And I was saw this like path that I could create a Salesforce app to make it easy to send out Starbucks gift cards. And that started to do tens of thousands of revenue. And then it kind of dawned on me that there was a bigger opportunity with sending anything. And it also happened to be that I was at a company where we were struggling to execute on direct mail. And it was kind of painful, but you know, it was basically a side project turned into a full fledged, you know, multi hundred million dollar company. Now that's awesome.

And then your first product, how did you develop it? Did you engineer it? Did you have a team? What was like the initial, like team composition?

Yeah. So the initial project. So I'm a more business side, I'm not technical, so non technical founder and actually my co founder was non technical too. So I took on the technical side of things by way of finding someone on Upwork or at the time Odesky to develop an app. It was like five grand out of my pocket. And that was kind of our V1 of coffee sender and that kind of was outsourced over in Pakistan actually. And that kind of snowballed into becoming best friends with a couple engineers through that. That then snowballed into building out Sendoso with a fully remote engineering team. So that was a huge win too early on because engineering talent for me to get going was paid out of My pocket and was, you know, much cheaper than a San Francisco engineer.

So you're a non technical founder. Do you realize like how rare that is?

I know. And two non technical founders, both with sales AE backgrounds is like probably one of the most rare things. I don't know too many other companies that can say that.

I, I don't either. So your first version of your product, I remember like you told me about it at the time. Obviously I wish like, you know, I kind of, you know, maybe offered an investment or something like that in hindsight. But your first version of your product, were you, you know, embarrassed about it? What did it look like? Was it just super bare bones?

Yeah, I mean the first version was actually built for me, so. So I actually built this to scratch my own itch and my own pain point. So I didn't really even care to make it pretty at the very beginning. And then I started to see some organic use where like I put in the app exchange so I could use it and could tell a few buddies to use it. And then that's where I just started to get random people starting to sign up and ask for feature requests. And then it was at that moment where we started to see like tens of thousands of people sending coffee. And the kind of epiphany of like it was I was struggling to do direct mail and sending gifts at my current account executive job where I was like, well, if I wish there was a button to send direct mail, like I have this button to send Starbucks gift cards. And then I was like, oh shit, I'm gonna try to build that. And then I quit my job as a sales rep and the next day I was the CEO and the journey almost started over to back to zero because we basically was like, okay, coffee sender, the hundreds of thousands of dollars remain with that are worthless to us now. Let's now start zero and build Sendoso, which had some similarities but you know, have this major warehouse component where we have, you know, six global warehouses. And that was, you know, a big thing to build out day zero.

And so in the, in the beginning day, so you had, you had Coffee Sender. Did you end up selling that company?

And then you go all in, just basically stealing some early customers that were using Coffee Sender to be kind of beta customers for Sendoso. And then just put like a end of life date on that where I was just like, we're going to throw this in the trash and move over and you can either move over or get off. It was a good, it was kind of an interesting point because there was still, you know, hundreds of thousands of dollars to be made on it, but we just canned it for a bigger opportunity.

Hopefully that's smart. That's a good lesson for entrepreneurs is when you know you have something and it can be hard to let go of something that's generating, you know, a lot of cash flow. But if you see this bigger opportunity, you know, that can lead to bigger and better things. And that sounds like what you did.

Exactly.

That's awesome. How did you get your first customers? Was. Where were you before Sendosa?

Talkdesk? Yeah, I was at Talkdesk.

Were they a first customer? How did you get like the first five?

Yeah, so I would say the. The first five I would say came from Coffee Sender. And so that was. But I didn't want to qualify those as customers because it was almost too easy to get them. And then there was a couple other customers of like friends and VPs of sales that I knew. But my goal was to get. Our early goal was to get like 10 customers that we had no idea who they were that we outbounded to. And I think that was a true testament of the like, is this something that has legs? Because I can convince someone to buy this who's a buddy of mine or who is kind of using this app before. So we just. It was actually while we were. While I was focused on product and engineering for about nine months building, my co founder Braden was selling a slide deck. And so he was basically like, I'd be like, hey, here's a new design page. Throw it in your slide deck. And so he had like probably like 50 customers ready to kind of sign up and pay before we even launched. So that was.

So you have like a pre sale strategy. You basically had a product and value proposition so good that you were able to reach out to people in advance and get them excited.

Yeah. So the slide deck selling was something that I think it's never too early to start selling when you're in startup mode, even while you're developing the product. It's like if you can put your value prop in a deck and put some fancy design mocks in it. If your product market fit is there, you should be able to get people to buy it. And we did. And so then once day one of product live, you know, we're like, hey, get on it now. You have to. Now here's how much it costs. You know, rubber meets the road. Are you going to sign a contract? So we. That was though something that in the early days we, I think priced too low and we had like a 10x price increase. But there was, there was also some. We probably had about 50 customers that were paying ridiculously too low of price. But it was, and it was also our. Again, we had to go back to the drawing board to make sure that we could price it at a point where we could be able to scale, be able to afford sales reps. Besides like founders working for free. Ish. We didn't have the unit economics right when we first priced our product.

That was gonna be my next question was biggest mistake when growing from 0 to 1 million, would you say it's kind of pricing obviously 10xing from where you started. That's a big, you know, you're delivering a lot of value and you want to reflect that in your pricing.

Yeah, I think a lot of early founders might price so low or give away the farm because they want to get customers. And I think it, while it can get you early customers, it doesn't help you validate your business model well enough that you can actually have the right economics to scale. So, you know, once we switched over our pricing about 10x more and we're still seeing just as many customers, if not more come on board, then it was like another aha moment and another milestone for us.

Nice. And then so Chris, you built this amazing company but again, going back to like zero. What, like, what has always motivated you? Like you, you hustled a ton. You're super scrappy entrepreneur. Where does that come from? Like what, what in your background? What? Maybe?

Yeah, I mean, I think I've always been big dreamer. I've always wanted to like, you know, own an island and like have cool toys.

If you get it, you gotta invite me, man.

Man. Yeah. So that's. We've been some drivers and then there's been like. I think I could point back to being like an entrepreneur from like early days where like I remember me and my neighbor used to sell mistletoe because we were like, you know, five blocks from a Christmas tree farm and we make a ton of money over Christmas time or we would be selling like lemonade and like so I was always kind of hustling, I think. And I mean even seeing some inspiration in college from Chris Friedland. Actually what gave me another boost of like, you know, oh shit, I can, I could do this. Like seeing someone else from my university just blow up and have an awesome startup gave me another boost of inspiration to do it myself.

That's awesome. And then, you know, as you're you know, growing Sendozo. You know, we're still thinking about like the early days. What were some of the big breaks? Like, I read that you cold emailed like the CEO of Starbucks. Like, is there anything that comes to mind where you're like, whoa, this is like, this could be big.

Yeah, I mean that was, I mean this, the Starbucks thing was a big break during Coffee center because we started to do so much, we were doing a good amount of volume that we had some corporate person from Starbucks send us a cease and desist saying like, hey, you're, you're not allowed to buy gift cards from us anymore because we didn't go through an official process. We were just like buying them from their website and reselling them basically. And so we're like, ah, shit, the, you know, our, our apps done for. So we just like hail married, emailed like a million people at Starbucks and got some biz dev guy to take a meeting. We flew up to Seattle and they're like, oh, this is really cool actually, like keep doing this. And then gave us like the seal of approval to use their logo and everything. So that was, that was a big win.

Let's, let's dig into that. So that is like the definition of like resiliency and like persistence. See, obviously that's a huge setback. Some people might be like, hey, this isn't going to work out. Starbucks is a publicly traded company. And you were like, no, I'm going to get a hold of these people, figure out a way to make this work on your journey. Like, how important has just, you know, persistence and you know, being resilient because, you know, startups aren't a straight line up into the right. It's up, down, up, down, up, down. How's that been for you?

I mean, that has been one of the, I think the key drivers. I think I'm, I'm optimistic more than others and so that's been helpful for me. But we've had other things. I mean, one of the other kind of up down moments was, you know, when we, in the early days of Sendoso, we had a warehouse in Las Vegas that was probably, it was probably the size of a storage unit, one of our first ones. And we switched warehouses probably like five times to where now it's like bigger than a Costco, one of our main distro centers. But we were using a third party at the time and we kind of like had a scenario where they wouldn't let us take all of our goods back to a new facility we were setting up. So, like, I had to like, fly to Vegas on a Friday. Like, hey, I had to basically get all of our stuff out Friday night. And then I had to re build out our warehouse over the weekend so that Monday we could ship again. And so that was another scenario where I was like, oh, shit, like, we're dead if we can't ship anything. And so it was like 20 hours a day on a weekend. So, I mean, there's a handful of those that have happened over the years that. Especially in the early days, but I think for me, the big thing is like the little road bumps happen. But we were always celebrating the small stuff. I mean, I think micro milestones or micro celebrations create momentum. So me and my co founder used to do happy hours at. It was funny at Chipotle because they had like, cheaper beer in San Francisco than a bar. And like, the guac and chips are cheap. So we would, you know, get another customer and go to Chipotle for. At 5 o' clock for a beer. And, you know, we were. We tried to create a culture of celebrations, which helps get you over the hump when there's a lull.

Yeah, I. I cannot agree with that more because I. I've always believed if you can't celebrate the wins, it makes the losses so much harder.

Exactly.

How are you building the culture at Sendoso? I know it's kind of we're creeping over the. The 1 million mark, but I love that. And I've. I've seen a video of you. Literally water balloons are being thrown at you because I think you lost a contest with your SDR team. I love that, how you lead from the front. How is that, you know, how do you incorporate, you know, that style, leadership in Sandosa?

Yeah, I mean, I think it's part my personality and wanting to just have like a fun workplace. I mean, having fun as a part of our core DNA. I also make myself very available. I mean, like, I meet with. I have this, like, ask Chris anything. I'm randomly connected with five to ten employees a week just to shoot the shit. And so it makes me very approachable, which then makes. Feels like the whole company is very approachable. And I think I'm lucky that our product is a fun product too. When our customers are sending pictures of, like, their prospects or customers getting gifts, it's, you know, it's hard not to smile. And so we just try to use that creativity that, you know, positive energy and bring that back into our culture.

Yeah, I love that about your product. Where I see images from other people receiving, you know, Sendoso boxes, they take a picture. It's like a free marketing viral loop that happened naturally, which I think is great.

There are some other, though early zero to one things that I think we did well and a couple things you probably didn't do well. Like thinking back, I tried to think of a few things. I mean one, we did a good job of like outsourcing or finding like fractional labor when we needed it. Like we had a team in India that would do like lead enrichment. We had like a fractional content creator that was like super part time. And so we kind of like packed together roles that maybe bigger companies would have to pay full time for. And like I probably spent, you know, 300,000 or 500,000 on Upwork. And it's helped in the early days where it's like, is it too early to hire a content marketer? Yes. But yeah, content. So I think being like a, an upwork all star, I think when you're on the zero to one is a huge win.

Yeah. I did the same thing at Business Apps. We actually, because remember, I started it in chico. There's no engineers in Chico.

Yeah.

So I had to go on upwork and I ended up hiring a number of our like top engineers on upwork. But it also gives you that, you know, variable cost where it's not, you know, a monthly salary that you have to figure out how to make payroll each week. So in the early days, how, how cash efficient were you? Because it sounds like you really were, you know, you were, you were more hustle and you know, less, you know, spending for growth. You were just, you're just putting in the work, it sounds like.

So, I mean, for our first like the first like six months, it was really bootstrapped. We didn't go after any money. We were trying to hire based on revenue so we would get to enough point where we could hire our another like csm and that was based on revenue. I think Our first probably 10 employees were hires based on revenue or revenue potential. And so that, that got to a point where we couldn't scale fast enough and we just had too many customers and the demand was too high to where we ended up going after and getting about 350k in some angel convertible note. That lasted us a little while, but it made us much more disciplined. It made us think about our business model and being capital efficient. And then when it came time to raise a seed, where we raised a 2 million seed, we were at a point where we had enough traction and the numbers were so good that the seed round like took like two weeks because it was like we weren't out there hunting for it. It kind of came to us in a way.

So that, that's, that's a piece of wisdom right there. You could probably quote Chris. Where would you agree with this? Like, you know, entrepreneurs are always, you know, build a product, search for investors. But it sounds like you built a product, you got a bunch of traction and then that led investors to you. Is that accurate in saying where basically your traction.

And I think that's a good, that is a good path for like first time entrepreneurs or, or maybe entrepreneurs that don't have like a 500 million dollar exit where it's like, you know, easy to go like talk to a buddy and get 10 million. So I think focusing on my limited resources on customers, customers, customers really paid off that when I then turned to investors it was a much easier conversation. So we also made like some early, a lot of early customers were advisors, which helped a lot, especially during fundraising mode because they were like even more incentivized to be like giving us a good thumbs up. Now I've created like a nice little advisory network of about, about 100 advisors now that I have part customers, part not. But that's been a big win. And every year the customer knew me. And still some of them are like, I will like chime in on like customer success calls, like three years in like renewals. They still, some of them I'll meet up with.

So yeah, so that's another important, probably a really good piece of wisdom to share with others is so you have this large advisor network and I'm sure you learn from all these people, they're customers and they're you know, passionate customers about what you're doing. Do you, do you leverage them for you know, obviously introductions but for, let's say you're thinking about a new product release or just a different sort of direction to take the company. How much do you lean on those people? Because that's amazing. You have this group of really smart.

People helping and they're, I would say that probably about 50% are customers, 50% are not customers. So it's not like a traditional customer advisory board. It's I call like a personal industry advisory group. So I will lend on them for intros for like speaking on panels for product feedback or certain kind of like roadmap feedback for hiring. I mean we've hired some of our, even our exec team through these advisors so, yeah, it's. I think it's one of our things that I did well, that I. I tell other entrepreneurs to do is to get other advisors on your journey with you. And it's another. It's a great sounding board in the early days, and especially if partner customers, you can get, like, kind of feedback that maybe you wouldn't want to ask a real customer, but they're, like, just enough farther past a customer because they're a customer and an advisor that they can, you know, you feel comfortable asking maybe a stupid question.

So, yeah, that's awesome. And then, you know, in the beginning, you obviously did a ton of things right. If you had to maybe think of, like, the top three things that you're just really proud of, maybe it's the product decision. Maybe it was, you know, your hustle just to get your initial customers. Maybe it was the advisory board. Maybe it was a couple people that you hired, your culture. What would you narrow that down if it was going to be three things?

If I had to think of, like, three or four things, I'd say one is probably hiring my coo. So she was. We hired her, like, maybe she was the first dozen or so employees. She was like an all star in terms of, like, her background. And she was expensive, like, you know, five times more than, like, I was making when we were scrounging up. So it was like, holy shit, this person's gonna cost a lot. But she was so complimentary in her skill set of, like, knowing finance, knowing kind of investor relations, knowing hr, knowing operations, knowing legal, knowing all these other things that I didn't want to focus my limited time on. And so it was just such a good hire that I looked back and was like, probably the best hire we've ever made. And it's one of those things where, like, you kind of. Especially in the early, like, seed rounds or even before that when you're bootstrapping, like, an expensive hire might be like, I'll just wait. But the. You know, I would say that if it's the right person that compliments you as a founder that can come in there and make stuff happen, like, I would have made that hire again in a heartbeat. It was painful at the time from a cost standpoint to my, like, my lawyer was kind of like, dan, you're giving her a lot in terms of, like, options and pay. But, you know, it was like a big bet and the debt paid off, so you gotta make big bets. I'd say a few other things. You know, I definitely invested in marketing early on and kind of, I'd say somewhat brand in a way too. Like we went to conferences and we were like a 10 person company at a conference sitting next to a booth that had like you know, 800 people employee companies or thousands employees. So we kind of like looked bigger than we did. Almost like fake it till you make it. And so we started to get placed next to these other big martech companies or big sales tech companies. And so we were, it helped us attract talent. It also helped us kind of legitimize ourself. And so I'd say like investing in marketing and some brand early on paid off for us. And then I think the last thing was, you know, maybe as I look at recruiting. So recruiting is just uber important. As we scaled up and we about 250 something employees now. And so the early days being that I came from sales, I really like thought about like prospecting is almost like recruiting prospecting. And I had this like LinkedIn bot that I use to like reach out to people and like I basically created this like, like early outbound engine for recruiting. And that really helped me grow the talent pool early on because you know, I think hiring is so key in the early days and getting access to lots of talents and the right talent early on can help make them Reiki too.

I really, I like all those points, but I really like that last one for two reasons. I'd love to get your thoughts on this. So were you doing the initial sales for you know, up to the first like million or at least the couple, first couple hundred thousand?

I would say I was doing the sales for. I probably sold like maybe 10 or 20 customers. Now my co founder was sales background so I took the side of I'm gonna do, I'm gonna own product and marketing and engineering and design and customer success and finance. So I took on almost all those other things. I slowly peeled them off to other people, like got finance off my plate as soon as I could to our coo. But so I was selling in the early days just to validate some of my product features. And then I would be doing, I was doing more customer successing. I mean I was always semi involved but I just had another sales co founder that was able to take that on. Um, but I'm always selling. I think you gotta always be selling. I still sell today. It's just not as in the same capacity.

Yeah. And I think that's so important because number one it allows you to you know, really talk to customers, get feedback like what is actually happening in my business. But then again you're leading from the front.

Yeah, I would do a lot of like my co founder Brayden would be like demoing as if he was a salesperson. I would join as like, hey, I'm like leading product. Let me sneak peek some new features. And then I would kind of be selling while I'm talking anyway. So, you know, I think in the early days you always try to get customers on board no matter what your, what role you are.

That's awesome. And then in terms of recruiting, were you doing all the recruiting yourself personally up until like what employee did you stop doing that?

So I mean I think that was something that I would probably say we didn't do well as hire recruiters soon enough. I think it was probably a hundred, 150 people before we hired a recruiter.

And that was just you, you were.

Just there was the department head. So like when we brought on like, like our inside sales director VP who like he was taking on some of like hiring sdr. So there's some of the like department heads that would end up doing but like I would do, I still do a lot of sourcing, still do a lot of outreach, but I was doing almost all of the recruiting in the early days in conjunction maybe with the department head or just myself.

I know you say like, you know, hiring a recruiter like at a certain point is important, but I think, you know, the culture that you were able to establish at Sendoso by you know, being the person that's in the recruiting, doing the reach out, bringing the people in, I think that's, that's super important and it's not easy to do. You don't see a lot of founders doing that. So I think that's, that's awesome that you did that.

And I would say like I wouldn't, I would. The reason I bring on a recruiter earlier is maybe just for process and candidate experience and just helping move the needle for certain roles. But I think the founder being a part of the recruiting process is so important. And today I still like a lot of, you know, candidates I'll speak to before we as either like the closing call for them or the intro call or I'm still actively probably, you know, 10, 20% of my day is still in recruiting.

That's awesome. Well, final questions here. If you could go back in time, you know, we're starting at zero, what would you tell yourself? Like was it, hey Chris, this is going to be, you know, huge, like just buckle up for this rocket ship or hey, don't make these like couple mistakes or double down in this certain area. Like what would you, what two pieces of advice would you give yourself when you were first starting out?

You know, I think when I look back, is it one of the things I did well was just have fun. I tell myself to just have fun during this journey and you know, I was one where I would still like take vacations as an early founder and still live like a kind of a decent work life balance. And I think that, you know, that I love that like paid off well with our culture too where people weren't like afraid to take vacations and live their life. I mean we. I'm so most of our, almost all of our early employees like are at the company. I'd say like 99% of them. So people that have been here for three years are still like loving life. So I think that tests a lot to having fun. So I'd say just like have fun along the journey. I think the other thing maybe is just like back to like the, you know, it. These are like pebbles that then turn into rocks that turn into boulders and just like, you know, take each step in each day on its own and like, you know, don't, don't. I. I don't like looking at like the five, ten year plan. I look much more like looking at like the 5, 10 day plan and just block and tackle, get stuff done. And if you do that enough, you'll have a, you know, billion dollar company sooner than later.

Yeah, I love that. Number one, having fun. I think a lot of entrepreneurs focus so much on the destination rather than just enjoying the journey. And if you don't, you're just gonna be miserable and stressed out the entire time. And then two, typically, I'm sure you could probably relate to this, but big problems today probably won't matter in like a couple months. So it's like just accept it. You know, figure out, get 60% correct on like where you think the right decision is and then just go for it. But other last questions, any entrepreneurs you look up to?

You know, I'd say like I still look up to Chris Friedland actually. He was like my inspiration from college that was like now I'm more or less, I don't a lot of my advisors, there's some awesome advisors that I look up to or other CMOs and things like that. But you know, I'd say, you know, just having fun. And I don't, I don't spend as much time now as I would say. I did before, like, focused on, like, motivational mentors. And now I still maybe do a little bit more of, like, looking up to people that are just getting started and try to give back a little bit or, like, meet up with, you know, founders that are day. Day one of their journey. And that gives me. That gives me fun inspiration.

That's awesome. Now, what do you like to do for fun? You talked about fun quite a bit. You just got back from vacation.

Yeah. So vacationing, Love golfing, love hiking and getting outdoors, going on runs, my dog, doing some reading, hanging out with the wife.

So what's your favorite book?

I actually don't really read books that much. I'll do some. I listen to podcasts more or like, I have like a ton of RSS feeds in a read, but I've never, never really was a big book reader. But I love podcasts. I listen to this one called Acquired that I really love how I built this. Couple others that are. I'm trying to get back into them because they used to be like my. While I commute to work podcasts, I miss that. So I'm, like, trying to find time for podcasts. That was maybe one of the downsides of COVID is my podcast listening has decreased.

Yeah, I hear you there. Well, hey, thanks for joining me on this podcast, Chris. Tons of respect for just your entrepreneurial journey and just what you're building. So super excited to see you just continue to go up into the right man. So congrats and thanks for joining me on this. I really appreciate it. All right, see you, bud.