From Newcomer to Market Leader: What Worked and What Didn't with Red Points CEO Laura Urquizu

Hello, everybody. It's great to be here this afternoon. I hope to be, well, a little bit interesting. Otherwise, you're going to take a nap, eh? So hopefully you'll like it. So what I'm going to do today is to share with all of you our story. How we managed to go from being irrelevant, because we were very small, to the leader in the market in a few years. So this is a story of the last 7 years, no, when I joined Redpoints until now. And what I'm gonna do is to share with you what worked and what didn't work, which is as interesting, as you all know. Let me give you some context here. Well, this is evident, right? It's nothing that you don't know. The world is turning to e-commerce more than ever. Just look at these numbers. In the last, over the period of the last 7 years, that is when BreadPoints have been operative in the markets, the retail e-commerce sales worldwide have grown 5 times, 5 times over the last 7 years. Unluckily, the e-commerce fraud is growing as fast and exponentially as the e-commerce and the online sales. And not only the online fraud, of course, the counterfeiting, the credential sharing, the illegal content, the digital impersonations, all kind of fraud. Well, just let me give you some examples here of this. Look at the increasing counterfeits from 2019 to 2021. In fashion, it's been 33%. Look at sporting goods, 82%. 75% homeware. And toys, almost 76%. So what do we do with this? Okay, there's red points and this is what we do, no? Our mission is to make the internet a safer place for brands and consumers. One of the things we do is to fight the scammers and the ghost competitors, those ones that they're stealing the revenue from the brands and the consumers and we return to them. We're helping them to fight this terrible issue. And how are we doing it? Well, we designed a solution. We put tech, we put tech in a space where there was not technology previously. Of course, there were other competitors and those competitors, they were doing services, they were doing consulting, and they were doing a lot of manpower processes, and we came with technology. We came with a disruptive solution, but we were the newest. We were irrelevant, as I was telling you. So what did we do? What was the key to become the leader in the market? It was a journey, and here's the journey. So in the first 2 years, when I joined the startup, when I joined the initial founder, what we did is to figure it out, no? Figure out how our proposal was going to be successful in a market where there were other competitors addressing the very large companies. And we found a blue ocean. We thought it was a blue ocean. And it, well, it turned to be a blue ocean. So, as I was saying, our competitors, they were selling to very big companies, to the larger companies in the world, no brands that you all know. But we said, listen, everybody has this problem online, not only the very big ones, also the small companies, also the medium companies, also companies in some verticals that they don't even know it. We just had to surf the internet and find a problem. So we decided to address the SMB market. And it was a blue ocean because no one was doing it. We built our platform in a way that it was very easy to use for those kind of companies. And another thing that we did is, well, we are gonna be so big, we're gonna be so global that Spain for us is not the market. The market is the world. We thought very big from the very beginning. So instead of starting from Spain, no, in Spain, we decided to divide the world in industries. So for us, the market were the industries. It was not about Spain, it was not about US, it was not about France, it was about industries. So we wanted to address the toys industry or the lighting industry, we have the list of all the companies and we didn't even care where they were. We were selling to companies in Australia, in Scandinavia, in USA. So from the very, very beginning, our company was like very global, no? You'll see that later. And it had all kind of people from all countries in the world. With this, what we did is we proved the market fit, not only the product fit, but the market fit. And this is why in the next years, we decided to fund the company properly to become the market's— I mean, the leaders of the market because we always wanted to be that, the leaders of the market. We were thinking big from the very first day. And in 2016 and 2017, we welcomed our investors, Mangrove, Norzon, and Aros, that funded the company properly to grow exponentially. Well, now it looks like EBITDA is sexier than growth. But back then, growth, it was all about growth. And let me tell you something for smaller companies here. Is still about growth. I mean, when a company is young and is very young, you have to prove the market fit, you have to prove the product fit, you have to grow a lot so you can show that you can be a big company sometime. And you're going to need funding. Your finance strategy has to be going parallel to your company strategy. After that, we closed in 2019 another fundraising with Summit. So the company was already funded with $42 million. We closed $72 million. This is what we raised, but $20 million went to secondary. And this is how we could grow to more than 650 clients, by the end of 2019. That was amazing for us, eh? And of course, we had clients in US, in all Europe, Australia, Japan, and we opened our offices in New York and Salt Lake City, later Beijing. And 2021, again, more growth, growth, and now we have more than 1,000 clients, and we can call ourselves the leaders of the market, but not only that, the market says we are the leaders. This is how you know you are the leaders, no? Because they address you as the leader. And with this, and I will tell you later, we decided to build a new category. So we are the ones that we are not only building a company, we are also building a category. This came in 2021, but I'll explain you later. The journey was not always easy. Let's start with the wins, and later I will tell you also the mistakes, because we made quite a good number of mistakes too. What did work? What were our wins? Well, the first one, the global approach from the very first day. This is what I was telling you I'm telling you, no? We were thinking big from the very first day. Sometimes when you start a company and when you start your startup and you make your numbers, the numbers are very humble. The numbers are low. I was talking to a young company in their very first, I mean, in their very early days. Not long ago, and I was telling them, "Come on, you can do much more. I'm sure you can sell much more. Why are you putting these numbers here? You should be thinking big. Let's think big. Let's think global." And as I was telling you, from the very first day, we thought global. We were not thinking only in Spain, and this is how we built the teams that we We built and we approached the clients that we approach in vertical industries, by industries like I was telling you. And today, 60% of our revenues come from US. And let me tell you something, advisors that we talk to, they say that this is quite rare for a Spanish company, of course, and for a European company that has the headquarters in Europe. 60% of our revenues come from U.S. and this is because from the very first day, we thought that we could do it and we went global. The second win, the product evolution. Innovation is in our DNA. We never stop evolving our product, but we focus a lot on execution. We focus a lot on execution. Innovate, thinking always about the client. And this is how we've even built a team that is called Innovation that is transversal, doesn't belong to product or to technology. The Innovation team works together with product, but it works with sales, and it works with operations, and even with finance. And this Innovation team, what it does is to to cover all the processes and innovate in all the processes from sales, from go-to-market to operations, and of course product, no, product too. But this is something that we've never stopped. We started with one of the infringements, no, that it was anti-piracy, but we soon start building other modules and addressing other kind of infringements because, as you saw before, what we do is we address the online fraud but always from the IP rights management perspective. So we're always building new features, new modules, and new ways to address our clients and to address the problem. And as I say, this doesn't relate only only to product. It addresses to all the processes of the organization. But what is very important for us is to focus on execution. As I said, we decided to create a new category. When we started with the technology, the market said, oh, these guys are doing online brand protection. Well, why? Because there was a category called online brand protection. And they had to put us there. But we never fit really in the category. Our value proposition, it was very, very hard to explain to lawyers. So a lot of them didn't understand it. And of course, for small, medium companies, it really fit. But when we came to talk to larger customers that they were educated by our competitors, they really didn't understand it. So, we were really working against that situation for years until we became big enough to work on our own category, to change the buyer persona, to address different person in the organization, and to start talking revenue. That is what we really do, to help them with revenue. Then they understood it. And of course, what happened with the sales? They exploded. So last year, it was a total record in our company using our new narrative, our new messaging, and addressing the new buyer persona. What we did then, it was to invent the new category. So of course, now we are the leaders of the new category because we invented it. That's easier. But we are also the leaders of the old one. And the name is Digital Revenue Recovery because we help the companies to fight the phantom competitors. And we address the salespeople, the marketing people, the CROs, and so on. And they understand it much better. So if you don't like who is buying in your company, in the companies, in the clients, you should think about all of this. You should think about, is there other people people in the company that understand better our value proposition because this is what we did and we ended up creating a new category. And the fourth win is never give up on core values. So, listen, you have the values of your company. Culture is what you do when no one is watching you and the people you hire or the people you should be hiring if you do your homework, are people that they share your values. And those people are the ones who are going to drive your company to success. So, if you change the values in the middle of the race, then you end up with a team that doesn't belong to the new culture, doesn't belong to the new values, and this is gonna be failure for sure. You should stick to your values. And let me tell you something, one of the values should be transparency. And why I'm saying this, probably 3 years ago I would have not said this, but we had this 2020, wonderful 2020 with the pandemic. Now we have a new crisis that it looks that is coming on. Now the finance markets are changing and you need to tell all of this to your team. You need to tell this to your team so they are aligned and they fight for the company and they fight for you and they're going to do it. That's for sure. But if you only communicate the good news, if you're transparent only in the good times, that is not the way to do it. You also have to be transparent not only with your teams but also with all the stakeholders, investors, and so on, also in the hard times. And let me tell you something, it's even more important in the hard times. So transparency should be one of the core values, and of course innovation, as I was saying. The rest of them is up to you. But the message here is that make sure you don't change those values in the middle of the race because then you're going to lose your people. So then your chances to become a high-performance company are going to be much worse. And what didn't work? OK. The first thing— well, many things didn't work. As I was saying, we made a lot of mistakes. And if you are leading SaaS companies as a CEO or in the leadership team or whatever, you will know that it's a roller coaster. Some days are very good. Some days are really, really, really bad. And what it really shows are the nice stories. We all know that some days are really unbearable. All of us have some of those. And of course, we do make mistakes, no? The first one, and this is a summary that I would say is the summary of many, a mistake is to believe when someone tells you this can't be done. Over the years, I've heard, "This can't be done," so many times. And you know when it's been a mistake? The few times that I believed they were right. Because if you really believe that something can be done, it can always be done. You just have to look at a different way to do it. Because maybe you're trying to do it in a way that is impossible. Impossible. So the right statement will be, "This can't be done the way you're trying." But of course it can be done. It can always be done if you have the gut feeling. Just fire that brilliant, incredible CRO that you thought that it was gonna be wonderful and is not that wonderful, or change your go-to-market model that is very hard to realize that you're wrong, or throw away that product that it was going to be incredible and that release was going to be incredible and it's shit. And you have to just have the guts to do it. You have to have the guts to do it as soon as possible. But try to do the things in a different way. As I was saying, it's all about the execution. Realize. And let me tell you something, don't hide, yes, don't hide, don't hide the pink elephant under the carpet. The pink elephant are those things that we don't want to talk about, and when you hide a pink elephant under the carpet, you know what happens? The pink elephant grows and grows and grows, and one day, just can't do anything with that big elephant and it may collapse, the whole company may collapse, right? So, you have to be brave to look straight at the things that are not working, analyzing, changing, and executing. The sooner the better. Another mistake, hiring rock stars with big logos on their resume. Okay guys, all the startups, especially SaaS startups, but all of them I will say, we are totally infatuated with some guys that they have big logos in their CVs, in their track record, and we all think, oh my God, I have to hire this guy. Well, I've done it several times, and some of them have been a complete failure. Complete failure. Why? Because the guys, they were not cultural fit. That is what we were saying before. And you feel the pressure, no? Sometimes you feel the pressure that is everybody, "Oh my God, he's so good, look at," or she, "is so good. Look at what she's done in that company. Technically, it's amazing." And then you have this gut feeling there, you know, it's like, "Why, there's something missing." Jason M. Lemkin, never compromise the values or the culture fit because that wonderful guy is going to be toxic for your company and he's going to make much more harm than benefit for your company. This will be another thing, another advice that for us at least didn't work. It's much better because for us in our case, our culture fit Our culture and our values are a lot about team and a lot about alignment. So, we have to really take care of that and avoid these kind of mistakes. More. Define clear objectives for the whole company. Well, now think about your companies. Think about your startups. Do you think that you can ask everybody in your company what is the North Star and they will give you the correct answer? It's like, what is the North Star of this company? Or do you think that in your company everybody has his or her own North Star, or every team? Because then you have a problem. Has to share the same North Star. And listen, the North Star can change. It can change. Like, 7 years ago could be one North Star, and now it's a different one. But it's one. And the whole team has to know what is that North Star. If the answer is different depending on the person, then you have a problem. And once everybody knows the North Star, Then you can start working with OKRs in the company and OKRs in different areas or other methodologies. They work really, really, really nice. But make sure that the North Star is one. Otherwise, you're going to have this team going this way, that team going the other one, and not alignment. And alignment is critical when you are less than €10 million ARR or dollars ARR. Is critical. If your teams are not aligned, you're going to end up without a company. So make sure that everybody has clear what is the current North Star. If it is growth over 100%, great. If it is EBITDA positive next August, great too. But you have to choose one, and the whole company has to go there. And the second one that— those two for me are so important. The second one is psychological safety climate. You have to create a climate in your company where everybody can stand up and do all the suggestions that they want to do and have critical thinking because if you don't have that, the only thing that you have are followers that they're going to try to fit in, not to make a lot of noise, and well, to be nice. You don't want that. You want critical thinking. You want people that stand up for what they believe and to talk and to make suggestions, and this is how you're gonna make your company much better, much more innovative, and you're gonna have a high-performance team. By the way, there is a book that talks about this. The writer is Amy— I can't remember her last name, but it's called something like Fearless Organization if you're interested in all of this because it's really, really interesting. So to have a high-performance company, make sure you have this psychological safety climate. And this is it. What will be the key takeaways? First one, think big. I told you about thinking big, about global, about teams that they're in different places, a lot of nationalities, different verticals. Think big, whatever is the company that you have. Second one, always innovate, but with focus. Innovation by itself is invention. Innovation with execution is what works. Focus on the execution. By the way, we never abandon our value proposition. Our focus has always been online fraud, to fight online fraud. And listen, over the years, I heard so many times, oh, why don't you do this? Oh, why don't you do this other thing? Well, with our product, we can do price comparison. Of course, we can do price comparison, but this is not what we do. We have to stick to what we do. So focus with innovation is incredible. And third, I'm not gonna talk more about values, but never compromise values. If you compromise the values and the culture of your company, you're losing your company for sure. And this is it, and thank you so much.