CEO & Founder of GroupSolver, Rasto Ivanic, is Answering the Important Questions in the Tech Industry

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To the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neil Bloom, San Diego's Tech Ambassador and together we're going to put a face to the name of today's tech leaders with our own blend of local life lifestyle.

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Now recording here live in front of our Techcoast Angels Power our audience. Thanks everyone for joining us. Got our co host Ashok Kamal one and only from TCA and everyone else who's joined in. I think there's close to 30 or 40 of you. If you'd like to ask any questions please do it in the chat throughout this conversation and we will Ask Rosto. The goal is to kind of go about 20 minutes or so, so feel free to jump in with a question in the chat if you'd like, but this is going to go kind of quick. Rostov, CEO of Group Solver. Thanks for being here. Do you want to give us a quick overview of what Group Solver is?

Yeah. So Group Solver is a market research tech platform. We essentially build intelligent surveys, online surveys to ask the big why, how and what questions that every consumer company has, especially now in new normal. There's a lot of the why questions, of course. So we build a tech, we also help the customers implement it. And you know, we really are changing the way how people think about market research, really focusing on those fundamental business reasons rather than just building bunch of long surveys.

That's really cool. And I know we have a lot of TCA members who've joined in as investors too. So it's great to have you tell kind of your backstory front of them as well. Do you want to tell us a little bit kind of how this got started? I know you've spent some time in consulting, some time in biotech, so you've had some, you know, weaving of paths. How'd you end up here?

And I remember Ross though when I first got introduced to you, it was through a mutual friend, I think maybe Eric Gassner in the community. Now we're going back like four years. So before I was even part of TCA and I was at Outsite, the co living company and you were looking for a summer perk for your sales team, who I believe was and is still at least in part in Utah. And you were looking for a way to thank them. So what better way than send them to San Diego and Encinitas for the summer? Right? That's I believe when we first connected. Before you even raised any money from tcga.

Right, Right. Well, you know, if you're plugging that opportunity again, I will listen. Our sales team is doing really well and they are still in Utah. So whenever you mention water to them, they are all happy about it. But it's kind of difficult with travel. So my story is I didn't plan to get on market research or customer insights when I was growing up. I'm an economist by training. I got my PhD in Applied Economics from Purdue, got my MBA and then I went to join McKinsey for a little while because of course I didn't really know what I wanted to do when I grew up. But after five years there, a lot of soul searching, a Lot of the why questions I went to, I decided I wanted to try something more long term in the industry. You know, the consulting engagements tend to be three months in, out, and you kind of feel like you're on a conveyor belt and you never get to see the result of what you do. So I joined a small egg biotech company in the Bay Area called Mendel. And we were building, we were growing and breeding massive grasses so that we would convert them to biofuels and coal and, you know, save the world. Now that was a great experience, but turns out that it doesn't work really well when oil prices crash. Suddenly you're out of business. And so I found myself about six years ago, seven years ago, maybe a little bit longer than that, with kind of nothing really to do because my industry that I thought I was going to be in was kind of gone. And my wife, she happened to find a job as a professor at USD. So we moved to San Diego and I started exploring ideas of what can we do to do something that would be meaningful and fun. And so the genesis of Group Solver originally was creating a platform where people can find consensus on solving very difficult problems. So things like poverty and global warming. We got a grant from the Gates foundation to help them solve some of the issues in the developing world with respect to farming. How do we provide better programs for, for those farmers that are more meaningful to them. And as we were building the initial technology that eventually became Group Solver, we at some point realized that we have a fork in the road in front of us. We could stay on this mission of helping the nonprofits to make better decisions, but then you're becoming pretty tight to this. For those of you familiar with the grant making process, which can be very political, very long. And on the other hand, I realized talking to the smartest person I know in my life, which is my wife, who is a market research professor, suddenly there was an epiphany that what we are building really actually is solving a problem in market research, which is helping people ask those why questions that are not in the setting of focus group, where you have maybe five people telling you the insightful answers. But with build Technology, you can actually scale this up as a survey and to thousands of people, yet still get the deep insights from these open ends. And so that's when we turned around and I said, okay, we actually have something here that there is market for it and we can just give it a shot. So that's how Group Solver came about. And from that point on we were just doing a bunch of experimenting and putting up prototypes, getting embarrassed by publishing them, fixing them, finding good clients, getting feedback. It was a, you know, playing ping pong with our customers. That's what we've been doing.

I think the insight there for all entrepreneurs is to marry smarter than you and somebody who has a real paycheck and real job. So that's one of the takeaways. Rosto, I think you've raised money in three rounds from TCA and if I recall, not just money, but furniture as well.

Yeah. So the first round was an equity round and we had a bridge note about two years ago which we are about to repay. And this is the third round where TCA participated. But TCA was not a lead investor in this round.

Did I just hear right that you're about to repay a note? Walk me through that. Because that's not something we as investors hear too often. So a little more background and on the furniture as well.

So. So to continue the Group Solver story and I'll get to that note and repayment and what I feel is kind of a must to maintain good investor relationships is repaying loans. So Group Solver is a little bit different company in many respects than a lot of the other tech startups. It might just be me, maybe I don't learn. We just don't play by the rules always. So when we first raised money from tca, we said, look, we're going to use this money to prove that we can be a business. I was never quite keen on the idea of just run up the revenue and just push the puck to some next investor. I want to run a business. When we raised money three years ago from tca, we said, okay, we're going to use the money to prove the business. We're going to show you that we can grow, we can actually take care of ourselves as a business. It's a sustainable, you know, company. The funny thing, you know, maybe old fashioned. I believe that business should make money, so let's use the money to prove that. And we, so we got on the journey. There was a lot of bumps in a row. There was a couple of situations. We came close to running out of all the funds. So, you know, our dean, our board member from TCA can tell you some stories. So there was some true startup experiences we've had, but it was a lot of learning. And so that kind of being close to an edge forces you to make decisions and learn how to make them fast. And if you have to take a cut, take a Deep cut. So two years ago, we needed the bridge financing. We thought we were up onto something. Things were looking good. We just needed a little bit more liquidity. So we raised that loan, it's about $300,000. And we said, okay, so we just need that bridge to get us to the next point. So two years later, we have been profitable, we've become profitable. We doubled the revenue last year. We have some really good customers who we couldn't be here without them. We essentially got to a point with them that they became used to us as a way of doing business. So when you're thinking about solving a market research problem or customer insights problem, they think in Group Solver, we don't even go through any back and forth. There's no more ping pong with them. It's just, you want to get this done, go to Group Solver. So on the back of these repeat customers, we were able to stabilize the team, make it very efficient, grow the revenue, become profitable. And that led us to the position we are in that we are able to raise money and still have plenty of firepower that we can repay the loan. And actually some of the investors are going to be converting probably to equity instead of bread. The point is that to me, investors are part of a team. They bring with them the network, the knowledge and the discipline because we are playing with their money. That's a little bit of responsibility in there. And so it's kind of an indicator. It's a KPI for me. How are the investors feeling? Are they willing to come back and support us? We've been very lucky that we had really good investors so far. They're helping us think through the journey, think through the business proposition and hopefully it'll be paying off for everybody in the long run.

That's great to hear. Do you have any unique or kind of wild use cases that you weren't expecting Group Solver to be used for?

Yeah, we certainly do. I mean, there's a few that come to mind. We helped the company understand why people choose a certain brand of toenail fungus medicine, which was, you know, including all the pictures and experiences with that. So that was an interesting study. Another one, we were asked by a major consumer packaged goods company, why is it that in Mexico flavored condoms are the number one type of condoms being sold? So why is that? So that was a fun and interesting study that we put our interns on and they had a blast with that. But to kind of more serious, on the kind of more serious vein that I never thought we would be doing that. I mean, as a CEO you dream and you build vision, right? So nothing should be out of the realm of possibility. But when we did a project with Amazon, with Alexa, where they asked us to help them understand why people listen to music so that their product development team can better understand the Personas and understand who they are building those features for. And so we didn't know what we were going to do, we were not quite sure how we're going to do it. We just knew we wanted to be working with Amazon and we wanted to be successful. And so we ended up using our platform and our unique approach to open ends to help them understand this very behavioral, emotional based segmentation of the customers. I'm going to be talking technical, but usually segmentation is done by things like demographics and some purchase behaviors and then you build your segments and you target them by marketing. But what we did was something different. We actually asked people, why do you listen to music? When you hear word music, what comes to your mind? Fill in the blank. And we took those answers and we've just analyzed the data and we said we are going to make no assumptions about what the segmentation look like. Whatever people tell us, we're going to run with it. And so we built segmentation based on things like people saying music makes me feel sexy, or they would say I worship God through music, or when I'm alone and depressed, music helps me cope. So there were things that people say about music and it was really awesome for us to see that you can take those emotions, those things and actually use them in business and not sound like you're a pre canned advertisement. And so it was a very successful study. Amazon became a repeat customer. The last thing I heard was that they built Personas based on that. Put those Personas on the wall in big posters and they're using them now. That to me was one of those coolest things. Validating our approach and just kind of validating not just the technology. Because what makes our business interesting and different is not just the technology, it's, it's our approach to customers. We don't tell them, look, we do this and we do it as a subscription. And this is the terms and if you don't like it too bad or give you a discount, we say, how would you like to give us your money and then we'll do it. And we are learning from them. Every time we do something, we get feedback from them on what they really want. And as long as we pay attention, we are building the product that actually does something.

It's great to be in that position, you know, to have the opportunity for our customers to come to you and say, you know, how can, how can we help you? And vice versa. Do you have other stories around, especially during COVID times, how companies are using it right now to get a whole new sense of buying and what the customer's changing needs are?

Yeah. So this is more recent, of course. There's some really interesting things happening in the market and with the consumers we ran a study for or a food producer, I cannot mention the names, but you would know the brands. And they wanted to do again, segmentation and we happened to work with them on that in January right before COVID And by the time they were ready to understand and they make canned foods and foods that last for a long time. Right. So we work with them, we asked all those questions, did all the work, I mean, and then they wanted to use it in late March and early April. And it turns out that, you know, middle of COVID like everybody stocking their fridges and pantries, turns out that two of the six segments they identified as being where they should be focusing completely disappeared. Like they are no longer there. You know, people do not think about buying canned food to express themselves and experiment with food. It's, it's a very utilitarian good right now. And so there's absolutely change in behavior. For those of you want to Follow us on LinkedIn, we are doing post check every couple of weeks or a couple of weeks about how people are feeling about their shopping specifically. And so there is a real permanent, seems to be permanent or at least long term change in how people are shopping here. So we're hearing from companies asking to do the pulse check specifically on their category, specifically when it comes to those goods and services that have been affected by Covid. So food definitely. We have done some work for a sunscreen manufacturer. Now think about sunscreen, right. You going out to the pool, going to the beach is very different than it was when you didn't have to worry about being six feet away. Right. And so I think there is a little bit of a pause in the market where there's a lot of customers are saying, you know what, maybe this is temporary. Let's hold off from doing any new work until it settles down. I think they are slowly coming to a realization that there is no going back to where it was before. So we start getting more questions about what is really in the minds of the customers now. But ask me in three months and I'll tell you more specific examples. We are kind of in the middle of it right now.

Yeah, well, interesting thing is you're a pulse on the marketplace, and so you guys are basically creating business intelligence or discerning business intelligence with your AI. But really appreciate Rasta, I think every time I talk to you, I'm reminded how you are sort of the consummate founder that we, as investors are looking for. You just raised $2 million. I know you'll spend it wisely because. And for all the founders that are going to be listening back to this podcast, I just want to highlight Rosto's mentality, which is that the money that he raises from investors is either a liability in the case of a note or a responsibility in the case of equity financing. And that's how he treats the capital. It's fuel to build the business. I can think of instances where I've emailed with you over the years and had potential investors that want to talk to you, and you've basically said, my head's down. We're working on sales, you know, to basically build a better company. So we really appreciate that, you know, kind of about you, Rosto, and congrats again on raising the new round and, you know, all the amazing customer growth that you've. You've realized over the past couple years.

Thank you and thanks to TCA for being here for us. We're going to have a lot more fun. I promise you that.

Rosto, I got some. Just some quick closing questions because the Tacos in Tech podcast, I got to know. You have a favorite taco or favorite taco place?

Yeah, it's El Patron and Mira Mesa. It feels like a real deal, so I highly recommend. It's really close to i15 if you're in that area. Taco Tuesdays are amazing.

Awesome. We'll put it in the show notes, add it to our taco database, too. Do you have a place that you're just kind of missing right now that things really, everything reopens? That's. That's the first place you're gonna go?

I have a picture of a postcard that I bought a few years ago in Hawaii in Kauai in Hanalei Bay. There's a long pier, and the postcard says the board meeting on it. That's all it says. And I have it posted that we go to Hawaii every year, and I am really, really missing it. So as soon as we can, that'll be the first trip.

Awesome. Well, we'll look for a postcard from you waving back to us. In the future. But Rosso, thanks so much for being on. Congrats on the new round raise and now it's time to get back to work. And thanks for being on the podcast.

Thank you all.

Thanks.

Rosto, thanks for joining us on the.

Tacos and Tech podcast with Neil Blum. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Rap for our rad intro music. And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest Co working in Bankers Hill. You can find Neil Bloom on Twitter eelbloom as well as fresh brewed tech and tacos and Tech Pod on Twitter too.

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