Founder Stories - Jason Smith, CEO & Co-founder of Klue

I have Jason, CEO of Clue with us here today. So thank you, Jason, for joining us.

It's good to be here.

So, yeah, tell me a little bit about Clue and how it started and you know what Clue is.

Okay, so you want to jump right in. So Clue is Clue's competitive intelligence for enterprise sales. We help sales and the teams that enable sales to leverage competitive intelligence to win more business. Okay. So we do something funky. We try and collect all the information we can on the web about competitors that you care about, which is a constant battle to try and find. But we then combine it with things about emails and Slack conversations that are shared internally and package that up for product marketers to work back into battle cards and intel digests and deeper profiles on what the competition's up to.

Let me jump back a little bit. How old is Clue now?

So Clue's just over three years old. Okay.

Officially before that. I know you've had a wealth of entrepreneur and working in startups and all that kind of experience. Let's draw us back a little bit. How did before Clue, what were you doing?

So do you want the full background or just before Clue we can give you the full.

Let's do the full.

Okay. So Toronto kid that came out to Vancouver did solder at UBC and then grad it at the right time and got into the Internet thing back in the super early days like Netscape era and we built a web applications company effectively like a digital agency back in the 90s and that grew to about 100 people. We, we caught some win there in our sales and then Telus acquired us just before kind of the first era of dot com crashing. And then, and then you think business is easy and so you try your hand again. And this time I did it with the next one was with a couple Harvard MBAs. It was based out of SF and it was looking at group buying pre social graph. So this is like pre Facebook. So you had to email a bunch of your friends to say let's buy these mics and we can get a deal. And we raised about a million bucks there, but gave it back because everything was collapsing and it was not going to go anywhere. So a good learned failure. The next one was an E commerce thing. So you ever heard of a sport called ultimate Frisbee?

Absolutely.

All right, so I was big into that and I was a huge believer that every sport needed a brand to be emblematic of the characteristics of that sport. So this was a solder alum buddy of mine that was starting a company Selling gear to ultimate Frisbee players online and sidelines. Built this whole e commerce engine, which is probably the thing that we should have monetized. When you look at Job violator, we're.

Focused on the Frisbee.

We did the Frisbee market and it got to a couple million bucks, but never was going to take off. And then so that brings me to about 2004 when I was looking for a job and so I didn't want to work for big companies. So I looked for an early stage, under 10 person startup. And there was a company called Vision Critical at the time that was about eight people. So I joined them, did sales and marketing for the first 30 months and then became president of the SaaS side of the business basically. And over seven years helped grow that to 500 people. And then, and then turned 40 and bailed and took my kids around the world for a year and then came back and did. So I put a pause and went full binary instead of.

Was that an easy decision for you, man?

Like anytime you're like, I'm going to bail out of life and rent my house and maybe and travel around the world for a year, it's, it's a big step. I think there's a lot of people that get 49% there. But taking that extra jump is like taking the entrepreneurial leap. You have to go all in and commit for sure.

And so just talking about entrepreneurship, I know you've used this analogy a couple of times. You talked about it being like an itch that you had to scratch. You wanted to go back to the gritty lifestyle and doing, you know, customer market fit and doing all that kind of like grind over and over again. Do you believe that? You know, because entrepreneurship is so in some ways popular today, you know, instead of getting a job, a lot of people just decide to create their own. Do you find that the entrepreneurs do need that itch to make something successful? I guess successful is, can be subjective, but yeah.

Or at least to give it a go. Yeah, I think there's no question you have to have an itch. There's a talk I gave that talked about the multiple stages that I see in a startup. And I feel like at the end of each of those milestones, you kind of have to look at yourself in the mirror and say, am I going to the next level or I'm not? I call it cliffs and elevators. But there's this concept of like, you know, in the very beginning you have to have an idea that you, you really love. Like and it's like, and it doesn't have to be fully formed, but it has to pick at you. It has to be something that in your back of your head you're like, I keep working this over, I keep working this over. And it might not keep you up at night, but it's certainly close too, right? So you're just, you're thinking about it, iterating it, and in your own mind you kind of come to the point where it's like, this is something that I feel like is not being solved. And then that's the first step is convincing yourself.

What was that? What was that itch?

That was, that was absolutely looking at this competitive angle and saying, it's strange to me that we had this problem at Vision Critical and I ended up talking to 100 others. But that itch was like, everyone's got competitors, every company in the world, they have two things in common. They got customers and they got competitors. And there's tons of customer solutions, but there's very few for competitors. Right. So I looked at it and went, why? And then when I saw some of the trends, I'm like, well, it's just hard to keep on top of all that information. But you've got APIs and you've got machine learning trends behind you that are starting to make that problem solvable today. So a bit of the, why now? It was, you see the dovetailing of trends and you think, okay, that's interesting. But you know, getting back to these steps, which I think is really cool for an entrepreneur to think about, I think the first step is do you really convince yourself that this is a problem?

Yeah.

And once you get to that step, that's the first milestone. Take the elevator up and from there and the next one is go have a hundred coffee meetings with super smart people that aren't going to bullshit you. They're going to tell you straight up that that looks dumb. The people that you know if you go get a haircut aren't afraid to go, what the hell is that? Right. Like, not that you look fine. So you have to seek the honesty. And if you 100 coffee meetings with really smart people. Yeah. They're going to give you some pretty solid feedback. And if you find yourself being able to defend that or going away and researching it and coming back with, you know, more facts that prove your thesis, then the end of those hundred coffee meetings you kind of like, this is something. Yeah, this is something. And those don't have to be with prospects per se. Ideally they are but at least smart people that can give you perspectives. And then I think there's a bunch of other steps, including finding a co founder. That took me a while.

Yeah. And that's, that's, that's the next step of the elevator pitch.

Right.

It's finding that founding team and you know, you being in sales, marketing background.

Right.

And now, you know, understanding what Clue is today. It's a lot of machine learning, a lot of, a lot of highly technical things. From your beginning thesis, how, how much did you know about that technical landscape at the beginning? And like how did, how did that grow?

Totally naive. You need to be a bit naive as an entrepreneur. Of all the pain or you won't do it. Yeah. So I went in with high expectations of where machine learning was and pretty quickly that, yeah, I needed to find a killer technical person to help me build this awesome.

And then so just to dive deeper into that. Your co founder's name was Sarathi. Sarathi. So walk us through that journey. A little bit of how you kind of match made and found your co founder.

So I'm often asked this, like, how do you find your co founder? And it's like everything in the entrepreneurial land, there's no shortcut. Like it was hustle, it was like working over LinkedIn, working my network, tons of useless coffee meetings that went nowhere. But by the end of it, you end up with the person that you think you could work for a decade with, mindset wise. But I had a stop start. Like I had a guy that I was working with, super talented developer. But there's a huge difference between a really talented developer that you get along with and a co founder. To me, and that's about trust. If you can, you need to 100% trust that person that everything they're saying is up front that they're not hiding things from you. And there were just a couple indications with the first guy I was working with that just made me realize there were things that he was withholding that I wouldn't have withheld or things that he did that I wouldn't have done. And then you get this little second guess thing going on in your head and that means you shouldn't move forward. And so literally I was so keen to move forward with clue in 2014, end of 2013 actually, that I was paying this guy and I was like, okay, we're finally figuring out the equity relationship. And it took months to figure it out, finally get there and it was huge negotiation. And then, you know, he did a couple things that I just was like no, it's not going to work. So put Clue on the shelf and went back to the hustle and grind of trying to meet different people. And then I met Sarathi who I mean his background is phenomenal. Like he was chief technologist of Sophos, billion dollar plus web security company. He got there by way of an acquisition of his, of his company called ActiveState that he built the world's first any spam engine that was heuristic based machine learning. It was like what's relevant, what's not. When it hit your inbox. 100 million people use that software today. Like and he was the product guy behind that, the builder, the architect. And then before that he co wrote Perl, which is like an early open source movement. Right. And actually he ended up writing the anti spam program because he had so much email from his name being in the open source code everywhere that he had to write something to separate row amount. Anyway, so you hear this guy's pedigree and you're like wow, could I get a guy like that to work with me? And then, and that was the wooing stage. It was you're trying to convince somebody that could go get a job at Amazon or Google fairly easily and could start up any company with another founder or build his own thing if he wanted to. And you're asking him to work on an idea that you have, fall in love with that idea, trust you figure out the equity split. Oh, and by the way, work for very little money if not put money into the company. So like to get all those things lined up, it's just, it's hundreds of meetings to get there and finally I found Sarathi and, and then now you've got a hacker hustler combo and you can start to look at the next stage which is putting together enough of a prototype that might get you, in my case, angel funding that led me down the VC path.

Awesome. So I mean it's funny you mentioned that because I don't know if you've been watching the news, but Vancouver is getting a big, big Amazon office. So I think that's one of. I don't know if it's a concern but it's definitely a hot topic in tech today, specifically in Vancouver is, are all my co founders, are all my developers just going to fly the flock?

So I got a point of view on that. Okay. So my theory on that is short term, long term, so there might be some short term pain, but I'd say on the whole Amazon's not hiring everybody in the local ecosystem. They're bringing in people from Israel, from Bulgaria, from Russia, from France, from Asia, and they're bringing them into Canada to work for Amazon as part of our part, I think, the startup visa program. Yeah. So they're getting people from other parts of the world to come to Vancouver, which is actually broadening our pool because I believe there'll be a chunk of those people, I don't know if it's 20%, I don't know if it's 50%, that will get tired of the big company and we'll sacrifice some of the benefits, including wage, to go startup and they'll be looking around for people to join them in that. In that regime. So I think my belief is it's a huge net benefit to the economy, albeit short term. There'll be competition and price inflation on wages, which I think we need to be paying people more here anyway, which hopefully that will lead back to some of the funding levels being higher and our valuations being higher. But I think net, it's a benefit for the. For the economy, for sure.

Yeah, for sure. Like that. That's what we talked about in the podcast.

Oh, did you?

Absolutely. And I mean, like, so that actually leads to a different interesting topic that we wanted to talk about is, is, I mean like you spend, and not just you, but a lot of founders spend a lot of time looking for that fit, looking for that match.

Whether you're recruiting forever, man, like, and all the time. For sure.

Yeah. So this concept of intrapreneurship is something, I guess, relatively newer. Are you, are you actively doing things that, you know, especially since you're hiring people with former itches or things like that, Is there anything you're doing for your company on that front to kind of encourage building ideas? Could it be added to something that they're doing currently with their jobs or I guess even in a magical scenario? When you were at Vision Critical, you noticed this issue. Is there an alternate world where you would have just built Clue inside Vision Critical?

Yeah, it's a good question. I was kind of an entrepreneur at ea. Like we were looking at mobile gaming back in the day. I didn't mention that as part of my career, but I did spend a time of bit period of time in Electronic Arts. And so I have a couple opinions on the entrepreneurship side. I think for a company like Clue, when, you know, we're 15 people now, we expect to double within the year. It's all guns blazing on trying to realize that dream. So there's not a lot of time for multiple projects around that. You need to be very focused, I think as a startup and not get distracted. So that's a smaller company and a bigger company like Vision Critical was up to 800 people and EA was many thousands when I was there. I don't think entrepreneurship works unless you have complete executive CEO level buy in for relative independence. Maybe complete independence, including maybe separate floor or separate building. And it's up to them whether they should leverage the resources of that big company or not. So I think what Zuckerberg did with Instagram is a fantastic example. They have their own identity, they have their own business. They, they have. But they could leverage any of the stuff they wanted from Facebook. It was their choice. And I think that's what left some of the magic in Instagram. Now I was an acquisition. I've seen too many entrepreneurship stories, including one that we tried at Vision Critical where you've kind of got this team doing its own thing and then other people get interested in that cool thing and then they start to morph it to be more like what the old thing was. And maybe it's a bridge from the new thing to the old thing. And then, and then it becomes shitstorm. Something that nobody makes sense of anymore because that original thing wasn't left to breathe. It becomes meshed with something else. So I'm, I think intrapreneurship is a challenge. Yeah. And I think if you're going to do it, you need full executive buy in with some level of funding that creates an independent view. A startup truly outside the boundaries of the bigger company, but then can leverage what resources they choose of the bigger company.

Yeah. That's amazing. So kind of looking back, I mean, you're five, six companies deep, plus all the ones that were on napkins that.

We didn't talk about.

This is the fifth, this is the fifth one. What about 20 year old Jason? What advice would you give him?

I'd say go to the gym more. No, I just say, I'd say, particularly as a Canadian entrepreneur, I definitely say think bigger. That was one of the faults, I think in our first business we came out of. You come out of school, we came out of Solder and we were like, hey man, BC Hydro would be a huge deal if we got BC Hydro as a client. Yeah. And you're kind of so focused on the big companies in your, in your field of vision. And you know, we are chasing a new space that was building web applications back in the early days. There was wide open turf everywhere in the world. Like we should have been chasing Verizon and Disney and like NBC and not. Yeah, you've just got. You've got. You're going to spend too much time chasing the wrong thing and then subtract away from your vision, which is different from iterating. Right. Like, you still need to be open to looking at. If you're hitting a brick wall on your core business, maybe there's a different area you could go to. Yeah. But if you do too many things at once, then that dilutes your vision.

That's awesome. So, I mean, I mean, we could talk here forever, I think. But. But just to end it off, what would be the one piece of advice you give to anybody watching this video? Or entrepreneurs that are. That are. You know, you could be you when they're just starting out, or maybe they've already had a little bit success and are looking at scaling. What would be the one piece of advice for those guys or gals?

So I think for those that are, maybe I'll give two. But you know, the timing is really important to look at the dovetailing of trends and trying to be in front of those things. So I think the why now? Question that VCs look for, pay attention to that. Like, why is your idea now feasible or better than the five people that tried it five years ago or the 15 companies that did it? So, you know, YouTube maybe is a good example of like, if you tried YouTube in the late 90s when broadband didn't have penetration, it was too early.

Right.

But you hit YouTube at the right time and you've got the cell phone revolution and broadband, then you can make it work.

Yeah.

So you got to look at these broader trends. So a couple of the other pieces is choose your founder carefully, make sure you've got complete trust, and then maybe one last one is the shortest path to be. And this is a lesson I learned from a buddy of mine that started this company called 1-800-GOTJUN and those guys. Yeah, he built a great business. And I actually worked with Brian when I was looking at when I first was graduating. And. And it was like one truck on the road. Yeah. And I remember sitting in the office and like we're eating lunch and we're thinking about getting into a different market bins instead of on the back of a truck, sitting it out in front of a place. And you know, me and my solder business mindset was like, okay, well, let's think about the business plan. Let's put that together. We'll do some analysis on what it is. And in between bites of his sandwich, he had open. At the time it was yellow pages, but he would have flipped through it online and found the biggest bin company.

Yeah.

And then just called up the CEO and was like, hey, man, I want, I'm thinking about, you know, this market. Can you tell me something and you mind if I come in and talk to you? And literally within five minutes, he was going to get the abridged version of what that market's all about from somebody in it versus, you know, fooling around with tons of different, like navel gazing. Right. Like. So I think that's just it. It's maybe twofold, shortest path to be, but also getting out there in the market. And if somebody does maybe know what you think you need to know, go ask them. Okay.

It's a great note to end on, I think. Thank you very much for your time, Jason. I think we all learned a lot from this video. So hopefully how can we find you? Maybe that's one last thing.

Yeah, sure. So clue.com, which we paid a bunch of money for that domain. So yeah, come Visit us at clue.com, we're hoping, hiring for jobs, clue.com jobs we've got all sorts of roles open. And then me personally on Twitter, I'm Jason s. And I'm Jasonlu.com from an email standpoint. You can email me. And just a plug for Launch Academy. I think one of the things I'd say when we started our company and we were taking some desks around here, I think the juice and the vibe that you've created in Launch Academy is fantastic. It's lonely being an entrepreneur and just being around other people that are doing their thing here and maybe even asking advice of people that are similar stage. Not to mention the talks and all the other advantages, like, it's, it's just a great way to get started. So it's an aptly named company because it does help launch.

Awesome. Thank you for everything, Jason. Appreciate the plug.

Okay, we're out. Sam.