"Coming to America" -- The SaaStr London Summer Social

Well, great. Thanks. Thanks for everyone for coming. This is pretty awesome. You know, I have already learned a lot tonight just at cocktails. I have unintentionally worked with a bunch of startups that have moved to the U.S. i think I met PJ and his co founder Louis probably two years ago. Something like that feels like a lot of dog years. But I think Lewis co founder, just moved to San Francisco. The only U.S. employee.

Right.

And you guys were figuring things out and I got on to work with a bunch of folks there. It seems almost routine sitting in the Bay Area, but talking to folks here at night. I know it's an interesting topic, right? How do I do it? How do I manage it? Should I move? How do I manage? I've got customers across the world and I actually think we've got probably just about the most amazing two speakers here. I could imagine different stories. Both Showpad and Conversocial are sort of hitting 10 million ARR, which is a classic moment. Talk about that as initial scale. It's sort of starting to come together. You get out of that really painful period from like 2 to 10 where there's too much going on and not enough people to do it.

Right.

Showcase on a hiring tear now. Right. But even eight months ago, cash seems tight, right?

Yes, it always seems tight.

Always seems tight. Josh, I think you've got 70 or 80 folks in the company now, right? Between here, New York and little San Francisco.

We had 75 by the end of the year. Yeah.

So the good news is they've done a bunch of things differently in scaling. And I know a little bit more about Showpad, but made a lot of mistakes. Right. Learned from them. And I think, you know, we have a book coming out with Aaron Ross for the Saster annual in the U.S. it's called, I think it's called instead of predictable revenue, it is going to become impossible, inevitable. But my idea for the title was Same old crap, Same old S. Because the products are all different. Right. And we're innovating and more rapidly, we're growing. But we tend, for a given acd, kind of make the same mistakes.

Right.

If we compound trying to run companies on dual continents, if you can just make a fewer of the mistakes of these two super successful case studies, then just think how much if you didn't make the mistakes you made, could you be drawing 20% faster today? Like without the question?

Yeah.

So that's what I really want to dig in. We'll spend a little bit more time with PJ first and a Little more time with Josh, but we'll keep it a bit interactive. But pj, give us and brief the showcat story.

Right.

You were kind of dragged to the US by Jive from Belgium, right?

Yes. Yeah. So started showcasing four years ago. It actually spun off from the first company Louis and myself founded the year before.

Their services business, that never works, Right. The services flee from it.

Nobody wants to invest. We still employ 15 people there. Oh, you do? Yeah. We still own the company, but we don't run it anymore.

Just don't tell your investors.

They made us sign a bunch of stuff that we couldn't spend much time there anymore. No, just kidding. But spun up from a service business founded four years ago, yet we already had customers pretty early in the U.S. i mean, we just did like a lot of SaaS companies do, right. You go to the website, you. We started experimenting with some adwords. We had a free trial. We had a couple of customers in the US Pretty soon Va cef, some pretty big brands actually. And we just sold it from Belgium, from Gam Belgium. And then suddenly one of our customers, Jive, they were like Jive software, so social collaboration technology, and they were customers of Showpad. And suddenly they said, hey, guys, do you want to come and visit us in the US because we believe we can integrate both platforms and we can actually sell chopad in the US for you guys. And so that's how we made our first trips to the valley. That's about three years ago that we started.

Yeah.

So you probably sub 1 million revenue, right?

Yeah. Jive was probably at 200k ARR that they contacted us.

Have you ever met him in person?

No. Yeah, they were a customer.

But you never met them.

They were our biggest customer. We never met them.

They just had these foreigners with these funny accents on the phone, but they still buy. And they decided for them it was the best product to partner with. Right?

Yes.

Got it. So that's your historical act. You're good at a lot.

Yeah.

Somebody out in Palo Alto decides to randomly, not really randomly because you have the product, but decides to take a risk on you.

Yeah. And that's how we met the founders of Jive. We met Co Jai. We started meeting a bunch of people in the Valley and going out there and also realizing, like, initially as a European company, of course you're. I would say any SaaS product, you should be born global in a sense. Okay. I mean, anybody can become a customer anywhere in the world. But that made us realize that, hey, you know, going out there that you Know, we started talking to VCs, you come into the Bay Area, you know, feeling the vibe, feeling the energy there. And that's definitely what triggered us, like, okay, we should start doing business here. But at that time with Jive, we closed the OEM deal because we thought that Jive would be our. Yeah, that they would sell Showpad in the us Actually, at that time we didn't think yet of setting up a business there. Like, we just thought, hey, we're going to fly over there a lot. We're going to train the 200 jive sales guys on Showpad and they're going to bring in millions of dollars after a couple of months. But that failed.

It's a good learning from that. We could spend more time on it. So the relationship with Jive changed the game for the company by talking a little more about usifying, getting going, learning to be more enterprise. But as if your partner never became a material amount of your revenue, Right?

No, I mean, not in ARR. They did sell like a couple of very big deals for us in terms of cash. It generated like 1 million in cash, which is not bad. But in ARR, it's like, you know, 300K. They sold like a super big deal to T Mobile.

Yeah, but it was a license or something like that.

Yeah, like three years paid up front. Yeah, that was a big party at that time. But yeah, so that's. But then we started learning that actually Shopad wasn't like a big priority for Jive. And it's really hard to. I mean, they have their own struggles, have their own product. We price our product higher and higher and they're actually just selling it as kind of add on their platform. So that's when the struggle began. Like, okay, we should just start selling. Building our sales team ourselves and not relying on an OEM partner.

So it's interesting. Partnerships are. It can be a whole session itself. Then I want to ask one more thing and then get a little bit more. Josh's sort of come back to pj. So Jive is selling well, I'm embarrassed to say I've never actually used Java, but social collaboration. Yeah, Like Yammer Yammer, but on Prem.

And more stuff on Prem. Yep.

And Showpad is selling this mobile application where I can share collateral with my field team. Right. And so Java has people doing chats and what. Because at partnership you usually have to have a very high affinity partnership or it's hard to make money. What was the high affinity?

The high affinity was that there's a lot of Actually, we have Fortune 500 companies using Jive as well to collaborate and also share sales collateral and sales material. So they would use Jive as the point of reference. Like hey, here's the latest deck. Or this video or this testimonial.

Got it.

And so I mean we still have the integration today, but they were struggling on mobile. That was their big issue actually.

So you're the mobile check the box.

We were the mobile check the box. So they needed something mobile. They needed something, something.

Did it have their. I can't remember. Did it have their branding?

No, it was called. It's still out there. It's called Jive Present. So it had their branding.

Got it.

Makes sense. Ok. Then one of the. And then I want to get a little bit of the conversation starting, Josh. Okay, so Jive reaches out. It's a gift. Right. With hindsight, 250k. You took advantage of it. Right.

Flew out.

And then you make an interesting decision.

So.

So Lewis moves, your co founder moves out to San Francisco. Around 1/8 million ARR. Or something.

Yeah, we raised the series A, like $2,000,000 around 500k ARR. And then we used the money to start. We said let's set up an office in the US we picked New York because there was a direct flight from Brussels.

Yeah, A lot of people were asking about New York versus San Francisco earlier. Right.

It's closer.

And Josh will talk about it too.

It was closer. I mean, of course, great city, but yeah, it seemed closer. We had some customers in that area as well. So we felt like, hey, yeah, that would be the right place. So Louis moved there around I think 750 ARR. He was the only Soviet employee. I just went back and forth. We did like long trips. I would stay like three weeks, two weeks. We would just do, you know, we would just do hiring days, like just, you know, we would post job ads on LinkedIn and. But our problem was in New York was that we didn't have a real network there. We just had to build it from scratch. And we were already spending more time in the Bay because of Jai and because of the partnership that. Yeah, we hired like three, four people in New York. And then after four months we decided to actually fire the whole team. But we also were horrible hires, actually. All respect for those people. But it was just. We made a lot of mistakes there. I mean that's. We can talk. I'm sure as well Josh will be able to talk about that. But in the US people just sell themselves so good. It is. And it's a cliche but like you just, we run in that like kind of trap.

You got seduced by the fast talker.

Yeah, fast talker. We were like everybody that we were.

Hiring was like, I was President Circle, I did this great candidate, great candidates.

We felt like we were only interviewing great candidates in the us no one has ever missed quota.

So just one question on that. Just because it's interesting. So Lewis comes out to New York and then San Francisco when you're doing.

750K and 1 million.

Yeah.

And today as you're getting to eight figures, your revenue is coming up on 50, 50 US, European, which we'll talk about later. But what's interesting is back then it was like 1090 or something.

Yeah, it was like probably, yeah, maybe even, maybe 20, 18, 20.

So you take one of your co founders and you split the whole thing across the world when you've got $150,000 in U.S. revenue. So it's a big bet, right. Was there any doubt or was it clear to be in technology you had to do it. Because if you think of it as just 150k US, it's early, right?

It's very early. But you can, I mean there's just some logical things there. You just look at the market, all the very simple things. You look at the market. Look at the market where you can sell your product, but also just the job market and the talent there. It's just way quicker. You know, you can scale there a lot faster. It's about as well the VCs and the knowledge there that we found as well, that's just way more attractive. We just met a lot more interesting people at that time as well. We felt like, hey, this is great knowledge. I mean it's a bet. But you just know Enterprise SaaS, you want to go more enterprise. I mean, hey, if you're not going to the U.S. you know, you're not.

Going to be a billion dollar company. So at 150k in US not total revenues, that wasn't a week too early. Looking back on.

I mean it was early because it took us one year to make the mistakes and learn the lessons.

What would your advice be to folks in the audience thinking about it when it's too early?

I mean you need to have revenue in Europe, you need to have, I would definitely say if you don't have customers and you don't have revenue and you're still like, yeah, your product is not sellable, I would say don't go yet. Just first sell the product, get Some customers make sure you can. I mean, here in Europe it's very easy to. You can have customers in Paris, Amsterdam, Belgium, London. You can fly everywhere, talk to them. It's pretty condensed. And there's also a lot of companies here. Yeah, I wouldn't go before you have customers and real revenue. That would be my advice. How did you decide which functions should you put in the US because it's very common to keep engineering in Europe when you have to do a sales office. But you guys decided to put product.

Management in the US as well.

How did you come about that decision and how does it work for you? Initially product was in the US So initially US Focus was just set up. We just said at that time, let's set up a sales team there. That was the original plan was Louis moves for three months. I mean that at least what he told to his wife. So Louis moved for three months. At that time, the thinking was, let's set up a sales team, hire a VP of sales and brings back to Europe and again Chopad will flourish again. That thinking changes really rapidly once you're there.

That he would come back.

Yeah, that he would come back. But as well, then you really realized, okay, you're talking to more product people. You're talking about. You really know, you feel that the potential is just way bigger if you have a bigger plan.

So let's come back to product just quickly.

On the flip side of the advice, when you're really small and you don't have revenue and you have an early product, it's much easier to just move 100% to the US as you start getting the small beginnings of a business here in the UK or in Europe, then suddenly you have to manage both.

So you say, when did you. So let's go back to the quick.

Story of Pharma Social.

Right? So it started three years ago.

So very similar story to Piggy, actually. So we first got funding four years ago before then it spun it out of a services business.

Yeah, those never work. Right. Services and business assets.

The first year or so of Commasocial is funded from the profits from that.

Just the transition can be tough.

Right.

If you're not really going for it.

Right? Yeah.

Give up the revenue and give up the profits.

So I spoke to a lot of people at the time who were running agencies and trying to do SaaS products, and I just kept seeing them being dragged back into the services business because it was just like 100k projects with 50% profit margins, a big client, or like work on the Same for three months and maybe you'll sign up like a hundred dollars a month. And so they just kept getting called back and I was like, well that's.

Not going to work.

And so I was really clear. I had a co founder in the services business and I was like, look, I'm going to do common social. And as soon as I start this, I refused to even answer an email on the services business and I was pretty strict on that.

And is he still running at it? It's a separate process.

So we separated them out and then we sold that. Sold the subsidies.

Right, got it.

Okay. We had similar. We were three co founders in the service business and one of the co founders stayed in the service business, the.

Third one of which we don't see.

Yeah.

We gave him a bit of a shop like shares.

That's good. Okay, so, okay, so you spin it out and then okay, so many interesting things, getting to know a conversation. But so tell us a little about the story. So it's, I mean, social media, all this, it's a seemingly crowded space. Right. So what gets you off the ground? What's the magic moment where you break out and it all comes together?

Still happening, I guess.

Still happening.

So I was very early in the social media space building big Facebook apps and big marketing campaigns for brands back in 2007, 2008, it was a kind of heaty time and it was, let.

Me show you when you were first on Twitter.

But even though it was a great time and we were making lots of money as an agency, I was really set on how can we get a billion dollar software business out of this. And I really just didn't believe in the future of Facebook apps and all the stuff that we were doing. I thought a, it's not really the future of the Internet like Facebook. Don't think this is a future Internet. These aren't going to be around in a few years. And B, I was like, everyone's giving us lots of money because this is the cool thing and it's like winning awards and everyone else is doing it and the agencies are really excited by it. But are we actually adding value to their business in the end? I'm not really sure. And maybe that's just like floppy marketing guy or whatever. But I was just really consumed by that and I was like, yeah, if we want to build a business that's going to be a billion dollar business, then we've got to have like a 10 year time horizon. And that means it's got to be something. It's got to be based on a trend that I think is like a 10 year trend. And it's got to be based on something which is going to be fundamentally valuable to the businesses that we're selling to. It can't just be like the latest cool fad. It's got to be something that's essential to how they do business. And so while I was doing the Facebook app agency, I was really spending a lot of time thinking about that and I really just believed that the biggest trend that was happening was this major communication shift where everything was moving into smartphones. It was all about social media. Now there's a kind of shift into mobile messaging as well. But I really saw that as the kind of major 10 year shift. Something that was bigger than just Facebook, bigger than just Twitter. But it was pretty fundamental. And so it was based on that vision that we kind of. That I started working on common social. It took another year and a half before we decided to focus 100% on customer service. So the kind of idea evolved as we worked with different customers.

And how long from the official spin out, whatever the notional date is to a million in revenue, how long did that take? The first million error.

I don't know the exact date. I think it's maybe a year halfway.

And how. And by then. And at that point are you still 100% here or have you gone to New York?

Yeah.

So basically as soon as we raised VC in the first round, which is mid 2011, early mid 2011, we start thinking about the US how much, how.

Big was the revenue when you raised that?

Like not much, 150k a year. So it's okay.

So you improving your product market fit, but nothing else.

And we had like. That was about the same time that we realized we needed to focus on customer service, which I can talk more about. And we spent kind of 2011 shifting the business to focus on that relaunched beginning of 2012. And that's where I immediately started going out to the US and just kind of doing trips every month speaking to customers. We very quickly built a really good customer base in the uk partly because I'd been in the industry for a long time. We had a lot of customers at the agency, really strong relationships with the social networks here. So Facebook were recommending us and so we were able to really quickly spread in the UK and then I started going out to the US to try and sell us over there.

How did you decide?

East coast versus West Coast. Like Chopin.

Yeah. So it was really just a convenience thing to Start with the companies we're selling to major B2C companies. We didn't have a particular focus on tech and so the companies were selling to all over the US at the time. Social media was still pretty marketing heavy and there's a lot of activity happening with the agencies in New York, but we had our engineering scene here in London. I had a business in London that I had to pay attention to. And so just from a travel and a time zone perspective, I saw it as being much easier to do New York. There's certainly lots of trade offs which I can speak about. But it's worked out for us now. Yeah.

And so now. Okay, so just because the counterpart to PJ search event. So when. And so I think the narrative you told me is now you're here in London one out of every six weeks or something and then it was 50, 50 like 12 months ago. Or kind of relate that to revenue just so we can help people draw analogy in their businesses.

Right.

First off, I will share a little bit of a lesson in terms of advice I would give to people now who are looking at the US thing. So I did almost 18 months of two weeks, two weeks flying back and forth every month. We moved some sales guys out and trying to get the business going over there. And I actually viewed that as a terrible mistake for a number of reasons. Not just the constant jet lag and exhaustion, but what it meant was that you don't really live anywhere and you can't really focus on anywhere. So I wasn't in America enough to really focus on America and I wasn't really in the UK enough to really focus on the UK and it just kind of stalled us. And if I was doing it again today, I would have either moved completely to the US earlier or not move to the US as quickly, worked harder to get the UK running independently and then just moved more definitively to the us. So you ended up half pregnant, you.

Were just sorted in the world, right?

Yeah, exactly.

Yeah.

Things didn't really start happening in the US until I made the decision, hey, this isn't going to happen unless I actually move here. Yeah.

And PJ was fortunate enough that and. And he is going to move full time to the Bay Area in October. Right. But he had a co founder who had worked together closely that could do this two years ahead of you coming full time. How did you handle that with the home team and managing that?

Right.

Yeah, great difficulty. We had a really great CTO who on the tech side that was always fine.

And did you guys Go to middle school together or how did you have that trust to span time zones?

I think just three years of working together. We didn't know each other before, but he was one of the first. He kind of joined us like a year before he was B.C. he was one of the first employees and we just worked closely together. Got it. And it's kind of grown and becoming.

And did you know that would work, having him manage the London office or did you just hope that it would work? Was it clear?

I.

Because this dual management can be a tricky issue for people.

I've always been pretty clear that we wanted to separate the management of the engineering team from the commercial management. I've always had pretty strong opinions on how to build a really great engineering culture and it's very different to how to build a really great sales culture. And I think that it's a mistake for companies to try and force them together. So I knew that him and I were very aligned on the engineering culture we wanted to build and so he could look after that side of the. That side of things. It was much harder on the commercial side. So the first VP of sales I hired in the UK ended up being wrong. And it took me far too long to realize that.

More than one sales cycle.

More than one sales cycle. It was like a year and a half. And it was a mix of things. Partly we were kind of.

You hired him as your first VP of sales?

Yeah, we.

And that's when you were still doing the 5050 thing.

Yeah. Okay.

And he was in UK but was head of global sales versus European sales.

Global sales. Okay, got it.

So in addition to the wrong hire, which I think would be helpful, people learn being together more than 50% of the time is helpful.

Right?

Yeah.

I mean for me, I'm not that old. Yeah. All that experience, in many ways we're doing lots of stuff.

You're pretty experienced, but yeah, yeah, maybe at this point.

At the time, it was really the first person I'd hired that was older than me. I was like 26, 27 or something.

Good looking LinkedIn. Good looking.

LinkedIn.

Great LinkedIn.

Great LinkedIn. Great LinkedIn brand at the top president's club.

There were lots of reasons it didn't work out, but one of them was primarily mine, which was I hired this experienced guy and I didn't really manage him. And that contributed to his failure in the business, but also contributed to a lot of cultural issues. Lots of things came out of that. There were some other reasons he wasn't right for the business. But he would have been better for the business. And if he was wrong, I would have found out sooner if I'd managed him properly like I kind of learned to do now.

And you kept him for just two questions on that. And then he did a good chat. A few institute. So how long? So, you know, I mean, if you. For folks of the other part of SAS, you know, this is my 7% of first PP sales don't work out. And it's. The real truth is it's always our fault as founders.

Right.

It's never the candidate's fault. Right. They took a risk on us. It's never. Once in a while it's their fault. But even if it is, it's still our fault because we have the sixth sense of the eq. We should have realized and done our execution. So how long did you keep the wrong person?

Year and a half.

Okay, that's horrible.

Okay. Because.

Do you agree with my one sale? Like, if it doesn't work out in one sales cycle, it'll never work out. Right. You get better and better at firing. And did you keep them because you were desperate? Because you had the venture capital and you might as well spend it or what? A year and a half is kind of. I mean, you've done great. Right. But it's sort of inexcusable, let's say.

So he did have a really beneficial effect on the business when he first started.

In terms of sales, had he been a manager before or just an individual contributor?

He'd been a manager. Okay.

So he helped just.

He did close.

Oh, yeah, he actually closed. Got it. Part of the reason he didn't end up working out was that we were being on this continuous shift to more and more upmarket. Got it.

And doing bigger transactional deals.

And he was much better at the transactional, smaller to medium deal. Sold to marketing departments, which we were kind of in when he first joined. Wrapped that up. But then over the next year and a half, we were kind of evolving to doing bigger and bigger deals. Sold into customer service and IT and procurement and a more consultative sales cycle. And it really needed a different type of salesperson.

So you didn't hire for next year's Target acv. You hired for today's acv. That's mistake number one. Not for next year's acv.

So he did.

Worked out for a while, but then it became.

Could he have been director of SME solutions or loan or. You abandoned all that small stuff anyway, so there was nothing left.

Yeah. For us as a business, we Realized that what we do is significantly more valuable for large enterprise clients than it's the smaller clients. Like exponentially more valuable. And it just doesn't really make sense for us to be selling to small businesses.

So his replacement background on him or her, the second one you got, right?

Yeah. So now we have VP of sales in the US and one here in emea.

Okay, so you got two. They both report to you.

Certain issues for that.

Yeah. Okay, but so far that's worked for you, Right. And they both know how to do more enterprise. Five, six figure enough deals. That's their background.

Okay.

Yeah, I can talk more on that. Got it. And we've definitely seen differences in the UK and US on that as well.

And then just one on that. And then I want to ask dig in with PG on the same experience. So looking back, so 18 months with the wrong VP of sales. I mean, you built a great company, so it's all good. We all make mistakes. Looking back on it, we would have made a hire that was more enterprise. Right. And then.

And a better cultural fit.

A better cultural fit.

And I would have managed them better. Adam said that.

So you just didn't enjoy salesman, you didn't enjoy being part of sales because you seem customer centric. So what did you not? How did you not naturally. What did you learn from a management perspective?

From a management perspective, I think it's just, you know, you've got to learn as an entrepreneur. But even if you hire someone who's older and more experienced than you, they may know more than you in their respective area, but you've still got to manage them. They've still got to be going towards your vision from the product, from the company perspective, the culture perspective. And it's really easy as a kind of young entrepreneur to hire these older people and be slightly wowed by them and not manage them enough.

And did you set monthly goals and photos? Yeah, one on ones.

We had some stuff.

And did you interview the reps that he hired too?

I did always interview them, but I liked them. At the time. I didn't like him enough. Now I like my reps.

So you just deferred to him? When you hire reps you didn't believe then you got to fire that guy because that's when you're starting off the leading the reps that when you hire VP sales, we go through a rep change.

Right.

Because the ones before that are folks that we would buy from. And then when you hire VP sales, they're going to be different. But if you don't believe in them, then it's just. Okay, so you ended up with 2 and PJ, you ended up with the 2 situation too. You had a lot of learnings, right?

I mean actually, I mean we have two VP of sales, but actually one of the. Our VP of sales in the US is actually kind of like an interim VP of sales. So we actually. So let's step back for a minute.

He had a VP of sales for.

A long time in Europe.

Yeah, he's been there since almost inception.

He's been there since like 300k.

ARR. Yeah.

So he's banged out these transactional deals. He's closed big names. Right. And it's worked.

Yeah, it's worked. I mean he's been through a learning curve. There's been moments of doubt. Louis and myself as well, there's. But he's. I mean, I think it's very exceptional. Like, I recognize it now, like how exceptional it is. And so it's, you know, moving forward, he's now focusing very hard on the UK team building a tier we hired like, you know, 6, 7.

I should have known this, but he moved from Belgium to London.

No, but he's like, he's spending probably 70% of his time now in the UK so it's like a two hour train ride from where.

Do you think that migration will happen, where the EMEA sales team will be London based?

Yeah, probably.

Just as you get bigger.

As you get bigger, I mean it's natural.

That's the evolution.

Yeah, it's nice. So we're actually now moving like the second time around, but now in Europe. But a very similar story to Josh actually, like in terms of like why our first VP of sales in the US that we hired about last year, I think this time didn't work out. Like he was a great closer. He had an immediate impact on the business. And the great thing is, the funny thing is Jason you interviewed, you knew the guy, you warned us like it would happen. That's the funny thing. Looking back, I ignored some advice from Jason. Yeah, you know, it's gonna. You said like, hey, he'll do great, like the first six months, but then, you know, stuff might happen and stuff did happen.

So let's step back. So you have someone that you like. Charismatic, closed. Right.

Super experienced manager.

But he recruited a team.

He recruited a team.

Very trend. So were the issues that he needed to hire sort of next year's ACV similar to Josh or what were the very similar.

It was more transactional. His experience. He didn't have the experience of going like up market. You could also see he lacked some management experience as well. If you're managing a team of like six or 10 people in more transactional deals, working on switch smaller deals, it's a totally different thing than managing a team of people selling into the enterprise or just doing bigger deals. It's totally different. And as well we made a lot of mistakes as well. We weren't managing him as well properly. Definitely a big learning from us as well from Louis and myself in the last years how to deal with your management team. And really you need to hire people who just in their domain are way better. You can do it all and that you don't actually, you know, but that you can set the vision, you can set the vision of the company direction, where it's going. And that's. Yeah. And also yeah, having the one to one on ones things like that, that's a big learning. Do you see any cultural differences in sales in Europe and the US for example deal sizes and how do you manage that for us? Deal sizes in the US are way up right now. You can really see that right now. So it took us one year to start hiring the right people. Then it took us and now you see really a big effect on that.

Even one year later. Is it because of people or because.

Of the market or what do you attribute that to?

Combination. But I would say the biggest difference is that we start to crack the DNA of your sales guys. What is their ideal background? Like what products have they sold in the past? What type of companies do they come from? Like culturally I think those are like the, you know, you also again you make a lot of mistakes. Like again a big focus now at Showpad is like onboarding because I believe like you're wasting so much money if you're not onboarding your people in the right way. Like it's a huge training, training, onboarding, getting them like right now we're able to ramp the sales like you know, within like eight weeks. And that used to be our top sales guy. Right now he's bringing in about 1 point. Last year he brought in 1.5 million in ARR. And after his month 6 that we hired him. He was one of the first reps in Belgium actually we were super close of firing. He just in time closed.

This is interesting.

Closed the deal that kept him alive like they were going to keep him. And then he started. But it's because it was, because he didn't.

It was your fault.

It was our fault.

We didn't train him.

We didn't train him. We didn't scale him. Also, they were. Again, he was selling the product in the wrong way. And you learn a lot from that.

So now he's doing 1.5. So he's probably twice as good as the next guy.

Yes. I mean, that'd be great. Yeah, but he's like, we would record now his sessions, like, with customers and, like.

But he won't train other people, will he? He's a new interpreter, right?

Yeah, but, like, I mean, he trains him because we record him, what he does, and then we put that recording on Showpad for ourselves to see. So he's not training people. I mean, he's, of course, people. We give him access to him, like, you know, because, you know, we make him feel important as well.

I mean, it's just. It's not. Josh, you have one guy that outperforms all the reps, too. How big is the sales team on the reps?

So we're on about eight.

Eight reps. Do you have one that's like this story that's like 50 or 100% better than year two?

We have one guy who's similar. One and a half million dollars this year. But we've now got quite a few superstars on the team, and we're starting to get to the stage where the majority of the refs are performing consistently. Really, really well, which is a very different place where they were like a.

Year and a half ago. And can your two VPs, can they routinely hire the reps now?

Yeah, I mean, we've been much more aggressive in hiring in the U.S. yeah. But, yeah, I think we now, like BK said, we've got a pretty good idea of what makes a good rep, the kind of profile that we're looking for, which certainly takes a lot of time to find.

Yeah, because you've got eight now, so you probably want like 20 something in 12 months at least.

Yeah, we want to get to 15 million. Yeah, it was pretty unaccountable. Yeah.

And so just.

And so now that you're more involved in sales management and operations, at least strategically, how much of your VP of sales time do you think is involved in building this team? Now you want to go from 8 to 15 to 25. How much is our time? A lot. A lot.

Right?

A lot.

Yeah.

Like one over 50%. Right.

Because whenever I do this talk of what a great VP sales does to folks, they're always shocked when the first line is recruiting, recruiting, recruiting. But now you're down 50%.

I think it's not just your sales. I think one of the biggest lessons at our stage when you're looking at the exec team is the output of any exec is basically the output of that team. And so pretty much the biggest determinant of will that exec be really successful is can they inspire and hire a.

Absolutely.

Nothing else matters.

Right.

In the early days they can hack it as an individual contributor with friends. But yeah, you're too big for it.

Right? Okay.

And so just. I know, I just want to think back. And so the VP of the media Europe, we've learned we've got to add it to London, we've got to go up market, we've got to build a team. In the US we go transactional. It works for a while because we see a population but it doesn't scale with the bigger customers. Now we have minimum.

So he managed the transactional guys and he managed to close some very big deals himself. And then suddenly you hit a wall.

So it's uber learning. So in both these cases we actually got benefits from these hires. Right. And sometimes environments unfortunately end up being higher term in management than we like, but sometimes they still get us to the next level. What's. Because I've known you guys, there was a lot of stress, especially who was coming out to make these hires. Like let's build the dam management team tomorrow. Right. Should you have waited longer or been more patient or patience and stuff or what's the meta learning beyond the right ACV for next year? So be more patient or less patient.

For me first of all, like Louis and myself. So I think that was a critical thing for us and we keep on doing that in the hiring of the managing team. We always hire the management team together. So Louis will never hire somebody in the US that I haven't spent time with and vice versa in Europe. I will never hire somebody in the European team that Louis has met in person. So that's why there's a lot of flying back and forth. So that's like a rule of thumb there, meta learning. The other one is so if you're in a co founder, like kind of if you're with two co founders, but then yeah, I mean it's double because on the other side it did damage the business in some way because even right now we haven't. We let the person go in. I think it was January. So we've been looking for VP of sales since then. We had a kick ass VP of Customer success that took over and he had the experience of going even as a customer success person, of actually managing those upsells to very big customers. I mentioned the CO CEOs as the titles. So that's a very common setup. CEO, COO, VCs never like that. They hate it.

It's worse if you're Jack and it's two companies.

So that's worked out well for you.

Guys because you've been in different continents.

So now you're going to be moving.

To SF as well.

So we have two CEOs in the same office. How do you see that working out? So how do you do it? I mean, it's well, left and right.

Yeah, left CEO and right and right CEO I think.

So first of all, when we made this split, we split up certain responsibilities. Like US Sales was Louis. European sales was me. US Customer success was really European customer success. That was me. Then I did a bunch of operational finance stuff because we're headquartered in Ghent and we decided to be a product and marketing to make those hires in the US but everything around product marketing and anything related to strategy there, we always take decisions together. I'm super involved always in the marketing and in the product side of things. So going on calls with product team, late going on calls with Mark and late. And that's what we do together. I mean, study. It's always. It works for Leo and myself because we're kind of like Siamese twin. I mean you can feel, you know, there's some psychic kind of things going on. But like we have a really good connection. Like we can. We're actually. We started off as not being friends. I think that's a good one. Like my. If you start a company. If you start a company, like Louis was a colleague of mine and I always think that's a great. That enabled us. Like we worked one year professionally together. We then started a company. Of course now we're very good friends. But the base of our relation is like professionalism and being co workers. So we can be super brutal to each other super hard and can still walk out of the meeting room and like have a beer five minutes later and be all happy. So I mean, I think that that's what works for us. And of course, how do we want to work right now with me moving to the U.S. we'll see. We're talking about it right now. We have a great management team in Europe. That was the first we decided like, hey, PG is not going to move to the US until we have like a great engineering team, the right people in place. And yeah, I mean we feel the timing is right now and maybe next year I can talk about the learnings and maybe mistakes that we're making possibly now, but we feel the timing is right now because of also like fundraising and just US traction. And I mean, the scaling is going to happen for a big part in the us.

Yeah.

I want to talk, I want to make sure we share a few moments for managing product across two continents, because to me it's fascinating. It may be, though, the folks at our earlier stage is less interesting than it is to us because to me it's that. But let's. So let me jump ahead and then come back because the one topic that bores me to tears is money. But everyone's interested in money. Even though as a founder I found it just sort of an episodic thing I had to do every once in a while. And even as an investor, I find some of it boring, but I'm in the minority. So a couple questions on it. So both of you raised, notwithstanding that you partially usified still raised money from European investors so far, right?

Yeah.

So let's. And some of the folks I've talked to, they're like, I'm going to move to San Francisco to raise money, but I'm doing 20k a month in MRR. I'm doing 50k a month and I'm going to go. And surely there's more. There's simply more money in the Bay Area than there is anywhere else. Right. But what are the learnings on this in terms of how to play that? Is it just. Do people just throw money at you the minute you show up on Market street and get moved?

My simple learning would be if you don't have the vision and the willingness to go to the us, your valuation will drop drastically in Europe. I mean, for sure. I mean, you could get money, but it will be at a much lower valuation than if you don't have that vision of going there and it makes sense and you can prove that you're gonna do it.

Yeah, I mean, so we've raised 60 million now primarily from UK VCs. Part of that was certainly historical.

We were here.

That's where I had the relationships and that's where we had all our early traction. And we certainly, when we did our next major round and brought on Octopus, the second VC here in the UK, we spoke to US VCs as well. @ the time, the business was still, from a revenue perspective, primarily uk. We weren't that big in the US yet. I was kind of half there, half Not. And we found it really hard to raise in the US at that point. US VCs wanted to see a US business. It's fine to have be an English entrepreneur, but you had to be there and 5050 didn't count. Yeah, we were 5050 at the time. Sorry. They needed to be living there full time. Full time. And from a business perspective they wanted to see a business higher percent of your assets. They weren't interested in like a growing UK business with a tiny UK US customer. What do you think?

Does that have to be 5050 or approaching 5050 to cross that line, you think?

I think either it's like 50% more of your revenue is US and you're there or once you get kind of past the 10 million and you're more a growth business then I think they're the bit of no one cares at that point but at the earlier stage they want you to be close and they want it to be a US business. They understand.

We talked a lot when Louis and myself made our first trips to the US we already talked a lot to US VCs and their first question was always like hey, when are you guys gonna move here? So I mean that's literally like the first question you would get in most of the meetings. Are you living here, Are you moved already here or like it's like constantly. So I mean that's a big part of raising money in the us we haven't done it yet, but should go smoother now. I mean we did get some term sheets in the US on our last round although like. But then Louis already moved there and we had about 30 ish, maybe 25, 30 ish. ARR percent of our ARR was coming from the US and you could definitely see we had more traction there. We had our office there, we had our team there.

And then it's.

I'm curious what you think is that. This is what I hear folks say I'm going to move to San Francisco at 20k MRR to raise here's a phenomenon I've been Teddy, I'm curious your thoughts and other which is once you, if you, if you've been in Europe and you're starting to take off, right, and you've moved to the U.S. you're moving there still is. Even though the investor community is smaller, it's easier to get attention once you break out, whether it's two Millionaire or three Millionaire once you're one of those companies that's breaking out. And so what I see and maybe this is not statistic But I see a lot of European VCs then wanting to be even more aggressive in the US because they see the star pupil going out of town and it's almost an easier time to get that European money than us sometimes.

I mean, we always leverage that as well in our negotiations with VCs. I mean we would literally say, hey, we got some US term sheets and, and you know, and we would have them actually.

Yeah.

And then, yeah, you can just negotiate more founder. Yeah. And I think there's also a way better culture right now, you know, across the globe in like more founder friendly terms and like, you know, when it comes to like funding. But it can really help to like negotiate some of those points where, you know, in terms of like, you know, control or, you know, participating and all that kind of like stuff. I mean, it helps. I mean, I think you should definitely talk. If you're raising in Europe and you want to raise in Europe, definitely talk to us VCs. Because first of all, you're gonna learn so much from those conversations. Like we took a bunch of like, we would just go out there, do these trips, like just 10 days of like VC meetings. And like in those 10 days, your vision on your product will change, your vision on your company will evolve. You'll have. You will be so much. Had so much challenging questions. It helps you in your fundraising in Europe. So even if you're doing your first round in Europe, just go to the US, go talk to VCs. That would be my advice.

100%. It's still worth doing. And also things have changed. And certainly now us VCs are being much more aggressive about getting into European companies than they were even a couple years ago. Yeah.

So no magic sauces that magically move to the us Go to get money. That's a.

You would agree.

I think if you move your entire company to San Francisco and you're there and you got great traction, then you're being pretty.

Yeah. But you had to go 100% in with like 50% of your revenue to make the play work. Right.

I think, I think it's actually the best time to move to the US is right after you do your funding around Europe and then position yourself as the next one.

I think that's what you guys are doing.

So I wanted dm. How are we going to talk to. So I want to jump around a little bit, but just there's such this. The product question to me is so interesting, which is so many companies end up. They come from London or Gant Or Portugal or Paris or Sony or other companies I work with. And one way or another, you end up with an engineering center of excellence in your hometown. Sometimes it's your entire engineering team. Sometimes you end up with two engineering teams. Which sounds like you just started that at Converse Social. Just an engineer or two in the US or is that right?

Not yet. We will.

You will.

So you're just starting to build two sets of companies?

Yeah, we just started hiring product in the U.S. yeah.

So let's chat about that. Right. And PJ, do you have any engineers.

In the U.S. so we have two engineers now and we have. Our entire product organization is in the.

US and so let's highbody and then let's go over to Josh.

So.

So Louis comes out the whole management team overnight. Right. And you did hire, you hire your first product manager in the US out of a well known SaaS company to manage a bunch of engineers over in Belgium.

Right.

Which is tough.

Right?

First and not someone. And someone relatively junior.

Yeah, the guy was relatively junior. He had a product management role at Yammer. I mean, great guy. Sorry.

Good logo.

Yeah, good logo. Good logo. Good logo. I mean, this is one of the biggest challenges and like, it's still like our biggest challenge right now. I mean, Teddy will know that as well. Like in our boards. We talk about that a lot. I mean, we have right now we have almost 30 engineers in Ghent. We have two or three in San Francisco. We have our product team that we built. So that first hire we made him last year, he was again, he did a lot of the right things at a time. But then suddenly you hit a ceiling and it's really hard because. Super motivated guy, hard working. He was really like our engineers were actually happy that we had a.

They were so culturally, he made it work.

Culturally, he made it work. We flew him. We flew at that time. Maybe that was already one of the mistakes we made him. We didn't fly him enough to Belgium.

That's my opinion.

He only made one or two trips and you could have definitely seen those trips had a big impact.

But the engineers would listen to him.

Yeah, they would really, you know, they would listen to him. But then again, the problem is again like being a product manager from again an enterprise. If you don't have again, it keeps evolving to hiring people to have the playbook. And you will have certain.

You need something more senior.

Yeah, you need something more senior. You will have like David, our VP of sales. He's the only guy I've seen doing it like evolving. He didn't have the playbook when we hired him. And he learned so fast that he can just keep up with developing his playbook and implementing it. But with our first head of product at that time, he's figuring out so much stuff and we realized, well, we put him in front of VCs at that time. Horrible mistake. Because actually we didn't get some term sheets just, just because of that. We would get responses like, you know, why don't you invest? And they're like, yeah, your VPF product sucked. While Louis and myself were like, man, this guy is the bomb. He's good. But we just didn't see it. Now we hired a guy who has that experience playbook.

So it sounds like you're becoming anti up and coming.

Yeah, no, that's my problem. Because as a founder, as a founder, a co founder of a business, you're immediately attracted to people who are high energy, who want to make things happen. You're actually even like the underdogs a bit. Like people who are like, yeah, you know, I want to give this person the opportunity to do it. But the problem is a bit how further you get. You realize that yeah, it's like it's super hard and super rare that somebody will actually figure it out while doing it. When you're growing at more than 125, 150% a year, when the company is expanding that fast, when you're hiring at super high speed, it's very hard. I mean I think as well that's one of the hardest things or lessons I learned because you want to give those guys the opportunity, but it's sometimes very hard.

Yeah, I had exactly the same experience being way too long to hire a grade exec team for that reason that I have this kind of fundamental belief that any smart young person could learn anything. Yeah.

And we're called at PayPal, they're all like 17 now and they've gone to great things so it can work well. But hard earned enterprise without the domain experts on building a product, selling it, marketing the chutzpah doesn't only take your service.

Right.

It took me much longer to figure that out and start hiring really experienced people.

But you can also. We then had the other side of the metal as well that we like hire like a super experienced guy and.

That also like if they're not willing to do the work, it's got to be a senior. The ideal thing for me is the seniors you can go in enterprise but where they'll still do the work. Yep, right and then you're once you're actually even north of 10 million and you're well funded, they don't even actually have to do the work anymore because then they're going to hire a four person.

Right.

So Josh, going back. So it's interesting. So you've gotten pretty big without yet building a traditional product, product development, product team yet. Is that right or is that wrong? Are you ctoactive we have a V tier product. We do have V3 here in London. Based in London with the engineering team sitting together.

Yeah.

Right. Not in the US not in New York.

We're now hiring product managers in the.

US that will report to him.

They will report to.

Okay.

Product was a difficult area because I was like head of product for a long time. Yeah.

I was like that works up to like 3 million.

Yeah.

And I was like.

And then the product is complicated and it's a hack.

And I was. Yeah. So I was like, even in the early days I was everything. I was like heavily, heavily involved with the engineers. And then we got bigger. I was spending more time in the US and realized there was just no one really managing the product and so managed to get it. And also my style of managing product, which is probably quite similar to a lot of entrepreneurs, which is like I have an idea and I have it very clear on it and I'm pretty sure I'm right and I'll just. Yeah, that works when you're small and like you're early on. But once you have real customers or real needs and, and you have product market fit and you have lots of account managers and salespeople, then it's really about you need to build a process in enterprise.

You have to professionalize it.

You have to professionalize it. And that wasn't my forte. And so we managed to bring in a great YouTube product.

And how big were you when you hired him?

So that was coming up to two years ago. So we were probably at like two.

And a half and that was a big one.

It should be six months earlier.

Six months earlier. So half a million in revenue. You've got the logos, you've got renewals that have come up and then that's the right time and then so interesting. So it seems to work. But so your VP is here. Do you like to bring him to the custom meetings?

Yep.

So he flies over to California because I like to have the VP of product with the big customers.

Right.

To learn this is a multi year engagement relationship.

Absolutely. As much as we can. But he comes over to the US quite a bit.

50.

50.

He's not 50 50. But we realized we really need product managers under him in New York.

So you've hired seasoned but more junior folks. Do you think one of the more junior folks can go to your biggest customer in the US and handle a meeting with you?

So we're in the process of hiring and we're hiring people who aren't VP of products, but are senior product managers who are capable of doing that. We have an awesome product owner, senior product manager here in the UK for one of our product lines who reports into David, but he goes to all the big customer meetings. Got it. And he's great. And you can have people of that level.

So.

But again, I think the learning there again, hire as high as you can so they can still do the work. Right?

Yeah.

I would say that.

We'Re behind the curve in investing in the product team of products, but we really realize now we need product managers. A few product managers under here for different areas of the product. Really, really focused.

And did he know that and was pushing you for budget and didn't get it, or was it.

Yeah, to an extent.

So, okay, so that's interesting. So then let's make sure we get at least one more topic before we run out of time.

But.

So you've decided since engineering is going to stay in London, you've decided to put the VP product there, which makes total sense to me, because you want them together, but you lose. No matter how great these other folks are earning, you lose a bit of that direct customer connection. I think you guys decided to go the other way, which is to try and have head of product in the US where you saw the majority of your revenue going. Right, Right. What are the learnings?

Right. Wrong learnings. There's no substitute for having product and engineering sitting together. I mean, things will always go better if that's a possibility. But if we just look at it from a financial perspective as well as a company, one third of our headcount is in San Francisco, two thirds is in Europe. Half of like our cost base right now is in the US so 1/3 of the people and half of them are costing us half of the money in terms of, like, the salary.

Yeah.

If you would do engineering in San Francisco, that would even like, explode to, like a crazy amount. Because it's so expensive to hire engineers. They're less loyal and they're not.

But you have 30 engineers, so it's almost academic. That's what it is.

It's great. It's good. But again, what we do now, we hired an apartment in San Francisco. We fly in a lot of our engineers to San Francisco on a regular basis. There would always be a couple of people in the house there working on strategic products with our product team together. And we have our product guys flying a lot from San Francisco to Ghent and just spending two consecutive weeks with the team there. We're now, we're considering now again to add a kind of introduction, intermediate layer between having the product managers in San Francisco but then having kind of more projects. Because the problem is right now we have like three product people in the US and we have a team of 25, 30 engineers and they're communicating directly with all of those engineers. And that's a real hassle with a nine hour time difference. So we try now. Yeah, so we're now working with team leads and our engineering team that then will work with a kind of like, I mean somebody with a product background, but more like program project manager skills who's really good at like, you know, communicating things and making small decisions during the day. Because that's the big problem. If you have an engineering team here in Europe and your product is in the U.S. it's like engineering team is going to run into a bunch of problems during the day and they need feedback to like move forward in a swift way. And if you don't have that, then it's when you. Wrong things get developed and things.

Okay, so just look, so if I got to put you on the spot to answer questions, I'm a little bit confused. Learnings your VP of product when your engineering team stays in Europe. VP of product in Europe or us?

Yeah, us for me, us because.

Us because of customers.

Yeah, customers are knowledge. Like because. Just because of the sheer amount of talent in product that is in services.

Yeah. And Josh, you say stay with engineering, right?

It's good learning.

I don't think there's any perfect answer.

There's always like an ideal situation or there's no ideal situation. In the end, it probably depends on where you are at that stage and the people that you find. But we've certainly learned that we need products to an extent in the US near our big customers. The way we're working on that at the moment is keeping the VP here, but having senior product managers in New York who report to him and they travel back and forth. And he travels back and forth a lot.

But I think you really like it.

That you've been Brian, because.

If ignoring that, let's say it was just a random hire, where would you go us or if it was random hire now.

I would try and hire it in New York. In New York? Yeah.

That's this question. My view is A pluses you take anywhere in the world and A plus wants to work from Zanzibar. There's always so many. I mean, I'm not talking about grade inflation.

You gotta take.

Okay. But look at companies like Zendesk, good data, who are already you. You can really see that even those companies are still, they're still changing things. And I think it's going to be like an eternal kind of way of trying to optimize it.

It's hard.

It's pretty hard. But you have to make it work. And that can change from quarter to quarter, like a bit how you do it.

One thing I would say in terms of where product managers are is that no matter how global you are as a company, no matter how much communication, the fact is that if a product manager is here in London and they're sitting very close to a sales rep who's here speaking to the UK clients and they're kind of aware of the UK clients you have, they'll just be more UK focused. Even as much as they try to think about US customers, it's just easier.

It is easier.

Or learn about a UK customer's problems. And that really makes a big difference. A big kind of soft side of things. Yeah.

So one thing I know we're out of time. One thing I do want to get, because we didn't get is PJ gave us a great story of Louis, his co founder, going to New York and then moving on, moving the arm beyond to San Francisco, but just maybe in a couple minutes. But Josh, I do want to hear why you decided New York worked for you. We heard a little bit about Time Zone, but let's talk about management team. And you've got a couple sales guys in San Francisco, but it's not hq. And so how do the sales guys compete with box and benefits when it's not even your hq? What's your learning for the room for New York San Francisco?

Yeah. There is no doubt that there is in general more experienced startup execs at every level on the west Coast. There's no doubt. I feel really lucky that we've. I think I've got like the two best enterprise SaaS execs in New York that BK sales, not CMO. It wasn't easy to find them and there isn't like a massive, massive pool.

How did those searches take?

I mean, I'd say kind of building my exec team was like pretty much the whole of last year for me.

In New York for those positions. Do you feel like you got six good folks? Do you feel like you only got one great one?

I'd say, say I had two real contenders. Two contenders.

That's a big one. So you were able. It took a year. You found two, but it took a while.

Right?

Okay, keep going.

But that's changing as well. There are more and more like enterprise SaaS businesses. There's no doubt there's more in the Valley, but they are there. And one of the interesting things about, for example, one of our execs in New York, she'd always worked for Silicon Valley companies who had New York satellites. And so she was really excited to work for a founder who was in New York.

So hiring from satellites is a good one.

We have been able to build a really great exec team there. Could we have done it faster in San Francisco?

Maybe.

But we have managed to do it for hiring sales reps. It's a similar story. Are there as many enterprise SaaS sales reps in New York as there are in San Francisco? No, but there are a lot. And there are a lot of really great ones. You just have to filter through a lot of ad tech guys. A lot of ad tech.

A lot of ad tech.

You just fill some out day one and then here.

So just to summarize that, I did the PGN product, so if you had to do it again and you didn't keep the first EP of sales for 18 months and you didn't do your 5050 and you just got off your moved to the US full time and New York's great, you're gonna kill it. New York or San Francisco for most.

Folks, which would you do, including time differences?

Yeah.

It's a hard choice because maintaining communication and culture between two offices is really, really hard. Really hard. It's really hard. Really hard. And it's hard enough with the fact that we share half a day. And there are certainly a lot of advantages to the fact that our teams do share half a day and we can have all hand meetings together without that much difficulty. We did our H2 kickoff like three hours and we had both offices.

Yeah, I've been here three days. I've given up talking to California. I don't even know when it is over there. So you still say because folks are. A lot of folks in this room are going to make this decision in the next 12 months, the same decision as New York.

Say if you have like a real business here that you need to be heavily involved in. I think New York's actually a really great choice if you can just, like, pack up the whole thing and move, then go to San Francisco.

Because I.

Think there is more money, there are more people there. And personally, I also prefer New York.

Taya, we're pretty much out of time. Need to hit or.

I think so.

All right. Should we thank our guests? This was really good.