Million Dollar Exits Ep.5 with Chris Frantz: Stair-Stepping Approach To A Successful Exit

Hello everybody. I'm KP and welcome to Million Dollar Exits, a special segment on my main show, the Build in Public podcast. In this interview series, I sit down with founders who went from an idea to building a business and then eventually selling it for over $1 million. Hence the name Million Dollar Exits. This is something I'm very passionate about and curious about at this point in my career. I wanna learn and share all the insights, mindset shifts, lessons, and non-obvious tips that are part of this unique journey journey with the next wave of founders who wanna take this path as well. So buckle up and get ready to be inspired and informed. Here's a special shout out to our episode sponsor, paralect.com. Billion-dollar ideas come from every possible niche. If you're a busy domain expert in marketing, sales, finances, or healthcare, and don't wanna spend 6 months just to build an MVP, you'll find Paralect super valuable. Paralect is a venture studio built to design, build, and launch a product for you that is ready to sell in under 2 months. Start with no-code or go full-stack right away. Simply focus on growing your early adopter community and build in public, and they'll take care of the rest. Build your million-dollar startup with paralect.com. P-A-R-A-L-E-C-T.com. Hello, everybody. I'm KP. I'm your host, and I am super thrilled to welcome Chris, Chris to the show, Billion Dollar Exits. Chris, welcome. Thank you for being here.

Hey there. Thanks so much for having me.

Chris is currently building Loops. And actually, I'm— before we dive into your story about the exit and, you know, the company you sold, which is Snazzy AI, I would love to kind of introduce you to the listeners and like talk a little bit about what you're building right now.

Sure, definitely. So Loops is a YC company. We went through Y Combinator in early 2022 in the Winter '22 batch. Loops is the easiest way to set up email for your SaaS platform. So we help you with product marketing and transactional email, basically everything that you need from an email perspective besides sales email. Usually folks use a combination of like SendGrid, Mailgun, Mailchimp, Postmark, whatever. They glue it all together. It's expensive. It's a little buggy. No one knows where anything is. Loops unifies that all into a single beautiful interface, lightning fast. Simple, works everywhere, looks great everywhere.

I love it. I saw also the comparison to Framer, you know, and I thought that was pretty cool. And the design— I, I'm on the waitlist, by the way. I need to get off the waitlist.

Sure.

Happy to. Would love to. Yeah. I don't have a SaaS company personally, so I don't know how much is relevant to me, but like I do send a lot of outbound emails that currently I use HubSpot and other things for, but would love to check out Loops. And I did love—

Framer is a customer.

Really? Oh, that's cool.

Framer is a customer and the CEO of Framer is an investor.

That's cool. But I was gonna say, like, um, the design really stood out for me, you know. So I'm curious, do you personally have a design background, or where's the love for design coming from?

Sure. Yeah, so, um, we don't have any designers. That's just me. My background is— well, I started my professional career in design, so I, I have that. But I actually did a pretty long detour into marketing and growth, including being the 5th hire at a company called Curiosity, which is now a publicly traded company. So I was there for almost 5 years from one of the first hires to leaving before it IPO'd, which is not a recommendation I would make for other folks in terms of balancing life priorities and things that worked out well. And I'm also a self-taught developer. It's definitely not my strong suit, but I do push code daily at this point. So marketing, design, and developing. So I'm not great at anything, which basically means I have a pretty strong founder profile. Being exceptionally average at a lot of different things makes for a pretty strong founder, I think.

Yeah, the generalist, especially the growth side of it too. I think a lot of folks don't cross that bridge. They're usually like design developers or those skills, but the growth and marketing is a pretty strong complement. All right. So what was your exit story like? You know, I know we touched on Snazzy AI, you know, for a little bit, but if you want to summarize and give us a recap of what happened to Snazzy and what was the exit story like?

Sure. Yeah. So Snazzy was a tool that we built and sold to Unbounce. I guess that's why I'm on the show, hence the million-dollar exit part of it.

Yeah. And that's the company before Loops? Yes. So we sold that.

So we met in 2021 and we were at the acquiring company Loops for roughly— or sorry, Unbounce for roughly 6 months. And then the following year, 2022, is when we applied to YC with a bunch of ideas and ended up building Loops. It's now 2023, so you're all caught up.

March 16th or something. Yeah,

timestamp.

Yeah,

3:17 PM Eastern. So yeah, we were at Unbounce for a little while, but when we founded Snazzy, there were no other competitors in the space. The competitors at the time would grow to be Jasper, which was previously ConvertKit. And they changed their name to Jarvis.

Was Copy.ai one of the companies?

Copy.ai was probably the other big one. So those were the 2 big ones. We were in the same batch of access for OpenAI's early GPT-3 early access.

Yeah.

So I finagled my way in. I'm not 100% sure how I did, but we were in the first batch and it was like 167 people or something that had access and they were in there as well. They were much, much better funded, basically just Chris versus Copy.ai, which had venture backing pretty much right out of the gate because it was founded by venture capitalists, and then Jasper, then Conversion, which was pivot from an existing marketing company. They already had like a million plus signups for their existing products so they could sell into them. We didn't have any of that. They focused on templates for creating marketing copy. Right. And we, we did as well. But our goal and part of what we were able to sell on Mounce was our focus on the generative AI future. Kind of what we're seeing now was something that I was pitching almost 2 years ago. So our goal was to create presentations, to, to do so much more than just marketing copy. We were also the first Chrome extension that let you use GPT-3 anywhere. It was really cool, actually. You could do it in Notes, Notion, just like any— anything that you could use online, you could use our extension. It was very slick. We did, we did some cool stuff. We innovated a little bit with the OpenAI team. What we didn't do is a ton of marketing, which was something that you can do if you're a very well-funded venture company and you want to put your head down and build for a year. Right. Right. It's less possible when you're bootstrapping, which we were doing at that point. So what we found out is that while we were bootstrapping, building really cool tech, like we beat, you know, CopyAI by at least a year to a Chrome extension. While we were building all this cool tech, they were just posting on Twitter and, and marketing like crazy. Like, conversational was spending tens of thousands of dollars a month on Facebook ads.

Yeah.

So we started to do that. Our presence rapidly grew, revenue rapidly grew. We got on some radars, we had a couple acquisition offers, and Unbounce ended up making the one that made the most sense. I can't share actual revenue, but what I can share is that our revenue was basically doubling at the time of purchase, and it continued to do that as we were absorbed by Unbounce. So it was a great purchase for Unbounce at the time from an acquisition perspective, and it was great for us too.

Right, strategic acquisition. And also it seems like it was an acquihire, right? You were there. Did they bring in, uh, who was with you along in the team?

Yeah, so, um, shortly after, uh, founding the company, I brought on my co-founder Adam. Adam and I have worked on a number of projects before. We actually met at Curiosity. Which was the first company that I mentioned earlier. Yeah. And yeah, I brought him on and he helped us scale it out. He built some really cool stuff. Some of it I don't think I can talk about, but the tech behind the scenes is awesome. And we were able to quickly—

Unbounce got both of you in?

Yep. Just the two of us. And then Unbounce was able to fully build it into a platform. It's now called Smart Copy. If you go to unbounce.com,

it's

right on the headline of the landing page and it's a big focus of what they're doing. So They had a vision that aligned with what we were hoping for, which was that we would take the API and the, the, the really cool stuff they were able to build on top of it and build that into a platform that had network effects. Like Conversion AI had their existing platform they built on top of. We wanted that for us. Um, and we were able to get that with Unbounce. So,

Unbounce is massive, right? Do you remember any stats? Like how big were they when, when the acquisition happened?

No, but they're freely available. Unbounce is a much older company. They're the largest landing page builder on the internet.

Right.

If you're in marketing, you've used them before.

Yeah. Yeah. They're huge. I mean, I feel like their platform definitely like is in a whole different league compared to even ConversionZaspers or Copy.ai. Oh yeah.

They're much bigger than all those companies. Yeah. So, so that was great. Suddenly we were at the biggest company. Yeah, we were. We, so from the smallest to the biggest, and then we were able to integrate into what they were doing into our landing page builder. So all of a sudden you could generate landing pages with AI and you could generate iterations and copy. And we were able to tie that into their millions of data points around headlines. So we basically had this giant headline library we could fine-tune against, and it was really, really cool. Once we built it in and we migrated everything over, we hit the 6-month mark and we were like, well, we did the thing.

What now? What's next?

Yeah, we felt like we had one more in us. So we left without a plan at the end of 2021. We took time for families through the holidays. And then we applied blind late to YC, got in. I think we were the last company that got in and then got with a bunch of ideas and we ended up building Loops because, you know, if you've used Mailchimp, you understand why we're building Loops.

So, so is Adam with you too in this one?

He is. Yep.

That's so cool. That's cool. So what I love about your story, Chris, is that like, you know, I've been interviewing a lot of, you know, founders in this podcast, especially in this segment. Like the stair-stepping approach that I think often doesn't get enough spotlight on is where you started out as a bootstrap company, you built it, grew it, and got a meaningful exit. And then now you're taking a wild swing because, you know, going to YC and building, you know, Loops and going after something that's as big of a market like Mailchimp is huge. It's a huge TAM market. And so it's like, it's very, very cool to see that, you know, you didn't straight up jump to a VC-backed idea. Was that intentional, you think, or was it just serendipitous that you just built a small bootstrap company for And then kind of stair-step there?

The plan was definitely stair-stepping. It's very difficult to break out of— it's very difficult to break out of the norm and to break out of a small pool when you're a smaller company. Yeah, is what I found. You need venture backing to really reach that scale, or you need to lock in for a much longer period of time. There are non-venture-backed successful companies, of course, in technology, but it requires growing pretty slowly for a long period of time. Because if, you know, the other option is, is somebody gets venture funding and they copy your business. Yeah. And that's the thing that happens often. So we knew we needed venture funding and we knew we needed a lot more than we currently had. And we also saw some inevitabilities at the end of the OpenAI road. I think some of our previous competitors are probably hitting some of that with ChatGPT, with Microsoft's acquisition and integration into all of their products. Same with Google. I think life gets a lot harder. And in retrospect, I'm very glad that we didn't build a generative presentation building platform. Based on AI now that generative AI is coming to Google Slides and PowerPoint.

Yeah. I feel like that's become table stakes now, right?

Right.

So, what's your— I'm curious. So, as we speak today, we just saw yesterday and day before, there were 2 back-to-back launches, one from Google and one from Microsoft, both integrating all these AI features into their suite. But also, the biggest launch was GPT-4. I want to hear your take. What do you Like about it? What do you, what's your opinion?

Cool. Yeah, I'm, I'm on the, um, the early API access also on top of that. I haven't—

So you, you have seen, have you seen the GPT-4 stuff before it came out live this, this couple days ago? Is that what you mean?

Uh, I can't really talk about it, I don't think too much, but yeah. So I, I've been able to maintain like pretty good inroads with all of those fine folks. And obviously there's like the YC tie-in as well. But yeah, so it's, it's awesome. The 32,000 token parameter is pretty crazy. Even like the current version, which I think is limited to 8,000, is, is pretty substantial increase in, in the amount of tokens that it can take in as a request. I, I think there's some pretty stunning potential as, as to what's going to happen. I'm less sold on everybody incorporating GPT-4, 3.5, whatever they currently have access to into their product. I think the way that it will benefit users will be through documentation. Initially, which you're seeing. I'm not sold on the generative aspect, and I'm not sold on the summarizing.

Interesting. So for Loops, you— are you being a little cautious about integrating it into Loops' core platform yet? You want to wait a couple months and see if there's a real use case?

If you're a user and you want to send an email about a new product you're releasing to 150,000 to 200,000 people, are you going to generate that with AI? Should you generate that with AI? I lean towards no.

Yeah.

Because like one small hallucination, one small error in the generated text, and like maybe it like places a decimal point where it shouldn't, and you just told your entire user base that something is on sale when it's not. Yeah. Or is much more expensive. So it's— Loops is one of those things where you use inflection points around your company, or you create these automations, onboard folks, or you generate like a forgot password. Those are things that I don't know that you should be generating with AI. You, you could do it once, you focus, you do it really well, and then you turn it on and then you let it continue to function. The saving time of 20 seconds, 5 minutes, whatever it is, versus the potential downside, I think isn't worth the bargain today. Yeah. I think folks are gonna— I think, I think there's gonna be a backlash where folks are going to summarize a meeting, they're going to summarize it wrong, and then a deal is going to go bad, or they're going to use the AI auto response.

We're going to see a bunch of meme pages, aren't we? Right?

I think you put this in the hands of folks that aren't super familiar with the technology either, and they don't know to look out for hallucinations, or they ignore the warning, which is, let's be honest, like, Microsoft Office demographics publicly disclosed is a much older user base.

Right.

Frankly, if you put this technology in my dad's hands, yeah, and it was like it automatically summarized something, he would A, either be angry at it, or B, he would hit send. There would not be an editing process.

It's like the, you know, like when reply all feature, like in email chains, right? It's like— Right.

Exactly. Like how that's being abused. And could you just imagine if somebody was just letting AI summarize everything over and over and over? And you can tell, right? You can tell by the tone and the demeanor. So you're just Your, your, maybe your older coworker or your boss is just summarizing words that you say in a different tone and replying. You just know they're just hitting auto-reply. Like, how does that make you feel? I'm just talking about it kind of upsets me a little bit. Right. So, uh, now that I'm—

It's gonna be— it's gonna be— yeah, I think it's gonna be so— I'm, I'm very curious and sort of, yeah, definitely very curious and cautious to see like what, what's gonna unfold out of this thing, right? Because it's so powerful, like the demos that we've seen, like, right. It's, I mean, it's just so much. I feel like even like the top sophisticated savvy developers think it's very powerful, right? So put that much power in the hands of the average, you know, user, who knows what it's going to unleash.

So we'll see. I mean, like, it's the cat's out of the bag. It's going to happen. Pandora's box is opened. Yeah. And now it's being integrated into the largest productivity suite in the world in every single tool available for the same price.

So my prediction is I'm curious to see if everybody will jump on the bandwagon. You know how people like to jump on bandwagons, even Like with the, you think, you think about no-code. I was in the no-code space for the last, I don't know, 4 or 5 years. And when, when, when there was enough traction for the buzzword no-code, everybody jumped on it. And then you saw like SAP saying like no-code. I'm like, SAP is really not like, I think that at that point, like the internet is no-code, if you say, like, if you, if you will.

Sure.

Everybody jumped on it. Everybody, like, I understand it's one thing when Webflow says it's no-code. But it's completely different when Bank of America says it's no-code, right? Of course it's no-code,

right?

Right. But everybody had just slapped the tagline and then they just like had a, you know, a page that described how it's no-code and justified it. I have the same sense that this will happen for generative AI because it's so prevalent and so like catchy and buzzy. They're like, everyone's gonna say, like Notion did the Notion AI integration and then called Notion AI, Coda did the same. I feel like every tool will attempt to do this, you know, and have their own sort of, yeah, we're AI forward or something. And might be overkill.

Can I ask you a question? Have you used like a productivity tool like Notion? No. I've been on the beta for ages now and I have yet to accept any of the suggestions that it does.

Yeah. It is annoying actually. I wanna turn it off because it's always getting in the way. The only time where I used I wouldn't say used AI, but the only time I think AI plays a role is when on my Gmail, when does the auto—

The tab to complete.

Yeah. And that's not even AI. That's not, it was, it's been around for, I mean, it's not even the latest AI feature. It's been around for 2 or 3 years, right? The autocomplete thing.

Yeah. It's using Claude, I think.

Yeah. That I use because it's just, you know, it's very, very native and useful. Everything else feels like it's something that I, you have to really Like, I don't know, it just, like, to your point, like, it feels like an overkill, you know? And like, also, I think a lot of us, we know how to do things, and so you're really not hitting the wall that much. I'm like, I don't— right, like, you know, like when I'm writing an email to you, which I wrote an email to invite you to this podcast, I was not thinking, what's the right flowery phrase to use to get Chris? You know, I just, I know what to say, sound like a human, right? So, but I'm curious. I don't know. We'll see.

Yeah, I think, do you remember when So there's like all the current waves. There's no-code and then there was crypto. AI.

And

now we're on AI, I guess, right? But one thing I've been seeing is like folks are walking back the crypto stuff, right? They're pulling it out of their products. Like Stripe just brought on the crypto team, then they disbanded the team again. Different people are doing it. Like when FTX exploded, it really took down a large part of the community. And now some of the banks related to that have also Turn it down further. And we're seeing people take crypto out of products that they had previously put it in because it's not providing benefits to the end user. Are we going to see the same thing with AI? I think that's potentially the most interesting. I don't know. If Microsoft can't execute it, then I think we will potentially see it be pulled out everywhere because they have access to—

The largest surface area. Yeah.

Exactly. The largest surface area. So if they can't get it right, then nobody's going to be able to get it right. And just today is when they've announced that it's now in every single Microsoft Office product. So It's, it's on the website, it's live. So, right, you know, we'll see what the reaction is.

I also haven't— the other thing too, I was, uh, talking to my wife, uh, and asked her, hey, have you used Bing recently? Because, you know, OpenAI is integrated to Bing, and Bing's so— if you watch the demo and if you just go to Bing now, like, it's just so powerful compared to your lame Google Chrome browser. But I still am using Google Chrome. And yeah, I asked her and she said no. Like, she's So like 7 billion people are not going to switch over to a new browser because it's got like, you know, a particular new whatever hotshot feature. It's gonna— I think Google's still like— the old habits are still going to persist. And I'm so— I'm like very curious to see, you know, if as long as Google doesn't, you know, sort of implode or doesn't do something stupid to cause their own self-goal, I think they still have the advantage in terms of search. So, in terms of like the browser, we'll see again, you know.

Yeah, but Bing has nothing to lose. I mean, well, they do, they do like $3 or $4 billion a year, I think, in revenue. But compared to, that's like Google's entire business, right? 90% of its revenue comes

from— This is Google's game to lose, like you said.

Yeah, exactly. Google's game to lose.

Yeah, Google's game to lose. So, anyway, so back to our actual set of, you know, topics around exits. But this was fun. Thank you. What was your founder journey like? Before you got to Snazzy, Chris, tons of— how did you arrive at that idea?

Yeah, tons of side projects. Most didn't generate any revenue. They were all fun. Yeah, they were all fun. A lot of writing. I find writing to be very cathartic. Maybe that's another reason I'm not a big fan of the AI stuff. It kind of takes away from that somewhat. But I think you need that. I think you need to, to create a bunch of things so that you know what real market pull looks like and so you understand like what the complexities are. Across the board. Like, I've set up a couple Stripe Atlas accounts and now I know how to handle my taxes. And that's actually surprisingly helpful. I also know that having a large TAM is important. So you kind of need, you need visibility a couple years down the line. And that's one of the things that we got with Loops. We were like, this is a large TAM market. There's a lot that can be built here. Every business needs email. We can build, you know, if we fail, it is no one's fault but our own. This business, this exists. We can, we can make this work. Mm-hmm. With some of these AI products, they don't have that same same visibility down the line. Nobody knows if generating presentations based on a prompt is valuable,

right?

Long term, like what happens if an incumbent does? I mean, I don't, I don't think we've seen that proven out yet. And it's a lot sketchier future. However, you know, because nobody knows the size of the market, it's a much buzzier way to raise money. So what we're also seeing, I think, is a lot of early stage companies bolting on AI in order to boost their valuations so that they can raise larger rounds right now. Because if you say, hey, we're building a product that helps you, uh, I don't know, write product descriptions better, people are like, oh, that's not really interesting. It's like, hey, we're building a product to let you write 500 product descriptions in a minute using AI. Suddenly your pitch changes and you open yourself up to a whole nother type of venture investor. And the TAM suddenly is like, maybe this replaces all product descriptions every year. That's huge. How big is Shopify? This could be bigger than that. Right. But in reality, what happens is Shopify builds product description generation into their app like they did. And then suddenly you don't have a business.

Right. No, well said. I mean, and so while you were building these side projects, was that— were you full-time at some other place and then you were just building them on the side to eventually become a bootstrap founder?

Yeah. Yeah. For the most part, I've always worked. That's kind of been a thing for me. I find it— I need to work. I need to do a thing. I need to be constantly moving forward. And if I'm not, I feel like I'm moving backwards. But for the most part, while I had a full-time job, I was always working on some other projects. And in some cases, the projects were just writing. They weren't always a software project.

So with Snazzy, what point did you, did you ever go full-time on Snazzy? If yes, then what was the inflection point that brought you full-time?

It was very close to the purchase point. Because that's when the revenue eclipsed, actually eclipsed my bills ages ago. I think that's when the revenue eclipsed my bills, my salary. And then higher than my salary would have been in a best-case scenario working at like a FAANG or a larger company. And not only mine, but my co-founders as well. Right. So,

gotcha, gotcha. Cool. I mean, in the early days, right, did you have any specific challenges while you were pursuing Snazzy? Like, what, what were some hesitations and challenges that you faced early on?

Uh, churn is always a problem with early-stage SaaS companies. Uh, we mitigated that with our current company somewhat, by onboarding every single user for the first year. I did hundreds of user onboarding calls.

For Loops?

For Loops. And I did zero for Snazzy.

Yeah.

I think, oh my God, the difference between the retention rates between those 2 companies is bananas.

Yeah.

So highly recommend doing that. And that's one of the things that I, I realized during the process is we were building things because I thought they were cool. We were not building things that users wanted all of the time. Now we build things that users want All of the time. And as a result—

Because you could see them live, right?

Yeah, we see them live. We talk to them, they show us their screens. They say what's working on, what's not working for them, all of that. And every single user, hundreds of users last year onboarded just like this. But not only users that were coming on, users that were like eventual users. So people that are at like mid-market and even enterprise companies.

Still bringing them on, right? Like, uh, showing the product to them. Do you feel like you were doing a lot of things that are not scalable now? Was this— When you were at Synazy?

It's, uh, we're now in the scale mode in terms of, uh, scalable processes. During YC and last year, definitely not scalable. That's the— in fact, they tell you, I mean, do things that don't scale. It's repeated quite a lot. And now we kind of know what's going to scale. So we're starting to build those processes in so we can do that.

So yeah, I mean, were there any myths or misconceptions about exits that you believe were debunked from your experience?

Yeah, it's not a fast process. We have like probably one of the fastest acquisitions For a company worth upwards of 7 figures.

And for you, how long was that process like?

I think it was 45 days. And that's,

that's

exceptionally fast.

Exceptionally. Yeah. Wow.

Yeah. And that's, you know, like there's multiple teams of lawyers on each side, go back and forth on it. You need buy-in across the board. There's a board of directors. There's also like the investors and shareholders. FriendMiles is a large company. So there's a lot that goes into it. They did a lot of the work upfront. They were, Going to purchase a company in this space, so they had they had prepped some of that ahead of time, which made it faster. They were able to move much more quickly, and then we got lucky with the lawyer that we chose, and he was able to get out of the way. I think if I'm not a lawyer, so don't listen to this. But one of the more counterintuitive things is to not listen to your lawyer around some of the things that they get hung up on. There were some things that they would get hung up on that were just. inconsequential to us, but, you know, it would cause an extra couple of days turnaround time while we discussed it with the lawyer and be like, this isn't the problem. So I think in retrospect, I would have moved even more quickly through some of those barriers that they tossed up and probably brought on a more experienced founder to help me understand where some of the real hangups were because they weren't in the places that he highlighted. And maybe that could have been my choice of lawyer, but it was—

Interesting. Yeah. I like the part about maybe seeking advice from someone who's, you know, been through this process 2, 3 times, right? That would have been, I think, helpful, right? That's always a good sort of tip to talk to someone who's been through exactly what you're going through. And yeah, so what are a few tips, let's say 3 tips, uh, for someone who is on their idea-to-exit journey from your experience?

Sure. What stage are you looking for, at the idea?

You can spread them across.

Okay. Um, idea stage, you should definitely do something that you want to Do long term. I see a lot of folks building sales tools that don't care at all about sales.

Yeah, that's a big mistake. Founder market fit thing. Yeah.

Founder market fit is huge. Yeah. VC market fit is the thing that you see when you're seeing founders just plug AI into the products. That's VC market fit.

Yeah,

they want to raise some money, so they're adding features.

Narrative market fit kind of thing, I guess. Yeah.

Yeah. So work on something that you definitely want to do. Make sure that you have a supportive partner or some level of stability in your life so that you don't go off the deep end. Depression, anxiety, stress, all that stuff is actually pretty paramount in the founder community. It's not really talked about very much. You see it when you start to connect in person with founders and you like talk about what their life is like, especially if things aren't going so well. So, you know, just make sure that you have someone you can rely on, whether it's family or a partner or whatever. And then so that's more like midway through because there's going to be those times when things go bad. And then towards the end, the acquisition side of it, it felt like it was Like, if they don't buy this, like, we spent so much time and energy, like, what is going to happen now?

The sunk cost fallacy.

Exactly, yeah. It feels very sunk cost. And like, you know, your acquiring firm, they were great to negotiate with, but they know some of this stuff and they can use that to their advantage and drag it out. That didn't happen with us, but I've seen it happen with other people. And the inverse is actually true. If users are— if an acquiring firm is spending this much time talking to you, And paying attention to you, then it means you're building something of value. And if you're building something of value and you're having trouble seeing it, just know that other people do see it externally.

Yeah, that's a good one. Yeah, that's a good one. I'm glad you spread them across the

3 stages there.

So in your experience, how did the 80/20 rule play out? What few vital activities of building your startup do you believe in have resulted in high-leverage outcomes?

So from a marketing and growth perspective, the biggest mistake that I see people make is to spread out their efforts across different channels. And you should definitely find a channel that works and then double, triple, quadruple down. That's the best way to do it. So with Loops, actually, we did it with— or sorry, with Snazzy companies. With Snazzy, we do it on TikTok. We were super successful.

Wow.

And I've been successful with 2 other companies and where I worked in marketing growth positions utilizing TikTok. So I knew it was going to work well. And Uh, it was incredibly successful, tens of thousands of new users a day through, through TikTok at its high point. We also made it a freemium tool, so that played in really well with TikTok. It's a good user base for that. With Loops, you know, we're seeing it on Twitter, so that's where we're spending our time and focus. Previous to this company—

You must have tried TikTok for Loops too as an experiment, no?

Yeah, a little bit. It's not the right sector is kind of what we've seen. We want B2B founders and for the most part, B2B SaaS founders. And for the most part, like the density is really high on Twitter.

Yeah.

The effort to outcome ratio is really high. Like I can make a tweet, spend 5 minutes on it, 2 minutes on it, and it can result in like 40 new signups.

Right.

And versus the amount of TikToks I would have to do. And I do have a TikTok. You could find me. I'm @productmarketfit on TikTok.

What? No way. That's not your handle. That's cool.

Yeah, it's not bad, right?

That's cool.

So

what's fascinating in this example here is that there's no one silver bullet is what I'm learning from one company to the other, right? Like even within the company or within the one journey, what may work for you the first 6 months may not work for you the next 6 months, right? So it's good to keep an open mind about channels.

Definitely go where your users are is a big part of it. LinkedIn would be successful if I wasn't— if I didn't despise posting on LinkedIn so much.

If it wasn't such a cringe show on LinkedIn, right?

If you're a B2B founder and you can handle cringe, there's probably not a better place to be than LinkedIn.

I can't bring myself to post on LinkedIn as well, man. So, and I know it's a missed opportunity. It's like, really kills me. It's like, God, you know?

Yeah. Go where the social network vibe is taking you. Like 6 years ago, Facebook was the place. Facebook groups were definitely the place. YouTube SEO was great for us at a previous company. So, you know, that works really well. Wherever you find that you're getting distribution is where you should go. And distribution usually happens with social. You should definitely nail organic first. Certainly not do any paid advertising in your first year if you can afford not to do that. It's a bad sign if you have to do paid advertising in year 1.

So from product, I mean, you just touched on growth and marketing and some tips there. Like from product, what were some 80/20 like rules that, you know, gave you higher leverage results?

I mean, talking to users is always the best thing that you can do with your time. And—

I have a question about the talking to users part. I feel like It's like one of those things like do things that don't scale. It's very, very prevalent and cliché advice, but it's hard to execute it.

It's so easy to execute it.

What's that?

It's so easy to execute it.

I'm going to get there, which is imagine a founder listening to this and they're like, I know everybody says talk to users.

Yeah,

I have to. What's my excuse to talk to them? How do I get— like, I already did my onboarding call 10 days ago. They're onboarded, they're tinkering with the tool. How else should I insert myself into their life to talk to users? This is a popular question, by the way, that I get. So I'm curious what your answer is.

Well, it depends what you're building. If you're building like a PLG tool, then if it's users and they're 10 days in and they're not using the tool, then you have a problem, right? You need to find out why they're not. Like, you can review screen sessions too. You know, there's a million tools that'll help you do that. But just asking them why they're not using your tool is great, especially if you have a personal rapport with them because you've chatted with them. You built that connection. So just Reply to the email that you have with them and be like, "Hey, it's been ten days. I noticed that you're not using the platform. What's going on?" And you know, I mean, make it a little friendlier. Yeah, use GPT four to make it a little friendlier. But just keep it really simple. Be like, "Hey, just checking in." I send hey, just checking in type emails all the time because I still have that personal connection with users. But the real problem that you see with founders early on when they say, "I don't know how to talk to users. How am I going to find like?" If that's your problem, then you have a really big problem because you don't know where to get users. Like, if you have trouble talking to your users, then you're in bad shape with your product. And you should have thought about that really early. So we charged our first users $99 a month for unlimited emails, flat rate, 7 days after we started building. And we got 3 users to sign up out of like 20 that we talked to. 2 of those users are still with us a year on.

Wow.

One of them canceled like 2 months in when they realized it was nowhere near where they needed to be. But, but what we had was literally a text editor. That was it. Like some off-the-shelf text editor. You hit save and you hit publish. And then that sent us like an email to send it out. And we would manually send it basically in the backend for you.

Right.

And that's what people were paying for. And you know what? Most people that we talked to did not want that. They did tell us what they did want. And then we continued to talk to those people in the future as we started to build this stuff out. But a couple people, it worked for them. And we just kept building and kept finding more and more and more people to the point where by the time at the end of the year, our conversion rate off of calls was like 80% or 90% for users to at the very least sign up and begin to use our platform. And when we started, it was extremely low, you know, 10% to 20% at max.

Well, what's been consistent is that you still kept talking to users, even if they were pushing, sort of saying, pushing the product away because they were like, You know, this is, this is not good enough for us yet.

Yeah, 100%.

Yeah.

Yeah. And, and we're actually adding, uh, probably this week, maybe next week, a button in the app to literally just book a session with me to chat because I'm not onboarding users anymore. Now you get an invite code and you can go sign it up, but I still want that personal connection to offer people the personal connection. So it's gonna literally have a link to my Calendly. You can book a session, talk to me anytime.

That's cool. So when, when you were building Snazzy, switching back to that, um, how much time were you allocating on building Snazzy? Was this, other activities in life? Like, I know you were a full-time, you know, you had a full-time job. So how were you juggling these things? Which is another question that a lot of people have, like, oh, I have a full-time job, I can't build something on the side, or, you know, so on.

Well, then you don't want it enough.

Yeah, I knew you were gonna say that.

Yeah, I mean,

generally, like, what was this?

It's a you problem for sure.

What was juggling like?

I mean, I was routinely getting 4 to 6 hours of sleep at best. You just do it. You just don't have any other hobbies. That's actually a superpower, is not having hobbies. Is to make your business a hobby, and then then you get really into it. Like, don't play video games.

Yeah, don't watch Netflix. Don't watch.

Yeah, just take all of those leisure activities and replace it with building a business. And if that doesn't work for you, then you probably shouldn't be founding a company.

Yeah, work at a work at another company. You know, work at a startup or work at another company. Yeah, exactly. Yeah, you know what's funny? So yesterday I was on the Indie Hackers podcast, and Courtland DM me. You know, Courtney Allen, right? The founder of IndieHackers. And he DM'd me like an hour before and he goes, KP, what are your hobbies? And I was like, man, I have no hobbies. My whole hobby is just being a founder. You know, like if I have like 5 minutes time left, I want to do either the podcast, like all my hobbies are all tied back to the business somehow. Right. And what's left is like the time with Neil, like we were talking about earlier, like, you know, time with my son and— Family. My wife and I, and they both always say that there's not enough time, you know? So it's like, I got no hobbies, Courtland. That's my story. Yeah.

And that's honestly, and if that's a problem, then that sucks because you're competing against people that don't have hobbies. So it's not, it's just, it's just, it's just the way it is, man. You're competing with some very driven 20-year-old Stanford dropout that has nothing in his life but building this thing and about $10 million of venture capital. So, good luck. Those are the people you're competing against and they mint new ones every single week.

Yeah. I think it's just, it's the personality of the founder. I think generally, like, it takes this kind of sort of obsession about whatever you're building and in a healthy way, like obsession, not like in a weird way, but like, you're just like thinking about it in your shower all the time, you know? And so, it's just natural that you don't have time for leisure or hobbies. I mean, I still do other things now after, but like there were phases of my career where I was like so hell-bent, like, That thing. So I can, I can relate to what you were saying about the no hobbies part. Okay. This is another good one. How did you handle copycats? I know you had a lot, not just copycats, but competitors in general.

I mean, we had, we had real copycats. We had people that, that copied our site, our documentation, word for word, our icons, some of which I made myself, you know, our loops name would be in their documentation.

Yeah. It

was ridiculous. So I think I'm finally mature enough. At this ripe old age of like 30-something, 34. I'm 34 too. On the internet.

Are you '88? 1988?

Yeah, yeah, yeah.

Me too. Wow, nice.

So what I finally realized is it doesn't matter what competitors do and that you shouldn't pay any attention to them. It's basically, if you want to pay attention to competitors and they've like cloned you so much to the point that your company name is in their documentation, like you need to talk to a lawyer and then you can sue them. And if that's not the path that you want to do, you can name and shame publicly, but the vibes aren't going to be great. You're going to get defenders from both sides. It's going to drag you down mentally. It's generally not worth it. Doing negative things on the internet publicly is mostly not worth it. And I find to be a real drain on my personality, my energy, my family life as a result. I'm just thinking about that stuff. So I try to do positive things on the internet now, and I try to ignore competitors and copycats.

Yeah. Who are 3 people you would recommend others to follow to learn more about building and selling companies? It doesn't have to be 3, but whoever comes to mind.

Yeah, I don't think you should follow anybody. I think you should probably do your own thing. Like, you don't need any advice. The only advice that you need is that you should go talk to users and then you should try to build something where they'll give you money. And that's really it. There's literally nothing else. In Y Combinator, I got in and I was like, okay, we're going to go. I'm going to hear the sacred words of wisdom from freaking Paul Graham, Michael Seibel, and these gods of the startup world. And you know what they said? The same stuff that's publicly available. They just repeated it more and more often face-to-face.

Can we actually talk about that a little bit? I want to like kind of go a little deeper into your YC experience because that's another thing that, you know, is everyone wants to know what it's like to be inside YC. What were like 2 or 3 big reflections you had while you were there? Like one of them seems to me that what's inside is not any different from what's outside publicly on the Startup School. Yeah,

ignore conventional wisdom. The companies that did the best were the quietest. So 2 examples, these are companies that were in our like mini batch. So like broken out from the main YC thing, there's 6 companies in—

Is it like a pod?

Yeah. So there's 2 of them. One was a founder that left Facebook and he was a solo founder when he came in. He ended up bringing on a co-founder that he previously knew. He didn't have a product until halfway through. He was selling exclusively to enterprise companies. They hit their Series A in 10 months and they did a million of revenue in less than 10 months. And every customer they bring on is $150K in MRR minimum. And they have, you know, like their TAM is like maybe a couple hundred companies today. Right. He has posted like twice on LinkedIn, doesn't have a Twitter account, doesn't go to any of the events, just knows this industry super well, incredibly intelligent, lives in DC near me.

Oh, really?

Yeah. Just absolutely smashing it. One of the most successful companies in the batch. Nobody even knows who he is or what his company does. So there's that person. And then there's another person who was also in our batch and they pivoted halfway through from one tool to something completely unrelated. He's not a technical founder. He's a sales— he actually has a government background and he learned sales basically in YC. And they got to $10K MRR a week. After pivoting, which is astonishing. And he just did it through sales and bringing on large contracts. And the technical team was building it and he was just out there pitching, pitching, pitching until somebody said yes. And he was relentless, highly caffeinated, a little bit older. He was in like, I think he was mid or late 30s, early 40s. And it doesn't fit your profile at all. Non-technical, never written a line of code. And he was pitching not a dev tool, but like a dev infrastructure level tool. He just— his CTO pitched him on it. They pivoted away from what they were previously doing that was more in his wheelhouse, and they're wildly successful. So those are 2 people in our little limited pod, don't fit any of the standard things.

Right.

Didn't do it, didn't do YC Startup School, aren't on Twitter, aren't on any of these places, don't know what IndieHackers is if you ask them. Extremely successful building software products out of YC. So you shouldn't follow anybody. You should just go talk to users, know your market, and then build something that people want to pay you for. Because that's really all there is to it.

Yeah. There's as many molds of this as there are humans of this, right? Like there's no one mold, seems to me.

Exactly. And it's just, you're hearing about the people that are successful on Twitter and on IndieHackers because it's, that's what they've chosen. They've said yes to some podcasts. Hey, they've done the posts and they're celebrating, but the really rich ones are the quiet ones.

Yeah. They're the ones in life, right? The real ones.

Like, yeah,

you don't see Warren Buffett on Twitter.

What's that phrase? Rich yells, wealth whispers or something.

Yeah, yeah, yeah. It's, yeah, yeah. No, like, like I was saying, like Warren Buffett doesn't sit there and write threads and Charlie Munger doesn't give a shit. Like I saw him really lay into the crypto, you know, people in one of the recent, you know, interviews. He's like, doesn't care what Twitter thinks. He just goes into it. Anyway, that was it. That was my last question for you, Chris. Thank you so much. This is such, such pleasure. So much fun. I learned a lot about the journey and hopefully this was fun for you, like walking down the memory lane. And thank you so much again.

Yeah, definitely. I appreciate talking to a fellow oldie, '88.

Yeah, there we go. We're here. Yeah. Awesome. Have a good one. Okay. Thank you.

Thank you.