Daniel Dippold: Welcome Elias, to Been There, Done That.  

Elias Malm: Thank you so much. Feels amazing.

Daniel: It's awesome to have you for another episode like on product market fit and everything else when it comes to building a company, hiring, etc. It's great to have you. You're building a fully autonomous AI driven marketing agency.

Elias: Yeah! And what a studio you have!

Daniel: Yeah, like my first question isn't this the most awesome podcast studio in the world?!

Elias: It's the best one I've ever been in. It's really sick.

Daniel: So tell us a little bit about your journey from zero to Maui.

Elias: Zero to Maui, that's a long journey! But no, it's been kind of crazy. I quit my job at Google. I think it's almost a year now on the date, I think, and got this idea with Epiminds. And it's been a crazy, crazy journey. We met you [EWOR] from the start, I think two weeks in. So yeah, it's been a fun ride, and now we've been here for like three days in Maui, met these amazing people, and have gotten some crazy, crazy stories.

I talked to my friend back home and I told him that we'd been seeing, talking with people who like shared firsthand stories about like Elon Musk, Larry Ellison, all of these like crazy things they've seen firsthand and he was like, do you understand how insane this is that you are in Maui seeing these people?! And I was like, yeah, it's pretty cool. It's been cool.

Daniel: Yeah, and I remember like two weeks in when we chatted and you guys didn't even have customers and stuff.

Elias: We didn't have a company or customers!

Daniel: Yeah, I remember this was amazing. But tell us a little bit about what happened before. Like how you knew you were gonna be an entrepreneur. Maybe the early evidence, a little bit about your background.

Elias: I think the first story I told you, I got this question like, “What was the first thing you hacked, or did you do something like a bit illegal?” and I think the first time I ever made money was a bit of a scheme. I think me and a buddy of mine, we started like, you know, reselling candy. As I know Petter Made also did, that was the first thing we connected on, he founded SumUp. So we resold candy to, you know, the people and then we realized that hey, we can do more than this. And I think what we did then, we realized that all of these like casinos, you know, when you have this time, we had these crazy bonuses, like as long as you start an account on a casino, you get like this fucking thousand euros to play for, right? And I think we were maybe 14 at the time. So what we did is that instead of selling the candy, we gave the candy for free. And in exchange for that, we got to use their school computers for like 10 minutes. We didn't say what we're going to do. And all we used it for was just get the IP, create accounts. So I think for like two weeks, we created like hundreds of accounts for all of these casino sites with like fake profiles and IDs and all of these things. And then we, I think like, you know, next to the math class, I think we made like $2,000 in two weeks when we were 14. I think that was the first time I felt like I was going to be entrepreneurial because it was not that legal, but it was the first taste of money, you know.

Daniel: What is your take on which borders you can or like which you know like legalities you can circumvent as a founder?

Elias: When you're 14 you can do whatever you want! We had this as a big discussion at the Maui event like should you be a devil or should you be an angel? think you have to be heavily aggressive to be a founder. Like I think you have to be an outlier in either way. If you play the long game, I think the angels and you know being good will always win. But I think like short-term things you need to be able to do the best for your company and the best for yourself. And maybe a bit out of the you know, the box. But I think long term like, you know, you play a long game and I think that's that's gonna be the key.

Daniel: And you went from selling candy to a $6M dollar round plus from Lightspeed. Let's talk a little bit about that but before that you needed to figure something out, which is product market fit. And you actually found product market fit twice. You're a real outlier right. Like other people find it once, you found it twice.

It would be amazing to hear the story a little bit because people are always you know, in the early days, wondering what is it really? When do you feel you have it? How do you know you have it? Because you guys were already selling before the product already existed right. You didn't even know at that time whether the product market fit would be there.

Elias: I led the agency partnerships at Google and I always knew that I wanted to solve this problem with autonomous marketing. Like can we do this, can we enable all agencies but also in-house teams to be able to have world class marketing internally. And I think the biggest thing that I saw what early entrepreneurs do wrong is that they spend six months to a year building something that they don't even know if it's a viable solution or people like it. So I think we closed our first 15 customers just with a Figma file. So there was no problem, there was no product, there was nothing at all and we just told them like hey this is what we think the industry needs. We haven't built it yet but here's how it will look like, would you buy it? And then we actually sold it. So we got money in the bank, we did that before we even put the first line of code in.

Daniel: Tell us how you did that because so many founders stop right the moment someone says I'm willing to pay. Which I think doesn't really mean they're willing to pay, right? Only when you have the money they're willing to pay. So what did you ask people, right? Like did you say wire the money now, did you send them a contract, how did you do it?

Elias: We did two things. I really agree. If you say like, hey, we're going to build this and your LOIs and all of that bullshit, I don't think that that's maybe a really good signal. So what we did is that we said, hey, you pay up front because the money has to leave their bank account. So you pay up front and you do all of these things, but you can also add a guarantee. And I think this is what we did. It's like, hey, you pay up front. We want to build this for you for the next three months or two months. If we don't do it, you get a 100% money back guarantee. Or if we don't reach KPI XYZ, you get all the money back.

Daniel: Did you pay anyone back? Did anyone want their money back?

Elias: Yeah, we had one, $50 a month. He was a single person. And our average order value is like a couple of thousand. So the only one was, you know, 50 bucks a month, I think. And more than happy to because like in the early stage, it doesn't really matter about the money, especially if you're gonna go to maybe the VC route, but you need the real feedback and you can only get that if someone pays for it.

So I think like that was a huge key for us that made us move extremely quickly. And then I think like giving these crazy guarantees is also really, really good. Like I would recommend people to say, hey, you know, you pay upfront, you do all of these things, we agree on these KPIs, and if we don't deliver, we pay it two times back. I think like the ROI and like if you actually do the math for that, it always, it always pans out.

Daniel: Two times! That is an amazing hack. It makes it so much more interesting for the customer to say hell yeah and it's an absolute win-win. I don't only get my money back, I get twice back because I invested time. Yeah I love this. It’s crazy, I never heard this before. Did you invent this or?

Elias: No, I think there's a guy called Alex Sormozi, which is like, you know, maybe in the startup area, but he's an amazing seller.

Daniel: He has great ideas.I've read his books.

Elias: Yeah. And this is from a book called Hundred Million Dollar Offers, I think. And I think he also did the math. Let's say if that would increase your conversion rate with like 50%, which it will, like, guaranteed it will. And let's say if two people, you know, want their money back, like, that cost compared to what you make is like, you know, insane. And I also noticed something is that, yes, you asked me like, did we pay anyone back? And we only had one, right? But we had a lot of people, we had to extend it. We had to do, you know, you know, extend maybe one month, maybe two months. And what you can notice that if you work really, really closely with them and like make them feel involved, you know, do what you say, if you don't deliver on it, they are still so happy and really like you and want to work with you and believe in it that they will extend it. Yeah. So like, you know, if you only, as long as you do right by your customers, make them feel involved, like, the guarantees and all of these, like, it's nothing you should be afraid about.

Daniel:I know we wanted to talk about PMF and everything, but you're so skilled at sales. I want to use the opportunity a little bit to go into this. From top of funnel, how do you actually find those people? Do you increase conversion throughout? What are your tips for entrepreneurs who want to get to a million ARR and listen to this episode?

Elias: I think one thing to think about and what you say a lot, you always play the long game and I appreciate that and I think, like what I did, I led like, you know, Agency Support at Google and I tried to always do right by everyone that I met and all my clients and I think that is sometimes hard in sales because you feel like, hey, you know, you have this target, you want to push product, you want to do all of these things, but like just an example, when I decided to quit, I was, you know, talking with you guys and all of these things and I called up all of my, you know, agencies, clients that I met, I didn't pitch them. I said, I'm going to do this thing, you know, thank you so much for the collaboration. I think 80% said, hey, can we join? And I think that only happens if you build trust long term and maybe not everyone has that network, but I would just say that like first, like, you know, 10 customers, 20 customers, even like the first, you know, 50, you can probably just get from your network. So like anyone, like no people, like you just get intro, intro, intro, intro, don't do any ads, don't do any bullshit like that, just intros all the time.

Daniel: I wholeheartedly agree. I think you should exhaust intros as a channel. Like the moment every single one of your friends, acquaintances, weak ties everyone tells you I do not have any intros more for you that's when you start the traditional channels. Until then it's intro time!

Elias: And every person you meet just ask, hey, if you didn't like this or if you liked it, what are two to three people that you think is exceptional that I should meet? And it doesn't have to be like there would be value for this product or whatever, but then you can just go to them and say, hey, I have this person that you know, said that you were the most exceptional CMO, agency person that you know, I would love to talk to you. I would say that's my biggest tip in the beginning.

Then I would do like how to structure an offer? Like how can you build offers? Alex Ramos' book is pretty amazing. Like how do you structure an offer that feels like insanely stupid to say no to? And I can walk you through our offer that we have to our agencies.

Let's pretend you're an agency and I say like, okay, hey, in two years you will have a huge problem, right? Yeah. Like you need to change the way you work, you build for hours, you do manual work, all of these things. There is a huge risk that you will not be an agency if you keep going the way you are now. We think that this is the solution. We will build it for you. So one guy from Spotify, who's an A engineer, who's exceptional, you know, one guy from, you know, has his own agency, worked at Google. We will work for you, you know, for three months, building up the most exceptional solution for you. If it works, you pay a fraction of what you should pay if you would build it yourself. And if it doesn't, we pay all the money back. Like that's an offer that you would probably have something like, you know, wrong thing in your brain if you would say no to that. That's how we structure it. And I think you can always make that offer work. We had like a 90% conversion rate on that.

Daniel: Incredible. And how did you then go from there? You started working with people, right? And they started using the product and you started building the product. And that's when we approached product market fit, right? But like, how did you walk us a little bit through the specifics afterwards? What happened afterwards? What was the first thing you actually gave to customers?

Elias: Yeah, so the first thing we gave to customers, we just connected your data and be able to talk to it via AI, right? So like you have all of this marketing data, you want to centralize it and you talk to it. That was the first thing we built.

And I think we took a bet that we wanted to build it multi-agentic because we wanted to be able to have it insanely scalable. That caused a lot of problems as well because of hallucinations and the LLMs weren't maybe where it was supposed to be. So I think like in the beginning, it was like a real mess of like, how do you make this valuable? How do you make sure every number is correct? And all of these things. But one thing I would also recommend to other people that I think we did really well is that we show our pilots really well. And what I mean by that is that I have this example that is a bit sensitive, but I'm going to share it now. I think like the first person we ever had on the platform, we had like two people, so it was not super sensitive, but they got the wrong data. So one person got their data and the other one got vice versa. And that's like an insanely big no-no, right? In marketing, that's like a huge thing. And it could have been really, really bad. And what our pilot person did, instead of like, you know, taking advantage of that, becoming mad, all of these things, we can actually see him immediately log out to the platform. He called me up and said, hey, this has happened. I know you're going to fix it. Just call me and I will be at the platform again. And I think that is kind of what you need in the early stages. You need to like pick your partners that will give you like exceptionally good feedback, but also be there in the tough moments. That has never happened again and it will never happen.

Daniel: But those mistakes happen. In every single startup I know these stories people typically don't have the courage you have to share them. But I can tell you in every single startup they happen. And you got to be ready for this, right? Because no one shares these stories. People are always like when they happen to them, they're like “Fuck. I'm completely screwed”. Truth is, it happens all the time.

Elias: And I think another thing like how you it’s great is that if you don't have these like exceptional people in the beginning is that something that we do is that we try to be exceptional with involving them into our business. So what that means that we have an average response rate of two minutes on Slack. So that means that there's not a customer that doesn't get an answer in two minutes if they ping us on Slack. And then we also share the business updates. So when we were in SF, you know, raising all these rounds, I sent them selfies from like investors from the [EWOR] Grand Pitch, from all of these things, right? And that what that causes is if things go wrong, they want you so badly to succeed that they would help you. Like I think we have clients that spend 100 hours feedbacking. 100 hours, which is absolutely crazy. I think that only happens if they feel part of the team. Right?

Daniel: Yes, you're building a tribe, and the customers are part of the tribe, right? And you share your moments of success and bliss with them. That's amazing. I think every startup should do it like this.

Elias: I mean, you do the same thing like with EWOR. Like when you do ref calls and all of these things, I think, you know, they're like our customers. They spend a lot of time doing ref calls and all of these things.

Daniel: And that our employees like our future employees right ref call you right? I wholeheartedly agree with the tribe thing because as you say I'm living this too and I think every founder should do it this way. But let's continue then so you gave something that didn't work to your first customers. So how did you go from like it didn't work, to it did work? And then maybe all the way to what you told me in January, right? You started last year in May. In January you told me things broke. Yeah, we have to start again. So maybe we go a little bit through that journey

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Elias: Yeah, I think I think the entire philosophy that we have had is that like, you know. Let's say if you have, you know, you bootstrap or you raise capital, technically the math is how quickly can you talk to users, build something launch it, and get feedback? How quickly can you do that? Until you run out of money, run out of runway or patience or get burned out or whatever. So I think our entire thing, for me and Mo was like, how quickly can we have the iteration cycles? Because let's say if you can iterate, you know once every day or once every two days, you know you can take you not be wrong that many times and and I think that's the entire journey to get to PMF. It's like how quickly can we have this iteration cycles?

Daniel: It's learning velocity.

Elias: Yeah, so that's like the entire thing we did like how quickly can we ship things and all of that? And I think quickly we realized that this was something that the industry needed. We got four term sheets from our customers. Three wanted to be angels and I think that really showed that even if the product wasn't there yet, they were like hey, this is gonna be a thing.

So that was the first time, not nearly PMF, but it was like signs that we have something, right? Yes, and then we iterated, iterated, iterated, iterated and like even through January we closed a lot of customers, we raised a round, and all of these things and I think in January we realized that our ambition when it comes to we want to actually run this fully autonomous, not just the chatbot, caused us to rethink the entire technology like we had shipped so so much and in the tech that was really big. And and all of these things so we have to actually rebuild the entire thing and that was really rough, right? But it really really paid off. Now we're in a safe place, like I would confidently say that we have PMF and that we're ready to scale.

Daniel: How do you know?

Elias: I think this is like the most loose thing ever like people say “Oh, I have PMF”. No, you don't, right? And I think you have to define that. I would love to hear your definition. But I would say like, when you have something that you can't keep up with your demand,  when it breaks the customers like, you know, try to kill you or like they can't live without it. And then the most thing that people maybe missed especially startups in this area is that is it actually financially making sense because selling $100 or credit for $50 is not PMF. It’s just discounting, right?

Daniel: Let us go into two of those things. The first thing is vibe coding is very fast iteration. It just gets you to something really fast, but long-term it typically breaks. How much did you guys vibe code? And when did you kind of see, if even, did you see there was kind of a limit to it?

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Elias: I mean, I'm not allowed to touch the code base anymore. I think, like, UI and all of these things, like spinning up IDs, we vibe code like 90% of it, right? And I think you should in these, like, early stages. But I also think that we could have done it a bit more with a long-term vision in the beginning. Like Paul Müller [EWOR Partner], which we work really closely with, he's like, you know, a specific, you know, he loves certain parts of tech and how to build it. Yeah. And I think he also said something that I think a lot of people get wrong, is that it doesn't necessarily take longer building it right in the beginning. And I think, I mean, it's hard to balance that because you want to move really quick, you want to ship features and so on. But I would say, like, fundamental structure, you should try to really think long-term. But everything like UI, all of these things, I think you can spin up, like, 100% vibe code.  And then also, you have to always think about, maybe things don't work ideally now, but let's say in six months, you know, a year, like, maybe you can vibe code the entire product, then I'm not sure. But I think that balance is really hard.

Daniel: To be honest, people are more excited in my opinion than they should. But back to that part you know vibe coding or coding new features, like when do you decide to cut and when do you launch a feature in the first place?

Elias: I think this is also one of the biggest learnings, is that having these amazing tools where you can build anything in like two days, right. It's not usually always the best, because it creates you to build a fucking monster when maybe the core thing was just, hey, you needed this feature to work, right?. And I think that's something we have learned. I would say if you are shipping more features than you kill, you're probably doing something wrong, I would say. And I think we shipped probably, I think we had like one month we shipped 35 features. And we killed like 10. And I think then you're starting to become to like, hey, maybe there's something we need to look into, right? But I would say like, you know, co-building the feature with the customers is pretty good. So what basically that means is that like, we have our customers sit with us in the office, and then we can actually build out features together. And what we usually do is we vibe code the UI, we give it to the user to see like how they experience with it. And then if it's successful, then we build it for real. And then we always try to kill as much features as we as we release.

Daniel: It's a really good framework. Do you think that translates to like other, like should any entrepreneur generally always like focus more on the killing than on the generation?

Elias: I think it's a really good question like I always love building new features and I think most entrepreneurs does but I think it creates like you have to have an insane discipline to not do it and I think if you look at all of these like you know amazing products that are really broad right now I think they started out solving one specific problem for one specific type of user maybe that changed a bit in the AI era because you can get like you know the network effects of having multiple features working together and agents but I'm not sure if I have the best answer but I would say that you know pushing more features is probably not what's gonna get you to PMF.

Daniel: Let's talk real PMF. It's iterating features with customers, right? We've talked about the feature part. Let's talk a little bit more about the customer part. We talked about the early stages of the funnel, how to get them, how to convert them, but there's more to that, right? Like you need to find out who your ideal customer is and ideally also through which channel you reach them, right? So can you invite us a little bit into your discovery journey onto the customer side?

Elias: Yeah, and just one thing to note on the PMF, I think it's like, it's kind of a magical thing. Like, I mean, you have experienced this a lot of times. It was a week where we felt like, oh fuck. We rebuilt the entire product and then it kind of just hit. I don't know if it was like, you know, a new model was released or finding like our technical solution was like, you know, good enough. But like from a week, we saw like everything changed. And I think that was like amazing to see.

Daniel: What did you feel there?

Elias: First of all, I use the product every day, right? I'm a marketer, I run our marketing with it. But I just saw that like, fuck, this is like, I can't even judge the responses that we get because it's better than me in marketing. And I was like, oh fuck, I get a bit insecure now.

But it was like, oh damn, this is so fucking sick. And we also saw that, hey, this is gonna work. Like our thesis that agents can do marketing end to end is gonna work. And that was like so cool to see. But then like user metrics, like I think what we've always done is that we pick three metrics that we think symbolizes PMF.

And then we try to increase them with, why is it usually like 7.5%, 10% or 12.5% week over week. Like 7.5%, you're on the way to PMF, 10%, you're doing exceptionally well, 12.5%, you're killing it, right? So we're tracking these like all the time. And I think we just saw it hit like 7.5%, 15%, 20% week over week. And then you realize, hey, we've done something right now. Feedback started coming in, which was really, really cool.

We also had this insane story that it was like the craziest Friday of my life. It was like, there was this customer that we'd worked for like six weeks with. And they had done like a case study internally, and they were really, really psyched about what they have done with us. So I remember he texted me like the Tuesday before the Friday and he was like, “Hey, I'm so psyched about the case study we've done. I want to be able to present this to my leadership team.” And he sent me like time savings, increased quality and all of this in the sheet. And I was like, yeah, this kind of makes sense, right? And then I didn't hear anything back from him. And then he called me up out of the blue on a Friday and he said, “Hi Elias”. And I could hear in his voice that he was pretty stressed. And I was like, “Yeah, what's up?” And I was like, “How did it go?” And he's like, “I'm fired”. And I was like, “What?!” So our customers had pitched the time savings, all of these things to his board and his agency. And he got fired on the day. And I was like, first of all, I was like, what is going on? Walk me through it, right? And he said that like, because the time saving was so insane and all of these things, how they've angled it, people were afraid to lose their job, right? And people started protesting. Like they, he said it was complete chaos. And then the board had to choose between him or the company and they let him go. And he was kind of pissed off as well. So he didn't want to work in the company anymore. And I was like, maybe, like first of all, I felt pretty bad, but he was also pretty happy. He started his own agency now and he's using us. So it's all good.

I think that kind of like insane thing when it's like, you know, you disrupted the market. And like, of course, like we don't think people will lose their job. We think they just have to change from being marketing specialists to being marketing engineers, right? But having that type of thing was probably the thing we felt like, oh wait, we've actually built something that is like 10 times different than what you have in the market. And that was really cool. So you can talk about the user metrics, all of these things. But I think that moment was like, fuck yes, PMF! There's something here.

Daniel: Yeah, life is a journey between rich and abstract, right? And our brains do math abstractly, but like, then there's the stories, the richness, right? And I really think product market fit, you need rich and abstraction. Abstraction is the metrics, and rich is exactly those kinds of stories.

Elias: Yeah, and I think like, you know, I think there's some like people that need to transform with AI and some people like you absolutely refuse this. And I think it's our job to like teach them how do you stay relevant? How do you do all of these things? Because we want to empower marketers, right? But, but yeah, I think it's like, you would rather provoke some kind of emotion. I think that's really key. I think you would rather want to be loved by 20% hated by 80% than being like, you know, middle of everything. I think that's what you need to do in a startup. Yes. And I think that was like one sign we're like, hey, some kind of PMF right now.

Daniel: That, by the way, translates into hiring, investors and all the things. It's a great wisdom, which maybe is a great segue to fundraising.The PMF, the true PMF, would you say that happened before or after the raise?

Elias: No, no, I think PMF came for us like maybe three months four months after the raise I would say.

Daniel: Which is incredibly important, right? Like let's pause very quickly. You say you have raised pre-PMF, right. And most people think, “Oh I need PMF in order to raise such a big round from Lightspeed” because you had many term sheets, right? Like you guys had a really nice oversubscribed round. Yeah, and at the end of the day it was pre-PMF.

Elias: But I think, to be honest, everyone is pre-PMF at that stage. I think there's people that don't know what the definition of PMF is or are absolute bullshitters

Daniel: Honest question, did you think you were pre-PMF?

Elias: Yeah, 100%. I feel like we have extreme signs of like, hey, this is something that we will be able to do. But like, if you look at the definition of PMF and especially if you look back at it, no way, not like this.

Daniel: I was asking somewhat cheekily, right, because kind of brings me to something I really believe in. I think as investors you just you develop a great bullshit detector. And when someone tells you PMF and they don't have it, you smell it, right? And you guys were just super honest and authentic, right? Like you told look we're not at PMF. We think we're gonna be there soon But if you gotta invest you gotta invest now, right? So how did you do it?

Elias: Yeah, I think, first of all, I think that was probably like, we've gotten a lot of support from EWOR, we appreciate that. But I think like, the round was something that this is my first time ever doing a startup, ever raising capital. I didn't even know how it worked. Like, you know, I have like no previous experience. I think like understanding that game and understanding the math and how investors think. Like just to put in perspective, I thought that they were risk averse. I thought, hey, we need to prove that this is going to work. And then I think, I think it was also you that explained the math and it's like, hey, it doesn't really matter. Like it's, you know, as long as you can build like, you know, exceptional company and all of these, like, you know, get the, you know, 1000x outcome.

Daniel: One false negative is way more expensive in opportunity cost than one less true positive. And most people don't understand this in the confusion matrix of the decision making of an investor.

Elias: So I think I think that was like one of the biggest things, but like first of all we raised with you. We didn't have a company, right? We created the company to be able to to raise with you. So I think that was pretty fun. And I think that was like when you're choosing pre-seed, I think you should only choose because of the people because that's what you need. Like it doesn't matter, right? Like we had runway, we had like 12 months of savings, you know saved up. Just picking the right type of people and then in the Seed, of course, then it's more about like, you know, capital and so on but also like picking the right type of partner. But I think for us is like it was a bit of special like we raised with you guys and then we went to San Francisco and we're not planning on raising, but then we just saw this like hey this climate is popping off like we got so much interesting like let's do it now.

Daniel: I remember you guys you know like we started saying let's maybe do a million, right? And then we said let us do three, let’s do five, right? And it just kept increasing and it's first ambition and and excitement which is so important I think because you always need more money than you think. We can get into this in a second, yeah. What was it in San Francisco that triggered it? Because it I think we should do this more in Europe. It’s a topic very dear to my heart and I would love to understand what happened for you where you were like, “Hell yeah, I want to raise more money. I want to think bigger.”

Elias: I mean, I think it was more like the people that we were around in the SF Residency house. Like, we had like, what was it, like 25 people? Everyone was like in the same stage. Everyone raised money. And I think that inspires you. It also creates competition. Good and bad, right?

Daniel: Yeah, big rounds.

Elias: Yeah, it was crazy. But I also think that just being able to see someone who's done it before. I think it kind of became obvious that like, yes, we can do this in December. We can do all of that now. But like, if we have this amazing traction, like now and all of the people that want to join, why don't we just do it now and then be able to lock in and focus on the building? But I also think that like SF for me was like both good and bad, I would say. And like, I really liked SF, but I also hate it in some cases, especially when it comes to fundraising. Sometimes it feels like that's the end goal, right? And I really hope that people see that about us. And I think that's the philosophy we had is that like, you know, it's not nearly, you know, important. And like, the only thing that matters is like, you know, actually building the best type of product and winning. So I think that's the thing I hate about SF, but also what I was, you know, it can be good as well.

Daniel: What is your similarity that you see between fundraising and sales? How is fundraising similar to sales and how is it different?

Elias: Yeah, I think it's like exactly the same thing, to be honest. I think it's like no difference at all. I think you just have to adapt it, right? Like, first of all, you know, figure out what the people care about. You're sitting there next to people and it's just conviction, right? And how do you get that? And I think that is like, there's some like strategies that we use that were really good and some regrets that we had as well.

But I think it's like, it's 100% the same as sales. But I think, you know, what we did was really good is that we were really deliberate about following up on the questions that we were asked. So like, when you go through fundraising, you will kind of see that you get the same three to five questions. Investors are not that different. And I think what we did really well is that, and also what you should do in sales calls is that you listen to the calls, you listen to the notes, and then you, every time it was not perfect, like absolutely perfect, your answer, you walk through it. And I think we discussed a lot about this, like the moat, all of these things we discussed together.

Daniel: I remember talking about how many calls can you do during a day? Like 15? No problem! I remember it like we were both sitting at 4 a.m. Right like with the red eyes. But I was talking to my team. Yeah, right like my leadership team at 4 a.m. And it's okay. They've seen me with red eyes. You were talking to investors sharp, you know mentally sharp. Maybe not as sharp as you were at 8am. But I heard you like talking and it was and then Mo came at 4:30 and was coding. You guys were on it!

Elias: Yeah, and that also goes back what made me think that like SF is good and bad. I always come back to the thing that Paul Müller [EWOR Partner] said to us the first time I met him. It sticks with me. It's like it scarred me for life. It's like you are nothing until $10M ARR. That's pretty rough to hear, but I think like it's so true. And so like you know just raising capital these things like I think in SF like for the seven weeks, we did like 3.45 every day I woke up. I had the European VCs. I had our clients, I had all of these things and then it was the US ones. And I think it was just like pure grand night I will definitely not as sharp as I you know red eyes and all these things, but I think that's that's true. I also remember a few regrets I can share that we had with the round if you're gonna raise a round.

First of all my biggest thing was like, you know not doing practice calls. That was probably the big one. And I think like because we learned so quickly like because we wrote down the questions. So like I think after like 10 calls, our meetings were like 20 minutes because we answered it in a good way. We had the story down. And I think wasting the first 10 to you know 15 like meetings with getting that slow like start I think just like grabbing a call with someone you trust or someone and just like, “Hey roast the fuck out of me” and I get all of these things over I think that was like one of the big big regrets. So what we would have done, if we wouldn't have done it differently, is like first of all, you know, get a coach that can coach you.

Daniel: We do that now, by the way. I don't know if it was your feedback or someone else's, but in the next iteration of the fundraising in Grand Pitch, we do mock calls.

Elias: Yeah, and I think everyone has said, like, how did you raise big rounds? Like, the only thing you should do is, like, grab a meeting with Daniel, and, like, you know, grab as many meetings until he tells you to fuck off.

So you get it, like, exceptionally down, and then you start meeting people. And I think that's, like, a really good way to do it. But I think a lot of people, like, the same way with sales, you don't want to get in that position where you, like, you know, you get criticized and all of these things. Like, just do it, it's going to be worth it, right? And I think, like, you always get the same type of questions. Like, we got, like, hey, why won't Google do this? You know, why agencies versus in-house? You know, moat is, of course, a question that I think we really nailed down the answer to. I think that was one of the ones that we just hadn't talked about. And then you get, like, a bunch of others, and it's, like, it's going to be different from every company, but, like, you will get only five questions, or, like, three to five that you just have to nail, right? So I think that's how we do it.

Daniel: Yeah, it's like I love doing this because my first 150 investor meetings did not go well. They were all no’s, right? And I still feel the energy and the pain today, so it's very easy for me to let others feel the pain as well and be just that, you know, like difficult investors.

But as you say, you know, at one point, you kind of get the answers. And I also recommend that founders sit down with investors to formulate these answers. Because investors always get the superficial helicopter view, like, oh, I look at this, it needs to be a $10 billion company, blah, blah, blah, right? Like I look at the environment, and the founder always looks from what do I have? And what can I do with what I've got? And together, you actually come up with the best answers to the questions that you get most of the time.

Elias: To put it in perspective, something that I was most embarrassed about in the round is that I spent eight hours on our deck. Do you remember this? Beautiful design, everything was great. It was like, hey we need to redo the entire thing and it was like and then we sat down for like 15 minutes and we just like wrote it like in a blank you know blank paper no fancy designs everything just make the headlines you know just build them and like make the story work 25 minutes and I was like I wasted eight hours on this shit before asking someone and I think that's like every found asking kind of proud and some kind of you know it's again iterations like us the second thing that I that I would really do again is that I didn't know that you would get that many no's like we met 60 people I think we had like

Daniel: You're 80% customer conversing like it was like the most like

Elias: It broke my identity. It was like, I think I'm a pretty good seller and it's like, I think we looked at the stats. I think I have 60 investors' calls. I think we got 23 yeses. Looking back on that, I think that's exceptional.

Daniel: Only three yes’s on 60 calls.

Elias: Yeah, I think like totally when we look at it, but all of them was not of course leads, right, but it was like

Daniel: Yeah, but the first ones are typically always the null, right? Yeah, but I didn't know about it, and no one told me.

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Elias: So I was like, I think you had like 17 nodes, and I was like, fuck, this is like, this is never gonna work, right? Yeah. And I'm looking back and it's like, you had what? And I was like, yeah.

Daniel: Yeah, it's one of the best raids I've ever heard.

Elias: Yeah, but like some were small and some were like big and of course a lot of them comes off You get like an amazing leader slide speed, right? But it was like I didn't know at the time that 17 knows is something that you should expect right? Yeah

Daniel: And then still, at Lightspeed, I remember this really well, because I think I wrote the intro two weeks before they sent the term sheet, or one week. But they were so fast.They were literally light speeds. And you guys were like, look, we don't wanna negotiate too much. Let's say closest term sheet within a day or two, and I think that's what you did. So you close this super fast, and maybe walk us a little bit through your mind space then, and then I wanna talk about spending the money afterwards.

Elias: Yeah, I think light speed we chose because, first of all, we got them highly recommended. I think you even said, out of all the people you met, light speed, all the tier ones, light speed is exceptional, right? And then we got an extremely good relationship and an image of the team. A lot of them were ex-Googlers as well, so they had marketing experience and so on.We really wanted someone to understand how this can end, because otherwise it's really hard to see the difference with things kind of vibe-coded like AICMO and like a real infrastructure, like the next generation of marketing. And they really did that. And we had like a high trust in all of these things. I thought it was more like, you know, we want to go with you guys. And I think that was like a pretty easy decision.

Daniel: Yeah, and you didn't shop around and we're like, hey, let's see how many other term sheets we can get which price we can get Is that this feels right right and probably the time you won from this and the relationship you gained with them through this

Elias: Yeah, I think the only thing we changed, it was super simple. Like we just walked them through like, hey, we think this is fair. Like, I think there's ristles, like push up the valuation too high. Like you should, you should do what's best. And I think we discussed this with you. And then also like we wanted room for angels because yes, you know, light speed will help us a lot. But like having high strategic angels and marketing and people that build companies is like really good. That's the only thing we negotiated.So I think we pushed up a bit and like met, met some room for angels. But yeah, it was pretty straightforward.

Daniel: So suddenly you had, what, $6.6 million plus customer money on your bank account? Yeah. And then what? How do you spend it? Yeah.

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Elias: I think the first thing you have to I think realize is like I think especially if you don't have like entrepreneur friends is that I think we had like 700 articles it was I think we did a good yeah I think we got like a after like we got like this report and it was like 700 articles about around we were really good for like customers and all of these things yeah but I think you had

Daniel: Like, what, 800 people on your waiting list or something? Sixteen hundred, yeah, yeah.What, 1600? Sixteen hundred, yeah. Okay, shit. Yeah, yeah. And I think it was really good. By the way, an important thing. The people that don't raise and don't announce, we have some deep tech companies that don't do this. It's totally fine, right? But like, you can leverage an announcement big time, and you guys did that.

Elias: And I think that was good, but what I like... Yeah, I think we're coming back to what's the end goal, right? And I think a lot of people, when they race, they're like, oh, now we can breathe out, right?I think for us, it was like the months after the race was probably the most stressful in the world. Because, I mean, I think I'm a person that, like, if someone gives me, you know, that trust, you feel like an insane person, like, hey, we need to make this work, right? Yes. And then also, like, having that much, you know, raising that much money, I've never seen that much money in my life, right? It also makes it hard to, like, where do you spend it on? Like, it feels insane to spend that type of money, but you have to as well, and you have to, like, be aggressive, but also not, you know, it's not your money, right? And I think that balance is, like, extremely hard. And also, I would say that, like, when it comes to... When you race from a tier one VC, it's really, really cool because you get a lot, a lot of opportunities. Yes. That doesn't mean that you should take them. Yes. Like, I think we had, like... Five events every fucking day.

Daniel: No, you are successful because you are very focused and purpose driven. You get tons of opportunity.Step two. Step three, you try to embark on all of those opportunities. Step four, you're unsuccessful because you've spread yourself too thin and that is the paradox of success. Success creates unsuccessful. Yeah. And also, like...

Elias: Like more resources creates more problems. What you said about the success priorities is like so true and I think that's something that we've been like really deliberate with, but like not always perfect.But what that means that like, I don't think I've ever gone to an event in like in Stockholm that is not like directly benefited like, you know, the customers and you get so many, like all of these things. And now, you know, I'm sitting in Maui, this is the first one, it was Maui, right? But I think like, that's so true. And I think you have to be extremely disciplined about that. Is that like, hey, you know, it's really good to also have little resources because then you have to focus. So like, how do you keep that going after you get a lot of money and a lot of opportunity? And I think that's something that like I could feel from the week we raised money that, oh, oh, we need to think about this, right? We can't, we need to like be disciplined enough. And I think a lot of people don't realize that. And I think we did, but I also think that we made a lot of mistakes in that sense, but yeah, 100%. And also like how much people will say like, oh, this was amazing, you must do so great. And it's like, hey, we have like, like we're nothing until 10 million yards. Nothing until 10 million. And it's like, that thing is like how little it matters to be honest. Like I don't want to sound ungrateful because raising money is exceptional. Well, but like how, how little it matters at this stage. I think it's like, you have to be brutal about that.

Daniel: Yes, and it's a personal struggle. Because the outside is, and it's great, this feeling. We as humans, we all love it. People come to us, they want to give us things, right? It's a great feeling, but there's lots of great stoic literature about it, right? It's just so tempting to stay in that feeling.And dude, I've seen so many founders now. They raised these superstar rounds and they're nothing today. All of their ARR crashed, everything, you know, and they didn't recover ever from this because they just kept chasing this feeling. And what you guys did is something different. We'll get to this in a sec. But what I really want to talk about is one of the big chunks of where you spend the money is team. Yep. Right. So, so many people who listen to this, they either before they're around or like just after. What's the kind of advice you want to give to anyone who is ready to hire?

Elias: Yeah, I think first of all, when it comes to like, spending money, I think we discussed this a lot. And I think we discussed a bit about like the zero sum, like zero sum game, like winner takes all. And I think that like can be true in some cases with startup is that like, we pay exceptionally well. And I think that could be both good and bad, right?Yeah, I think you need to, you would rather have a person who's like the top 1% and pay him five times more if you have to, right, than have someone who's top 10%. Especially with AI, like the thing is powerful.

Daniel: and AI is amplifying the power law. So the percentile differences make a bigger difference than like the percentage you would add to the wage. I agree.

Elias: And also the startup is climbing in Stockholm and you have to be insanely, insanely aggressive. But also you have to, you know, you can't spend money on stupid shit, right? And I think that balance between how aggressive can we be, and because if you don't do anything, you die regardless, right? And I think that's something for me to think about.But yeah, hiring is of course something we've had a lot of mistakes in, but also something that we've... I think we've gotten a really good framework for it now, which I think is pretty, pretty good. It's a pretty, pretty good framework.Yeah, I mean, you recommended it. I rose it. Yeah, you mean the WHO framework?

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Daniel: but you use both from what I understand. Yeah, so I think.

Elias: You know, we have the blueprint with like the evil framework and then I asked around to all of our angels and people and one like queasy thing was like Read the book who from page to page and that's what we did and the who framework is something we implement That runs all of our processes now.Yes, and I think that's been a game changer Yes, so first of all, there's some like rules don't don't ever outsource hiring, you know, never hire a recruiter We did do you outsource hiring? Yeah, we did we did we never do it again never

Daniel: any listener in this podcast. Never, ever outsource hiring. Yeah, and I think, I think, like.

Elias: Yeah, it's more like recruiter can pull pipeline and you can think about time save, but you don't have to. Same with customers, it's like that's doing cold outreach before you have talked to your network. Don't do it in that sense.So I think that thing also talks a lot about reference calls. I think how people are stuck at that and how you do that in a really nice way. And then also how you build a framework. And the WHO framework is basically, you scope extremely clear what the outcomes of this role should be. And how you define it is that you want to find A players. So the entire thing is that you write down an outcome that only 10% of people has a 90% likelihood of achieving. And within a six months or a month or a year period, and you write down as like, hey, closed X amount of ARR for this type of customer, like extremely, extremely crisp. And then you write three things, like one to three things that you want the role to achieve. And then there's a few more things. But what that creates is that, first of all, we never hire someone if you haven't written the scorecard. In November, we went out to hire a found in GTM, right? Yes, that was kind of pre hiring anymore, right? Yeah, pre hiring and also pre the framework, right? And if we would have the framework, we would have realized that we wouldn't be able to scope out exactly what this person to achieve. So we shouldn't have hired them. And instead we went out, that is semi, we didn't hire someone, but we waste the time on that. So I think that type of framework is exceptionally well and something that we would recommend like everyone to do. And also I think we have a great way to get modular D-ware as well with that type of thing.

Daniel: So great to hear and Can you walk us practically a little bit through the process? So before you do a higher what do you scope exactly which steps do you go through then also? How do you feel the fun and how many people do you talk to how many ref calls right like the whole thing?

Elias: Yeah, so how we do our process firstly the scorecard, so one to two things, you know clear outcomes And then everyone in the team gets that yeah, then based on that thing We then go out and we do a lot of poaching now So like we use our network we use the inbound that we get and then we just like You know try to pick the most you know best people that we think would be able to achieve the scorecard And the scorecard helps a lot with that because you can kind of clearly see signals like hey, it's the outcome It's not the experience like no one gives a fuck if you're 10 years of experience something No, can do you see this outcome? Yeah, and then we do a lot of like, you know Found the lead like outreach and so on and how we do the process that we have directly one screening call So like 20 minutes just get a feeling right then we have something practical a case and when I'm hiring for in sales That's basically selling me.I pretend to be you know customer and they should also sell me in 30 minutes Yeah, and then we go quickly towards a trial So we don't hire anyone who hasn't worked with us. So we pay them to take off from their work We do a week if they can we fly them from wherever they are and we work with them And I think that's like the only way you can do it for sales people. They go in they have to close the D And like you know, they can close more than that But but that's the thing and for tech people they build a feature in the ship And I think that's how we do it and then the learning here is that how can you shorten the process? Because you need to have it extremely extremely quick And then after we have agreed on someone we do a lot a lot of ref calls So we don't hire anyone that we can't do like back to references with and we try to like call their kindergarten teacher And like whatever right and spend a lot of time on that

Daniel: Yes, what is the funnest conversation you had with a kindergarten teacher about a potential higher ed? I have

Elias: I had someone who recommended someone like, I don't know if it was there, we didn't hire this person, but I had someone recommended their mom to talk to. That was like the weirdest thing ever.I call her up, right? But yeah, I don't think we've had that many crazy stories, but I think the people that we've got reference calls like, hey, you can call my mom or whatever, that's pretty crazy.

Daniel: And let's also talk about the probabilities of hiring because you hire people and it's not always right. So what happens after the hire? Because hiring is one part, retention, hiring, it's like a whole other part to get right. You can't always get it right, but you can make sure that 100% of the good people stay and 100% of the bad people leave. How do you achieve that?

Elias:  achieve that. I think on the 100% of bad people leave, I think the scorecard helps because you actually have what this person should achieve. So it's pretty straightforward and also like one thing, we show the scorecard to them. Nice.And that disqualifies a lot of people as well. Yeah. Because if they see this insane scorecard, I have to close $2 million in the first month like for the first year, like I can't do this and they disqualify themselves. Yes. And when you have this scorecard, you can follow up every month, right? You can say like, okay, hey, this is what we said you want to do. Have you done it? And how do we get there, right? And that was like super simple. And I think you should just like, you know, fire fast, right? Yeah. For both sakes, it's better. And how you make the good people stay, I think you just like giving them, you know, freedom to execute. I think that's what people that are exceptional want to do. Yeah. How do you make them work with the best type of people and how do you make them not have to go through approvals or anything like bullshit, things like that? Yeah. And like, how do you make sure that they can like, if they get an idea, they can ship it the next day? Yeah. And that's what people want, right?

Daniel: Yeah to tease you on the previous one a little bit Nietzsche once said you cannot become who you are By knowing who you will be already Right, so you you kind of have to grow a little bit into your potential. Yeah, how do you how do you know?when you give people these crazy goals and that That you're not that you don't optimize for overconfidence instead of potential

Elias: Yeah, I think that's why we work with them. I can clearly tell if someone's highly intelligent and that they should take pretty good correlation with if they're going to learn quickly. And then also working a week together, you can see how quickly they learn. Because they should go for a week. They should learn every day, right? And then all you should look at is, do you get energy from working with this person? I think that's one of the most important things.And then do they have an exponential curve? The first person we hired, we hired him. He was still doing his monsters. So he was half working with us, half doing his thing. We paid him for more than average, right? And he's been exceptional, like insane, right? Leading projects from day one, all of these things. If you find these good people, give them ownership and see exponential curves, I think you're pretty good.

Daniel: I love it so any final recommendations to founders listening to this if you could redo the whole thing yeah from like you know the very beginning where you had those 20 customers but you didn't have a product yet what would be like the main things you'd do differently today

Elias: I mean, hey, we've gone through a lot of mistakes. I would fix those mistakes. And some of them you have to do. Yeah, yeah, yeah. But I think we talked about this a lot.I think there was this podcast with Naval and he got asked the same questions. And I think this was the first thing I saw when I started my own company and I said, I need to think about this. I still haven't needed to nail it, but he said, I would do everything exactly the same, but I would do less pain and suffering because that was optional. And I think that's such a nice thing for entrepreneurs, like, hey, pain is good. You should embrace it, right? But we're sitting here in Maui. It's pretty amazing that we get to do these things. We get to work with amazing customers. We get to push ourselves to bring a fucking burnout. I think that's an extreme privilege. And to be able to stop and be like, hey, this is really cool that I get to be in this. I have something that I could have done that a lot better, right? Like, except for me, it was a fucking blur, right? I just remember it was chaos, like, panics all the time, right? And I think being able to stay up and like, fuck, this is a privilege. And I think that's the only thing I would have done.

Daniel: And I would almost adapt Naval's framing, and I would say the suffering is necessary for learning, it needs to be emotional, but you need to embrace it, you need to feel it through to completion, and you need to be stoic about it, knowing that this is your body telling you something, this is your body learning, and to feel the beauty in the suffering, because without pain, no gain, without that, no good.

Elias: And I think all of it like a pain came in like exceptionally well like I am you know fucking love that in some sense But I think it's more about my thing like you know Realizing that hey you shows this you're fucking in the middle of it like just fucking go right and I think also like stopping up because otherwise time moves pretty quickly and when you work these like you know hours and like Being able to enjoy these things and all that like you know you should do this for the next ten years And you should do that by fucking you know high high low lows. You know yeah, but you get what I mean That's what the VC thinks yeah

Daniel: 10 years. Yeah, you know. You know, you can build an Nvidia for 40 years. But I mean, you will.

Elias: In Austria you said this, you said this thing like, didn't you say like, living life to the fullest is that there's a distance between the highest highs and the lowest lows? Yes.And that's like a really brutal thing to say because it can be pretty like, all psychologists will say be in the middle, right? Like, you know. But I think that's like such a fucking epic way of saying it and I think that would be like, that's how we should do it, right? Would you watch a movie that is just this? Hey, I know, I know. I'm with you and I think I tried to embrace that, right? But yeah, like knowing that hey, I chose this, you know, this is, enjoy the pain, enjoy all of it. I think that's pretty cool.

Daniel: it's good to recap this right like it's good as fast it's I'm part of that force that's eternally works evil and therewith eternally does good and I think that's Mephisto's way of saying hey like we need these low moments to have these like super high moments and it's the oscillation that makes life life

Elias: And also I remember your speech, like hey, pick the people. I think that's like the only way you can do this high, higher than low lows is like the people that you have around you and I think that's like also one thing that I would always do.

Daniel: it's so much more exciting. Cool. Yeah. Dude, that was incredible. Thank you so much man.

Elias: Thanks for having me.