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Are you a founder looking to sell your company, or already in the process of doing so? In The Big Exit Show by Peak and NP-Hard with our hosts Johan van Mil and Anke Huiskes talk to entrepreneurs about scaling their companies and the route to making a successful exit. They bring you real stories, valuable insights, and expert advice from entrepreneurs who have successfully exited their business. Learn what to expect, avoid common pitfalls, and get inspired to achieve your own big exit! 🔥 Subscribe now to stay ahead in your journey and get actionable tips from those who’ve been there before.
Anke: [00:00:00] So Johan, another episode and another unique and different story. When you spoke to a Ferdinand who's built Reveall and unlike other companies that we interviewed, this was a really, in my, like a short stint in two years, he went full speed ahead, many, many learnings. I think you can tell that he's been used to be on stage because the concrete examples that he gave while building up the company, while going through a pithead.
And also with the exit and how that came together provides another way, I think, with great learnings for founders listening to this call. What were your one or two key takeaways?
Johan: Yeah, for me, for me, what was really interesting to hear and need how we started the company, right? Because he bought the technology of another company to start this company.
And I did it myself also entrepreneur as an entrepreneur. And he mentioned, let's say the learnings from that, but also, you know, It speeds up your, your company, but also it slows down. So I think that was really interesting for me to learn also here and to also can confirm it. And [00:01:00] secondly, also, I think the learnings that he had also in the runway, right?
Because you can calculate a runway. But in fact, it's always different than you calculate. And I've seen it a lot of times with founders that they don't have it really sharp, right? I think his advice also on that was really valuable. And last point, indeed, was the way how he communicated also with his people, because he was very transparent also to his team, also in the exit process.
So I think a lot of, let's say, insights from this short but heavy growth of this company. So, let's listen, right?
Madelon: Starting a company is easy. Growing a company is harder, but selling your company, that's a whole different story. In the big exit show, we lift the curtain of secrecy around selling businesses by learning from ambitious and successful founders who have been on this rollercoaster. Our hosts, venture capital investors, Johan van Mill, the founding and manager partner of Peak, and AnHuiskeskes, the founding and managing partner of NP Hard, will help you on this exciting journey.[00:02:00]
Johan: Speak with Ferdinand Goetzen from the company Reveallll. And Ferdinand, tell us what, what was Reveallll doing and also how did you start the company?
Ferdinand: Yeah. SReveallllal started as. I guess it's a somewhat unique story. I had worked as a executive in growth for close to a decade. And I thought, you know, I, I've been working with companies in the one to a hundred million annual revenue range. And I thought, let's try the zero to one thing. I tried founding companies in my early twenties, all terrible failures.
And that's why I moved to Amsterdam actually to get closer to the tech world and actually learn from others who are doing it. And we started Reveallll. So Reveallll in its essence took on a few different iterations over its time, but it started as what we call the customer insights platform. In essence, we saw that companies were really good at [00:03:00] using quantitative data.
To make decisions and they were nowhere near as good at using qualitative data in their decision making. And we wanted to change that by making qualitative, qualitative data, easier to manage, easier to interpret, easier to synthesize, easier to make actionable. And that's essentially what we offered. And that then evolved into a product management platform with a customer insights, heavy focused over time.
The starting gun of this was. I wanted to build something that helped companies learn from their customers better because I just found that customer insights was one of those things that everybody agrees they're important, then nobody does anything about it. And very often user research is left to the user research team and user research teams are notoriously.
I don't want to annoy all of them or say anything upsetting, but very often I'm not particularly strategic or engaged in the revenue goals of a company. So they often don't get listened to even if they have very good insights. So I wanted to make user research and customer insights more democratized, more available, more commonplace in in strategy teams, especially in product and commercial teams.
[00:04:00] So that was the idea I left with. I decided to meet as many people as I could, because I had just an idea, not even a concrete one. And I got to know a user research agency based just outside of Amsterdam and they had built the very first, what at the time was called a user research repository. Essentially, yeah, a repository for all your user research insights.
And they'd built it within their agency, partially as an internal tool. They had some success in selling it externally, but it really wasn't the main goal of their business. And they'd gone through a few different kind of. Iterations, they thought they might hire a CEO and they thought they might spin it off into a separate company.
By the time I met them, they had hired a head of product to manage the product moving forward. And his name was Marcel, Marcel Hagedoorn, also very experienced agency founder in the UX and product space. And we hit it off and we kind of went to them with this crazy proposition of, Hey, how about you give us your company, your product for free, and we'll give you a slice of the new company we're going to form, because you've built something that people want, and there were about a dozen companies on [00:05:00] there using it really effectively.
And we know how to grow businesses and you know, if there's, you know, I wasn't fully confident that I could build a, build a product from scratch. And that was completely new to me, but I knew that if there was something there with product market fits. I could make it grow. I've done that successfully before with 3DHubs, Recruity, and a dozen other companies, that's where I felt my, my safe, that's what, that was my safe space.
That's what something, my comfort zone, that's something I was good at. So it seemed like a really good fit. So we took over that product. And then we realized that it was still much further away from that product market fit that it appeared to have on the surface. And hence the the uphill startup life began, which was to be expected, but it was a very unique situation where we took over an existing product with an existing brand, with an existing user base.
And we had to figure out the processes behind taking that over, turning that into our own thing and actually pushing it out to market.
Anke: From my understanding in terms of timeline, like, negotiation of you taking over and like figuring out what the commercial structure is. Up to like, you bought it and then you [00:06:00] realize like, Ooh, it's far ahead of like really product market fit than I expected when I created it.
Like what, what is the timeline that we're talking about?
Ferdinand: So the timeline is very condensed, but also too long given the circumstances. So I think I started speaking to these guys in August and I think within four weeks we had made the deal for myself and my co founder to take this over. We'd pulled in some friends and a, and a development agency.
I grew up in Hungary in central Eastern Europe, and I had connections there who are good developers. And they, they helped us do the tech due diligence, make sure that everything was fine under the hood. We took it over, we launched in July. Sorry. No, when I said August, I meant May. And then in July we launched in December we raised our pre seed of 1.
5 million. And ironically, the first months after we launched, everything we expected to happen was happening. You know, we implemented automated payments, self service payments. This seemed like a no brainer, right? There's 12 companies on there, [00:07:00] named as big as PostNL. They're using the product daily.
There's, the ACVs aren't where you want them to be. But general, you know, knowledge is, or the general consensus is if the usage is there, you can draw, you could draw the price out of that if the value is there. So we can drive the ACVs up. And in the first four months we closed several deals with absolutely zero idea of what we were doing sales wise.
We were just getting on calls with people who had heard of us launching, who maybe had spoken to the agency in the past. And we just closed deals January, February, March, and then in April we stopped closing deals. And then we realized, ah. I still don't know to this day why January, February, March, we were so on track, but then we started to see that the pipeline started to dry up.
We started to see that we were losing deals based sometimes to competitors, sometimes to inaction. And we realized, okay, we need to change something fundamental. And there's a lot of learnings now in hindsight that I can look back on, but that's, that's kind of the timeframe. So launched in July, raised in December.
And by March, April, we knew that. Something was not [00:08:00] quite there yet, product market fit wise,
Johan: and is it probably because it can be, let's say, seasonality, right? That in April it stopped, right? Because a lot of, let's say, budgets are, let's say, freed up from that time can also be, let's say, the new kid on the block, right?
You see it also with companies that they have success in getting in, but then, right? What do you think? In hindsight, what the reason was that it, let's say,
Ferdinand: I was raised as a, as a head of growth in the school of hard knocks where seasonality is never an excuse not to grow. Then again, seasonality is never an excuse when you do grow either.
So it works both ways. No, I don't think that was the issue to be honest. There's a few things that essentially when we took over this product, a lot of people gave us a lot of warnings because they said, you know, taking over an existing product has risks. There's technical debt. Yeah. We actually hired a, well, I brought in a late co founder who was a CTO, former director of engineering from Amazon, Sky Scanner, like crazy experienced guy, really good rapport.
We brought him in. So we had a very strong team. We had this strong proposition. We were backed by the founders of one of the top UX agencies in the country. And we thought, okay, you know, we, we, we, we raised [00:09:00] 1. 5 million. Everything was kind of set up for success. And a lot of people, when we took over the product gave us these warning signals of, you know, be careful of this, this, this, and that.
And to be honest, everything we were warned about didn't turn out to be true. So a lot of the things people said would kind of cause our downfall, technical debt being one of the big ones, those weren't an issue. What I think was an issue is fundamentally when you start a company, you need that first year or seven months or eight months where you just fail and fall in your face a hundred times over.
Because there are just fundamental dynamics that you start to understand about your users, about why they chose the product, about how they made that decision. There's a certain dynamics that you understand when you go through those iterated failures. It's why I generally recommend companies now, from my experience, to try and bootstrap a little bit at the start, just to get those learnings.
Because when you have money, it's easier to, you're not under the same pressure to, to iterate fast. Even though we all know it's important. And I think we, we skipped basically the first three steps. [00:10:00] And then we realized that something around step one was broken. In this case, very particularly what we had underestimated was there were these big companies using the product they had been acquired by this agency.
And this agency would sell, and I don't want to give away their pricing. They would sell large contracts to big corporate companies, enterprise clients. So they would sell these large contracts. And then they would sell the tool as a line item in those contracts. And that is a dynamic that nobody really took into account and we didn't see it.
And in hindsight, I'm like, Oh, I should have seen it. But I think our investors didn't really see it either. And the founders of the agency didn't see it either. But essentially that was really crucial because there's a big difference between choosing a software as a standalone software. Or choosing a software when you know that there is an agency behind it that is going to fuel the adoption, use and success of that software.
And the idea was always that with a strong customer success motion, we could fill that gap because previously the agency would drive the adoption and use of the software, the best practices, right? A change in user behavior was needed. For the software to be [00:11:00] successful, the agency could facilitate that change in user behavior and they would get paid for it.
When we had tried to fill that gap with a strong customer success motion, we hired some really smart customer success people who understood product, who understood user research, it just wasn't enough and you couldn't make it commercially viable. And that's when we later pivoted towards a much more self service motion.
We went a little bit further down market. And And that's where the whole product led growth kind of self serve automated motion came into play because we wanted to minimize that change in user behavior. Cause we knew we couldn't white glove it to the extent that we need it.
Anke: And maybe to the to this story, because it seems that you took like a shortcut, you Instead of building it from scratch, you take something over.
So in one hand, you're saving time and you don't need maybe the technical skills in order to build something from the ground up. And now you're saying like, maybe because we went so fast from zero to five, basically we maybe missed some of the nuances that come into play. And I think to this point as well, we have a lot of companies pitching us that come from the agency.[00:12:00]
Now that I see they have something working, they're trying to spin it out as a product to get funding for, and I'm always a little bit hesitant, I guess, because I think that building a service business is different than a product company, how with the learnings that you have today, and also with the companies that you're working with, like, I don't want to go into that right now yet, but In hindsight, would you have done it completely differently and build up from the ground up?
Ferdinand: Yeah, yeah, I would have built it from the ground up. Again, I think it depends on the circumstances. And I think from an investor's perspective, I totally understand. There's too many variables there that you don't control and that you can't predict. So, but I think as a founder, there's just certain things that you need to look out for.
I mean, there are very successful agency spinoffs. We transfer to binders or what have you. There are companies that do it really well. In our case, we looked at it as, you know, we weren't the agency that owned it. Right. So if you have concerns around, maybe the agency has certain biases towards the services and how they were like, we weren't an agency.
We were just a couple of guys who wanted to build a SaaS startup. And we saw the opportunity to kind of get a, get a headstart with a product that seemed to [00:13:00] align very heavily with what we were envisioning anyway, I think. In the end, the dynamics of what, how people buy is something that is always underestimated.
And it's something that we underestimated. And I think understanding then probably the best thing I could have done at the time is when I, when we took over the product, if I could do one thing differently, I would call every single customer and say, the price is now not 5k, it's a hundred K. And. Even if they all churn, that's fine.
But at least then I need to understand what do I need to change for you to be willing to pay a hundred K or at least 50 K because we were sitting somewhere between, you know, the companies were too big to really be self serve and to really manage it themselves, but they were not paying the ACVs that a company that size needs to pay.
So it was, you know, that valley of death sitting kind of awkwardly in between. And. We didn't instantly decide, okay, let's go up market and really double down on the enterprise motion. We didn't decide to go down market and really capture the midsize businesses. The reason for that being that we had these three, four months where it just went really well.
I mean, we, we closed, I think eight or nine deals. The ACVs again, were not as big as the companies would warrant, but good companies, [00:14:00] recognizable brands, everything was on track and pretty much the whole market was telling us all the VCs we spoke to said, look, if you can keep this up for another four months, you can go and raise a series a, or you can raise a pre series a or whatever.
I mean, also the context of the market's really important. I think we raised when the market was at its absolute hottest. And then we started running out of money when the absolute market was at its absolute coldest. And I think every other company from, All the companies, all the founders I know who started around the same time and started running out of money around the same time.
We kind of ended up best off out of that lot. So, it was a, it was like lugging a massive rock up a very steep hill for two years. We got an okay outcome given the circumstances, but the journey was tough for sure. And
Anke: maybe for context for the listeners 2021 is when you started. When you raise the money, 2023 is when you exit.
I think for those who are not familiar with the context of timing.
Ferdinand: Yeah. And you know, you don't need, sorry. Good for you. Can
Johan: you indeed take us back to the moment that you raised capital, right? Especially in this, these hot [00:15:00] days of the market, right. What was, let's say the atmosphere like how, how did the funding process go?
And also it did perhaps the next round was of course different, but can you take us through that moment also?
Ferdinand: Yeah. I think in fundraising, my experience is momentum plays a huge role. Of course, it's important to have good metrics and, and it's important to have potential. Generally you have two kinds of VCs.
You have the ones that look at your finances and then you have the ones that look at the team and the product. We've fared better with the latter because I think our team was quite strong and the vision was quite strong. Of course we had a unique looking cap table and we had a unique background.
And I think some VCs thought, you know, that could, that could be that unique little something that makes these guys different. And some said, ah, you know, maybe I'm not going to touch that for now. Let's see. And you know, I think one of my big learnings is, you know, VCs, there's VCs of different tiers, right?
You know, the big, really big VCs, they can afford to wait. That's always the case. So when we'd speak to large VCs, I think the general attitude was, look, that you, we like you guys. We love this vision. We see potential, but we could afford to wait one or two rounds to come in, right? If [00:16:00] we, if we show interest in five years, you're not going to go for anybody else.
Right. If you get one of the really big names. So we started talking more to local VCs, more niche VCs and, in the end, we ended up having two term sheets on the table with the promise of another from another VC. And that turned into two of the VCs in the running, combining together to make us a joint offer, which also drove up, of course, the terms, the valuation.
Johan: And these are the two also, which brought out a term sheet, right? Or did you have one follower and one, let's say leading, how did you, can you tell a little bit also how you played that process, right? Especially in this competitive market at that time.
Ferdinand: Yeah, it was a crazy. It was a crazy evening. We had one term sheet on the table.
I'm going to not avoid, I'm going to avoid, I mean, people can look up who the VCs are, but I'm not going to say who was in what position, but we had one term sheet that was, was, was better than the other. And so essentially, and we had one VC where we felt, okay, the connection on culture was good, right?
You know, they, they, they seem to connect with us on a personal level. And the other one just seemed to be really strong in the industry. So I saw there was good arguments for [00:17:00] both. One offer was definitely better than the other. And then I just called up the one with the less good offer. And I said, look, I'm sorry.
Like the other offers just too much better for me to compromise on anything else. And they said, well, who's the VC and what's going on. And this is all happening in, I think I had about eight phone calls in the span of 45 minutes, 9 PM on a Tuesday or something, because I'm calling VC A and saying, Hey you know, we have this other offer I need to think about it and VCB saying, Hey, we've got this other offer is actually better.
Everyone was very honest and transparent, which I appreciate it. So the VC that made the smaller offer said, look, essentially, if another VC comes into the mix, this de risks it for us. So we're willing to go up in the terms and match their terms or join with their terms. Because obviously if we see another VC that's interested, we have the chance of losing this deal, we're willing to take that extra step.
In the end, if you would just kind of film it from the outside, it looked like I played it like an absolute genius. I can't say that that was my intention at the time. It was really just a matter of, I'm not sure which one to pick here and I'm not sure how to go forward and I just want to balance it.
I did not expect, I did not even know that two VCs could agree to go together in on a deal. [00:18:00] I was very scared that if I introduced them that they might actually cut me out or that they might undercut me. So, I'm a quite a skeptical person. I grew up in a, I grew up in a country where you cannot lay too much on trust.
So, I was a little bit careful there. And in the end they talked, they saw the potential, and then there was a little bit discussion around, you know, one VC would only want to be involved if they had a certain cut, if they had a certain share on the cap table. So in the end, they actually made a, an offer for a large amount at a larger valuation than what either of them had previously offered.
And we agreed to go in together and one VC did take the lead and the other one followed.
Johan: Cool. Good to hear. And well played indeed, because this is a very tight Thing, right? Also, if you have multiple VCs wanting to, let's say, join each other and then prevent that one of them is stepping out.
So well played indeed. I think very good. But if you look at Beck Ferdinand, because it's also about learning, right? And also you started now a new company. And also regarding the exit, we're going to dive further. What would you, what would your biggest, let's say, recommendations be to founders in this, let's say funding process?[00:19:00]
Ferdinand: Yeah, that's a, that's a tough one. I did not enjoy fundraising. I'll be very honest. I thought it was an absolute nightmare. I had some very good experiences and I was very happy with the VCs that we brought on board. They were very honest and they were very transparent and they worked very closely with us.
But I also met a lot of VCs that. When things are hot, they give you all their time in the world. And then when things are not so hot, they don't give you the time of day. The amount of VCs that call me while walking down the street or sitting on a train or just no camera or whatever, just it drained a lot of my energy because I wanted to build a company.
I wanted to grow the business. And there were a lot of different dynamics that for me that, that I found challenging. Best advice I can give is. Nail down your commercial metrics before you talk to them. Cause it makes everything much easier. I think when you're talking from a position of strong commercial metrics, I mean, we were talking to VCs before we even had actually started commercializing, right?
We had some, we had some customers, we had a product, but because we'd taken over, we'd taken over this product. So the angel, so, so the founders of the agency joined as angels. So we already had [00:20:00] some angels on board. We were not keen to bring on more angels that would give us maybe three, six months, cause that would only add more to the cap table.
So our path was to either. Strip everything down and bootstrap it forward, which seems there was just too much work to do to do that viably in a short period of time at the time, or to bring in a VC very early on, you know, if I could do it differently, I would bring into VC six months later after I've had the chance to really figure out the commercials pivot in the right direction, because then I would have also had the runway we needed to actually get to where we wanted to go with all the setbacks that were in the market.
So my advice would be, unless you're doing something that really, really For feasibility purposes, right? If you need a lab or if you need a factory or if you need a warehouse, but if you're just building SAS, then I don't think there's too many excuses not to have revenue before you talk to BCs because you should be able to generate that.
There are exceptions, but 99 percent of the time or 98 percent of the time, I think having some strong revenue motion, commercial motion [00:21:00] makes everything easier.
Anke: And maybe going back to that timeline again, when you have 1. 5 million in the bank and the time span of the company was relatively short. And you know, like from your first experience, because she didn't love it that much, it's not like done within a week, basically, can you map out the timeline when you were building a product and you see it went really well, then you hit this wall where you had to like, re figure things out, you had enough money on the bank, I think for probably like 18, 24 months of runway.
When you figure out like, Ooh, for this next phase, either we have to go out and raise a seat extension. Or we have to figure out a plan B. How did that come to play? And when did you get your aha moments that things had to move faster than you maybe anticipated?
Ferdinand: Yeah. So I think we worked very quickly.
We built very quickly. We iterated very quickly. We, we were very fast moving company. I think one of the things that a lot of people underestimate is, you know, 18 months of runway is not 18 months of runway. Right. Because six months before your runway runs out, everybody starts freaking out. [00:22:00] And even if you do get to the very end of your runway, you still have notice periods, you have liabilities, you have to cut down costs, you have to cancel.
Yeah. If you wanted to cut your costs down, you'll always have three months of costs. It takes you two or three months to cut your costs down to zero or a set of costs down to zero. So the growth
Madelon: phase.
Johan: Your runway is right based on your revenue projections, right? And in a lot of cases, that's not met, right?
And then you run out of your runway, right? Yeah.
Ferdinand: So I'm generally like to plan conservatively and then hopefully over deliver. So we, we, we thought of our runway as how much money do, how much time do we have if we make zero revenue, which was never the plan. We were very ambitious, but that's how we planned it.
But even then it's never as long as what you say, because you have to make the decision to raise, to get a bridge, like, because we talk about how long is your runway, right? in relative to what I mean, it's relative to At what point do you, you need more money or cut down costs? Cause that's essentially what, what, what happens in that money can be revenue, that can be a bridge round, that can be external funding, that could be a bank loan, whatever.[00:23:00]
But that decision has to happen long before the end of your runway. So your runway is only ever about 70 percent as long as it actually is. And that was a big learning for me. So we launched the company, we raised in December, January, February, March, we had good months. Things were looking good. We had a huge amount of bad luck as well.
The market changed around October the following year. Y Combinator published that, that, that piece saying you have to default alive. And suddenly the tone of every single VC in the, in the continent changed from one day to the next. And every company as well, understandably. And we had, I think five or six VCs we were building very strong relationships with, where we are talking to partner level partners at those VCs.
And when we actually later, and this is, I'm skipping ahead, when we actually went to raise, Out of the six strong relationships we built, five had left their funds in the last three months. So we also had a lot of bad luck there where a lot of time we invested into relationships, people who believed in our vision, people who really believed and they didn't leave to another VC.
They just left and went off to do something else completely. So different. So there were a few different things that came together there in terms of how we kind [00:24:00] of took it step by step. In January, February, March, we started hiring a team. And again, this is one of the downsides of having money is you're, you feel like you need to start investing it.
Because you know, investors invest because they want to see you grow. And if you are not growing as fast as you know, you want, or they want, then they want to see that you're doing things about it. And one of the things you can do about it, and there was no pressure from our VCs to do this. It's a lot of the pressure that people talk about.
That founders have, I don't think it comes explicitly from their investors. It's what you have in here in your head, because you're very aware that you've taken other people's money. You're very aware that you have a responsibility for making that successful. So you start thinking, okay, you know, if I hire people and it doesn't work, well, then I've spent a lot of money and it didn't work, but if I don't hire people and it doesn't work, then there's all these things I could have done that I didn't do.
And that's one of the big debates that I had in my mind. So we hired somebody to take over sales. We hired somebody to take over a customer success. We hired a few developers. We were one of the few completely remote first country companies really designed as a remote [00:25:00] first company, not, you know, reluctantly remote first because of COVID.
So our costs were relatively low for the the team that we built. We built a really strong team. I think our employee net net promoter score, even until the very end when we had layoffs and everything was 95 to 98 average, like people were super happy. People loved working for the company and we were producing very tangible deliverables.
They weren't just always turning around the results that we wanted because it was an uphill battle at the time. So we hired quite a lot. Well, we hired quite fast. I think it's not quite a lot. We hired the people you would expect to hire in that period, but we hired them quite fast. Which I think was also a mistake because it's.
It just added one person between you and the customer. And again, this comes from thinking that you're three steps ahead of where you actually are. If you have a product with revenue and you have strong signals, you're like, okay, there's, there's this pull from the market. And then you close three, four deals, three months in a row.
You're like, there's a pull from the market. We need to now get ready to scale. You then hire someone for sales, but that's, you know, whereas if you don't have any customers, the logic is simple as a [00:26:00] founder, you need to talk to your customers. And you need to learn everything about them and you need to be part of every single process that's what you would do pre funding but in this case, of course because we had the funding because we had the The the market pull we felt like we had the market pull we we did not put We we did not we acted like a company that was one or two steps ahead of where we actually were Which I can only say now looking back on it a few years later It was not obvious at the time.
Johan: So first it was based on your technology, right? Which you bought, which exited you too early, right? You start running without even couldn't walking, right? I rephrase it in my own words. And now you say also after the funding, we did more or less the same, right? So the speed was too high for the phase that you're in, right?
Ferdinand: Yes. I mean, this, I think given the information we had at the time, and
Grace: this is
Ferdinand: not me trying to cover my bases. I was very critical of myself throughout this entire process. I'm a very self critical person and expect a lot of myself, but at the time with the information we had. We were making completely justifiable choices, right?
We were not burning tons [00:27:00] of money on a big office We were not spending a lot of money on like team outings. We were not hiring people for you know, 50 60 70k a year We were hiring really good people at really good rates with a very lean remote first setup But I think we probably because we skipped that learning phase that you have when you start from scratch There were just, we just spent basically the next seven months learning all that stuff that we should have, would have learned seven months earlier if we haven't taken over an existing business.
So we skipped those first seven months and in some ways we did skip it, right? We raised earlier than we could have. We did a lot of things sooner than we could have, but we also skipped some of those fundamental learning. So I always described it as building a house on a, on a really shaky foundation.
And that's kind of what we were doing. And it wasn't a technologically shaky foundation. It was just a, a market dynamic, shaky foundation, if that makes sense.
Anke: Can you take us through the moment that you have figured out, like we need more money or we needed a different plan. Because with six months of runway something has to change.
How did that [00:28:00] come about? And also like leading up to the sale to next, when did you meet the founder of that company and
Ferdinand: Yeah, and not to dwell too much, but there is a big period between what I'm describing here as this tough uphill battle. And then when we decided that when we only had six months of runway left, so we realized this uphill battle, this is the first seven months of our business.
And then you have the last or the first six months and you have the last six months and there's still 12 months in between. And in those 12 months, we built out the team. We built out new features. We acquired. No, we acquired over 25 companies ranging from the German, German West lottery to Postenel to all kinds of great companies out there.
So we did actually a lot of good stuff. We of course grew the revenue substantially. If you look at a X factor, not substantially, if you look at the absolute numbers as much as we'd want it to, and we did a big pivot. So we, in January, 2022. I don't know what the year is anyway, 22 23, sorry. January 23, we pivoted completely into the product management space.
Cause [00:29:00] essentially one of our big learnings was just that the user research teams did not have enough decision making power to get us the ACVs that we wanted. Right. They were the first to get fired when things, times were tough and they very often were given kind of a pity budget for themselves and ultimately it was still the CPO making the decision and getting the CPO to make a decision to spend 20, 30, 40 K for a, for a product or a CPO or CXO for, for a product that's, you know, was being used more largely by user researchers.
That was not a strong proposition and we'd seen the best traction with product managers, product managers who wanted to take on more research. And we tapped into this trend of product discovery, which is this. Strong trend within the product world, which is basically the democratization of research and product teams taking over more of the research capabilities.
And the bottom dynamics is simple product managers have to wear 50 hats at the same time. So they cannot spend all their time on research. So they need tools that make research easy, which is a completely shift from, you know, having requests around, can you make. These 50 different types of tags for my research, which is a [00:30:00] very operationally user researchy request to, Hey, I just want to find like three pieces of customer feedback to attach to my product, like backlog items so that I can justify building it next in the next sprint.
Very different shift. And that also produced a lot of positive results. We started seeing a lot of progress, but still we saw that fundamentally. And this is where we get to the last six months. A change in user behavior was needed, right? The, this is one of the fundamental prompts. If the user has to change how they behave.
Everything is harder. So unless you're charging a lot of money to white glove it and train and implement it. It's just not feasible. So my big learning is unless you're charging, you know, 50 K a year, at least a massive change in user behavior is not a viable thing unless you, unless you really, you know, have all the time in the world to educate the market.
If you look at like the guys who do back base and 37 signals, they have the luxury to do that, right? They, they are profitable. They can run as long as they want. They can educate the market. And then based on that, they can decide. Did you
Johan: realize that, that it didn't work out this pivot when it was, let's say that pivotal moment for yourself.
Ferdinand: Well, the [00:31:00] pivot did work out. We just realized that we had to make it easier. So the pivot started working quite effectively. And there's a reason we sold the company in the end and didn't shut it down. It's because we didn't do everything wrong. We got quite a, we got quite a lot of traction with product teams.
We did the first ever global product discovery conference. Every product team in Europe knew about us. Well, that's maybe a stretch, but a lot of them did. And we started building the self serve motion. We started building everything around product teams, adopting this. And one of the things we realized is if we could implement artificial intelligence as a way to almost make qualitative data automated, the same way that your quantitative analytics would be, we said that could be the game changer because a product person doesn't want to spend a lot of time digging around in data, they want to get it when they need it.
And they don't spend all day in data. They dip in and out when they need it. But the problem is that realization that learning came quite late, right? We're talking six months to the end of our runway, seven months to the end of our runway. The whole market is on fire. Nobody's nobody we knew who was raising was successfully raising.
All the VCs we build relationships with were dropping like flies from the funds that they [00:32:00] were working at. So it was kind of a, a, a, a tough situation. We turned to our investors and we had a long conversation with them about what our options were. And In the end, one of the toughest decisions was they were willing to give us a bridge.
So they said, you know, we're willing to give you this kind of bridge, but I was not confident that it was enough to get us to where we needed to go. Literally and figuratively, the whole point of a bridge is that, you know, you can see the other side. If you can't see the other side, you can't build a bridge.
And the bridge they were willing to give us, which I think was given the circumstances, was completely fair, just wasn't. What we could build we could not build what we needed to build in that period and market it and take it to market So
Johan: good you couldn't see the land right if you were standing on the bridge That's what you I couldn't
Ferdinand: see the land.
So it was just not long enough, right? The the the so I needed like and I really didn't want a situation where I take more money from people And i'm just really don't have not not don't have the certainty. I just don't have the confidence I don't see the land close enough to, to, to, to, I can't even tell you how long the bridge needs to be like, I couldn't tell you the, you know, there was like, you know, how much time [00:33:00] do you need us?
I really don't know because I thought we needed six months and here we are 18 months later and we've learned from the market and you know, those seven months of learnings, we've had them now. We're very confident about what the market needs. And around this time, I met the founder of next. He actually reached out to me to in like a automated LinkedIn sales pitch, kind of like, Hey, we're building this thing.
And I'm like, wait, that's what we're trying to build. So he'd built,
Johan: he reached out to you as a customer as a potential customer. So
Ferdinand: I think it was an automated LinkedIn outreach message. I'm not sure. I don't want to put him on the spot here. He's a super nice guy. And and but he reached out to me and I said, Hey, yeah, we actually do something very similar.
And we said, okay, cool. Let's get on a call. So I get a call from Moody, the founder of next. And We realized we're two sides of the same coin. So this is a company that a bootstrapped its way a very long way, which is why they were still alive. They'd done many, many pivots over six or seven years, which shows that the market we were in was just tough.
They'd done a lot of different pivots and they'd nailed down two things, which is the product adoption and, and, and, and the ACVs they were getting the [00:34:00] ACVs that we needed to make it feasible what we were doing. Meanwhile, nobody really knew about them. They didn't have that strong market traction. They didn't have that strong recognition, that strong brand, that strong marketing.
I mean, I'm a marketer by training. That's what I do. Everyone knew about us, right? People thought we were a 5 million ARR company. Like that's literally what people would come up to us regularly. And and, and imply. So we had a lot of what we had a lot to offer these guys and they had a lot to offer us.
And the thing that they were building, I saw it as kind of this serendipitous validation of what we wanted to do. Cause we built this engine or we built this platform that allows product teams to manage insights. And we were like, okay. If we use AI to automate the insight generation, that's what people need.
And these guys had built exactly that. They built an AI insight generation engine for large companies. So then we had to kind of come together and that's a lot of parties, right? Our investors, our angel investors, the guys from next, their stakeholders, cause they did have some investors on board, our, our end and kind of sit down like, okay, what are [00:35:00] we going to do?
We can take this bridge and maybe try to compete with these guys a little bit. Yeah. But we don't know how far we can get and look how far they are already on the product side or maybe we can make something happen. And that's how that came. And that happened relatively fast. Because they, and it came from the fact that they were building what we wanted to build.
That was, and how many
Anke: people were then in the team in your team still and in their team?
Ferdinand: They're, they're a relatively small company with a high efficiency rate. So I think they were 12, 10, 12, something like that. I think we had our peak where maybe nine, 10 people, but at this point we were down to five.
Anke: Yeah,
Ferdinand: And at the time we were really exploring the different options. We really really believed we were onto something and our vcs also believed it too. So there was a lot of willingness to collaborate with us on finding a path forward, because the need in the market was super clear. We had traction.
It just wasn't this consistent traction that we could replicate really fast, but we saw we had the signals, we had the evidence. We knew this is a problem that needs solving. We just got to a point where, I mean, it's also important [00:36:00] to note that this problem with the change in user behavior. Generative AI fixes that, but generative AI didn't become a thing until halfway through running our company.
Like if we'd started our company in 2021, this would have been a completely different thing. I would have started from day one building the analytics for qualitative data. That's what I would have done from day one. It's only when chat GPT and all these different technologies became clear that we realized this can actually solve.
The problem we're seeing, which is people have a hard time sifting through all the data, matching all the commonalities, but AI can do that for you. And these guys have gotten in quite early because they have a strong relationship with Microsoft and they had built this and it was a huge potential for us to kind of partner with them and make that work.
Johan: So after the talk and after the reach out, the commercial probably reach out, right? If the founder, you had a chat with him, you saw some that you are both doing the same thing on the different side of the coin as you described, right? What did you do also in the process? Right? Because did you reach out to other, because you felt, you know, There would be, let's say, a match in the future, right?
So it was an option next to the bridge without a land, right? If you describe it, what did you do on the other hand? Did you reach out to other, let's [00:37:00] say, potential companies to work with or investors or whatever, what was your approach there?
Ferdinand: So the first thing was that we were entering a very uncertain, risky territory, right?
We're running out of money. There's a few options on the horizon, but we've seen how a funding round can materialize out of nowhere. And we've also seen how a very concrete, almost offer on the table can disappear into nothing out of nowhere. So the first thing I did is secure the wellbeing of the whole team.
So we sat down at the founders. We said, you know, this is, you know, we're going to take this to the end. And we made sure that everyone on the team had, there's a lot of, a lot of things to, there's a lot of context to this, but you know, when we, when, when October, that October, where the market started to change, we actually gave everyone the option to basically trade a part of their paycheck for equity.
And almost every one of the company took it. And we made sure that we paid them back. We made sure that essentially everybody would be covered and would not be left without a job without notice. So that's kind of the first thing that we did, because we just knew the next six months are going to be rough.
And we actually, the entire process was fully communicated to the team. So we told people like, if you stay. There is no certainty and it's going to be [00:38:00] hectic, crazy. There's going to be knee jerk reactions. And that's kind of the reality of it. So that's kind of step one. Step two is we talked to other companies, but the reality is every single company in the product project management adjacent space was getting a hundred offers a day from companies that, that, that were, because there was a lot of companies looking to get acquired and we were at this stage, not looking to get acquired.
We were actually trying to raise. a, an extension. So we previously were raising a seed round and we decided to raise kind of a pre seed extension with this new AI vision. We just sat too much in between the previous and the new proposition. We didn't have enough of the new proposition to convince them on the new proposition.
We had too much of the old proposition to convince them on that. So. We had a bunch of VCs that were interested. We were looking at this kind of fundraise process and then this opportunity to work with next came in parallel. And we did talk to a few other companies about MNAs, but that was not really the explicit goal at the time.
It was not, it also did not seem like a super viable path. It's something conversations we had going always because it's always an option, but it was not a, it was [00:39:00] not a. We were not we were not in a position. It's concrete,
Anke: maybe. Yeah.
Ferdinand: Yeah. Okay.
Johan: And, and, and and then did, so you fully informed your team, if I understand you correctly, right?
So you fully made them aware about the situation? From day one. From day one? They all knew what was going on. Yeah, yeah. What made you realize to do that? Because that's, that's what we don't hear a lot, right?
Ferdinand: I think there's two approaches you can be, is you can be super open or you can not be open. Any company I've ever worked at that tries to find a middle ground struggles because there's always going to, because if you create a culture of openness, there's always going to be that thing you can't be open about, right?
There's always going to be, whether it's contractual or not, there's things that you're not going to inform your team about. If sometimes because you can't, sometimes because it's not in your interest, but sometimes it's also not in their interest to worry them when things are constantly uncertain. The problem is once you start drawing that line, you will always have people who have wrong expectations because they're used to being told about everything and suddenly they're not told about everything and they start to worry.
So you either don't tell people much and you kind of create a culture of, [00:40:00] look, at this level, we tell you everything. And at this level, you just don't get to know because you're not there yet. And that's okay. And that's, I think that works quite well in a lot of companies, most companies operate that way, or you just say, we're going to be perfectly open.
And we just said to them, we're going to be completely open with you. We're going to tell you how much money we have in the bank. We're going to tell you how, where we're going. We're going to tell you how we operate. We're going to tell you what decisions we're considering making. And you can all be part of that decision, or you can at least give your opinion to that decision.
And we were also very clear that, you know, certain decisions lie with us and they can't influence those because that's just the reality of the situation.
Anke: And maybe also because it's a relatively small team, and although you were working remotely, it's still super small team where half of them basically don't know what's going on, and the other half is basically working on a side project as well that you probably don't know.
Learned about when we are the owner.
Ferdinand: Yeah. I mean, everybody, everybody knew what was going on and that made everything a lot easier because it also gave me a clean conscience because I didn't have to make really difficult decisions. I would just talk to them and say, look, these are, you know, these are the decisions we need to make and this is why.[00:41:00]
Johan: Last question on this, Anke, because you mentioned also that at a certain point you offered your, sorry, your employees not to get salary, but to take shares in the company, right?
Ferdinand: Well, to reduce their salary in exchange for shares. Yeah.
Johan: Okay. To reduce the salary and change the chair. Okay. Yeah. What was the reason?
Because you ran out of money, right? So you wanted to, let's say, of course, to spend less money or was, let's say a motivation to keep the team on board. What was the main reason for you to, to do this?
Ferdinand: Both. It gave everybody skin in the game and extended our runway. And it was just a good solution at the time.
I'd seen it done at a previous company and I participated and I thought it was a really smart idea. And at the time we were just, at the time we didn't need more runway, right? This is October, right? We had runway easily till the next summer. But we thought the more runway we have, the better. And this was a good way to achieve that.
Johan: Good to hear. Anke, sorry, I was interrupting you.
Anke: No, so we go to the guestimation that this time around, we don't get from the colleagues of Peak, but from our friend Chet
Madelon: Chitti.
Grace: Reveallll founded in [00:42:00] 2021, quickly emerged as a game changer in the customer insight space. With a focus on transforming qualitative data, like customer feedback, into actionable insights, it caught the attention of investors, securing 1.
5 million in pre seed funding from Fortino and Dutch Founders Fund. Fast forward to its acquisition, and Reveallll had built a talented team of 16, ready to make waves. This acquisition wasn't just about numbers. It was a strategic move for NEXT, an AI powered product discovery platform. By integrating Reveallll's expertise, Next enhances its capabilities in qualitative data analysis, unlocking deeper customer insights.
This means smarter product development and better decision making. While the exact financials are under wraps. Similar deals usually fall between 3 million and 5 million, reflecting the value of expertise and strategic alignment. It's a win win for both [00:43:00] companies, setting the stage for innovation in the product landscape.
Ferdinand: I think that the factors in the calculation are not all correct in that sense. The the assumption that there was an acqui hire feature, not so much. The deal we ended up making, and I can't disclose obviously what it was, was pretty complex and strange, to be honest, compared to what you'd expect. So it was not something that was all cash.
It was not something that was all equity. There were a few different things tied to it based on the nature of what we were giving the new company. So I think the answer is I can't say whether this was the amount that would have been transferred on the day, but it would, but over time, that amount could have also changed quite radically.
So, that's all I can say to it.
Johan: And that's pretty complex, right? Because you had, of course, let's say the urgent early angels, right? Because you bought the tech from it. You had to say the new shareholders for Tino Dutch farmers fund also there, right? The VCs in it. And you also as a founding team, right?
Yeah. How did you, because then you have, let's say different interest also on that end. How did you deal on that end with, let's say the different groups also with a construction [00:44:00] like that?
Ferdinand: Honestly, a lot of the negotiation had to happen with the acquiring party and our VCs. Because there were a lot of different factors that to be taken into account in the end.
I think everybody was very collaborative. Everybody wanted, wanted to make a deal happen if it was, you know, viable and that made things quite easy. So I think a lot of the time was spent more in the fine print of the, of the structuring, the deal, then on the overall, you know, who gets what and how that was not too much of an issue, to be honest.
So in the end we spent a lot of time, you know, messing about with the details, but I think everybody was pretty quickly aligned on the situation, you know, what the benefits were of doing this and who could benefit how and in what's in what way that was pretty clear. And we also stepped back as founders from the deal quite quickly.
You know, I took a big step back saying, you know, I don't care what I get out of this. My mo for me, the most important thing is we built this awesome thing. I didn't want it to just, you know, gather dust on the shelf and I didn't want to have the temptation of digging it out and doing something with it, which is always a very problematic thing.
If if you shut down a [00:45:00] company and then you pick something up again. So for me, I wanted to clear, clear cut chapter and I wanted to bring the value of what we created into another business. That was more important than my personal financial gain.
Anke: And did the team move over to a new company or they basically took the tech and you didn't stay on board, at least not for a long time.
We stayed on
Ferdinand: board as a transitionary phase. And I still, you know, advise the company now. And you know, we, we have, we did not transfer too much of the team because it's also important that we reduce the team quite a lot until that time. So, I think there's a couple of people who've collaborated here and there, but it was not an acqui hire.
So that was definitely not a big part of the. Part of the structure.
Anke: Yeah. And now you start a new company again. So I think that's maybe also given the time, a new story for a different time, but I think as we started this conversation before starting to record, you're not a person who easily sits still.
I think you're constantly looking for the next opportunity. You like doing things fast. I think also as a leader, the way that you [00:46:00] took your team in this rollercoaster with the ups and the lows has been a great insights. I think great leadership style, if you would ask me especially that also explains the high MPS.
Which is very remarkable, which could also be like a separate episode. I think like how you created that. I would love to learn more. Well, yeah, probably final season to this, like getting a NPS score of 90 plus is an exception. Yeah.
Ferdinand: I mean, at the end of the day, you know, I've always been an entrepreneur at heart.
I've now launched a new company. It's called the growth syndicate and we've taken a very different direction. So we don't have any VC funding. And I'm going back to the roots of what I do best, which is helping companies grow from 1 million onwards. Fundamental of what we do now is essentially, yeah, we help companies get from one to five, five to 50 to a hundred million in revenue.
We've done that before with several companies before. And it's kind of a collective of some of the best growth leaders on the continent. We've already now started to get the first results from the companies we work with. And, you know, it ranges from three X meeting bookings to 600 percent growth in eight months in revenue.
[00:47:00] So it's going really well, but the, one of the key parts of our vision is that actually we want to build products too, it's very different. One of the things I noticed was. The nature of VC investment is that there has to be a certain potential return for it to be interesting, right? There's, it's a high risk, high return game.
And what happens in that space is that a lot of things don't get built because they don't have the potential. They don't have the potential to get past five or 2 million or 1 million ARR. But just because something can't get past one or two or 3 million ARR doesn't mean it's not valuable. And one of the things that I saw is, you know, when you look at, we work with marketing teams, what have marketing teams, they don't use really big tools, right?
They get forced into HubSpot and they get forced into whatever other teams are using, but they use a lot of extensions. They use a lot of small tools, tools that maybe have the potential for five or a K or a million ARR, but really cool, useful tools. So we support companies on a fractional basis, and then we building these tools on the side.
And building a community around that so it's a, it's a very different kind of thing. Heavily influenced by my experience building building, building a SaaS in a, in a volatile environment. But I still love building [00:48:00] software. So that's always going to be a part of it.
Anke: And if people want to reach out to you, where can they, what's the best way to connect with you?
Ferdinand: Just find me on LinkedIn. The growsyndicate. com as well. They can check out what we do and that's it. That's it. In essence.
Anke: And maybe before we wrap this up, is there one thing that we didn't ask you or one thing that you still want to share before we say bye?
Ferdinand: No, I think I think I think one of the big things is a lot of people look at the change in the market as like, This kind of unfortunate thing, you know, like three years ago, we could have gotten so much money, but I actually think it's quite a positive thing for a lot of founders because it forces them to make certain decisions that are probably more prudent.
So, having a lot of money is having a lot of money back is cool, but it's also quite burdensome and it's, you always spend other people's money differently than you spend your own money. So I think A little bit more, a little bit less doesn't necessarily matter as long as you have the right investors in bars, people who support you, people who agree with your vision, people who see where you're going, and then you still have to figure out all the unit economics yourself anyways.
Johan: That's about
Ferdinand: it. [00:49:00]
Johan: Great words to end this. Ferdinand, thanks a lot for sharing your story also, and thanks a lot for sharing indeed how you started also and how you brought it to a good end. So thanks. Thank you. I appreciate it. Thanks.
Anke: All right.
Johan: Bye. Bye.
Madelon: Thank you so much for listening to this episode of the big exit show.
We hope you enjoyed today. If so, please subscribe to our show on Spotify or your favorite podcast platform. If you have feedback or suggestions for guests that you want to see on the show, please send us a message to podcast at peak. capital. Thanks again for listening and hope you join us for the next episode.