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A podcast for builders by builders in the Triangle. We explore the startup journey and stories with local Triangle founders, from the idea to the exit and everything in between. Hosted by serial entrepreneur and founder of the Triangle Tweener Fund Scot Wingo, and produced by Earfluence.
00:00:03 - Dusan Babich
Like most of the reason startups fail is because you're bullying something nobody wants. So I would also especially like in a B2B thing, I think it's different for consumer, but like maybe consumer you have to just think ahead and nobody's going to describe the problem well enough for you to build a product like that. But in the B2B space they may not use the right nouns, but the buyer completely understands what they want.
00:00:32 - VO
Welcome to Triangle Tweenertalks, a weekly podcast by Builders for Builders where we explore the startup journey from the idea to the exit and all the lessons in between, with an exclusive focus on founders from the Triangle region of North Carolina. Tweenertalks is produced by Earfluence. Now here is your host, serial founder and General Partner of the Triangle Tweener Fund, Scott Wingo.
00:00:54 - Scot Wingo
Welcome to this episode of Triangle Tweener Talks, an in depth discussion with desean Babbage. This episode is sponsored by Smashing Boxes, a Durham based lean design centric digital transformation company. Smashingboxes.com Robinson Bradshaw, a full service business law firm with a passion for supporting the Triangle entrepreneurial ecosystem. Learn more about Robinson Bradshaw at robinsonbradshaw.com Special thanks to our friends at Earfluence who produced this podcast. Desean moved to the Triangle from South Africa where he started Device Magic and moved to the Triangle with him in 2015. He continued to bootstrap Device Magic here for five years until 20 when he sold Device Magic to a private equity or PE firm. Desean rolled forward some of his equity and got to enjoy the rare and elusive double exit. So he sold some to private equity and then later the whole entity was sold and he got a benefit of that. In addition to a great bootstrapping story in this episode desean shares some great lessons learned such as how he learned from an earlier startup that didn't work out. So we always learn a lot more from our failures and our successes. So he shares some of that, his lesson on selling a company private equity and learning things like the rule of 40. And then a ton of great founder tips around thinking about distribution, go to market and why he has chosen not to take traditional vc. Finally, he gives us some hints about his next startup that he's working on right now. And now without further ado is my conversation with Deshaun Babich, Founder of Device Magic. You and I know each other but we always meet each other for five minutes at events. So I've yeah, in lieu of a long coffee meeting, I thought let's just get this on the record. So we have our coffees, we're ready to dig in.
00:02:44 - Dusan Babich
Thank you. Yeah, it's good to be here.
00:02:45 - Scot Wingo
I kind of know about you from device magic on, but I'd like to go back further. Judging from your accent, you're not from South Carolina or North Carolina.
00:02:55 - Dusan Babich
I'm further south than that, yeah. Originally, yes. From South Africa. Johannesburg originally, yeah.
00:03:00 - Scot Wingo
So you born there or.
00:03:02 - Dusan Babich
I was born there and moved to the U.S. it's 10 years ago now. Going on 10 years, yeah.
00:03:08 - Scot Wingo
So in South Africa were you, did you do technical school and do work for engineering firms or like what. What was your. What did you do there?
00:03:17 - Dusan Babich
Yeah, I actually didn't really. I sort of always I studied mechanical engineering. I was convinced I wanted to do aeronautics or something like that. But then after doing like some compulsory vacation work, I realized there's not really a big industry for that in South Africa at all. Not which is obvious in retrospect, but I'd always, you know, been fascinated with computing and when obviously the Internet came about, then that's what I'd spend most of my time with. And during college I started a small like web development business and then kind of left college and decided I don't think, you know, mechanical engineering was for me and I just started like a IT consulting shop and then within a couple of years then did my first actual startup where we raised money and it was more of a product based idea.
00:04:04 - Scot Wingo
And that was in South Africa?
00:04:05 - Dusan Babich
That was in South Africa. It was a company called Red 5 Labs and this is dating me quite a bit now. But at that time Symbian Nokia was like the dominant smartphone operating system and ecosystem and Visual Studio and. NET were by far the de facto developer tool of choice. And me and my co founder had tried to port the. NET framework onto Symbian Nokia devices.
00:04:28 - Scot Wingo
Wow, that's probably harder than it sounds. It was not enough memory. Those are memory hogs because they're PC based and they wanted to sell more memory. So getting that onto an old school phone was probably a bit of a challenge.
00:04:40 - Dusan Babich
So yeah, I mean Simian was running on better hardware than like, you know, the original Nokia phones, but it was still very resource constrained and lots of gymnastics to get things to work and. But we had some things going away. Like at the time there was a project called Mono, which then became Xamarin, which was a. NET open source implementation. So we were able to bootstrap a lot of our code with theirs. It was under MIT license and that allowed us to have something Shippable without having to write every single framework.
00:05:10 - Scot Wingo
My first company did, we were big partners with Visual Studio. We did MFC extensions. I don't know if you remember that's a little bit before this type of thing. But yeah, I know the Visual Studio folks really well. Fun fact, Visual Studio was started in the triangle. There was a guy, Brian Handy, not to be confused with Brian Handley. There's two Brian, very similar names.
00:05:29 - Dusan Babich
No, I didn't know that.
00:05:30 - Scot Wingo
And he started this company called One Tree Software and it was like early, early GitHub, like branching kind of thing. Microsoft bought it and used that as the foundation for Visual Studio.
00:05:41 - Dusan Babich
Oh, I didn't realize that came from this area.
00:05:43 - Scot Wingo
Yeah, we're hopefully going to have him on the POD because I don't think a lot of people know that. Interesting history.
00:05:48 - Dusan Babich
Yeah, yeah. So that sort of ended up failing. We raised some money and there was obviously big market risk, but I completely missed it. Like I didn't think at the time. Sumi Nokia and The ecosystem had 80% plus of smartphone shipments.
00:06:04 - Scot Wingo
Yep.
00:06:05 - Dusan Babich
And then, you know, the rest of the world is more like a BlackBerry. Well, the US was a BlackBerry plus clamshell world. People carry two devices and then it was almost overnight when iPhone got released. Like everything changed and then nobody was worried about writing things for Nokia or Sony Ericsson phones. That all just the whole momentum changed and we eventually just shut down the business and return what capital was left to investors.
00:06:28 - Scot Wingo
What did you learn from that? Not your startup field, but this massive thing happened. I remember the time when Jobs did the first iPhone demo. All the Nokia, BlackBerry, they all laughed. It doesn't have a keyboard. It's terrible at everything. It's not good at phone calls, it's not good at email. They obviously got it wrong.
00:06:48 - Dusan Babich
Yeah, I think that we knew there was market risk. We just. It was one of those binary things. I suppose we should have got to market faster. I got a lot. I got distracted with VC issues and board management. We spent probably a year being not very constructive in terms of R and D. We were way underfunded. I think probably the lesson I had was don't raise money for a company that has to be international out of a smaller country without some path to getting that, you know, abroad. So we were just under capitalized from day one. And there still would have been probably a way to get an exit if we got to market quicker. I remember getting some advice from somebody just to open source, open source it. Stop trying to license anything and maybe just sell like, you know, more of a red hat style business model that that would have been the best chance of getting a broad adoption and probably getting acquired. But yeah, in the end, the market moved before we could really react. And we had attached our wagon to one bet, like there was no way to repurpose the code base.
00:07:51 - Scot Wingo
That happened. And then what did you do?
00:07:53 - Dusan Babich
Well, yeah, we sat around for a while like wondering what to do next. But we figured we wanted to do something in mobile probably and we played around with a few ideas. And another big lesson was I didn't spend any time thinking about distribution in that first company. It was all just about technical product. That's all we're really worried about. So this time we thought we're going to have some idea of distribution and we're going to test out these ideas with the market and willingness to pay before. So we played around with a few ideas. One of the things we saw in that startup was a lot of B2B apps were basically like capturing data in a form, persisting it locally, doing some validation and then setting it into a server or cloud process. And there was a pattern that kept on repeating in the apps that.
00:08:39 - Scot Wingo
So the form was on a mobile device.
00:08:41 - Dusan Babich
Yes, in this situation.
00:08:42 - Scot Wingo
Got it.
00:08:43 - Dusan Babich
And they were building that app again and again and again for the most part. And that's what they were trying to use our simian. Net framework to do.
00:08:50 - Scot Wingo
So you did all this thing where you replicated a whole framework and they just build a form, right?
00:08:55 - Dusan Babich
Yeah, basically we had some other developers that were doing really impressive things. We had to study their code to understand how they were doing that. But for the most part it was fairly boring B2B apps.
00:09:07 - Scot Wingo
So this is what's frustrating as a tech founder. You build this whole thing and then someone like the most simple use case and you're like, I could have done that in 1-80th of the time. Yeah, there was probably how you're going to use this.
00:09:17 - Dusan Babich
It was also not a very fun product in the sense that there was no creativity. It was like, well, this is the API that you have to support. There's no like wiggle room there. And there were some parts of it we didn't support just because of resources. I think at our peak we were like 10 or 12 people. The Microsoft Team that was doing the compact framework that started with a. Net code base at 30 people. So we always, you know, we had to just be lean and mean and cut things out. But so that was one of the ideas we had for device magic. We just kind of Device Magic was just chosen because we think it'll involve mobile devices and we could find the dot com. That was it.
00:09:50 - Scot Wingo
So you started that in South Africa?
00:09:51 - Dusan Babich
Yes.
00:09:52 - Scot Wingo
Oh, I didn't know that.
00:09:52 - Dusan Babich
Yeah, that was started in South Africa.
00:09:55 - Scot Wingo
What year?
00:09:56 - Dusan Babich
That was 2011 basically when we then we crystallized, we tested out a few ideas. The two others luckily just were so bad that they just failed immediately. And so we continued with what really was a mobile phones product and we prioritized that into a platform called Device Magic. And at the time we were still supporting J2ME Java based phones as well as BlackBerry. And that's how we, that's how we went to market and then we added support for other platforms like Android and iOS as we went.
00:10:26 - Scot Wingo
So then you said 10 years ago you moved to the US so you started in 2011 and then something makes you move with Device Magic to the United States. What happened there?
00:10:35 - Dusan Babich
Well, I had promised myself not to try and scale another software business in South Africa. Not that it's impossible. There have actually been some great successes of businesses that were started and scaled and sold out of South Africa. But I do think it's like a headwind that is not really worth having. So in 2011 we applied to incubator, claimed to be the first B2B dedicated B2B incubator in Dallas, Texas. Got in and we spent three months there and that allowed us to kind of reincorporate in the US Move ip.
00:11:09 - Scot Wingo
Was that like a techstars or something that doesn't exist anymore?
00:11:12 - Dusan Babich
It does exist. It was called Tech Wildcatters.
00:11:14 - Scot Wingo
Oh yeah, I've heard of that.
00:11:15 - Dusan Babich
Yeah, but at the time there was. That whole model was quite nascent. But yeah, we applied to one, we needed to get some cash to buy the IP and that's what we used it for. And then we basically became like a US company that had a South African sister company essentially.
00:11:33 - Scot Wingo
And you probably had some developers back there, but you and maybe a co founder were here or like me and.
00:11:38 - Dusan Babich
My co founder were in the US and then developers there. But that went pretty well and we learned quite a bit in that incubator and then we had to return back to South Africa and then we were kind of just in a. In no man's land for a couple of years trying to figure out how to get back to the US in terms of visas and everything else. So we still had a US go to market but we just, you know, couldn't be in the US but eventually we figured that out in 2015. I moved on a visa, and my co founder joined later that year.
00:12:09 - Scot Wingo
Why the Triangle? So you went to Dallas and you said, this isn't. We need to get to the Triangle. Like, it's interesting you landed here. What. What was the. What was the pull from the Triangle?
00:12:18 - Dusan Babich
This is a very common question I get, which I understand, because most people don't move from South Africa to Raleigh, North Carolina.
00:12:24 - Scot Wingo
Yeah. The only other one I know is Grant Kitchen, and I'm sure you guys know each other.
00:12:27 - Dusan Babich
We do. We do, yes. No, I know Grant pretty well. He's here.
00:12:32 - Scot Wingo
He's been here a long time.
00:12:33 - Dusan Babich
Yeah, a lot longer than me. So what actually happened after that incubator? We attended a conference in San Jose, and I met these guys from a company called Shoebox and a bunch of others. And Taylor Mingos was saying to me, you got to come and check out this area. There's been some great successes that have been organically grown B2B SaaS like Sharefile. I'd never heard of these companies. I didn't really even know where Rolly was. So I said, no, I'll come and check it out. And it took a while, at least a year and a half. And then he kind of assembled this little roadshow of meet some investors, meet some of the local founders, get to learn about the ecosystem. So he was really the reason we. Yeah, we came to the Triangle.
00:13:14 - Scot Wingo
I didn't know that story.
00:13:15 - Dusan Babich
The other reason was, I mean, like, of course we considered, like, you know, New York, SF, probably even Miami, D.C. but we were bootstrapping. And besides the money we had raised in the incubator, which was like, you know, we did 25k from them and about 20k from an angel that I knew. And we just couldn't, like, afford to put ourselves in a. In a market that was, like, twice as expensive. And we'd have to pay ourselves twice as much for no apparent value because we weren't trying to raise money. We were trying to do this mostly organically.
00:13:47 - Scot Wingo
Yeah. I think our recruiting brochure should just be a, you know, a page of San Jose real estate, a page of Austin real estate, and a page of Triangle. The Triangle has grown, and those of us that are here complain about it. But, like, if you. If you put those three pages together. First of all, the thing that blows my mind is in California, the yards are square feet. I couldn't get. I was like, is that the house? Like, what's going. No, no. The actual yard is in square feet. That's here. We're Always on acres. And it's like, you know, it's so small that you're measured by a dollar per square foot of the lot, right?
00:14:14 - Dusan Babich
Yeah, yeah. It is very different. And I mean, clearly there's advantages to those cities as well. But for what we were doing, I also love the fact that there were three great colleges. So in terms of like scaling a sales function, there was plenty of talent around here and there was this momentum going because of ShareFile, I think, was one of the ones that started it. But it took me a while to realize that Epic Games was based here as well. So there are quite a few companies that are under the radar that are from this area that I think just don't get as much attention than they would if they were in a bigger market.
00:14:50 - Scot Wingo
Yeah. And Red Hat, who you mentioned earlier, right?
00:14:52 - Dusan Babich
Yeah.
00:14:53 - Scot Wingo
Okay, so it's 2015. You're here in the triangle, thanks to the shoebox guys.
00:14:58 - Dusan Babich
Yeah.
00:14:59 - Scot Wingo
And you know what, what happened to device magic? Did you stay in forms or what? What happened?
00:15:04 - Dusan Babich
Yeah, we stayed in forms. We started that product. At the time, we weren't like, really struggling to grow. We had done a couple of organic SEO things based on. I can't remember their names, but they had two people that came into that incubator and taught us a lot about SEO and that carried us for years. Like we were just doing well and SEO him getting pretty much free leads. So we were growing somewhere between 80 to 100% year over year without much effort. And then when I moved to the US at that stage, we really had a salesperson, a customer support representative, and I think somebody was doing marketing for us.
00:15:40 - Scot Wingo
Yeah, I vaguely remember I discovered you guys on the tweener list. And I came to your office a couple times and it was like this third subleased space in the RTP area off Aviation Airport. Am I remembering that right? Or is it off Western Parkway?
00:15:56 - Dusan Babich
Our original first office was in Durham at the American tobacco campus on 201 West Main Street. And then we. I moved to Raleigh and most of our employees were living closer to there anyway, so we just. I think our first base was American Underground, maybe.
00:16:12 - Scot Wingo
Okay.
00:16:12 - Dusan Babich
But yeah, we were nomadic. We went to a few different offices.
00:16:15 - Scot Wingo
Yeah, yeah. And everyone would ask, what are these guys doing? I was like, you know, it's kind of mobile forums and I don't know exactly what's going on.
00:16:22 - Dusan Babich
Well, that turned out to be quite a problem. Like, the lesson of device magic was it was very horizontal. It was fine to capture inbound demand. Very hard to generate demand without bound. Because if you call up like our ICP and say we're doing mobile forms, they wouldn't even know what that was. So it was a little bit of a technology looking for a problem.
00:16:44 - Scot Wingo
But when they have an acute need and they're searching for all kinds of things like a phone that'll work, a form that'll work on this insert platform name, boom. You guys are. The power of your SEO is being right there at that acute need.
00:16:57 - Dusan Babich
Once it worked out it's called offline forms and mobile forms, yeah, then it just became fairly trivial and with closed deals pretty quickly. But you were constrained and throttled on like, well, how many searches are taking place for that keyword? And we didn't really. We weren't really able to expand that, that service area that much. We had a lot of word of mouth going. And so, yeah, we continued to scale the business and buy organically. And probably around about, I think it was around 2017, maybe we started getting some more like strategic inbounds. But we were small. Like we were, you know, doing like 1 or 2 million of AR and for a number of reasons they didn't go anywhere. And we sort of just went heads down and continued to grow and leveled up and got more experienced. Go to market leaders.
00:17:44 - Scot Wingo
Did you raise money or you bootstrapped?
00:17:46 - Dusan Babich
No, we continued bootstrapping.
00:17:47 - Scot Wingo
Yeah.
00:17:48 - Dusan Babich
We never really found there was an obvious way to deploy the money, like in the sense of millions of dollars and have investors get a return. So we certainly were approached and we considered it, but we didn't have this machine where you could just put money into a marketing channel and it would just work. We'd done multiple tests that had always had middling results. So yeah, we never raised anything after that.
00:18:11 - Scot Wingo
I know the end of this story, but how did you get to an exit on device magic?
00:18:16 - Dusan Babich
Yeah. So then I think, I don't know, there must be some list or radar you get onto when you cross a certain revenue threshold. I've been told it's 5 million AR. When you cross that, you're on some list and everybody knows about it.
00:18:26 - Scot Wingo
The private equity guys, largely.
00:18:28 - Dusan Babich
Yeah, private equity growth equity. So I was getting. It felt like it once said one.
00:18:33 - Scot Wingo
A day about when did you get to 5 million? So you were kind of like slow. Was there some, some. Did you just like tortoise your way there or was there some inflection point where it kind of took off on you?
00:18:42 - Dusan Babich
No, unfortunately, there's no inflection point. It was just a slower grind.
00:18:45 - Scot Wingo
Hey, slow and steady wins the race.
00:18:47 - Dusan Babich
Yeah, so. And we had like the typical decaying SAS growth rate, like, you know, so we did 100%, then 80%, then 70%. And maybe there was one year, we reversed that into a bit of quicker growth, but it was pretty much just a slow compounding. There was no massive inflection point.
00:19:03 - Scot Wingo
But I bet the Churn is pretty low because if you're the lead gen engine off these mobile forums, you have to really do something bad to get ripped out because no one wants to. It's got all the tracking, it's injecting into the CRM system, it's all wired up the way they want it and it's probably relatively low. Churn.
00:19:19 - Dusan Babich
It was pretty sticky. We always had logo churn. Like we almost were two different businesses. So if you had. If people spend like less than $1,000 a year with us, the Churn was a completely different profile to the ones that have been more like mid market. But we always had good net dollar retention. So even though we had a little bit of logo trend, we would always, I think we'd grow like 10% every year just based on existing customer base. So that helped kind of propel us forward. And yeah, we're getting all these inbounds. And I didn't take them that seriously because there were so many. And it was always like, you know, junior analyst. And then K1 Investment Management reached out and I gave them a little bit more attention because of their pitch, I suppose. And then a few months.
00:20:05 - Scot Wingo
Were they private equity or.
00:20:07 - Dusan Babich
They're a private equity firm out of la. I think, like reasonably new. I think they. I think that fund was like $2 billion fund. Anyway, they'd impressed me with their thoughts on the space. They had clearly done some research on it and then a few months later they just announced that they were buying our largest competitor. So that definitely got my attention then. And actually, did that feel like they.
00:20:27 - Scot Wingo
Had, like, did you feel like they kind of used you a little bit to understand the market or you went into it knowing that was a possibility and no harm, no foul?
00:20:34 - Dusan Babich
Yeah, I think I've been lucky enough. There's something that's great about the series. There's a very welcoming atmosphere and people are very willing to help. And I got connected to really great advisors that eventually joined like an advisory board. But yeah, they cautioned me, you know, you're going to get pumped for information. That's the point of all those calls. So. And you spend 15, 20 minutes, get on the call, try and Learn as much as you can as well. But expect that this person is filling out a matrix and they're trying to fill out your employee account and revenue and you know, growth rate, etc. That's what they're doing.
00:21:04 - Scot Wingo
Yeah.
00:21:04 - Dusan Babich
So no, I didn't. I was surprised. Like, wow, okay, you are really serious about the space then. Yeah. And then a mentor of mine, Duran, who I'm sure you know as well, he said, well, what on earth you doing? Like, get on a plane now and go and visit them and meet the partner and see how serious this is. So I did. We almost concluded a deal and for a couple of reasons, we ended up going our separate ways. And then we also growing really well at that stage. We had unlocked a few things that were allowing us to grow a bit quicker. And then Covid hit and we had this period of like, we had a quarter where like, I'm not sure we'll be in business anymore. But we came away pretty unscathed. I think we managed to grow like 2% and then exiting Covid, we started experiencing rapid growth as people realized like we kind of all these manual processes that rely on paper being brought back to the office. So we saw, you know, huge demand then that suddenly was pent up from COVID and we, we were engaged with, with K1 and yeah. Then we concluded a deal.
00:22:07 - Scot Wingo
So they rolled you into that other platform.
00:22:09 - Dusan Babich
They did, yeah.
00:22:10 - Scot Wingo
Interesting. Yeah, it's interesting. They bought number. Were you number two? So they bought number one and number two.
00:22:15 - Dusan Babich
I don't know. I don't think, I mean, in their portfolio. Yeah, we were. But we were significantly smaller than their sort of anchor platform, Portca. I mean, we were a quarter of the size best case.
00:22:29 - Scot Wingo
Yeah, to the extent you're okay talking about it was this like one of those 100% buyouts or more like one of those 51% where they try to keep you on for a while and then any range you can give us of what kind of outcome that was may help other founders understand things.
00:22:42 - Dusan Babich
Yeah, they didn't do any PR during acquisition and that entity, that rolled up entity just got acquired a couple of months ago. So I think they probably won't mind as much. But yeah, it was in the tens of millions of dollars. And there wasn't from the start they said there's not going to be 100% cash. You're going to have some rolled stock, which I hated at the time and I thought that was awful. But in fact the roll stock did really, really, really well.
00:23:12 - Scot Wingo
Is that out now that you had the second kind of the double bang. Yeah, yeah. They sell you on this like double bang. So get some now and then more later. But you know, the more later can always be zero, which is. And you have no control, which is a founder. We like our control.
00:23:24 - Dusan Babich
It was completely scary. And I remember thinking, how does you know this is going to go wrong somehow? I just don't know how yet. But yes, it was mostly majority cash and some earn out and then there was some rolled stock. I would say they undersold what our eventual outcome was going to be. Good.
00:23:43 - Scot Wingo
How long? So you sold what year?
00:23:46 - Dusan Babich
October 20th. We sold.
00:23:48 - Scot Wingo
Okay. Right. During COVID and Covid. Ish. And then when did the second transaction happen? Just recently.
00:23:54 - Dusan Babich
Yeah, I think it concluded July. July 1st.
00:23:56 - Scot Wingo
Of 24?
00:23:57 - Dusan Babich
Yeah, of 24.
00:23:57 - Scot Wingo
So kind of a four year role.
00:23:59 - Dusan Babich
Yeah.
00:23:59 - Scot Wingo
Were you at. Did you work for the company all four years?
00:24:01 - Dusan Babich
No, I didn't. I had an art, which was actually not that long. And then I ran product. I was chief product officer for a while and I probably. I think it was around May of 22. I left then and then. Yeah, they just recently announced that transaction, this most. The one that acquired the whole company.
00:24:23 - Scot Wingo
Did you have inklings or just a happy surprise? One day you woke up and this thing you probably had marked to zero was suddenly worth something.
00:24:29 - Dusan Babich
I was getting a couple of odd questions from people that I thought this is a real strange detail to be asking here in like April of 24. But yeah, I still stayed in touch with people and I think there had been discussions they were either going to buy other companies or they were maybe getting bought. So you never take them too seriously. But I still maintain a good relationship with the Go Canvas CEO, which was the, you know, the bigger company, our big competitor.
00:24:56 - Scot Wingo
Oh yeah.
00:24:57 - Dusan Babich
But yeah, it was an amazing surprise. It was, I think a really great deal. So they did PR on that one and it was a German public company called Nemechek. Bought them for like 780 million. Wow.
00:25:08 - Scot Wingo
Almost as big as ShareFile. ShareFile's recent transaction with. What's it. Progress?
00:25:15 - Dusan Babich
Oh, yeah, yeah.
00:25:17 - Scot Wingo
850. Yeah. Go Canvas. Did they have something here?
00:25:21 - Dusan Babich
Go Canvas was. Did they have something in.
00:25:24 - Scot Wingo
Yeah. Before they bought you guys, did they have people here? That sounds really familiar to me.
00:25:28 - Dusan Babich
Oh, right, Yeah, I think they. They did. They had. I think they had somebody running marketing. Yeah, yeah, they did have a few people in the area.
00:25:34 - Scot Wingo
Okay, interesting. Yeah.
00:25:35 - Dusan Babich
But they were also like. We had a more diverse revenue base. There's Quite a lot of international revenue. They liked this African thing that we had some lower cost engineering, labor, support labor. So they really scaled up that operation a lot and I think that helped because the world changed from I think like 21 where it was just the headline ARR growth multiple. That's all that mattered to like more of an EBITDA story where you had to be at least, well, heavily EBITDA positive or certainly not negative.
00:26:04 - Scot Wingo
Yeah. When they acquired you, were they big on the rule of 40? That's like all the private equity guys obsessed with it.
00:26:10 - Dusan Babich
Yeah, but we were too as well. Like I mean we were very, for a company I suppose as small as us, without like, you know, there was not the structure of vc. So the board meetings were kind of me and my co founder and then this advisory board. So we had to be obsessed with metrics and like study ourselves as if we were a VC backed company because we did eventually want to pursue an outcome. We never really, the business was never really profitable. So we were always hoping for an outcome one day but we just kept on growing. But, But Rule of 40 was something we were quite obsessed with.
00:26:41 - Scot Wingo
Yeah. And for those listening or watching Rule of 40 is where private equity firms, they look at your year over year growth rate and then so let's say you're growing 20%, then they want to see your EBITDA and those two things as a percent of revenue. Those two things added together. The goal is to get to 40 or north of 40. So if you're growing 20% they want you to be at 20% EBITDA. If you're growing at 30, 10 so on and so forth. Right now they don't like the inverse of it. They don't like 80% growth minus 40. So like no, that's no good. So you have to have relatively, I think the minimum on EBITDA they would like is at least 10, maybe 15%. Right now it's probably pretty conservative, so probably 15 to 20% because what they do is they use your EBITDA to go get leverage up when they do these acquisitions. Right. So they're going to go get some debt against that EBITDA. So that's why they like that rule of 40.
00:27:29 - Dusan Babich
Well I learned a lot from the experience just watching private equity. I think I had a more negative view of private equity because in the years prior it was more the traditional they'll probably pay like 3 to 4x ARR and it'll be 50% cash, 50% role. And it's kind of like A middling outcome. It's not a really positive outcome for the common stockholders. But that was not my experience at all. And observing the private equity firm and how they lever up the company and it's an incredible thing to watch and how well it worked. Yeah. So I learned a lot in that process. But the whole rule of 40 is nice, I think, if you are bootstrapping, because you'd always get compared against a company, you know, where they'd say you need to be tripling every year, but they would never mention, yeah, they're tripling, but they EBITDA is like negative 100% or something. Yeah. So the rule of 40 just keeps you saying, like, you should be exceeding that if you're a smaller company. But it allowed you to at least compare with, oh, we're not losing cash.
00:28:25 - Scot Wingo
So you should have it as a. You should have line of sight too. Right. So as a bootstrapper, you have to be profitable. So it helps you think through. Well, this year I'll be flat, but then you get to 5% and then kind of like inch your way there.
00:28:39 - Dusan Babich
And now I think that's just the way forward now for SaaS. But there was a time when EBITDA was almost completely disregarded. Everybody was heavily funded and capital was cheap, so nobody worried about it. But yeah, now I think, as you pointed out, it can't really be. They want to see like 10 or 15% irrespective of what the growth rate is.
00:28:56 - Scot Wingo
And the nice thing about bootstrapping is when you have an exit, the waterfall is very simple. It's you and the co founders. Did you have an employee stock option pool?
00:29:02 - Dusan Babich
Yeah, we did. Yeah.
00:29:03 - Scot Wingo
So, you know, so it's founders, employees, and that's it.
00:29:07 - Dusan Babich
So we actually even had. In the early days, we couldn't really afford to pay people salaries sometimes. And we said, look, we can pay you in common stock. So there were a couple of early employees that just got. They're just that common. But yeah, it was mostly held internally. I think the angel and institution were like 10 to 12% combined.
00:29:30 - Scot Wingo
Oh, like the accelerator, the maverick people. What are they called? Yeah, Wildcats. Okay. So then you left in 2022. I see you at investor meetings. So I know you're an LP in some of the funds around town and you've been doing some angel investing.
00:29:43 - Dusan Babich
Yeah, I was a little bit burnt out. It was quite a long journey and there was so much riding on that company that it took me a while to realize. Okay, that actually was pretty stressful because there Were times when, well, my income depends on this company. My presence in the United States depends on this company. And oh, by the way, because you.
00:30:02 - Scot Wingo
Were on a H1B visa.
00:30:03 - Dusan Babich
I was on an L1, which was like a transfer visa, which is a lot nicer or it's got many advantages to an H1B. But at that stage I wasn't a permanent resident yet. So everything was like hanging on this. And yeah, if this failed, I rounded down to zero basically after the exit and I spent some time working there. I thought I just need to take some time off and not try and have any goal in mind.
00:30:27 - Scot Wingo
She went crazy. Got a Ferrari, got some gold chains. I can see you've got like a razzle dazzle to you. That's not your style.
00:30:34 - Dusan Babich
Better that I didn't comment all of that. But yes, I did enjoy getting some nice things and I started playing with AR VR, AI, a little bit of robotics, but there was no like gold in mind. It was just tinker with whatever is of interest at the time. Like wake up every day. And so today I'm going to play with that or read this or early Oculus.
00:30:54 - Scot Wingo
Did you have, you have the whole family of Oculi or Oculuses?
00:30:57 - Dusan Babich
No, no, I didn't. I went straight to like a HP headset, I think the Reverb G2. So I did that. Spent some time too much time playing flight simulators and just enjoying like having no real objective in mind.
00:31:12 - Scot Wingo
Yeah. You have an Apple Vision Pro.
00:31:14 - Dusan Babich
I don't know.
00:31:16 - Scot Wingo
Yeah, I, I think you would like it. Don't believe the reviews. It's pretty good from an AR VR enthusiast. It's pretty amazing.
00:31:22 - Dusan Babich
Okay.
00:31:22 - Scot Wingo
Yeah, the see through AR stuff's really nice.
00:31:25 - Dusan Babich
Yeah, I need to play around with that. I, I then sort of got stuck into AI and kept on learning more about that and I haven't really got back into AR VR.
00:31:33 - Scot Wingo
But yeah, you can take interactive, I think they call them interactive photos from your phone. And then when you watch them, like if you want a vacation or something, it's really cool to puts yourself back into the picture. It's kind of like, you know, one of the sci fi Minority Report type of. Remember when he's watching his. That was his son and he's watching the movie and it's kind of like around him it gets pretty close to that. It's pretty wild.
00:31:55 - Dusan Babich
Well, you convinced me to check it out. Yeah, I suppose I did believe. I mean the reviews weren't great and it's hard to imagine like wearing that in Public or on a commute or something.
00:32:05 - Scot Wingo
For certain people that can afford it, it's good. It's like not for the. If getting a new phone is kind of a big budget thing for you, then you probably should not get one.
00:32:11 - Dusan Babich
So I took some time off, didn't really have much going on and I started playing with AI. I did some consulting for another cybernetic company that was trying to do a go to market in the us but then the AI was just exploding and I wanted to get back into it and I raised friends and family around and I've jumped back in and Taylor who introduced me to the area as a co founder and we're making something.
00:32:36 - Scot Wingo
Of a full circle moment.
00:32:37 - Dusan Babich
Yeah, it is. It's great to be working with Taylor. So I've known him for so long and we kind of figured we'd work well together. So. Yeah, it's a crazy space, but it's nice to be building something again.
00:32:48 - Scot Wingo
Yeah. So you're poking around in AI. I've been doing a lot of exploration there. Can you say like what you're working on?
00:32:54 - Dusan Babich
We slend stealth, but it's gen AI and it's a B2B application. It's. Yeah, I'll leave it at that for now, but hopefully in a couple of weeks we have something to show. It's quite a hotly contested space, or maybe not contested, but it's very busy and we want to figure out a differentiation and an exact positioning. But yeah, I think we'll have something soon.
00:33:16 - Scot Wingo
It's an interesting topic that we're going to do a lot on here. Let me ask a couple more questions and then we can spend a little time on that. It's interesting your story. A lot of the folks were kind of from here or like me have been here for like 30 years. You're kind of 10 years into it and you're an immigrant, which is awesome. You know what, what was it like to come to the Triangle? How did our startup ecosystem, I mean you weren't in San Jose long but like obviously compared to South Africa. And then, you know, maybe some of the people that were on your advisory board you like to give a shout out to just so other people kind of see what will help other founders. Like this advisory board say, say a bit more about that. Did you do like the quarter point kind of thing, like a Silicon Valley type where you gave them a little bit of equity or was this just kind of a. They all volunteered and how many people do you have on there? And like how did you use them, help people kind of understand that. I think that's an interesting topic that I get asked a lot about.
00:34:04 - Dusan Babich
Yeah, yeah, for sure. Well, I think the first thing, it was eye opening to me so I always wanted to move to the us it wasn't that I wanted to leave South Africa per se. I always wanted to move to the us. I wasn't considering other countries.
00:34:15 - Scot Wingo
It was a pull, not a push.
00:34:17 - Dusan Babich
Right. And part of it's been, you know, the access to capital, how much rewards growth and software and innovation. But I was a bit astounded to see just how big things were in terms of the amount of capital and how big even North Carolina is in terms of just the companies that are here and how big the mid sized companies are throughout the us so that was pretty eye opening. I haven't lived in those other markets long enough to compare, I would say, you know, like Dallas, Texas and Raleigh, North Carolina at least at that time seemed like they were of equivalent sizes in terms of venture capital markets and new companies. Now I would imagine that Raleigh's way past that. But yeah, I can't really compare it to the Bay Area, but I had a lot of mentors and advisors along the way. I try to give them equity. Some refuse. Jess Lipson was actually like a really, really great mentor. Informal. He wasn't actually ever on an advisory board but he helped me a lot.
00:35:21 - Scot Wingo
How'd you get connected to Jess?
00:35:23 - Dusan Babich
I think actually there was a time when like Citrix was thinking about doing something in mobile form space and one of the corp dev people reached out and Christianza. Yeah, he's quite an intimidating guy.
00:35:37 - Scot Wingo
He's intense.
00:35:38 - Dusan Babich
He's pretty intense. I remember that meeting.
00:35:41 - Scot Wingo
I have to have like a very large Starbucks before I meet with Christianza because I know it's going to be a whirlwind of a discussion.
00:35:47 - Dusan Babich
We probably knew people in common and we sort of got acquainted then during that time.
00:35:52 - Scot Wingo
So it was in the Citrix era.
00:35:53 - Dusan Babich
Yes, it was, it was in the Citrix era. But besides that I had another mentor, Slash who was a board advisor, Finney, who had moved from South Africa to the us so he kind of pioneered that whole journey like how you set up the companies, how you do the ip, how you do the transfer visa. So I was kind of just following in his footsteps. He had laid out that whole blueprint already. And then there were Peter Bourne and Bruce Bohm that probably more in the latter years helped me a lot with go to market and some product refinement. But there was A lot of help along the way. Like, I mean, I came here, I knew like one person, but the community is very welcoming, people trying to help you. They're excited about what you're doing. Of course, they're fascinated that you moved from South Africa to, to North Carolina. That was always a very.
00:36:39 - Scot Wingo
Yes. You're an anomaly. Your accent's amazing. Yeah. I remember I went to Grant Kitchen, worked for me at Channel Advisor and we went to some a trade show and I got a wedge salad. And you know, it's a blue cheese wedge salad.
00:36:53 - Dusan Babich
Yeah.
00:36:53 - Scot Wingo
And he kept asking me, what is a wedge salad? I was like, they take the lettuce and they make a wedge. He's like, what? And then it came and he's like, oh, a wedge. And I was like, it's the same word. He's like, no, that's a wedge. And I was like, okay, it's a wedge.
00:37:05 - Dusan Babich
Yeah. Well, the struggle is real coming with his accent because I think people also very polite here. So I realized that when I, when I made us friends, 50% of the time they didn't know what I was saying.
00:37:19 - Scot Wingo
Yeah.
00:37:20 - Dusan Babich
And eventually they said, you know, we don't know what you saying. Most of the time we're just nodding our heads. And now they've learned the accents or I been able to slightly change intonation to make it more digestible. But it is really weird coming to another English speaking country and there's certain things you would mention or say and you just get these puzzled expressions and I can't. An example doesn't come to mind now.
00:37:42 - Scot Wingo
But yeah, my favorite is when you're literally saying the same word, but like you don't understand each other. It's like, what, what. What was going on there?
00:37:47 - Dusan Babich
Oh, yeah, I get that a lot. Most of the people that have known me a while now have been exposed to other savage accents. So.
00:37:56 - Scot Wingo
Yeah.
00:37:56 - Dusan Babich
But it's less of a problem actually in like New York or LA or sf. I think they're just used to different accents or maybe like the South African accents closer to British. So they exposed to that. Whereas around here, like, you can definitely see some strange reactions when you, when you first open your mouth.
00:38:13 - Scot Wingo
Yeah. Always presents to me as more Australian or New Zealand and I have to kind of like listen carefully and then I can, I can kind of tell. You mentioned Duran. How did you meet him? Was this when he was at Sola Samanaj?
00:38:24 - Dusan Babich
This was at Samana Gi. I was doing a reference check on account exec Adam, and he had provided another safragan as a reference who was his boss. But maybe he didn't work at the company anymore. He'd moved to Pinehurst. I think it was Daryl Bestes. And he said, oh, you would get along well with Doron, you should meet up with him. So I said, okay. He made an intro. I show up at this manager office, I'm trying to find her on. All the meeting rooms are named after scotch distilleries. So I immediately think, okay, I think I'm getting along well with this guy. And then we spend so much time, we were playing like the points and miles game. Like we were obsessed with that. Well, we saw. And I couldn't believe I'd found somebody that was as obsessed. And I was learning a lot from him. So yeah, we spoke about that for like hours. We just hit it off immediately. Yeah, he's been, he's been great. He's more like a. More of an informal advisor slash mentor. But he taught me a lot.
00:39:21 - Scot Wingo
And he's very succinct and to the point. Like he'll, you'll have a conversation, he'll say you need to do this. He's like very, he's like, he's very good at summarizing things in a very succinct way.
00:39:30 - Dusan Babich
Yeah. Incredibly laconic. And like I remember I would ask him these questions and be a whole rambling question. It's 100,000. I said, I haven't even finished. He said, It's $100,000. That's what it is. That's the answer. It's like, oh, okay, yeah, you're right.
00:39:44 - Scot Wingo
Was he right? Yeah, yeah, he's right.
00:39:46 - Dusan Babich
Yeah, he does, he does that all the time. Which is, and he's the one who prompted me like get on the plane and go and have the conversation.
00:39:53 - Scot Wingo
Yeah.
00:39:54 - Dusan Babich
So yeah, he's, he's very direct and that's something unique about him that forced me to. You know, I would always, when I would meet with him, I'd say like, well, I'm pretty sure what I should be thinking about. And I'd go away thinking, nope, you were completely wrong about that. I learned a lot.
00:40:09 - Scot Wingo
Yeah. Let's talk about AI a little bit in the abstract sense. You've got your startup over here at Super Stealth. We're not going to talk about that. A couple topics that fascinate me. Number one is my AI journey. Went from playing around with some of the co piloty kind of things where they give you a productivity boost in the 20 or 30% if you're a developer or whatnot. Then I came across the framework which is retrieval augmented generation where you marry the traditional database. You and I are familiar with an LLM and you get this really interesting, you know, less hallucinations, more vertical oriented kind of results and more chronologically more current data. So that's really interesting. And then the one that's been really interesting is. And when we're recording this In October of 24, less than 30 days ago, OpenAI came out with 01. And that's more of an agentic. So these agents and what they've done there is they've trained one agent on how to think through big picture processes and it's a coordinating kind of orchestrating agent and then it has little worker agents which would be the normal chat GPTs. So you know what we're seeing is there's companies like Klarna where they're saying they used to have 5,000 in people, now they've gotten rid of a bunch of customer. It's really not gotten rid of, but they've had churn naturally bring this down. So now they're I think half that headcount and they can see it going to like a thousand or something. And they've slowly but surely got these agents that are doing most of the customer service. They're doing a lot of credit checking a lot of these processes that used to be very much, I'm taking number, put it in here, move it here. Kind of like information workers can be automated with these agents and they talk to each other and do interesting things. And now they're working on the engineering team and then they announced they're going to get rid of some of these big SaaS applications, specifically Salesforce and Workday and just build their own because they think they can do that cheaper with this augmented engineering team versus the SaaS licensing. So that's been part of my journey in kind of thinking through this. It's really fascinating. Oh, and then just the last one is Jensen, the CEO of Nvidia just this week was on one of the podcasts and he talked about, you know, he sees, I think they have 25,000 people now. He sees a day where they'll have 30,000, 35,000 human employees and 200,000 you know, AI agent employees basically kind of augmenting what those people do. It's like a really interesting, as a multiple time founder, it's really interesting to think about. All right, I'm going to have these human employees and these kind of like AI employees and they're going to work Together and that's going to give me all this leverage. The extreme of that is in Silicon Valley they talk about the single person unicorn. Will this get to the point where, let's say Dushan's 6 company, it's just you and an idea and this army of AI agents. What do you think about all those topics? Is that poppycock or whatever the right South African word is, or what do you think about all those topics?
00:42:57 - Dusan Babich
Well, yeah, there was a lot there. I mean I followed AI for many, many years, way before like LLM. So I didn't follow it intensely but always kept an eye on it. I've been fascinated and fascinated with it since watching like, you know, 2001 and multiple Odyssey. Right, yeah. So like I always, always, always was.
00:43:16 - Scot Wingo
Yeah, what's the big. The monolith.
00:43:18 - Dusan Babich
Right, Yeah, I was fascinated by the topic and tel 9000 et cetera and all the science fiction references. So I was really excited when some of this stuff started coming to fruition. But it's funny, I stay in touch with ex MIT computer science and AI Lab grad and he was not impressed at all with what our LLMs are doing. And he said, I don't see any path for this to go to AGI in artificial general intelligence. But I mean it really is impressive what's going on. Considering that, and this is probably a gross oversimplification, but it's just predicting the next token and what that actually manifests in is astounding. Yeah, I don't know about the single person unicorn, but it does feel to me that this is as big as or bigger than Internet and mobile, which were absolutely colossal. But I think this one will be more. It's going to display some roles entirely and change the way some aspects of work are done. But like my own exploration, I just try to build something simple with like a vector. Db you were mentioning rag and it was just uploading like a bunch of PDFs actually like quarterly statements and being able to interrogate an AI and say, you know, what is the revenue from this product line in third quarter 23. And it's really, I mean what you can build. And now building this new company, I'm doing coding again, which is nice, cool. But the like.
00:44:48 - Scot Wingo
Are you using Cursor or just VS?
00:44:50 - Dusan Babich
I'm just using VS code with GitHub Copilot and then I have ChatGPT as well on the side. But what used to take. It felt like days to figure out.
00:45:02 - Scot Wingo
Yeah, in the net days you get stuck and you would be like, you'd flip, you'd have to get a book. So you had a wallet, books, and you get the book off, you couldn't find it there. Then you go to a Usenet group and you'd post and you wait and wait and then, you know, no one would answer for days. Then you'd like, say, help, you know, then you'd call Microsoft and get to level one, level two, level three, level four, and then finally someone would answer your question. You know, it was like a two week journey. If you got stuck on something, it.
00:45:26 - Dusan Babich
Was just so much like boilerplate code had to be written by hand. And yeah, the. I think it's still helpful if you have some background in software development and computer science because your prompt will be that much better. So you have to give it some direction. But once you've given it some direction, like the days of writing, a whole lot of boilerplate code is gone and the code's maybe not optimized, but it's better than I would have written it and it can refine itself so quickly. I think Stack overflow was a big moment for developer productivity when at least you could find an answer pretty quickly and you be somewhat certain that is the correct answer. But this is just a game changer for that specific aspect of software development. So I do think that there's still going to be even increased importance for incredible coders. But the kind of junior entry level thing where you're just pumping out boilerplate code and tests and things like that, I think that's all gone now.
00:46:25 - Scot Wingo
Yeah, when you're writing code, 80% of it is kind of grunt work, kind of like template. Then 20% is like novel creative. So it's going to be nice to just really focus on that and have the AI do the other. Yeah, if it does the novel part, then you and I are out of a job.
00:46:39 - Dusan Babich
Yeah, that too. Yeah. But in terms of like worrying about syntax and reference documentation like that, you just don't have to think about that. I mean, if you've got some familiarity with a couple of different languages, then you'll immediately follow the syntax and you're not having to write any of that yourself. And it's cut and paste and it even helps you with debugging, which is incredible. So if you like, you know, I'm sure you do this too, you're prompted to say, well, I think there's a bug that you've introduced in this line. Something's not quite right. You know, this variable's not being set correctly. It'll then Spit out another iteration that fixed it.
00:47:14 - Scot Wingo
Yeah, you had this like I was dealing with a government agency and they gave me like a 60 page document. I scanned it in a PDF, I loaded it in 01 and it was complicated because that weird columns and the data was just like totally disaster. It wasn't something I could just like pull OCR out of the PDF and it kept doing it wrong and I kept telling it how to correct a one and ultimately it was like, you're right, I was wrong. And then it would like go correct it. And then at the end it like said I'm done with the CSV, do you want it? And it took like you know, four prompts to kind of get there. It would have taken me weeks to, you know, or you'd have to send it to like India and have someone transcoded or something. It's amazing like that it can think like that.
00:47:48 - Dusan Babich
I think you were mentioning just in terms of like finding something on a webpage or in a PDF document was. It was obviously trivial to understand, but very fragile code to write to figure out the DOM and get to a certain element or pass a PDF and understand that structure. Now it just please tell me what it said in this box and then answer gets spat out immediately. So yeah, I think like studying for coding, it's really changed almost everything. It's going to be interesting to see what other functions are displaced or made greatly more efficient, but it's hard to tell. I think initially they thought legal would be very subject to displacement by AI. I don't know that that's happened as much as people expected.
00:48:35 - Scot Wingo
Hallucinations are really bad in the legal world that in the medical world they have much bigger consequences than a B2B SaaS app. If someone calls the wrong number, we'll be okay or something. You know, the product's not described entirely right. Within reason. If it's the wrong price, that can be done that before. So we got like two more minutes. What are some. So this is from founders for other founders, you're kind of, I don't know how you count but you know, was device magic feels like startup maybe like number one, two or three somewhere in there.
00:49:03 - Dusan Babich
Yeah, probably two. I'd say like two.
00:49:05 - Scot Wingo
So now you're working on number three. What would you say to first time founders? Like, you know, what are some lessons learned that you would share if Some, you know, 22 year old was fresh out of school and said hey desean, what, what are some tips? What, what's your answer?
00:49:19 - Dusan Babich
So mine are going to be biased due to the mistakes I made. So this may not be like, you.
00:49:24 - Scot Wingo
Know, that's what makes it interesting. You have a. You have a good list.
00:49:27 - Dusan Babich
I would say, like worry about distribution as early as possible because like we're now in a place where with AI, you can pretty much write any B2B SaaS app. Like you mentioned Planet replacing Salesforce on workday, if that can be done with that quickly. Most applications that are line of business or vertical, you know, you can write it. It's going to be distribution and what's the cost of customer acquisition? That's going to be probably a limiting factor. And yeah, I would also say like probably be cautious with VC and what the outcome expectation is. And once you sort of sign up for that journey, you can't really detach from that journey. So think about the kind of outcome and maybe work backwards. But yeah, I'd say distribution was a huge thing that I didn't think enough about. It still comes down to, and I've read this so many times, most of the reason startups fail is because you're building something nobody wants. So I would also, especially like in the B2B thing, I think it's different for consumer, but maybe consumer, you have to just think ahead and nobody's going to describe the problem well enough for you to build a product like that. But in the B2B space, they may not use the right nouns, but the buyer completely understands what they want, what they want solved. So better to test that out early. Maybe not going full lean startup, but I would invest more time in figuring out that you're building something people want because that's the first issue. The next one is distribution and then the rest of it you can fix. You can always solve that later. You can always hire a good, great VP of sales. Yeah, you can hire a great marketer. But if those two problems are not solved, then it's just really difficult.
00:51:11 - Scot Wingo
Yeah, as a tech founder, we don't really want to worry about distribution. We want to build something kind of fun. But even the best mousetrap doesn't sell itself. That's the hard part, is getting it. There's so much noise and people have so many options and things they can look at and getting in front of them is what you're calling distribution is the hardest part.
00:51:28 - Dusan Babich
Yeah, and we always in device magic wanted to find some like viral distribution mechanism. We never came up with one that worked when we tried a couple. But yeah, like figuring out the growth channels is essential. And at least the CEOs got to be obsessed with that. Maybe the CTO doesn't have to be, and he or she can obsess with the product. But yeah, I definitely didn't spend enough time on that. And it doesn't mean that that's impossible. But it's harder to scale quickly if you don't have a real idea of who the buyer is, what problem you're solving, because it just reduces any capability to do outbound. And actually, maybe that's another good test. If you're doing like B2B, try and outbound it. Like, try and get some meetings booked with outbound. And if you find that I don't even know who to call, I don't know what their job title is, I don't know what problem we're solving, well, then that's probably worth fixing first before building anything.
00:52:18 - Scot Wingo
Awesome. Well, thanks, Deshaun. Thanks for coming on.
00:52:20 - Dusan Babich
Thanks for having me.
00:52:20 - Scot Wingo
I've learned a ton of stuff about your background, so it's awesome to hear. And thanks for sharing your stories with our listeners and viewers.
00:52:27 - Dusan Babich
Great. Thanks. It was awesome to be here.
00:52:35 - VO
For more Tweener content, check out the Triangle Tweener time substack@tweener.substack.com for more tweener content, check out tweenertimes.com thanks for listening and we'll see you again soon on Triangle Tweener Talks.