This Week in Startups - E1146: LAUNCH Accelerator Cohort 19 founders reflect on their journeys thru the program: Blush (custom illustration tool), Palabra (no-code email automation) & Rolebot (AI hiring platform)

Episode Date: December 2, 2020

Check out Blush: https://blush.design Check out Palabra: https://palabra.io Check out Rolebot: https://www.rolebot.io Apply for the LAUNCH Accelerator: https://launch.co/apply FOLLOW Jason: https://linktr.ee/calacanis

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first five employees by signing up at chart hop dot com slash twist today hey everybody welcome to another episode of this weekend startups i'm your host jason calicanus and today's a special day we are going to celebrate and get to meet three of my latest investments. These are three startups that went through the launch accelerator, and they did it virtually. So when the pandemic hit, we moved our classes in March of 2020 into remote. We thought we would be back sometime in the summer or the fall, but here we are 10 months later. And thankfully, we're on the brink for those of you watching this a decade from now and who want to get a feel for what the pandemic was like. We're on the brink of people taking vaccines and maybe getting back to normal, but we took the year and perfected

hopefully how to run a virtual remote accelerator. And so we had seven companies come, as always, we invest $100,000 into them for 6% of these companies, which is a good deal, but it's a ton of work to run an accelerator. And the concept behind an accelerator is you pick 1% 2% of the applications you get, and hopefully you do a good job picking, you anoint them, and then you share those companies and you work with those companies on growth, on refining their pitch, and then you introduce them to hundreds of investors. In this case, I believe the 19th cohort of the launch accelerator, LA19, as we call it, hit 750 investors.

So they got to meet a lot of different investors, and that is really the focus of our accelerator growth as in revenue growth and meeting investors. And at the end of each class, we asked the invited guests, the judges, who are investors, to rank the companies in terms of which ones they were most likely to do a follow-up meeting with and ultimately invest in. So they give us their one, two, and three. And we keep those scores. And it's a really interesting way for us to match investors, right?

So if somebody picks a certain company as number one, they probably would like to do a follow-up meeting. And so that's one of the reasons we do it. It also gives the founders and the cohort a chance to see how they're doing versus their competitors. So if you know this company is coming in first every week, this company is coming in second every week. Maybe they're doing something right. Maybe they have some clarity in their pitch. Maybe the product is exceptional. Maybe the founder is really good at answering questions. There's a number of different reasons we like to do this ranking. It's also entertaining for me coming each week to get an idea of who's doing well and why. So, In first place, we had the company blush.

And Pablo Stanley is the founder, co-founder, and CEO. And he had a really unique product. And I like to explain why I was drawn to these products. Ultimately, I approve every investment we make. We're a solo GP firm launch. We have a bunch of managing directors and associates, but ultimately I have to rubber stamp everything myself. and I saw shades of Canva and other consumer subscription software inside of enterprises.

So enterprise subscriptions for designers and would-be designers were something I saw in blush. Dot Design. So welcome to the program, Pablo, who came in first with 165 points. How are you doing, Pablo? Doing good. Thank you. Thanks for having me. And yeah, it's so blessed to be first.

but I was joined by other great products too. Yeah. But yeah, you're right. It's it was, our idea is to unlock people's creativity, the designers, but also the non-designers. And this can be the people who are starting a business, who are starting their own, I don't know, their own thing where they're telling their story.

Like now everyone has a voice in a platform. And also teams, like the people who are in different parts of a team who can also tell a story. And they sometimes have to be the ones that have to be creating the creative assets, right? So that's where a blush comes in. So when somebody goes to blush. Dot design, Pablo, what will they see? What is the offering if you would explain it in a sentence or two? Yeah.

So it is a place where you're going to see a lot of doodles, a lot of illustrations. And these are all coming from different artists. around the world. And as soon as you pick a style of theme that you like, you're going to be able to edit every little piece of the artwork, which is usually not the deal. Usually you get one stock thing, one thing that was pre-built, and that's it. You don't get to say anything about it. Maybe you choose the best one that fits your needs. But here on Blush, you actually get to edit it and you make it your own and then download it. And this is a web app, or Blush the design, as you said,

but also you can use it with different integrations. So if you are someone who uses Figma, uses a sketch or other creative tool, you can also use it there. And that way it's in context and it doesn't break your creative process, your design process. And the product is $10 a month, I think, or something like that, $15 a month?

It's $15 a month. If you get on the pay plan, it's a little bit cheaper. It's a little bit more affordable at $12. Got it. Yeah. So per seat for enterprise. And if I was going to build a website and I wanted to have an illustration of a bunch of people sitting around a conference room desk, let's say, I could actually change their hair color,

their gender, the shirt they're wearing. I could click all of those little items and change them up and make them my own. So if this was a work from home piece of enterprise software and I was building the website for it or I was doing a conference and the conference was specifically for people in Japan and it was specifically for men or women in Japan or for teenagers,

I could change the artwork to match that use case because each illustration as opposed to being a flat file is broken up into the component pieces and so you could say, show me two people in a park or I could change it to the beach or I could change it to the moon or a city, correct? Exactly, yeah.

It's just whatever story you need to tell and for whatever audience you want to reach, you can adjust the art to adjust to those needs. And it's something also that people usually say, like on our MPS survey, is that it's, yeah, it keeps in that ability, but it's also, it feels fun. They just like the ability to actually change all these things. Or sometimes they just press the random button and just see what you get.

And always whatever you what you get with the random button actually just looks fine. It looks perfect. So, so yeah, it's something that I feel people feel empowered when they use it and feel like they're creating something unique. How many different illustration styles will I find at blush. design today? Right now, there are around like 20 different illustration sets, collections. We are actually, we're super excited because after launch, we started reaching out to more artists. And now, like, we're going to start 2021 with around between 50 and 100 different artists who are joining.

And that's going to be great. And then after that, our idea is to open up. the tooling for creators right now. It's almost like a closed beta in a way. So just some artists have joined the community and have worked with us really closely. And now we're creating the tooling so anyone can upload their artwork

and the community can actually say which ones are the best ones with voting and all that stuff. When an artist submits their drawings, do they have to give them to you in some special format and then translates into your website? i.e. like an illustrator file with layers, or what do they call it when each object is separated

like that? Yeah, exactly. So every illustrator has their own workflow. Some of them will work with Procreate, which is like a tool on iPad. Some of them will be more traditional with Adobe Illustrator. Some of them actually try the newer tools, like a fake mind sketch. Doesn't matter. Like all of those, we can read them as long as they're vector files. As long as you can export to SVG, we can read it and put it on blush. And that's what also the illustrator, the creator tool is doing that whatever tool you're using, we can just turn it into a blush system and to a blush modular illustration system that you can make it available.

And you've had 67,000 people sign up for the product and you're currently at 700 paying customers, about 10K a month in MRR. When we get back from this quick break, I want to know what the reception was from the investment community and why you think you did so well in terms of fundraising and also in terms of ranking first in the launch accelerated 19 class when we get back on this week's startups. Guess what? Masterclass is giving twist listeners the perfect gift for the holidays. You can get an annual membership to Masterclass and give one to someone else for free by going to Masterclass.com slash startups right now. Masterclass.com slash startups right now.

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and give one to someone else for free, two for one. What a great deal. Get unlimited access to every Masterclass for you and your friend right now, masterclass.com slash startups. That's Masterclass.com slash startups. All right, welcome back to this weekend startups on the program today. Three founders we're going to meet who came in first, second, and third, in terms of the voting in the launch accelerators,

19th cohort. The first up was Pablo Stanley from blush. Dot Design, or just blush, but you can visit them at blush. Dot Design. Just quickly as we wrap up here, and we'll talk a little bit about the overall startup climate, but you did come in first, and you did have a successful fundraise, and in fact, you were, I think, oversubscribed, had a lot of people who wanted to invest. What did you learn during the accelerator about fundraising, and why do you think

this idea at this time was so well received by investors? I was blessed that I learned a lot of things, but if I have to pick three of them, one is like, you've got to stay focused, which is something that in every startup, I think it's really hard, right? Because there are so many directions you can take. But if you stay focused, that will allow you to just like focus on your goals, on your strategy, how you're going to get there. You keep people motivated. but also it looks well with investors because investors want to see clearly what is coming next and if you have a clear path there. Also, something that I think investors really gravitated to was being authentic,

which is something that I think you should work on something that is crucial for you and use your startup as a vehicle for those ideas. And maybe that's a little bit hippie, but it's actually true. Investors also gravitated towards that. They saw that my co-founders were really creative coders. I'm also an artist, illustrator, so that it all kind of like makes sense. So that was also something that I think they appreciated of our team. And also, well, as a lesson for myself, also, it was just like being able to listen.

and after being in so many calls, because by the way, we do this every week, every week we have to pitch and we have to talk to different investors. 16 weeks straight of just pitching. Everybody from Sequoia to Kraft to every venture firm in the Valley, angel investors who put in 5K, seed funds that put in 250K to venture funds that put in millions. You pitched everybody. And uniformly when you got to know, actually, you know, I'll save this for the end. I want to know what were the most common reasons people passed on investing. and what you learn from the nose. Next up is Karen.

Surfati, did I pronounce it correct, Karen? That's right. Yeah. And she is the co-founder of Palabra, which is P-A-L-A-B-R-A, palabra.io. And I think I saw you on Daniel Gross's Pioneer app,

which is a very fun community where people build stuff and they compete to get attention from Daniel and his team. And I think I happen to see you pitch, and I thought this is a great idea, Palabra. Tell everybody what was the idea for Palabra. Okay. So Palabra helps product teams drive product adoption with email automations.

That's what we do, basically. For people who don't know what an email automation is, can you give us the canonical best example that people would recognize immediately? For sure. So let's say you have a. startup and so you have a user sign up and then you need them to validate their email address, right? So because if they don't, they can't complete your, your key actions. They can get to Balurop. And your problem is that you cannot go into your app or your database every week and

get a list of who sign up this week so I can email them and remind them to validate their email address. We help you automate that email. So you don't need to do that manually every week. And the other thing we help you with and that we learned building this product is that most companies will depend on an engineer to get that list of who signed up this week. Big companies and startups, they all have this problem where the marketing person or the product person who needs to send this email every week doesn't have access to this data. So we solve this like what we call a no-code implementation of Sackment, which is basically we help you get all this customer data, and you don't need engineers for it. So you're completely free to send these emails by yourself,

and everything's automated and you can improve your customer retention that way. And it's all visual and no-code, so you don't have to go to the tech department and say, hey, when somebody signs up, three days after they sign up, if they haven't used the product, duX, and then four days, if they do Y, then do Z, all that logic and that mapping is done with the visual editor that you've created and some logic trees. And you can do this all as the marketing or product person, correct? That's right. And the other thing that I noticed personally as a product person is that

when I try to do the same thing with other tools available, it's always very hard to solve. It's never as easy as moving a card and adding and changing things. You always need to. And there's sense and logic as if you were an engineer. And so we solved it in a way that people understand, which is basically something that looks like a trello board. And you can just move cards around, set up your automations. You can set it up in two minutes with our engineers, which is something that users enjoy a lot. And it's super easy to use. And it's super affordable was the other value proposition. I mean, people can do this kind of complexity with tools like Segment and MailChimp and MixPanel, I believe. But those are all very expensive as well.

and they're not visual editors to the best of my knowledge, right? So you've kind of done two things here as you've simplified it, and you've also made it more affordable, correct? That's the value prop. It is, and it's also the data, as I mentioned. You can do most of the things with the tools that you're using. You can do it mixed panel, but every step of the way, you need engineers to set up things for you.

To bring customer data into these platforms, we cut that part off and you can just do it yourself. So it's cheaper and it's also something that you can do yourself in five minutes. And you came in second with 114 points right behind Pablo and blush. What did investors think about this idea as you brought it to the community and you pitched over 16 weeks? You came in second and it was a really solid cohort.

So coming in second was no easy feat. And coming in the top half of a class that's selected from 1% of applicants also, you know, sort of being the best of the best. What did you learn from the investor reaction to your pitch? Yeah. So I think that the first thing I learned was from all these questions that investors would ask, like how they think about our business. And I learned basically how to ask those same questions myself to our business.

Like, how do we solve this? What's like the real answer to how we're solving this problem? And so I learned how to think like them. That's the first thing. And I think that what resonated with them was, first thing, definitely the fact that the product looks good and it's easy to use. But also the fact that I think that we all agree that there's still a problem with emails, with the emails that companies are sending. There's a problem here that no one is solving and the solutions are not good enough. And there's definitely not a single winner.

And that's why also there are so many competitors in this space. So I think that's something that was very attracted to them. It's very interesting when you get feedback from six, seven, eight investors per week, every week, in and week out, and we track the question. So Presh, who was an associate at the firm, we'll type in the questions as they come in and put them into this Slack room where your cohort is hanging out. And we get to look at those questions over time. And you're saying those investor questions led you to examine your business and try to really

understand with empathy why the investors were so concerned about the investors. these same couple of themes, one of which was, why does this exist? Aren't there a lot of people in this space? I was like, well, what you're saying is they still perceive there to be an opportunity even though, and there were still problems to be solved, even though people have been solving this problem for 20 years. Yeah, totally. And I totally agree about the questions.

I think it was the most interesting thing for me. It was my first time raising money from investors. and going through that was what's awesome, and it was also horrible, like talking to 30 investors every week and then having one-on-one meetings with, I don't know, 20 or 10 of them. And many times, like, hearing this is not good enough for us, this is not like hearing no after no.

It also, I learned a lot from that, to be honest. It gets in your head hearing that many knows until you realize you only need one yes. And that is sort of the magic of all this, isn't it? And also, what I learned is that this is not for everyone. Like, there's a type of investor that's good for us. And that's probably going to be a product person, a person that really appreciates a good product.

And probably a person who has an engineering background, that they are going to understand how, how what we're trying to solve is it's hard. And that's also why no one is doing it or not a lot of people are doing it. And it was true. like when I finally realized who these people were, we were able to close around in like a week or two. It was one of the fastest clothes I've ever seen. So congratulations on that. You just whipped through the process, which was just very encouraging to me that we had put you in front of enough investors.

That's always what I'm worried about is I believe if we select companies for the accelerator, there should be some downstream investors from us who like it. And it really is. I'm reticent to use the dating analogy. But there are some people who, you know, want to, you know, be in a couple or in a pairing where and in a relationship, whether it's business or personal, where they go on vacation five times a year. And then there are other people who like to stay home and watch Netflix and cook dinner, right? Like, you have to find the investor who's actually compatible with what you want and you

find that. So we'll talk a little bit more about that when we get back. And next up, we'll hear from our third of the. the top three vote getters in the launch accelerator 19 class, which is helping people with AI figure out who to hire next when we get back on this week and startups. The way we worked has changed overnight and it has been a long 10 months, but we have learned that having access to the right resources is essential when you're trying to adapt to your business to this very changing climate.

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Again, Fiverr.com, code twist. Welcome back, everybody, to this week in startups. Thanks to all of our partners for supporting the show. It gives us the ability to have a huge team here and to do this show consistently two, three, four times a week with a high level of quality. I hope in my performance and my teams, I'm laughing because today we had a bunch of technical stuff.

now if it was what we figured it out. So next up is Shane Bernstein, and he is a CEO and founder of Rollbod. You can go see them at R-O-L-E-B-O-T-I-O. Again, these are nascent small companies, well under a million dollars in revenue each. Typically, when people come to the accelerator, they have two to 25K a month in revenue, sometimes as much as 50 or 100 if it's a marketplace, and they're taking a percentage of that or it's a direct-to-consumer product. But we like companies that have a couple of customers to come.

and Shane's company, Rollbot, which you can see again at Rollbot, bot, bot.io, came in third with 73.5 points. And they had a really interesting idea, which was take a LinkedIn URL, take a person's profile, put them into a little machine learning, and figure out who the next great employee for you to hire is. Did I explain the basic concept well? Yeah, I think what we're doing is really trying to remove some of the friction points in the recruitment process today,

which really, from a platform perspective, which really doesn't exist, just make it easier and cheaper for customers to hire. And how do you do that? Because we're in a world now where we had so many startups

the last decade in the recruiting space, everybody trying to improve diversity in the recruiting space, trying to lower the cost of finding people, trying to lower turnover, trying to understand employee sentiment, maybe employee incentives to get people,

to get people in, to do interviews, so many different ideas, so many different startups, so much money in that space. What's your unique take on it with Robot? How do you do it differently than everybody else in the space? Yeah, there's a lot of, it's a very crowded, or overcrowded space. I think that's one of the challenges of our business. I feel like companies keep coming in and kind of repeating the same thing that already exists with a different banner. And what we're doing is very unique. So we're removing a lot of the, we're not redoing recruitment, we're not reinventing recruitment. We're just recalibrating it. We're removing some of the antiquated layers that exist and just simplifying it. What we've done is really we removed job

descriptions, which is one of the biggest friction points of the recruitment space. Someone has to translate the job description. It takes a long time. It adds another, you know, a month, three to four weeks onto your hiring process. We remove the job description. And kind of the use case behind that is, you know, point us to your two best people in your company and let us clone those people. And that's really the business case behind that. So basically what robot does is, you know, we remove the job description in lieu of that. We have our customers point us to their two ideal people and we essentially clone them or build them a look-like town pool based on those two people. Our AI goes out and captures evidence-based data on the web and builds a look-like town pool.

And then we schedule the interview, really simplifying the process, which really cuts it in half. And in addition to that, you know, our cost also lowers by half because what we're doing is monetizing the interview, not the placement fee of which an agency does and not giving you a resume, which may or may not be the right resume. So how do you charge customers at Robot, if not through placement or a SaaS fee? What do you do? So we charge by the interview, essentially the handshake. It's the first touchpoint. It's the first phone interview. We know that one, we know that one in five, after interviewing five people, one, most of our customers make one higher. So we charge at the interview level, which is much different. Essentially, it's 90% cheaper than what an agency would cost you. What is an agency charge to place 100K or 75K employee? It's about 20 to 25% on average. So for 100K. So it could be 15K, 20K, something like that.

The average placement fee today is 20 to 25K. Paying no less than, you know, no more than $2,500 with robot, but most of the time, half of that. So it's significant cost. So you're charging $500 per interview with a qualified candidate. Yeah, it's actually a little bit cheaper than that. But yeah, no more than $500 per interview. interview. So out the door. And is, do you have people who complain and say, oh, these first three weren't targeted enough? Can I have my money back? And then they wound up hiring the fourth and they

don't understand that that's part of the process. Yeah. So, I mean, most companies don't hire. Yeah. So, so most companies, it doesn't take more than 10 interviews. We structure our pricing around 10. So we double our success metric of five to ensure our customers make a higher. Though our, our pricing is flexible. So, so, you know, no matter what, you make a hire. But, yeah, that's, I mean, essentially that's what we're doing. We know that a certain percentage of interviews are not going to be the right fit, but we also know a certain percentage are. So from a pure volume perspective, if you interview enough, you'll make a hire. And most of our customers are hiring one out of five interviews today. How do you deal with injecting bias into the process? If a machine is doing it, machines sometimes might actually be biased because they might pick up a bias that exists in society, i.e., oh, you have people from Stanford because, the founder of this company went to Stanford or the founder went to an East Coast school, they went to MIT, and they have

four MIT people there already, and those four MIT people all were in this math, you know, math, you know, guild or something, and all of a sudden, the AI is taking you down a path where you're cloning people, and then

the organization looks maybe too much like a certain type of person, i.e., becomes all white males or skews too heavily Asian, let's say, or Indian and because you've got a bunch of Asian and Indian folks because your CTO brought a bunch of people from their previous company and had a dev shop in India, right? You could be inheriting bias unknowingly, right? Yeah. So we actually, we, so we guarantee diversity. The way in which

we do that is we actually look at, we're basically, our AI, right, is someone selects yes, you know, our AI learns, someone selects no, our AI learns. So our AI is only as good as what our users where our customers are selecting. So we push AI. So in other words, no matter what our customers are selecting, our AI still delivers a certain percentage of diverse candidates. Our diversity is actually based off the U.S. government census, including gender. So we serve, like, so if our customer, if we're serving 33% or more, so for every 15 profiles we serve, five or more diverse, we're serving, you know, five or more. If our customers are selecting three, we're still select, we're still serving five or more. We are in the sourcing business. So our customers select who they want, but we can't

control who's actually hiring. They have to hire. But our goal and our theory around diversity is the more that we source, the more they interview, the more they interview, the more they hire. And that moves the needle over time. You can't really, you know, force someone to make a hiring decision. That's up to the customer, up to the company themselves. But you can certainly encourage it and really ignore their diversity or their bias when they're actually selecting by continue to serving. And that's what we do. And I'm curious to people come to you and say, hey, I've got a diversity problem in this organization. Can you only serve? We want to use robot just to get diverse candidates.

Can you only serve me this specific weakness we have in our diversity at our organization? And this, this, you know, a selection of candidates. We do that. We do that. Yeah. So a lot of, a lot of companies will have, you know, they have diversity levels. And let's say they have, you know, they need to increase their Native American hiring. And it's low right now.

So we actually, we can serve, you know, specific groups of people to get them up to a level that they're comfortable with and that they're focused on. So we most certainly can do that. Our customers will let us know what they would like to do. We're happy to deliver on that front. You did well because you were increasing revenue while you're in the accelerator. What did you learn from the feedback from investors? What were your major takeaways from this process of literally presenting over 16 weeks, maybe 20 times because we had some side meetings, et cetera.

And then you had, of course, all the meetings you did one-on-one. So I guess what did you learn from that process of having yourself pitch relentlessly for 16 weeks straight? So you definitely experienced a lot of humility and a lot of praise at the same time. So you learn how to tell your narrative better. I mean, we took 25-minute pitch, which I was pitching to, you know, investors prior to the program. And we turned it into three minutes. And we continue to refine that. And Jason, you know, you really got us, you know, every day is demo day.

So we have to be on our A game. You really kind of bring the A game out of us on a daily basis, and that's important. I mean, that, you know, increases confidence. It gives us as founders, which we typically don't have, we don't report to anyone. So we have a deadline. We have to hit. And this is more of like an expectation that we have to hit every week, week over week. We really, you know, pitching every day, you know, pitching every week, you gain confidence.

And you get better at what you do. And you start to tell a better narrative about. what your company does from an investment point of view. I think that's important because I'm pitching to a lot of customers every day. I'm also pitching to investors. I think pitching to investors and customers is a very different path. Yes. If you were to separate out what customers care about most versus what investors care about most, what would those be? Customers care about value. They care about what they save, what they gain. Investors care about growth. They care about, you know, month over month growth, percentage of growth. They care about

consistent growth and consistent revenue, not just you hit one month, but they want to see consistent. They care about team. It's a completely different dichotomy of what, you know, customers care about versus what investors care about. And switching hats, you know, every day, sometimes by the hour is difficult. So the more you do it, the better you get at it. Yes, the investors want to see that you have a growth mindset and that you want to build something large and meaningful in the world because that's the only way they're going to get a return on their investment. And then your customers, they simply want their problem solved and they want it solved and as elegant and as quick a fashion with the best possible outcome. So it really is two different drivers there. and I think we heard earlier from Pablo and Karen that it was a bit exhausting,

but that you, and you get a lot of knows, but you get some yeses. How did that process go for you in terms of who was interested in this business and where there are a large number of people who were just like, I just can't get interested in another recruiting platform? Yeah, I mean, we encounter that a lot. I think the institutional investors that were most interested in what we did were really the operator, founder-based VCs, because they experienced the pain point at some level during their careers versus the traditional VCs. You know, they look at, they look at the

recruitment space. They look that there's a lot of investment made in it. There hasn't been a strong return. I mean, if you look at some of the, just for example, you just had hired, got acquired by Vetteri recently, more of the assets than the business. It's a tough business. It's very segmented. So we get a lot of pushback there, but definitely the founder operators, even on the angel's side much more interested because they feel the pain point. They see the problem. So if they can see the problem, they felt it before, they're going to be more drawn to it. Before you grow your company, you need to know your company. Chart Hop is an organizational management platform that helps you focus on the most important asset in your company. It's your people.

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That's right. it's a $600 value by going to charthop.com slash twist. C-H-A-R-T-H-O-P-com slash twist, charthop.com slash twist, to build your dream team today. Karen, I'm assuming that was the same thing for Pallabra, correct? But if people had experienced the problem before in one of their startups that they previously invested in or they were an operator-turned investor, did you have the same experience? Yes, for sure. So founders have been through it.

And also investors like they've seen it in their startup. they struggle with retention or feature adoption, and there is no easy solution for solving that. So yes, for sure. Pablo, when you were doing follow-up meetings with investors you met, what was the way in which you got follow-up meetings? Was there some silver bullet or something you would write an email that would result in people taking the meeting?

Now, you've met them casually at the accelerator, or whatever you would consider an accelerator, you know, sort of touchpoint. Now you want to close and get a longer meeting, right? So the goal is to get that longer meeting. What did you say in the emails and how would you get that second meeting with folks? Yeah, well, one thing that we actually learn a lot here on lunch was take notes. Take notes of what they say, take notes with their questions. So it was like it was really easy after that.

because the email will be about that question that they asked, about that concern that they had, that thing that they mentioned. So, like, I would mention that. And I suppose, like, that would create a connection. It's like, oh, yeah, you remember. Right? And that will be, like, a little hack, right?

And I suppose it's like for anything, you just want to remember something that was mentioned when you talk to them. When it came to closing around, what route did you go? because people know, I've talked about this, I think, a bunch, but I'll state it here again. We want to, we'll make that investment when people are in the accelerator, but because we have a syndicate and because we have a fund, we're sort of like if Y Combinator or Techstars married angelist, right? So we can follow on and we do want to follow on on the companies that graduate

and get a qualified offer from another investor. So how did your round come together? Did you get a term sheet from somebody? Did you do a party round? Obviously, we participated. I think we did half the round we co-led. So explain to folks that process. Yeah, well, a lot of it was talking to, well, different investors and just like choosing the ones that would bring more value, the ones that would connect it better with or values with our idea. And in a way, we're going to be more helpful in the wrong way.

So like pretty much just like selecting those strategic investors. And then, well, after that, just like, like being able to, okay, say, that's it. That's a point where we have enough for the next 18 months. And now let's just focus on the product. Let's just focus on those metrics. Hey, if we get a million dollars raised or whatever it was, I think it was around a million or a million and change, if we raise a million dollars coming out of the accelerator, that gives us enough to go for 18 months and then take our revenue.

revenue from, you know, 10K a month to 50 or 100k a month, something like that was the goal? Correct. Yeah. And actually, we raised, our expectation was a little bit lower. And being there, one of the advice was like, hey, if you want to do this and if you want to do this, you should actually be racing more. And once we hit that goal, we said like, okay, we got there. Now let's just start focusing on just the product and our goals and what we actually talked about when we were raising the funds. Did you get a term sheet from, I don't remember the history of it, but because we have so many investments, but remind me, did you get a term sheet from one specific person or did you just

say, hey, here's the terms we want. Would you like to participate? Because people do succeed with both strategies. Yeah. So we had a term sheet that we worked with our first investor. And that's pretty much just what we use for the rest of it around. It was a, like, there were pretty fair terms, and like, so everyone was just, like, following those terms. And some people will want some specific things changed, but just for the sake of, like, hey, no, already other investors are in and it will be unfair for them.

So, we kept it the same. And they were okay with it. So, yeah, it was pretty much just, like, the first term. and that's it. Like everybody just followed that. What week did you get that in, that term sheet of the 16, in the 16 weeks approximately? Because you had a lot of interest early on.

It was. When did that, when did you meet that investor? I'm curious. I think it was, I think it was before. I think it was before we started. We already had something. Oh, cool. Got it.

And then we just like work with it with the investors at launch too. Great. And you were able to tell those other investors, hey, listen, the terms are set. We can't really negotiate all these minor points. If you want to be on board, you're on board. If you don't, it's okay. And you were oversubscribed.

And so how do you deal with when you're oversubscribed telling people they didn't get into the round or to tell them, hey, we'll talk down the road? Yeah, exactly. Just like a tell him, hey, we're super blessed and grateful to get that attention. Which, by the way, which was just like sudden. I don't know if all of the investors are in a Slack group, something and you talk to each other. No.

But suddenly, like, everybody was just, like, interested as like, oh, we just reached the goal. I don't know. And so, but it was a, hey, let's talk next year. Let's talk. We're going to be at that point where, like, and we'll keep you updated. By the way, like, that's something that we're starting doing, like a month, monthly updates for our investors, but also the people who showed interest. So, and now actually, like, with the latest.

update that we had, a lot of those people who showed interest, they're like, hey, how can it help you? How can we be involved? So that's actually true to be. So you really work focusing on maintaining those relationships with the monthly update or every other month update and saying, hey, even non-investors will send them a modified update, maybe not with all the details, but with some of the details, and just keep them engaged so that when we do want to raise our, what would probably be a Series A or a pre-Series A round, you have that optionality. And they're already up to date. Exactly. Exactly. So they know where we're at and they know what the numbers are and hopefully they're excited to join us. Yeah. Karen, tell us how did you around come

together? You were, you're an extremely, if I remember correctly, extremely low burn company. I mean, it was you and your co-founder write the code and do all the design, correct? Yeah, that's right. Not super scalable, but it does keep the cost low. I agree. And we were not sure if we wanted to raise because of that. We knew that we could build a team with the money that we had. But then we got a lot of interest. So I started thinking about, okay, what's our next goal?

What's the next thing that we want to accomplish? And we met, I actually met an investor from a small, firm through lunch and talked to her like a couple of times. And then she introduced us to a firm that they co-invested with. And we met them. It was great. And I think we met like a Thursday on a Monday. They gave us a term sheet.

So that there's no more to it. We had another firms that were interested and we basically picked that. one. And you raised a small amount of money, 500K to a million, something in that range, if I remember correctly? That's right. Yes. And so now you're going to move from this sort of indie hacker bootstrapping mindset to a venture scale mindset. How has that been like for you as a founder and just changing your mindset from, or have you even changed your mindset? Are you going to keep the indie hacker mindset and just have a big bank balance? How are you thinking about this now? you're buying everybody big huge Dell curved monitors and just area chairs and new headsets?

So no. I think I always had the growth mindset. I was never interested in having something small just for the profits. I always wanted to do something big, like something that doesn't exist, something that it would allow us to get to whole new markets. So I don't know if I've ever had the in the hacker mindset. What I can tell you is that I do believe in being cost-effective. I don't know why.

You're frugal. It probably comes from your childhood. Definitely. Were you allowed to throw food in the garbage or not? Did your parents stop you from throwing food away? I agree. I don't know. It's like a cultural thing I can explain.

But I think that's a good thing. And that can give us a lot of time to figure things out if we make mistakes. And I think that's a feature in Notabox. So I want to keep that. You get to play some bets and you get to take some risk. That's a really nice place to be as a founder is to have that runway to say, I have three experiments slash bets in the Annie Duke sense or the Netflix sense. What bold, you know, audacious bets can I make?

And, you know, if you have the $500,000 or a million dollars in the bank and your low burn and those cost 50K or $100k each, yeah, you can make two or three, four bets. and not worry if all of them fail because none of them are going to be the risk of ruin. They get all upside, right? I agree. And I believe that you still need to have discipline. Like, you still need to know if something's not working

and just throw it away and go to a different path, even if you have a lot of runway. But it definitely feels better. And also talking to investors, like, I'm not desperate. I don't really need the money. It would help me get places, but I don't need it. So I think that's a good thing, a good place to be.

That is a fantastic place. I mean, I think Pablo can also relate to that. When you have the money in the bank and when you're low burn, you can turn down investors. And then if you turn down investors or they know that you don't need the money, they're going to be more likely to want to put that money in. Shane, how is your fundraising gone so far since being in the slow? Because you also, I think, were either profitable or break even for much of your existence, correct? Yeah, we hit profitability early on.

Obviously, COVID came about. We made some adjustments. We just hit profitability again in October. Congratulations. You know, we're not in a position. We're not in a, thank you. We're not in a desperate position. We're looking for the right partner.

We've gotten a few commitments, but we're still looking for a lead. And it's really the right lead, the right partner for us. We have a foundation. We have a business. We have a model. We've customer. So for us is just about find that person that believes in us in what we're doing to the space. So you're being thoughtful about finding that perfect lead.

I mean, we're growing organically. But it would be, you know, it's always. nice to get a cash infusion so that you can really grow, grow out the business. So we're just looking for that right partner. Now that you've met so many investors, when you think about the wrong part and the right partner, just with all of this newfound knowledge about investors and how they think after this sort of 16 week boot camp, what have you learned the great investment? What, what characteristics do the great investors have that you want? And what are the things that are red flagged for you that you don't want an investor?

I mean, I see there's a lot of investors that bring, you know, they just bring the check. And for us, it's about value, right? You want someone who believes in your journey who can help you, at least guide you. They're not going to be super hands-on because they have other investments, but at least guide you in the right direction, make introduction, strategic introductions to other companies or other partners that I think can benefit the business. And I really do, you know, I'm, you know, a big fan of, as I mentioned before, just the, it's the, it's the, operator, it's someone who feels the pain. I mean, we built this business because of the pain point, because there wasn't anything else in existence. And for us, it's about finding that, that, you know,

investor who's also felt that and really wants to bring disruption to the business, not just, you know, the same thing over and over again. So that's for us. So some level of enthusiasm beyond the check, you don't need them to come work there every day, but you do want them to be available, to mentor you or to sort of hash things out and learn from them. If you, if you, you were to look at the program in retrospect now and just sort of think about that time period when you're in the accelerator and maybe somebody else's been accepted into it and you're talking to them and saying, hey, here's how to get the most out of this accelerator, launch just specifically. What's your best advice to them? We'll go around the horn with that.

What's your best advice, Shane, to getting the most out of the launch accelerator? I mean, I think with launch and with anything, you get what you put into it. You guys launch the team and Jason, you have a great team. I mean, the team puts, you know, they give, they're willing to give it, give it their all to us every day as long as we're willing to give back. I think, you know, you can go through and just do the demo days and not really participate or you can go in and help other entrepreneurs through, you know, you have Slack channels and various other avenues.

We can get introductions to other VCs, which has been, you know, super helpful. But not everyone does it. So, you know, for us, it's, you know, you go all in. then you'll get the most out of it. And so far, so good for us. I mean, it's been, it's been a wonderful experience. I think we've really matured over this process. We continue to mature.

It's definitely, you've become more refined. Karen, what are your thoughts if you were advising the next, uh, Karen or Pablo to come to, or Shane to come to the accelerator? What would you advise them on day zero, week zero? I think that the first thing is like, just take the offer and do it. That's the first thing. because I think that what we get through the program, I don't know if you can get it with another one, to be honest.

Like, I've been through other programs, very important ones, and you don't get like 30 intros every week. Like, it's just not going to happen. It's like numbers game. I don't know. It's just not going to happen. So I think that's the first thing for me. So don't overthink it.

Like, just go do it. It's, you're going to get value from it. Definitely. Because I talk to funders. that they tell me, I don't know if it's the right time for us. I don't know if we are ready to talk to that many investors at this time. And what I can tell you is I learned from that process. I'm very thankful to lunch for all that I've learned.

I know that I wouldn't know the things that I know today if it wasn't for those conversations. So it's never too early to talk to people that understand your business and that know a lot of things about your industry that you may not know. Like, it's never too early for that. So I would just do it. It's massive acceleration in terms of learning. Like when you decide you're going to jump in the ocean and go scuba diving, you know, or swimming or whatever, you're going all in.

And you're just going to, it's going to be a fire hose of information when you start meeting those investors. And why be scared of it? Like you've got a real business. We've given you the green light. You should do it. And you had, I think, a really great slide where you really know, you understand social prof. You're like, we have two investors and you show Daniel and myself. having Daniel as an investor is super powerful because he's very well respected and then obviously

I've got some notoriety in the industry for better or worse but it does there is some anointing that occurs for you having been in Pioneer labs and lunch correct I think so yeah like it was definitely very different going through Pioneer than going through lunch like through Pioneer it was just myself so it was I don't know just Daniel saw something in the product or in myself, I don't know what it was. But then lunch was very different. It was like a completely different league. It's talking to, and also the co-founders who are in the cohort with us,

like they have real businesses. Like, everyone was doing better than we were. We started lunch with zero KMR and we finished with 1.5KMR. We took a flyer on you, for sure. We looked at the product and we looked at you and I watched you in the videos with Daniel and I just said, this is something special here. They really understand their product and their customer well. And the internal dialogue with the team was, we should be taking more risk with our accelerator.

Let's take some more risk. Let's bet on somebody who doesn't have the revenue turned on once in a while if they show great product jobs. I think that's Daniel's unique gift in the world is he's very good at spotting emerging products, right? I think we've had three. I think we'll have three people who've come through Pioneer as a sort of funnel into our accelerator. That's very confirming for me. Pablo, when you look back on your time and you look at what you learned, what would your advice be to people who've been accepted to the accelerator

or are considering applying? Yeah. Since I launch, like again, you're constantly talking to investors and you're refining that pitch and just like doing a lot of talking, a lot of talking, you have to be ready for rejection, which is also what Karen said and be ready to be put down and getting out of your comfort zone.

But the thing is that you're going to come out of it stronger and more confident. And also, looking back, I'm unthankful of the people that said no, all of them, because they're now realizing that they saved us from a bad relationship They were able to say, like, no, this is not going to work out. So, but like you're saying, Jason, you only need one yes.

And then after that, I think it gets a little bit easier. But yeah, be ready. Be ready for a constant rejection, constant nose. But it's going to be fine. If you think about it like if we were all actors and we were going on auditions, it's the equivalent on going 30 auditions a week. if you went on 30 auditions for 16 weeks and you did 500 plus auditions, what do you think is going to happen?

You will get one part in all likelihood. And the other 499 knows don't matter anymore if that part is a defining part for your career. And you got, you know, I don't know, cast in a movie or cast in a TV show, you're Queen's Gambit or Saturday Night Live, you know, depending on what you're going for. All of a sudden, you only need one opportunity. And that really is the key. And that's why we have the ability because of our notoriety from previous investments to get so many people who want to come see the latest group of investments we've made

that you kind of draft off of that. And they're coming in with the expectation that, hey, we're like Saturday Live. We're picking good cast members. And, you know, there might be an Adam Sandler or an Eddie Murphy or a Kristenwig or whoever in this, you know, cohort here. There's some raw talent here. You just, you just have to pick the right one. So I do like the like sort of SNL.

If you're not everybody understands what happened with SNL, but, you know, Laura Michael's so good at picking people and giving them opportunity at a young age and maybe with less refinement that the studio is just pick those people and do movies with them, right? I mean, Adam Sandler is the like number one driver of Netflix in terms of movies and he was in SNL. he got fired from S&O. I don't know if you knew that story,

but I think ultimately Adam Sandler Gmonde of getting fired and then went on to do all these incredible movies. All right, listen, this has been amazing. Continue to success with blush. Design, go check that out, especially if you're building a website. It's only $100 a year.

It's too cheap. It should be $99 a month, but Pablo is doing the Canva thing. I think it should be $1,000 a year, but for the value he's offering. But, you know, he's going for a different, strategy. I understand. Founders going to do their things. All right, if you want to check out Palabra, that's palabra.io, P-A-L-A-B-R-A-O, but you have to join the waitlist, which has about

800-900-500 people on it, but maybe if you, like Karen, know you saw this on this weekend startup, she'll let you in. But you're looking for people to join the beta, correct? That's right, yes. And who's the perfect customer for you right now? It's a SOS company that's thinking about how do I get my users to value. Great. And then Shane, of course, from roelbot.io, you're looking for customers and for that perfect lead investor. So if you are that perfect lead investor and you really believe in this model, which I do, and it's done fabulously and they're break-even now profitable, go check out rollebot.io.

And you're obviously looking for customers. Who's the ideal customer for you? Yeah, mid to enterprise level. Someone who's looking for corporate level talent, so essentially skilled talent pool. So somebody who's, what would the footprint in terms of number of hires per year be for your ideal customer profile? You know, five new hires a year, 10 new hires a year or more? I'd say 25 or more at any given time. Got it.

Active hiring. Yep. Got it. So this is a 200 to 500 person company hiring 25 people a year because the average turnover in Silicon Valley is about 15%. So if you were in a 500 person company, you'd be turning over 75 people a year. That means you have 25 open

positions between voluntary and involuntary. So really great job. And thank you all for allowing us to be on the journey with you. We really have enjoyed watching each of you thrive in Launch Accelerator 19

and you can pay it forward by building a unicorn so that I can put you in my Twitter bio as my eighth, ninth, or tenth unicorn. So that's all I ask of each of you. Awesome. Can you please just trace commas

so that my Twitter bio can be even more dunking on the industry versus getting in early on unicorns? It's really been great to get to know you. I'm sorry that I wasn't able to host you for a barbecue at my house, which is always the tradition.

I smoke some meats, you know, doing some pork shoulder. I do a little bit of brisket. I'll typically get some wagu and do up some wagu on the skillet there. Some of that Miyazaki beef wasn't able to do it. But when the pandemic is gone, I invite you all to come to my house for a ridiculous barbecue. And I'm going to double the amount of wagu and Kobe beef that we order. Hold on. You need to have a vegan option, too. Oh, my Lord. my Wagyu beef, you're not going to eat my Australian woggu like Kobe. All right, I'm all in.

I will make some vegetarian options. Do you eat fish? Pablo? No. No? Just strictly vegan. Vegan, yes. I will, there is something I could do on the smoker.

I will look into smoking vegetables. There's got to be something I can do on the smoker. Portobello's. I'll take Pablo's portion. Take Pablo's portion of Kobe. Exactly. All right. Very good.

All right, we'll see you all next time on this weekend service. Bye-bye.