Guy Reams (00:00.174)
Welcome to episode three of the Founders Journey. Today's conversation is with Roberto Pena Castro, who's the CEO of Lead Sales and one of his original investors, Zeynep Ilgaz, founding partner of Cross Ocean Ventures. I hope you enjoy. All right, welcome Zeynep and Robbie. Thank you very much. Thank you for showing up today on our call. I'm looking forward to talking to you today. I think we're going to...
I think we're going to have a lot of fun. So our goal is to really dive into your relationship, but also to dive into the evolution that you've had in your journey as an entrepreneur. And also Zainab, your relationship as an investor. And then we'll just kind of go through and see what we uncover as we, as we talk. So with that, I want to give each of you an opportunity to introduce yourself and explain a little bit about who you are.
And then, and then we'll get into the company a little bit after that. Okay. So Zeynep, why don't you start, introduce yourself, explain who you are and where you come from and what you're about. And, and we'll get started with that. Thank you so much, Guy, for having us. And I'm originally an immigrant from Turkey. Came with my husband here many moons ago. Got our masters in business in the nineties. And after that,
We started a company from my garage, grew the business. It was a bi -diagnostics company we were acquired four years ago. And since then, we've been more on the investment side. Now I'm a general partner at Cross Ocean Ventures. I'm also an angel investor with the Newfound Venture Group. And at Cross Ocean, we basically invest in early stage technology companies, both national and international, that have a potential to grow.
And mostly we invest in SaaS, AI, diagnostics, and software companies. And I met Robbie from Lead Sales at one of the meetings. I was at Berkeley Skydeck. And yeah, and that's how we got connected. Wow. That's pretty exciting. So Robbie, why don't you tell us about yourself? Yeah, sure. So I'm Robbie Pena Castro, CEO and co -founder of Lead Sales.
Guy Reams (02:25.742)
I studied international business from the Tecnologico de Monterrey here in Mexico. I'm based in Querétaro, usually between here, Finland and San Francisco. That's kind of weird, but yeah, that's exactly how my life goes. And yeah, we started this business back in 2019, late 2019, because we solved a family business problem.
which was scaling the sales operations through conversational commerce, specifically WhatsApp messages, because that's a trend that for the longest time I seen, and I also saw this while I was working at Google. So I worked at Google from 2019 until 2021. And yeah, we created this solution which exploded during the pandemic, because not only we...
got a solution that helps you scale conversational commerce, but also helps you work remotely, right? So we took the wave and from there, we bootstrapped basically for the first two years and a half until we got to Berkeley Skydeck, which was where Zeynep and I got to connect now. And from there, the rest is history. We're still growing and running strong to become one of the...
biggest tech companies of Mexico. So for people that are in the United States, how close to you are you in Mexico City? Is that where you're originally from in Mexico? So I was born in Mexico City, but like when I was six months, my parents migrated to Queretaro, which is two hours and a half away from Mexico City. Just a small historic thing.
Queretaro is where the constitution was written for Mexico. So it's a very historical place. And I say downtown Queretaro is one of the most beautiful places in Mexico. Wow. Sounds like I should visit there. That's great. So I want to get into the Berkeley connection. That's pretty important, it sounds like. But before we get there, how did you get started, Robbie, with this
Guy Reams (04:46.286)
this idea in the first place. What was the catalyst that got you going down this? Was it somebody you met? How did that happen? I mean, it was just like a serendipity, I would say, because while we were working on this family business, the operation grew so fast that we couldn't keep up with the messages. And I always say that communication channels like WhatsApp and social media are meant for that.
for communications, but the market starts to adopt them for sales and to buy stuff. And the thing that really made us go into this making of a solution was when we lost a deal with a customer of over $50 ,000. So once we lost that, it was like, we need to do something about this. So from there, that was the moment that...
the ice broke and we needed to solve this problem. And when we went out and searched for a solution, which in our heads wasn't that, like, it didn't sound as a millionaire idea because it was kind of like, I'm sure there has to be something, right? Because while I was working at Google, I saw this trend. Like a lot of my customers I worked with, over a thousand SMBs all across Latin America, they were all shifting to conversational commerce. And everyone was asking me,
Hey, can you help me, Robbie, with my Google Ads campaigns to go from a form to directly target my customers so they can reach out to me through a chat? No? So I thought there was already a solution, and there was, but mainly for enterprise. So there was not a specific solution for SMB that was accessible and that was easy to use, right? So that was the moment where I realized there's a gap here in this market. I might as well just solve it, but I never intended to.
for that to become the company that is now with more than 2000 customers in 20 countries running at 2 .6 million ARR, right? And with a potential to really get to a hundred million ARR in the next three to five years. You're bringing up a lot of topics I want to dive into. But interestingly to me is there's a theory that floats around and that is that the best ideas,
Guy Reams (07:11.758)
organically or naturally out of a problem that you're facing in your own business that you end up solving. And then by solving that, that ends up becoming your actual business, which is an interesting, sounds like that's exactly what happened to you. Yeah. I mean, but it's funny, you know, like, and I just recalled this in a previous meeting. So when I got to Google,
My manager told me like, hey, Robbie, how do you seal yourself in the next five years? And I told him, I want to be the best entrepreneur of Mexico. And I knew that I was, I was going to do something with tech. Like Google was only my platform. I didn't know if I was going to be there for two years, one year, five years, 10 years, but I knew what I wanted. So I was preparing myself for that opportunity. And usually is that I think it becomes with preparation meets opportunity. And when you get it, you just make the best of it.
I'm really interested. So you're working at Google, which for a lot of younger up and comers, that's like the, the, the greatest job. They find out that it's not so great when they get there, but they it's, it's awesome. So you're there, but you also, your family, it wasn't your family running the business. Is that what was going on? You had a family business that was running. Yeah, that, that family business, we started it in 2018, no. And this was the second year of the family business, but I.
stepped out because I joined Google early in 2019. But yeah, I started this just like internal solution for the family business, right? But during the pandemic, that was when I went back because I was living in Mexico City in Google Mexico. And I went back to my hometown in Queretaro and having that extra time after my shift, that was where I started working.
from 6 PM until 1 AM, 2 AM, you know, like with the extra time and really much nothing to do, you know, like during the pandemic. So I was seeing this more as a side business at the beginning. But then it just exploded and eventually it was just too big to ignore. And I decided to quit Google and join this full time in September, 2021. Now, I think just to give context, because I've noticed that...
Guy Reams (09:33.134)
people outside of the United States are not familiar with the dominance of WhatsApp. If you go outside of the United States, WhatsApp is probably one of the primary tools for communication. And so you were using that as a way for customers to connect with you, correct? So there's a kind of a universal nature of WhatsApp. Like people use that just like they would use the old telephone. It's like the way of communicating.
Yeah, and it's asynchronous, it's instant, and it also follows a trend, right? And we see this also in China with WeChat. And I also, during my studies, I went to China and I used WeChat. So I already had kind of like a vision of what was happening back in 2019, but it just exponentially grew through the pandemic. And now everywhere you go in a third world country, specifically Latin America,
or you go to Africa or you go to Southeast Asia or India, everyone uses WhatsApp. So it's just a matter of time where we're gonna start seeing this in America because I see it with my friends that don't even travel outside of the US, but they start using WhatsApp for the WhatsApp groups, right? That's the first trend of adoption because it's easier and it's more user -friendly, but eventually, businesses are going to quickly...
catch the trend and eventually I think everyone's going to be using WhatsApp for transactions. And what was so appealing to funnel incoming customers? Was WhatsApp your primary marketing thing or was your marketing funneling people to WhatsApp so that you could communicate with them in real time? Explain that to me. Yeah, so it's more because of the the easiness to just send documents, PDFs, you know, we...
We send the quotations because the family business was basically a cocktail catering business for weddings and events. So it just makes sense to just send the quote through a PDF via WhatsApp. So we started developing this marketing funnel where we just drive leads through WhatsApp. But then we had the problem that the infinite inbox list was just too big to keep up. And the thing is, it's just a list.
Guy Reams (11:56.59)
And essentially what we do at Lead Sales, we go from an infinite inbox list so you can organize your funnel into columns. So you can just drag and drop like a Trello, like a typical CRM, right? But the thing that differs us from a Salesforce or a Hopspot is that our heart, the heart of the business, the heart of the technology is engineered with the chat in mind. Whereas Hopspot Salesforce goes more for the traditional way of doing business, which is email.
Right? And when you click on a lead, you go into the deal page where you see all the interaction through email, but some other things, right? But we understood, at least for our type of doing business, we interact through the chat and through the chat, everything happens, right? And eventually, it's just gonna be a matter of time where we integrate payments, where we integrate e -commerce solutions with Shopify, for example, and you're gonna have a platform.
where you can see everything that is happening on your business through a single platform. That's kind of the, the, the, the vision that we have to become an operating system for businesses that start through conversational commerce. So you almost have a, a Kanban like interface where people like, like I, I'm thinking monday .com, like real simple CRM interface, but you're tying that to WhatsApp. So as you're getting leads in and stuff, you're able to visualize.
your leads and try that's really creative. I like that. Yep. Exactly what you just said. A Kanban for WhatsApp. Cause I've had that annoyance too, because I mean you can connect these CRMs to these systems, but if you're a small business, you don't have time for all of that. I mean, you could spend days building a tech stack to do all that stuff. I just want, I just want to track the people I'm talking to. That's it.
That's great. So now take me to how do you, so you're working, you're back in Mexico city or Mexico area. You're back at your hometown and you're, you're working your side gig and now you've decided to quit and do this. Now, what makes you decide to take the tech stack you built and convert it into a company called lead cells? What caused you to do that? What was your thought?
Guy Reams (14:16.174)
to do that, to take that step. In 2020, that was the moment where we decided to launch this as a side business, right? And first day that we launched campaigns on Google Ads and Facebook Ads was the first day that we received our first customer, right? And we've always, since 2020, charged $83 as a base plan for three users. And people just paid it because they needed this type of solution so much, right? And...
In the beginning, I was like, well, this is nice, but I still love my job at Google. It was my dream job. So I'll try to balance it out both. And I started hiring people, like interns. But the moment where it just made sense to me, it was when it was too big to handle. So by September 2021, we already had around 300 customers, 30k MRR, and also,
We were a team of 15 people by then and it was just getting out of control and I couldn't keep up as well with delivering on my job. And I said, you know what, let's do this. And also specifically, and you know this and Zaynab know this, 2021 was where everyone was fucking just raising money, man. And I couldn't, as a bootstrap business, I couldn't compete with hiring good technical people. So I was like,
Dude, I just need to hop on this because for the longest time I hated VC. I didn't want to go to this route because I thought, and I think of it differently now, right? But I was thinking of that like selling my soul to the devil because I was like, I'm gonna lose control of my business. I'm gonna do this and this and this, but I, because I'm very logical, right? And I was like, if I'm doing this with my own sales and I'm growing this business organically, like why should I race? But.
That was the moment it clicked. If I wanted to raise money, it was to hire the best talent and retain the best technical people so I can grow this to the potential that it has. And specifically because it's technology, right? And in those times, everyone was just making a freaking lot of money because every single startup raised a lot of money, right? So I was like, I need to do this, right? And in my head, it was also the logical sense of, back then I was like 26 years old.
Guy Reams (16:41.806)
So I was thinking, okay, I'm 26 years old. I have this job, right? But still, if I hop onto this, I might as well learn something, right? I'm gonna learn something. If I make it, then it's the best decision. If I don't, I will still be maybe 28, 29, and I can go back to work, right? I can get another job. So that was the moment it just clicked, and I decided to drop out and pursue this. And also,
Looking into like, how can I get to Silicon Valley? Because that was the Mecca. And I applied to Accelerators and luckily we got into Skydeck. Wow. So you weren't involved with Berkeley at all. You just applied to their open calls for new companies. That's great. So you came to, there's a couple of realizations you came to. Number one was it's time to focus. I can't be living in two worlds.
I can't be a Google employee and doing the family business and doing my side gig. I got three things going on. I got to pick. That's a pretty important realization. And the second one you had to do is I'm not going to be able to accelerate this any further without some financial help because I need to go hire people and I don't have the cash to do that. So you had to make that decision, right? That's the cash, but not with our sales. I mean, with our sales, we could hire, but like,
just to a certain level of people. So, but going higher. But that's an interesting question because this was a lesson. Like you said, I went to school too. When I founded my first company, I used my operating cash to hire new people and grow the business. But I left, I decimated the cashflow to do that. And so I ended up running into this problem when I really needed the money to grow. I couldn't cause it wasn't in the.
It's just a constant problem, right? So I learned very quickly, it's better to grow with other people's money than it is to grow with your own money. That was not an easy lesson for me to learn, right? Because I was just like you, I had the suspicion that the, I had a lack of trust of people that had money. I figured they're gonna try to do something to me that I don't want.
Guy Reams (19:04.622)
But it sounds like you had a great experience in your first, in your introduction to do it to investors. They weren't sharks. They weren't trying to steal your company from you. They weren't trying to take it all away. Right. No. And, and I mean, if, if, if you connect the dots. It all the investors that we have right now are the right investors. I mean, we, we could have come just for the money.
And we could have got like really bad investors who think they know it all and they're just gonna guide you, not even guide you, like order you to do stuff because they think that's the right thing to do. But in our case, we've always partnered up with diverse investors and investors coming from different backgrounds and also investors that have done it themselves before, right? It's not just your typical MBA investor, no, it's operating investors.
who know and have lived and suffered through the same journey that we had and they understand it now. And I think that's the most valuable thing that we have gained from our investors at least. And I think we've been living a dream since day one. So I want to get to how you met Zayna, but let's get there. So you start going around looking for funds that you can apply to. What led you to Berkeley, just a Google search? How did you find Berkeley Skydex?
This is a funny story. And I think I have never mentioned that, but my co -founder David, he's like a master at like just applying and searching for accelerators, right? Because he's been in the game before even I got in, right? And I got to meet my co -founder through a startup because I used to work for him at his previous startup, right?
That's how we got to meet in 2018 in my last year of college. I worked for him at his previous software as a service startup for e -commerce logistics, right? And he applied. He looked out and he got and found the application of Berkeley Skydeck, no? And he applied and he's like, yeah, we got this interview, Robbie, and I was at the beach, right? And he's like, we got this interview.
Guy Reams (21:28.11)
you should pitch, you know? And I was like, okay, but I'm at the pool. So I just went out and out of the pool, just put a shirt on, still with my flip flops in my swimming suit. And I just pitched, you know? And David was there and he's like, fuck man, this is so great. But he didn't give me enough context. Like he was like, do you know what it is? It's like Berkeley, man. And I didn't associate that. You know, I was like Skylick. But then he's like,
It's the University of Berkeley in California, man. And it's like 200K, you know? I was like, shit, I just blew it up. But then we got a second interview and of course I prepared myself and I let myself know no probability of failure and I pitched my heart out and essentially, and I think this is useful, if we're talking to an audience that is in this journey or is...
thinking about going into a startup world, I think a lot of founders just apply randomly to stuff and when they come to pitch, they don't adapt the narrative. In my case, I always try to adapt the narrative to where I'm pitching, right? So in Skydick, I analyzed like how's the program structured and I created a definite plan to how was I going to use not only the network but also the program in order for me to go out.
go out and race, right? So I said, in the first two months, I'm gonna do this. In the second two months, I'm gonna do this. And in the third two months, I'm gonna do this, right? And I pitched that vision to Sean, who is the managing partner at Skydeck Fund and also director of the program. And he liked it, no? He liked my passion. And also because we were in no way associated with Berkeley whatsoever, no? And we were the second...
team of Mexicans coming to Skydeck, no? Because the only one who had been before us in Skydeck was Alejandro Cantu, the founder of SkyAlert, this app that alerts every single person in Mexico City about the potential earthquakes, right? So it was just like that. It was just preparing and catching the opportunity. Wow. So customizing your...
Guy Reams (23:52.718)
pitch to the fund that you're going after. Now you mentioned a word. I just want to clarify it because people listening may not understand all these phrases. So you mentioned in your friend was going out looking for incubators. What does that mean to you when you say incubator? Well, incubators, accelerators, just like programs where we could connect with, with people who have done it before. And also.
It's usually a place where you learn, right? And that time, I didn't know a lot about startups, no? So we needed to get a fast track into learning what there is to learn of the startup business, no? And that's what I get from incubators and accelerators, right? Just to build your idea, but with guardrails, if you could say so.
to do not in order to not make as much mistakes as if you were doing it alone. So, so in that case, the accelerator or an incubator was a great place for you to come and learn as well as get some initial funding so that you guys could get rolling.
Now, Zeynep, when did you get involved in Berkeley and when was the first time you heard from Robbie? So after our company was acquired, I didn't want to start another company, but I wanted to invest in technology companies, but my husband and I. So we started this small fund called CrossOcean and that's when I got involved with Berkeley Skydeck. I was just looking at different organizations or universities that have programs where they have a good list of...
Companies coming to and Berkeley Skydeck had a very good reputation. I have no affiliation with Berkeley either. So, and it's only an hour flight for me. So it's not that hard to get there. So, yeah, I've been part speeding as an advisor mentor and we've we had invested in one other company before lead sales. And that was the first batch I was involved with and then this batch where Robin was.
Guy Reams (26:08.142)
I actually also mentored the company. But when I saw Lisa's, and it's the first time I think, Rabi, I saw you was when you were doing the pitch at demo day. I had read about your pitch during the, you know, they give all the information to all the advisors. But when I saw your pitch and that presence you had and your team and the value proposition, that was it for me. Yeah, it was.
It was easy and it's simple like that. And then I came back and we were, we are three partners at Corso Ocean. Then I recommended we look at this company and she went through our process and yeah, that's how we ended up investing.
Guy Reams (26:54.414)
That's awesome. So you talked to the, to Sean, Robbie, you talked to Sean and he says, all right, we're happy. Now is that when he got you ready for demo day? Was that the next step was to get ready for demo day or walk us through with the process he had to go through once you got the thumbs up from Sean. Yeah. I mean, it works with batches, right? And our batch started in May. So you go and get to live in Silicon Valley.
for six months, right? So we were from May until September, which was demo day. So we got in and I remember those days vividly for the rest of my life, you know, like going into Trader Joe's, buying frozen food because we were broke and trying to survive in California, which is expensive. It's nothing compared to Mexico. So we lived there for almost six months and just...
got in 7 a left at maybe 10 p and all the way again and again and again every single day and getting into workshops, getting paired with advisors, and also before demo day, they help you get in to the door of the biggest funds, right? So we got to pitch to Sequoia, we got into Founders Fund, you know, and we pitched our idea to every single one, but also the difficulty was,
to get them to understand what was happening outside of the US. Because whenever we were speaking about WhatsApp, they were like, I don't get it. But it was part of it. But we got prepared and we pitched. And from there, from those connections, that was how we started getting our first investors in. And Zainab and Cross Ocean, they were
our first checks, because you get prepared in an accelerator to try and go out and raise as much money as possible, right? And you go and it's like, okay, go raise three million. Why? Because that's the benchmark, let's do it. And I went with that idea, even though that I didn't know what I was gonna do with $3 million. And I remember, I had already pitched almost 200, 250,
Guy Reams (29:22.446)
VCs and I was just about to drop the tower, you know, I was like man This is stupid might as well just keep bootstrapping and build this by ourselves, you know But then I was like, okay I mean probably the narrative of three million dollars is not working. Do I really need three million dollars? No, not really. I actually could make it with only 250k so I I went on and changed that pitch and and it clicked, you know, it clicked because we weren't raising that much capital we
in that type of round, you don't really need a lead investor. And we marketed, not even as a seed round, we marketed as the angel round that we never had because we were bootstrapped, right? So that's kind of where it all made sense. And Zainab and CrossOcean, they invested the first 100K check. And also we got other investors and eventually we ended up raising 400K. So we got over a subscribe, right?
So that was kind of how everything ended up organizing. And oversubscribed means that you were asking for 250, but you got 400. You got more than you were asking for. And is it hard to say no? You've got people that are saying, yes, yes, yes, we'll give you checks. But then you're like, no, I don't need that much. What's that like? Yeah. I mean, it's funny. It's like, why are you...
taking this cash, you know, should I take it, should I not, right? And it all comes because when you're a first time founder, or at least myself, I consider myself a first time founder in the technology side, no. I didn't know that you could probably play with valuations, but that also eventually catches you in the ass, you know, like if you start playing with that, maybe yes, you can get a lot of money.
but you overinflate your valuation and eventually if you don't make it with that money and you go out and raise, you're gonna look bad because then nobody's giving you money at that valuation because you didn't reach those goals. So then it's also, I'd say it's an art to control your mind to greed and ambition, you know, because sometimes it gets in your head and it's like, yeah, I can raise a lot of money, but you don't really need that money.
Guy Reams (31:46.094)
right? So yeah, I've heard this a lot in talking to early founders. I don't know, Zainab, if you've had that experience too, but there's a real tough balance there of, like you said, being too greedy, like, well, my company's worth 20 million because I'm awesome. And you're like, I want, I want, you know, you'll get 10 % of my company at 20 million. So you need to give me $2 million. And then you're all excited about that. But then
You know, you're come the next, when you'd actually need more money, you go to raise it. And nobody's like, you're not worth $20 million. Cause you don't have any customers yet. You're worth $5 million. And now you're in a real tough spot because your, your previous valuation was 20 million. And now you got to drop the valuation, which nobody likes. Zainab, I don't know if you had that experience where companies come in just way too ambitious. yeah, all the time. And I think one of the things, one of the many things I liked about Robbie and his team is the humility and being able to really look at it from a very realistic standpoint.
and also looking at it from an investor standpoint, right? So that really just resonated with me. And I was a former founder. We didn't go down the angel investing route, but we got private equity investment further down the line. So I think that that was a very important point for us as investors, really for Robbie and his team to look at it realistically. And just like he said,
If you don't need more money, buy, raise it. And from his standpoint, lose more shares. So, and he's been very resourceful with how he's using the funds. He is sending us monthly updates as investors and the communication has been superb. So these are all dream companies that investors want to have founders that are really counting their money, using it resourceful, not wasting it.
and updating us on the good news and the bad news, right? And having a positive attitude, things go wrong, but it's not the end of the world, just like in life, right? Having that attitude where you understand what's going on, look at it from a top -eye view and analyze it and then move on and on from it. It's interesting. I don't know, probably I'll ask you about this because I've been on dates when I went into it.
Guy Reams (34:05.822)
I had an impression.
But what they really want is a difference. So as you just heard Dana talk, she likes it when people are humble, teachable, and are willing to tell you the bad news. I don't know if that, what was your impression? Is that what you thought people wanted or what was your impression of what investors wanted to see in the future?
I mean, it's a tough question. I thought that they wanted me to pitch the big dream, right? But the big dream needs to be like, reverse engineered on, okay, yeah, that is possible, but like, what are you going to do like in the next months, you know? So it makes it more tangible. So there's like a little road at least for that. It's just not like, yeah, you're gonna be a hundred mil in ARR, no, but like how, you know?
So that make a lot of sense because when we were raising three million, we didn't have a clue. But when we were raising 250, we knew what we needed to do with that money. And it just set us up better because like after we raised the pre -seed, no, in a matter of like eight months, we were already raising our seed round and we even, again, got oversubscribed. We went out for three million and we ended up raising 3 .7 million.
Right, so I think it's all been a process, you know, and now I think more of like, how can I really bring down a plan that makes sense, you know, and really have that outline better for an investor instead of just like questioning like, okay, but how are you gonna do it? And also, it's a matter of de -risking the investment, no, because.
Guy Reams (35:57.55)
the more money that you're putting in, obviously there's a bigger risk for the investor and they need to validate that there's enough indicators now that their money is just gonna go wasted. So you move up to Berkeley and you're living, you're eating frozen food out of Trader Joe's, you're scraping by, you're probably also trying to run the business you started, because I think you already picked up some customers.
So you're grinding all day long at the Berkeley, the business area they have there. And you're learning from mentors, you're building your plan. And this whole time you're pitching to hundreds of VCs. Right? So guy, that was like a total refiner's fire. Like you were learning, like, I mean, that must have been pretty grueling, honestly. Was that pretty grueling?
It was, I think it was even more for my co -founder, because at least I had kind of a training when I got into Google, because when you get into Google, it's like a fire hose just opens and you just need to absorb everything. In this case, it was kind of similar, and I had already that previous experience, but still, it was all new information. It was, okay, you need to learn this and this and this, and you need to...
have accountability with your advisors, but at the same time you need to keep building the business, keep growing the business, you know? So we had like crazy nights, crazy days, you know, in doing all this. But we kept committed, you know? And we tried to balance everything out, you know? Like eating on the times that we could, sleeping at least some time, you know? Doing exercise, we went out for hike runs in Berkeley, which was beautiful, me and my co -founder.
And we kept building the business, and it was because we built a really solid foundation back home where the team was also supporting us while we were there. I mean, in nowadays, and also when you're working on a software company, you can basically do it wherever. So in our case, that was also helpful. And we managed to do that. And we pulled it off because when we got into Skydeck, we had like 350 customers.
Guy Reams (38:24.11)
I, and by the end of, of, of the program, we got to almost 900 and, and reached our big milestone of a million in ARR. So that was also how we were confident as Sanev said in our pitch, no, in the demo day that it's like, guys, we just did this like in six months. So imagine what we could do if we get a little bit of cash. So that was it. So you figured out your correct amount to ask, which sounds like a big pivotal moment for you.
figured out exactly how much you should be asking for, not pie in the sky, but you're asking for the right amount, the appropriate amount, you knew exactly what that money was going to be spent on. And then you put the pitch to a group of people and Xanax and Cross Ocean was one of them. So you got commitments from people. So talk to me, Robbie, how hard was it to go from commitment to actually getting a check? It wasn't that difficult, you know, because
Not only because cross ocean is awesome, right? That's why. Yeah, I mean, there there there was the commitment with with cross ocean, not and and maybe it's it's a flaw or not. I don't know, but I I trust in people, you know, like and and it's just for me it's energy. No, if if I trust that person, like if they want to do wrong on me and back out on their word, that's on them, not on me. So I'm just going to trust with that. And and with that commitment, that's when I went on.
to fundraise with Ulu Ventures, which was a fund that also participated in the pre -seed round with Miriam and Clint, Clint Corber. And when I pitched them, and that was another serendipity moment where I was talking to them previously, before I took this turn into just raising a 250K round, and they still kept with the idea that we were raising three million. And during the pitch,
to the partners, because we went on to the committee. When I reached to the final slide, where it was the ask, I forgot to change the slide for them, and it just said 250K. Miriam looked at me and she's like, Robbie, weren't you raising like three million dollars? I was like, yeah, things change. I don't need that much money right now. And I think from the feedback that I received,
Guy Reams (40:48.686)
I just think this is better so we can focus and keep working to improve our metrics and stuff so we're better prepared for a three million raise. She was like, that's nice. So how much you got? I got a 100K commitment. Okay, so you got 100K. We don't need to be in this committee. I'll just give you a 100K check right now. I'm like, okay, perfect.
That is amazing that you, it's funny how you hit the spot where people were comfortable with where you were at and they were much more willing to invest at that point. That's interesting. So Zainab, so you talked a little bit about Robbie and about his personality and his being transparent with you, which was very valuable. But tell us about what excited CrossOcean about the company itself? Why was this interesting to you?
First of all, we are big WhatsApp users and I know the potential in Turkey. That's all that's used and during running our company Confirmed Biosciences, WhatsApp was a big way for us to do deals and transactions with China because we were working with manufacturing partners there. So I understood that there was a definitely unmet need in terms of how to get organized and the potential of doing commerce on it.
So that first -hand experience just really drove me into that technology and the potential. I mean, that's all I can tell you. And then when they did their pitch, of course, the way they identified the market potential, the traction they already got, it's such a small startup. That just was the cherry on top for me. Because most of the companies are confirmed that we invest in our more B2B.
I mean, I guess lead sales, you do have a B2B, but the pitch was more on the B2C side. So for us, it was a deviation, but it didn't matter. Great. So, that's great. So Robbie, you get the money. You've got, you've got the first, first round, angel round. what did you spend the money on first? First off, tell me what it was like to get the checks, the first checks. And then once you, once you, you know, tell me about that.
Guy Reams (43:03.022)
And then how did you, what was your plan?
I mean, it was mixed emotions, right? Because the first year, like, hooray, we got it. And then it's like, shit, now we need to get back to work. Like, no more fundraising. So it was a mix of emotions. But we instantly went back to work, and we got the confidence again to keep hiring people, even though we couldn't afford it with our own sales. And we kept...
growing the tech team in order to keep building. That was our main focus. And also work on the feedback that most of our conversations during the fundraisers have. Like, okay, you guys need to focus a lot on the churn. You're losing a lot of customers. Or you should also be really clear about which markets are gonna penetrate and you need to solidify your strategy.
So we went back and worked on those things. And yeah, as we started pounding down the churn, because we were like at the churn of 25, 20 % monthly churn. I mean, we were targeting everyone and also SMBs. So the churn was most likely to go that high. But we needed to nail down and we started dropping the churn.
We started dropping it and got into the five -ish percent through this talent acquisition. And eventually that allowed us to unlock again the conversations of a seed round because now it was clear that we could execute with a bit of money. And we also got this narrative that, hey, we raised this 400K in order to work on this. Now we're raising this to keep pounding on the churn but also keep growing.
Guy Reams (45:03.022)
And again, it made sense given that we were consistently delivering. I think that's the best way to build a proof on your work and on what you're doing. No, and it just keeps compounding. And I think it made the seed round for us. That's great. So Zainab, why investors always go ahead. I need to sign something downstairs. I've been putting it on the chat. Can I go down, sign it and come back real quick?
I'll be right back. Sure. Yeah, go ahead. So, so Robbie, why do you think investors were so worried about churn?
Huh.
Guy Reams (45:48.686)
It's just typical of this business that churn is a very important metric because even if you have like a 9, 10 % churn, right, you would be losing more than 100 % of your customers every single year. So you need to replace those. So that is kind of like where we need to focus on.
if you want to build a sustainable business. And usually churn is a reflection on how much value are you giving to your customers. If they're really happy and satisfied with your product, they would stay forever, ideally. So that's what in software as a service is critical to nail it down and understand why customers are leaving and how you can prevent and retain those customers from leaving. So that's the...
the pure logic of it. How were you able to do that? Like what was your, what was the, some of the things you got recommended to do to improve your churn rate? Well, mainly we already knew certain things now from, from, from just understanding like why are customers leaving? well, because the, the platform sometimes is unstable. Customers get disconnected. Customers didn't receive all of their messages. No. So that was the, the, the.
the thing that you can see on the top, and we focus on that. But then as we solve that, then it comes to something more qualitative. So we had to talk with our customers, like, why are you leaving? But also talking with customers who were staying, why are you staying? What did you understand or why are you seeing the value of this? And then getting those learnings and communicate that to the new customers so we get a better chance of them reaching that a -ha moment.
with our platform, right? So all of that just, and it's a never ending game, you know, like we're still trying to learn more. We're still trying to nail down our ICP because working in conversational commerce is super broad, no? Like we have customers that are just a corner restaurant that sells tacos in Mexico City till fintechs and even governments, right? That use our platform. So.
Guy Reams (48:12.974)
So then you have all of this and you need to sometimes let go of customers. Sometimes you're not the best for everyone. And for the longest time, I've always thought that we can, but once you start seeing the success path of other really good companies, for example, Amazon, right? Amazon was never the everything store that it is today. It was just the best bookstore online in that time.
And it just focused on doing that extremely well and delivering value to their customers. And it was really specific. And then they stepped in into the toys market, right? And then became the best toy store online in the market, right? And eventually that compounded into what they are today. So right now we're focusing down again into focusing which are our two or three main customers, main industries, so we can focus in building for them, so they stay.
And maybe later we can expand that ICP. Once we're the best of the best for these three types of customers, we can start going into that. And this is an ongoing process because you always have the outliers, right? You're thinking, well, I'm not building for governments, but there's this government in Uruguay that they've been customers for more than 24 months. I don't know. I was never intended for that. You get attracted by...
So when you said ICP, you mean the ideal customer profile, what the ideal customer is. So you get attracted by these one -offs and sometimes do you find yourself getting distracted by that government in Hawaii and not your real ideal customer? Is that a hard battle? It's a hard battle because there's a reason why they're sticking for so long and sometimes you even question yourself, like, should I focus on that?
But then you, you, you, you zoom out, no? Because sometimes that happens with a lot of founders. They just zoomed in so deep that they cannot see the clear picture. But then when you zoom out, it's like, well, yes, it's cool that this customer is here for that long, but how many customers of this type are there in the world? Right? And if it's less than a thousand, it's not even worth it because you're not going to grow your market beyond that. Right? So then that's, that's the way you should focus it because we're not building a lifestyle business, you know, like,
Guy Reams (50:36.686)
Yeah, I could live with a thousand if this was still bootstrapped. But if I'm going for the billion dollar exit, no, or even like going for an IPO, I should be seeing bigger markets. So that's where we're focusing, right? So maybe more e -commerce, professional services where the market is huge, no? And we can get a hundred thousand companies of that, no? And it can take us to a hundred million in ARR, which eventually gives you the logic due to the multiples that...
our invaluations for a billion dollar acquisition or a billion dollar series B. Yeah, you have to really think about what your customer, what the customer you're going after, you have to think about what the total potential of that customer is. Cause you could be chasing something that's just not going to net anything. And that's such a trap as a founder. It's such a trap to figure out is this an opportunistic versus strategic way of growing the business.
And then really scaling it up from there. So that investors look at that a lot, actually, after the funding. And that's why these monthly updates are so important. And the open communication to see where the founder is going and being a sounding board to see, to help with that bird's eye view. Okay. Do you really want to do this? Is this really a way to grow your company versus, you know, this is just too opportunistic. The small dollars isn't going to get you anywhere.
Robbie, did you get a lot of value like that from your early investors? When you first started out, did you get, in addition to their check, did you get a lot of advice and guidance to help you start thinking this through? I mean, was there a lot of, I mean, tell me about that. This is a great question, guy. And I think at least I believe I'm the right person to answer this because a lot of founders are like, dude, my investors are useless. I'm like, why?
Because they never help me. I'm like, well, do you update monthly? Are you transparent with your issues? No, no, no, because if I tell them what is happening really, they're going to fuck me. I'm like, well, there you go. You don't ask. So of course you're going to think that your investors are useless. In my case, I'm like, dude, if I don't tell them what's happening, good or bad, they won't be able to help me. And it's also my responsibility to ask for help. Investors are not like,
Guy Reams (53:03.182)
Geniuses to know what the hell is happening in your company if you're not telling them right and even if you're not telling them the truth Right so so I think that's the best way of answering like people who say investors Don't add value other than money is because they are not willing to put their egg on the closet and ask for help and Myself I try to always Detach myself from that ego. It's like yeah
I've built this business to a 2 .6 million ARR. So what? There's bigger businesses than me and I need to keep thinking humble and I need to keep asking for help. So in those monthly updates that Zainab mentions is where I'm always trying to ask for help from my investors and I always receive help. Like, and I always tend to, even if I don't know what to ask for, I even ask, ask me questions.
for me to think critically of my business and if I'm doing the right things. So that's also been very helpful. And I think at least for my investors would take the time to read my monthly updates because they are huge. Like I took an oath to be like Jeff Bezos, with his shareholder letters. But I mean, Jeff did it until they got to an IPO, right? I haven't even gotten to an IPO and I...
set myself every single month, I need to write down what the hell is happening with the business and where are we. So that's been huge, not only to be accountable, but also to make sure that we don't waste not even a month before we correct and take action. Zainab, tell us about Robbie's updates. Do you get those? I'm assuming, I mean, she's gone. She disappeared on this. So.
That's interesting that you say that, that providing regular updates, taking that really seriously, because I have, you know, there's a lot of founders I'm working with and not all of them do this. Some of them do, but many of them don't. And I don't know if they realize how off -putting that is.
Guy Reams (55:15.694)
And honestly, I'm willing to spend time with those that are communicating. The ones that communicate are the ones that are more likely to get attention. And those are the most likely to success. That's just the reality. Someone who's not accountable for their actions, maybe they're not in 100 percent, even if they say so, even if they're like, I'm just too busy working on this. Like, you're never too busy to be accountable. You're never too busy to actually think.
No, because, and that's what's something that I understood now that as I've been continuously writing down my updates, no, Jeff is right. When you write things down, you, you think and you understand it and you process it, no. And you're like, if I'm reading this as an investor, yeah, it looks shitty or yeah, this is not well, just focus on that. No. So yeah, I think, I think that's, that's a clear distinction of who's really.
all in and who's really gonna make it if they keep consistency and discipline in that area of the business. That's great advice. So after you got your initial round of funding, it sounds like you were very quickly getting ready for a second round of funding to ask for more money. You saw the infusion of cash got you the growth. You started growing in your ARR. What was the decision making process to go get more money?
Essentially as we saw the numbers keep going down and also then the next limitations of technologically speaking, and also the experience that we needed. We needed that money to keep hiring tech talent, but we acquired a lot of junior tech talent, which worked to just be scrappy and build tech. But then we got up to the point where we had built a huge technical depth.
and required for us to go even higher. And that required even better talent. And that was the moment where we decided, okay, we need to raise this next round fast because we need to keep building the team and also transforming the team. Even before we closed the round, since I was already confident that we were going to raise the round.
Guy Reams (57:44.078)
So I took some actions and we ended up cutting the team in tech. We cut out almost nine people, people who are brilliant that took us from point A to point B, but it was clear they were not gonna take us from point B to point C. And it was that clear and that decisiveness that...
pushed us, no, just to let's close the round because we're going to do this, no? And if we do this and we don't close the round, we're going to die. So just keep doing that. So that was kind of it. So I've heard this theme a couple of times and I want to just put it out there. This theme that the team that gets you to the first phase is not always the team that gets you to the second phase. And that's...
That's probably a realization that founders need to understand that you cannot be, I mean, you need to be loyal to your people because they helped you, but you also need to realize that the same people that started are not the same people that'll get it. You have a different company when you're at the different level, right? Yes. Yes. And, and I came to this realization and usually I'm a big fan of sharing books on podcasts. The book that changed.
Everything for me was the road less stupid by Keith Cunningham I don't know if you read or taking any course from from that guy But I mean I saw this video and it was like if you take Keith's four -day MBA, it's it's ten times Better than just taking two years for an MBA. I haven't taken that course I hope I have something a little bit of time to do it, but I read his book and and he said it no and
And in order to do those types of decisions, you need to set the breadcrumbs, no? So I knew I needed to take that decision, but I was not gonna take it just like straight up. It teaches you a way where you set up the objectives and keep your people accountable. So three months before taking that decision, I told them like, we need to reach this next month. Let's do it. Coming next month. Did we reach it? No, we need to reach it this month, second month.
Guy Reams (01:00:07.854)
Did we reach it? No. So by the third month, it was evident that the team was not delivering and they knew it. So it was easier for me to take that decision because it was like, it's not you, it's the business that needs to get these outcomes and it's not gonna wait for you to get better. And we don't have that time. We are a startup. I think you mentioned the phrase technical debt and...
I don't think a lot of, especially start startup founders that are in SAS, they don't realize that you start building customers and those customers are making feature requests and you want to make those users happy so that you can retain them and reduce your churn. So you're starting to build this long laundry list of things that have to get done. And there's lots of reasons why you can't do a feature because some tech technologies in your way. And that just list gets bigger and bigger and bigger and bigger.
And if your team can't camp up with that tech debt, it's crippling. No, and for the longest time I was like, I don't know if I'm built for just living for refactoring every single thing. But it is. As you're building, sometimes velocity takes you to just keep building arms on the octopus. And eventually when you want to fix something, you end up breaking three more arms.
And that's the best analogy of what technical depth is. At least in our case, it always was very frustrating when we are like, yes, let's build this feature and we build it and then we break three more things and we're like, what? And it's cool that we hadn't looked at it for almost eight months and we go back and like, how the fuck did we push this out into production? But that's just how it goes. Sometimes because you need to balance out like the...
the speed in which you push out things into the hands of the customer so you can validate, because you can build a perfect product, but then when you put it out in the hands of customers and they don't need it or not even want it, then you just waste the time. So it's a balance and there's no perfect way of doing this. Yeah, no, there isn't. I mean, everybody talks big about all these processes you can do. Methodologies, no. Yeah.
Guy Reams (01:02:28.91)
Because the problem is, is you need money. Like the lifeblood of the business requires you to do the thing that customer wants. So you can never develop things in the order and in the sequence that you want. So you're never able to build the perfect mousetrap. It's just not going to work. So you're right. Now, if you grow double or triple your size, you're going to have that same problem again. And you're right. You'll be refactoring the core modules again. It's just the way it works, right? Exactly.
I wish it wasn't that way, but it is. That's pretty fun. Hopefully AI can fix that. So is that the last round you did or have there been other rounds since then? Yeah, that was the last round. So the 3 .7 million, we raised that in 2023 in September. And it's funny, but again, we're looking at the potential and we're looking at the speed that we want. And it just seems that we're going to be...
Fundraising again by the middle of this year for a series a no even though like and we're trying to make sense of it because it's like We are we raised three point three point seven, right? And today we have still three point four million in the bank even though we've grown from like a thirty people team into a sixty people team because just we just keep selling and it just keeps growing and by the middle of this year we're gonna be profitable again and Yes, three million is a lot of money, but then I
you start seeing the demands and the needs of a business like of this caliber. You need people who have done it. And people who have taken companies from a million dollars to $10 million in ARR are not cheap. And they are looking for really big opportunities, but they are not gonna go for free. So that's kind of the logic that I'm trying to build into this narrative. And I'm starting to talk with investors.
But just hints, no, I'm not racing, but I'm trying to see again Talking with so many so I can know which one is the right fit for us that can trust us Understand the pain and the problem that we're solving and the big vision so we can keep building it trusting that we are going to always Be transparent about our problems and be open to receive feedback and questioning. No, so that's
Guy Reams (01:04:51.63)
I've heard you say this a couple of times. I think it's an important note just to bring out. people don't, when you think of investing, people sometimes think though, I'm just going to take whatever opportunity comes by way, but not all investors are the same. Not all investors bring the same value. So in your case, if you go to this next round, you're looking for more of a partner, somebody who can really that understands your next level of.
your next phase in your development. Yeah. And ideally someone who's done it before, ideally or someone who has the connections or someone who has in their portfolios companies like us, companies like Drift or companies like HubSpot, those type of investors. Because I'm a true believer and I understand the logic behind VC of like, it's better to invest in a second time founder because they've done it, they felt it. They...
They know what not to do. No, in my case, I had it more difficult because I'm a first time founder now, but at least I read a lot of books. So kind of it helps me know to understand who's who's done mistakes in the past. So yeah, you're always learning. You're always learning. So this is your first time at it. I mean, this is great. I mean, the fact that you're having success is amazing. A lot of people don't have success their first couple of rounds. So the fact that you
got onto a tech and a business niche that is a need that you can address is something special. What's next for you? Taking this company to the next big level, getting a big sale? Is that the goal is to take it to IPO or sell? I've heard you say that a couple of times. Yeah, I mean, it goes beyond money, you know, and probably you understand this because you sold your company. I mean, it's more about making it.
change, a mental change, at least in Latin America, because...
Guy Reams (01:06:56.142)
And it's kind of sad, no, because I understand why Silicon Valley it is what it is, because there's always proof of someone like you and someone that is not necessarily smarter than you, no, doing it, doing it big. And when I question myself, like, who do I look up to from Mexico? I don't know anyone. So it's sad, no, but that's kind of why.
no one is doing it because no one believes it's possible. Everyone is like, yeah, Jeff Bezos, yes, Elon Musk, yes, Mark, yes, Yen -Seng Huan. Yeah, but all of them are from the US. But there's no someone closer, closer to home that has done it. And I feel that that's what drives me. If I can make it, yes, maybe an exit and I can make a big boss of it or maybe an IPO and still make a big boss.
It would unlock something in people to see that it's possible because we built it as underdogs. We came from nothing, not even from Mexico City, just a shitty town in Queretaro, nothing. It's mainly industrial here. You only have like car fabrics and stuff like that. So that story is the story that people open their brains and see like, wow, this guy did it. So I can.
That's really powerful. You know, I was thinking I was going to ask you about the entrepreneur community in Mexico City and surrounding area. If that was thriving or if you felt like, but it sounds to me, what you're telling me is it's nowhere near what you would see in even where I'm from San Diego. It's like here. I could throw a rock out the, at the window and I'd probably hit a small little venture startup fund. Yeah.
No, no, no. And in Mexico we have this analogy that we are crabs in a bucket. You know, because crabs in a bucket when they're trying to escape, there's one pulling them down. That's what happens in this area, in this region. Whenever someone is trying to get out of the bucket and have massive success, there's always one pulling them down. And I think if I can drive that spear, if I can get out of this bucket, then I can...
Guy Reams (01:09:22.413)
also talk back to those people who are pulling people down to let them go, to let them keep shining because that's the real thing that happens in the US, and specifically in Silicon Valley. It's like everyone wants to give back because it's like I didn't do it myself. Someone above me helped me so now I need to give back. But in here it's like no, I did it myself. Fuck you, you're not gonna do it. Why, you know?
It's ridiculous because I'm more of, why not? It's for everyone. It's not only for me, but people here are only for them. And we need to change that. That's interesting. I think, I mean, it sounds awesome. I mean, you're right. I mean, I was born, I was raised in a family that was okay. I mean, we weren't poor, but we weren't exactly wealthy either.
middle -income family, but I was I was I always thought that a hundred thousand dollars a year would be The ultimate goal like to me to me if I ever got to the point where I made a hundred thousand dollars a year I would have arrived right I'd be rich How little did I know what? No, but but but but you know, I think about that. It's that mindset the mentality, you know, I was Born into a family that had that mentality. It wasn't their fault. I
It wasn't who they, you know, but, but it's interesting that you surround yourself with people that have different mentality and you start to absorb that idea, that thought process. And that's what you're describing to me is in the community that you're in, you're surrounded by people that don't have that entrepreneur mindset at all. Like, no, no. And I think for me, I don't know for you, no, but there's always someone who inspires you, no.
And for me it was my mom, my mom was one of the first software engineers in Mexico. She worked at HP, then she worked at IBM, and then she put on her own company of PC accessories and repairs. And I learned from her because she came even lower, she helped me and my brothers go up the ladder, but she came from a shitty, shitty shithole.
Guy Reams (01:11:47.214)
in Mexico City right next to the airport where everything is graffiti, where there's no lights, where you cannot go out in the streets, you know? But she had to build herself up because her dad died at 16. So then she break the ceiling. She had to do better because no one else was gonna come and save her. So she saved herself. So then, I don't know why, but I took that to oath to say, well, if my mom...
struggled in order to put me here. What the fuck am I doing if I'm not going even higher? So that's why. That's a great story. I mean, I think every family that has success in it always has that person that had to pull themselves out of nothing or overcome a major obstacle and demonstrate that resilience. And that inspires the next generations. That happened to my family.
There was one particular person that really raised them, their station up above where they were. And that's been the influence in my family. Sounds like that was your mom and your family. I mean, imagine how many more generations are going to be impacted by your mom's ability to overcome hardship like that. I mean, you're going to be successful and if you have kids, they will be inspired. I mean, just think of how much of an impact that will have in your family.
No, definitely. And when you read, for example, Steve Jobs' story and Jeff Bezos and all, I think probably they were also inspired by their own parents, you know? Like Steve Jobs being adopted, but like the story of how her mother just had one ask for anyone who was going to adopt her son, that they took them to college, you know? And then he goes to college and he's like, I'm not really built for college, but I'm not gonna...
break my mother's wish for me. So then if I'm not going to college, I need to be the best there is, even better than someone who's been to college. If you connect that, probably if he was still living, you ask him and he probably would say, yeah, probably that's some part of the reason that I did what I did. Yeah, that's so true. Well, that's really inspiring. So Robbie, it's been awesome talking to you.
Guy Reams (01:14:12.302)
I really hope that lead sales gets, it sounds like you're on the trajectory. I think success is in your future. There's no doubt about it. I'm actually curious. I'm going to go check it out and I might become your customer here shortly. Cause I have a little side business I'm doing. I track all my leads and notion and it's a giant tangled mess. So the ability to track leads like that in a very simple, elegant way would be very refreshing to me.
Yeah, it's going to come soon. Like, I mean, part of the series A would be this, like, how can we get again in track of shipping products faster and integrations, you know, because today's WhatsApp, Facebook and Instagram. But I know that it's email still a big part for certain industries. Chat through SMS is also big in the U .S. know, so maybe we can build that integration as well. Or I don't know.
Many things that not even you and I understand. Probably tomorrow, TikTok is going to be the de facto way of messaging between new generations or something else. But the timeless thing that you mentioned is how you can track that Kanban way and still make it easier. So that's what we're following. Yeah, that's great. Well, I wish you the best luck and thank you for taking the call today. I appreciate it. Likewise, Guy. And have a great weekend.
All right, thank you. Thank you for listening to this episode of the Founders Journey. You can follow us at FoundersJourney .fm for updates on our episodes and to recommend future guests. Special thanks to our primary sponsor, New Fund Venture Group, who can be found at NewFund. N -U -F -U -N -D dot com.