The First 100 | How Founders Acquired their First 100 Customers | Product-Market Fit

[Raised $60 million] Ep.50 - The First 100 with Jenny von Podewils, the Founder of Leapsome | Event-driven Marketing | Performance Marketing

March 27, 2023 Jenny von Podewils Season 2 Episode 14
The First 100 | How Founders Acquired their First 100 Customers | Product-Market Fit
[Raised $60 million] Ep.50 - The First 100 with Jenny von Podewils, the Founder of Leapsome | Event-driven Marketing | Performance Marketing
Show Notes Transcript

Jenny von Podewils is the Founder of Leapsome, a people enablement platform that enables organizations to develop a central repository of the collective intelligence of their individuals. Bootstrapped since 2016, you recently raised $60 million in a Series A round as you set out to expand globally.


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Let's do it! Let's do it! Broadcasting, from around the world, you're listening to the First 100, a podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Radwan. Good to have you on the show, Jenny. How are you doing today? I'm great and I'm happy to be here. Thank you for being here. I'm going to do a quick introduction for our listeners. So Jenny Vaughn Podwells is the founder of Leapsom, which is a people enablement platform that helps organization develop a repository of collective intelligence. You bootstrapped the company in 2016 and you recently raised around 60 million expansion globally. Take us back to the founding AHA movement, Jenny. How was it? Leap some born. So the AHA moment for Kajatan, my co-founder and I was basically out of the previous jobs we've had and the previous organizations we've worked for and worked with and seeing during phases of rapid growth and rapid change, how the alignments of the clarity what we wanted to achieve together, how the organizational health and culture and also how the lack of people enablements. what they know well, what they can improve on, how that wasn't properly built out. And ultimately that meant for the companies it was hard to fully live up to its potential and it was also frustrating for employees as maybe the work environment wasn't as fulfilling as it could have been. So, it comes down very much to Kai-Tanz and I, my previous experiences in the workplace. Tell the listeners a little bit what Lipsum does in essence. So Lipsum is a B2B software platform. It has a module for OKR tracking, for modern performance management and feedback, for employee surveys with actionable people analytics and action plans, as well as a learning, onboarding and a reward module. And why would companies roll this out? It's like an operating system for the company to build alignment. So we can jointly execute the strategy set up, set out to tackle. It helps companies to understand what works well in the company and how the company can be improved to the environment for people to succeed. and to help clarify the strengths of individuals and help people to reach really the high performance at the individual and the team level. So that's what we do. And working with this very big tech companies like Unity or Spotify, but also smaller tech companies, professional services companies, but also very established businesses. And yeah, that's amazing. Amazing. So I think so far, you have more than 1500 organization using your solution. And the show is about your first 100 paying customers. Do you remember your first paying customer and how did you convince them to be part of Leapsom? We set out with this product vision, but obviously you can't actually build the entire product from the get-go. So the first version of the product was actually just instant feedback. And there was a sales force consulting and development company here in Berlin that I think was our first paying customer. So they just paid for this instant feedback tool When you look back at it, it was super narrow, quite crappy. And I think they actually also didn't stay a customer for that long. But I think we, fun to work with them was still a lot of hand holding and being involved in the onboarding, the feedback trainings and, yeah, I mean, still, still important first win on that, that leaps some journey. Amazing. Can you highlight a little bit more? What was your early acquisition strategy after you had your version two or three of the software? Yeah. So in the very early days, what worked quite well for us was, first of all, events. So being involved in the right sort of meetup, vertical events, speaking about what we do, and thereby actually building trust. That's how we got quite a few of our early customers. In addition to that, it was in the very traditional way of going through network, sort of like friends, acquaintances, getting targeted introductions to other companies through VCs. And so it's been very, very nice. non-scalable in the sense, but that worked quite well for us in the very early days. To go back to the event marketing that you mentioned, you know, at the early stage you invest, you go out to the event and you expect a certain number of leads and then you don't get that. How do you keep yourself disciplined to know if that was a good investment and if you should do another event? I mean, I think for us in the early days, it was very, very sort of like basic metrics amount of conversations that followed from an event. And we were still in this very early, like learning and iteration phase. So a lot of these conversations even helped to fully understand the pain points of our potential customers, clarifying who our ICP is, clarifying who our buyer is, what people care about, how they think about the ROI of this tool category. So I think obviously the best case was making a sale from it. But I think even like these early conversations helped us quite a lot. As Nizer of us has ever worked in HR or as a people professional, we both have been sort of operators, Kajaton more on the product side and more on the sales side. So that's sort of been the very, very simple metric looking at events in the very early days. And today, how much of your investment is still in events? Super, super tiny share, which to some extent is also due to COVID. So we're only just in the process of revamping our field marketing and event strategy. We're doubling down on a handful of these really important like blockbuster trade shows that might even be an element of brand building being in the right places, being seen in the right places. They might not even be as important from a lead gen perspective than some of the much smaller, much more vertical events. So the event strategy we're building right now is a mixture of those big blockbuster in addition to very vertical events, partner events that are actually quite interesting for us from a lead gen perspective. Very interesting. What was the next channel that you went after, after events that was, let's say, successful and you've now still invest heavily in. So performance marketing has been a really important source of lead generation for us from the very early days onwards and actually continues to be one even right now. important for us in the early days. Once we had initial logos, initial case studies through sort of like these network or event leads, that was sort of like the website that we could lead these leads to that had enough credibility to then actually win us that initial demo. And back in the early days, we were very, very focused on very sort of high intent leads. So pretty much the only option on the website was actually to book a demo, not much else, to action. But that actually worked well for us in the early days. Yeah, so that was other important the gen-gen driver back in the day. Amazing. Is there any other tactic or strategy you've used to acquire the hundreds customer? It's always a good question because such a long time ago, so the networks, the targeted intros, the events, performance marketing, those were important once partnerships as of version one of partnerships was already also part of the equation back in the day. And there was like an HR practitioner's or expert network that we closely partnered with. We had an initial partnership with Personio as an HRS tool that we also did very much integrated with. So that's probably the other important additional source of pipeline that we already built back then. is the founders involvement day one when it comes to these partnerships, especially that maybe the reputation of the company is still unknown, and you'd need to try to get those logos, as you mentioned, on your platform. I mean, I think partnerships in the early days are very similar to sales, and I think it's also very effective if the first million of ARs is basically founders sold, and I think similarly the first partnership need to be built and maintained, ideally need to be built and maintained by one of the founders. I think it's super, super hard to be handing this off to someone else in the early days. I mean, worst case, let an intern do the sales because you don't feel like selling your own product. I think that's maybe not the ideal scenario to get started with. And what advice would you give a founder who's starting, let's say with a technical co-founder, they don't know how to sell, but they have to sell? What's the learnings here? any advice you could give? I mean, I think especially also for technical co-founders, it's quite valuable to be having the direct contact with customers. So also for us as a founder team, despite that I was the one that had more previous experience in sales, it's always been Kajaton and me selling in the early days. And I think that's also part of our success, that also the more technical founder, the product engineering founder at these tests has a certain level of direct experience. exposure to customers. And maybe then there is a motion of bringing somebody else onto the team that maybe handles more the salesy part of the relationship, and then doing it almost like it's a pilot co-pilot joint motion. But I think it's so important to hear from customers firsthand, both during the sales process, maybe why you don't convert them, and then obviously also in the onboarding and the ongoing relationship. So I feel like there's not really a short cut for that. unless it's like a pure product that grows motion. And also then you want to be speaking to your users, right? Exactly. Exactly. What has been the most challenging part of building LeapSim early on? I mean, there have been so many challenges along the journey and translating customer user feedback into the right product decisions, right? You can only build so many things at the same time. So figuring out what really now moves the needle in terms conversion, but also success and satisfaction of customers. Being very, very fast to build upon this feedback, but at the same time to also stay true to your product vision. So finding that really fine line of adapting the product roadmap, but also executing on your own vision. I think that's one. I think what we've actually been doing really well is building a standard product, a few customers. And I think this is something that especially with your first big customers that you win is a really big risk. And I think this is something where Kajtan is a really, really, really strong product leader to hold us accountable to that really clear product, product roadmap. Why staying, staying agile, agile enough, especially in the early days. Then I think the second challenge has been, and frankly, I think it continues to be a challenge as you grow, is scaling, marketing, and sales in sync. And I think there have been times when every seller had like 30 new demos a week, which is not really, I mean, it's a good problem to have, but it's also not really sustainable. And then there's times when maybe sales force doesn't actually get enough leads through an inbound motion. So scaling these in sync, I think that's probably one of the harder parts of scaling as well. And yeah, these are the top two that come to mind. when something you've built and you've believed in isn't the right way forward and challenging that again. I mentioned in the beginning, our first product was instant feedback standalone, which was just way too narrow a product to get started on. And I'm figuring out, we really need to double down building this or that, widening the product, which product or what feature we had in mind to build next. when to persist and when to course correct. I think that's also been been a constant learning path. Amazing. Thank you for sharing this. So you've raised 60 million. And it's quite a big number. How do you convince investors? Or at what point do you say, this is the time for me to go raise? And how would you determine the number? Is it 60? Is it 50? Is it 45? Yeah, and that's that's also a good question. I mean, we probably bootstrapping for such a long time. We're never dogmatically bootstrapped. We're always very pragmatically bootstrapped. So we always ask ourselves the question somewhat on a quarterly basis like what our core priorities as founders should be. And the core priorities were really long time. We're always like we should really focus on building product and converting and retaining customers. The lack of cash never seemed to be actually the most important priority because we're in a very cash flow optimized business model. And so we've always discussed and said, no, it's not the right time to raise. We shouldn't raise now. We should focus all our attention on the things I've just mentioned. And then we re-asked ourselves this question a year ago, so on January 2022. This was the time when we discussed like what got us here won't get us there. So what gets you from one to 10 million might not necessarily be what gets you from 10 to 100 million. We've decided to double down a lot more on moving upmarket. We've decided to focus more on complimenting an inbound motion with an outbound motion and also double down on our global expansion. We already have 20% of our revenues and customers from North America, but to further double down, to build an office, to set up an operation on the ground. All of these are really big investment projects, moving up market, building an outbound motion, global expansion. And in order to be able to double down on them somewhat in parallel, we decided that that's actually really good to point at time. where now cash all of a sudden actually is a bigger lever. And that's when we decided to go fundraise. It's been our series A, but based on the stage we were in, we could very much raise based on KPIs and metrics, whereas I guess in some series A rounds, you raise much more on the story, the potential, the team. And so to some extent it might have been a bit of an unusual series A round that it was very metrics driven. I mean, obviously there's also like the long-term story, the equity story, the potential we see the market, but we could back that up as really, really strong SAS KPIs. And I think SAS is such a, I mean, it's a bit of a, it's a very well understood model. And we could benchmark ourselves, and we had really, really strong benchmarks on all the KPIs. So that's why it's actually been a very, very lean and effective fundraising process for us, which was also something where when we always asked ourselves what our priorities should be, we always thought like when we are one step further, it's going to be easier. So why waste the time now if it's going to be easier after the next milestone? Amazing. What is the principle that you live by that has helped you a lot in your life or in business? Is there a particular one? Yes, there's really two for me personally. And I think actually these are very similar for Kajtan, my co-founder and I. One is to be impact-driven. So actually, I don't want to waste any time in my life not working and building things that matter. And for us, building leapsome, I mean, we're in the business of making work more fulfilling. And we to make this time count. So that impact orientation is, I think, a really strong motivator for both of us and actually for the majority of our team. And the second principle is always learning. And that's really, really strong also at the core of our culture and our DNAs. Two of our values are challenge the status quo and listen and learn. And for me personally, the drive is also to always keep learning, like never stand still, challenge the status quo. And I think this is really something that's also part of our secret source that we always want to get better and improve and challenge if something that got us here will still get us to the next stage. So that's probably the two. Impact and learning. Thank you for sharing these amazing principles, Jenny. What's next for Lipsa? I mean, the three big expansion topics that I've just mentioned, the global expansion was the focus on North America, moving more upmarket, also diversifying the pipeline generation. Those So that's more in the go-to-market side. Then on the product side, I mean, we're clearly not running out of ideas of what we want to achieve. And we've just launched lots of like a first version of Leapsome AI that helps you get recommendations on how to write better feedback. So there's a lot of things we want to do on the product side to really help our users to change the habits, to really build the most effective operating system for companies to build alignment, learning, retention, market where you need to do more to maintain your high performance, to maintain morale. So a lot more that we're focusing on the product side. And then also on the organizational side, as the third building block next to GTM and product is really building and keep building an exceptional organization. So we've set out to build the category need and people enablement, but we also really very much care about building the best possible organization we wish we would want to work in internally. So always keeping. to these values, executing on that, amidst all the craziness of growth. That's also really, really core focus for us. Thank you for sharing all of this, Jenny. We wish you the best of luck. How can people reach you? LinkedIn or email Jenny.Portovitz at either way. We're always hiring. We're building partnerships. Yeah, I mean, just love to hear from folks. Thank you so much, Hadi. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast on Apple iTunes, Stitcher, Google Play, or Spotify, and share it with a friend starting their entrepreneurship journey. Leave us a five-star review. Your support will help spread our podcast to more viewers.