Episode 5 - When product vision blinds you from seeing reality!

Seed to Success

The red flags I ignored while building for the wrong audience.

Episode overview

In this episode of Seed to Success, Alastair sits down with Sebastian Trif, former CEO and co-founder of Aurelia, who shares his valuable insights on navigating the complexities of start-up growth, and the difference between searching for product-market fit and executing it.

In this candid chat, Sebastian discusses the dynamics between technical and non-technical co-founders, the importance of paying yourself today (not tomorrow), and the balance of vision with practicality in the founder journey.

Tune in to hear about the critical difference between idea and execution and learn from Sebastian’s own experience navigating the complexities of the early-stage start-up landscape.

00:01:00 (Alastair)

Welcome to the show, Seed to Success. I'm excited here to have Sebastian Triff in the hot seat in the sofa here with me, CEO and co-founder of Aurelia, or rather former CEO of Aurelia. Aurelia raised 3 million from Blossom Capital, but recently closed, or is in the process of closing and actually returning some of those funds back to investors. So in this episode, Sebastian, we're going to explore why getting product market fit before marketing or before spending on marketing is so important and what it's like to give money back to investors, or certainly less money than they gave you. So, Seb, welcome to the show.

00:01:40 (Sebastian)

Thank you. Yeah, it's good to be here.

00:01:42 (Alastair)

Thank you. Seb, give us an elevator pitch on what Aurelia is, or was?

00:01:49 (Sebastian)

Yeah, so originally we went through a couple of iterations, right when we raised, we wanted to be a platform that unifies all financial systems, from you purchasing something on the website to your taxes being submitted digitally to whatever governing entity you're under. We wanted to build an API for all of that, but that's pretty hard to do and pretty capital intensive. So by speaking through some friends, people who were running businesses, we landed on this idea of automating at the time, all accounting that happens around an e commerce store. So when someone books an order on your Shopify website or sends an order through Amazon to those records being created in Xero or QuickBooks or something like that. But, yeah, we'll explore it later. But this was a bit hard to do without market research.

00:02:43 (Alastair)

So in principle, it's around being more efficient and seamless data from one system to another system in this kind of, this world, of cloud technology, where we've got best of breed systems that need to talk to each other. So in principle, great idea in terms of being more efficient, being better controlled and eliminating a human being from that process, really, isn't it? We met through the Early Adopters Hub. I think it's the first time we met, or actually maybe we met a show, but we certainly met a little bit more Early Adopters Hub. But that was right towards the end of the journey of Aurelia. Take us back to the start. How did you come up with the idea? Where did you see the gap in the market? What was the origin story for it?

00:03:25 (Sebastian)

Yeah, so me and my co-founder, we came from slightly different parts of the market. I came from being an engineer, being in fintech, of this kind of background. He was trying to manage multiple accounts in multiple countries and run a small business with that. And by putting our backgrounds together, we saw that the problem we've identified is that it's kind of impossible to do unless you break out excel, you have to do a bunch of manual work, have to read through or get so much advice to even run a small business by yourself. So that was the start. We tinkered around for a few months trying out different APIs, see if the problem was solved. And we saw that there is no solution, there wasn't anything complete that we could just take off the shelf. We decided to both quit our jobs and go all in on Aurelia. But yeah, I think to say that we've done market research at that stage, I don't think that's the case. I think we started with the vision first and oh, it would be cool to have this world where data flows seamlessly between all systems, no problems, no one has any manual work to do. And then we kind of worked backwards into what we need to do to achieve that. I think the struggle is that, at least in the space that we're in, in finance in general, or if you want to restrict it even more to accounting, this kind of idealistic worldview taken down to, oh, we're building a product and we're going to get people on board with at some point you really have to understand the needs of the people that you're actually selling to. And I think we were a bit too slow with that.

00:05:00 (Alastair)

So we'll definitely dig into that and how you would do that differently going forward. But first of all, how did you meet your co-founder and how did you decide? Actually, here is something for us to work on together, because in many ways it's like a marriage, right? Well, yeah, I'll stop there. How did you meet your co-founder and decide. Yeah, let's get into bed with each other, so to speak.

00:06:23 (Sebastian)

So we have a common friend, someone that I used to work with at wise. My co-founder Jasper knows her as well. And, well, the story is pretty simple. We were at the party of another Transferwise colleague. We got handed two beers and got told you two should talk to each other.

00:06:41 (Alastair)

Okay, so it was orchestrated. It was like a blind date?

00:06:43 (Sebastian)

Yeah, like someone was a matchmaker. But we rolled with that. We were just tinkering around with some fun stuff that had nothing to do with Aurelia for a while. And then it seemed like there was something in this vision of like a unified API to let you handle all of your finances in one place that was really attractive to us. And then we decided, you know what? I think we can actually do this. Let's go all in.

00:07:06 (Alastair)

So you're a developer, and obviously you quit your full time job, which at that time was a bank. Which bank?

00:07:12 (Sebastian)

Yeah, I was in Morgan.

00:07:13 (Alastair)

Yeah. And so your background's a developer. What was your co founder's background?

00:07:19 (Sebastian)

Also I would say computer science, but he comes more from like a sales background as well. He did very intensive job of door-to-door sales, selling textbooks and stuff like that. So we thought we had a winning combo, somebody who's…

00:07:31 (Alastair)

Selling textbooks door to door?

00:07:33 (Sebastian)


00:07:35 (Alastair)

You do hear of the examples of an encyclopaedia salesman's salesman 50 years ago, but still happening?

00:07:42 (Sebastian)

Yeah, he did it and I think he was quite good at it from what I understood as well. But, yeah, I think we thought we had the winning combo because he could look after this kind of customer development side, being able to sell and I would have the tech side. So you know what could go wrong?

00:08:01 (Alastair)

So we've just done an episode with Audrey Miller, partner at Tapestry VC, and their remit is they back repeat founders and technical founders, that's what they focus on and that's all around, well, a repeat founder, they have learned the hard way, learned the mistakes, learned what to do, what not to do and what to do. And second time, third time round, you expedite the decision making and you get the probability of which decisions to make, which direction to go a lot quicker because you've seen what works and what doesn't work. And equally with technical founders or co-founders, their view is with a technical founder, you can work on the product and adapt and iterate that much quicker. You can get a product and iterations of that product out much quicker than if you're non-technical. Yeah, so that's their approach, which is fascinating. We did a whole session on that and the kind of the value around that. Now, obviously you come from the remit or you come from the camp of your technical co-founder. I'd be interested to hear from your perspective how much that was an advantage to you. And actually, are there any disadvantages because of that? Because you can actually get something out so much quicker? Do you bypass, maybe this is leading the witness, right, and do you bypass certain steps because actually you can do something, you can knock something out overnight pretty quickly because you have that ability to do it. Be really interested to hear kind of how much you think that's an advantage and what the disadvantages of that might be, if at all?

00:09:50 (Sebastian)

Yeah, I got you. So I can't really speak for all engineers turned founders, because there's some really good success stories out there. And as an aspiring entrepreneur, coming from like an engineering background, you get hit over the head with those positive examples all the time…

00:10:07 (Alastair)

The few that are there as unicorn case studies.

00:10:12 (Sebastian)

So what I can speak from my experience though, is that I had this belief that if I can build something, then that's the hard part, what else is there to stop me? If I speak with a customer and they tell me, oh, this is not really it, I'm not really buying it, or something's broken in the product or something, I understand everything, that was my goal. I know the whole tech stack, from what button they click to what happens on our database. I want to know all of it. But it turns out that's not really enough. I think for me personally, there was a disadvantage in being stuck almost to this fantasy worldview where if you can build it, theoretical world, because in reality, at least something that I saw is that you have to spend so much time in customer discovery, customer validation, where you are not even telling the people you're speaking to what you intend to build. You just want to listen and almost wear their shoes for a while to really see what their worldview looks like. That has nothing to do with writing code. It's more to do with empathy, more to do with listening, all this stuff. Which, I mean, I'm very thankful to one of the angel investors on our board did so much coaching with me on that, and yeah, I think that's the… Now I look at it, I'm seeing that it's not enough to just be good technically, you really need this other part too.

00:11:30 (Alastair)

But still an advantage, being able to turn something around pretty quickly if you get the other steps in the right order, done at the right time.

00:11:39 (Sebastian)

Yeah, no humble brag on my part. It would be very weird for me to sit here and be like, yeah, just be an engineer.

00:11:45 (Alastair)

And how much do you think having understanding of the market is, or would be in your case would have been a superpower versus being an engineer? I guess what I'm trying to ask is how much emphasis would you place on understanding the market versus being able to code?

00:12:05 (Sebastian)

Yeah, I think that's a really good question and a very important distinction, especially for me personally. The way I see it is B2B SaaS versus B2C in general. I think for B2B SaaS, knowing the market is like, that's a superpower. I think you can be a great founder, be nontechnical, but just have really good, solid understanding of the market. Someone who spent 10/15 years in recruiting or some industry like that, they know it very well. I think you have a solid advantage by knowing that and you can find somebody to pair up with to be your technical counterpart.

00:12:38 (Alastair)

Yeah, I guess kind of to make clear which you picked up on is that it's not about going and doing some market research to understand the market. It's about that deep kind of decade or so entrenched in the market, and really knowing kind of what's going on in the market and how players in that market are struggling, what the gaps are, what the opportunities are, what real life is like in that market. So you're a full stack developer?

00:13:08 (Sebastian)


00:13:09 (Alastair)

And so I guess just for listeners, for those that might not be as familiar with that, can you explain what full stack developer is versus other types of developers?

00:13:17 (Sebastian)

Yeah, fair. Yeah, so that means that you're comfortable touching everything from UI code, something that you see on a webpage maybe, all the way down to what happens with security, what happens on the server, what happens in the database, all of that stuff. I learned it because that was just my passion. I was curious. I started off as a game developer originally, and in that there's no full stack or front and back-end delineation in the game development world. You're just building games and you have to get familiar with everything. So that's how I started. And then when I went into the web world, I didn't want to carry any distinction or anything like that with me. I just wanted to learn it, yeah.

00:13:58 (Alastair)

Okay, cool. So certainly a superpower nonetheless, right? For Aurelia. Let's go back to when you both left your jobs, full time jobs, full time employment, and you started building Aurelia at that point, after a couple months of knowing each other, tinkering around, at what point did you either have your first MVP or get funding? Which came first?

00:14:22 (Sebastian)

Oh, that's a good question. I would say the MVP came first. A very rickety, shoddy MVP for that stage. But, yeah, I think that came first.

00:14:30 (Alastair)

So talk me around the… because at the moment we're recording this kind of what we're in the middle of 2023. So Q3, Q3 2023. It's pretty hard at the moment to, it's pretty tight, pretty dry in terms of the market of getting funding. It was a little bit easier for you, I think, from what we've chatted about before. Talk to me about that funding route for you and how it came about.

00:14:55 (Sebastian)

Yeah, I'll be honest, I think I got very lucky with that one. The super short story is that we reached out to some people that we knew that were just investors, and we got some interest through that. I think we lined up about maybe 20/25 calls in total, and we got a ton of inbound, especially for being in London. So at the time, I don't know if it's the same now, but at the time, all I had to do is just put on my LinkedIn that I've started a new company and people were reaching out. Like the Ophelia from Blossom reached out and I was just watching the video of her, like two weeks earlier. I was thinking to myself, like, no way ever. These are great investors. Not in a million years would I get the chance to speak with them. And then she wrote to me on LinkedIn, like, two weeks later. I couldn't believe it. So I think we got very lucky with that as well. And I think there's something about the background of the team and how it fit very well with the space that we're after, which I think that's. I mean, you can ask investors, they know their thesis a lot better. But I think for us, that was part of what factored into that luck and how easy it was for us.

00:16:04 (Alastair)

And your background being the, I guess, game developer in a previous life, but also engineer at Transferwise, and then at JP Morgan as well. Both of those wet the appetite for, I think so VCs to kind of get excited about that you've been in and around that world, especially wise, I assume, in terms of that and experiencing that. And so what was the investment journey? Like, the pitch or the kind of actually signing terms and getting the money? What did the process look like for you, and how long was that process? Because you say you lined up 25 calls, but then you got a few inbounds.

00:16:45 (Sebastian)

Yeah. So for us, I think some of the investors were doing due diligence, so the process with some of them was taking over two weeks already with some of them. And then what I really appreciated about Blossom was that they moved very quickly. It was, I think, 72 hours from call to term sheet. So for us, that was quick. And I appreciated that because all the culture that I'm exposed to, everything that I see comes from the Bay area, and then there, at least everybody prides themselves with how fast they can get a deal close or something. So for us, it was very quick. It takes a long time, though, after that to sort out, like, your cap table of the legalities of how to actually accept those funds as a company. But, yeah, I can't really complain. We had it very easy.

00:17:36 (Alastair)

So from first conversation to a term sheet, 72 hours?

00:17:40 (Sebastian)


00:17:41 (Alastair)

Which is quick. Very quick. And then after that, how long until the money was in the bank?

00:17:48 (Sebastian)

I think it must have been another couple of weeks or so. Yeah, maybe two weeks, three weeks.

00:17:53 (Alastair)

And this was effectively your seed round, and it's $3million or pounds?

00:17:59 (Sebastian)

That was $3million and some couple Ks from angels, yeah.

00:18:05 (Alastair)

Okay. And what sort of due diligence did you have to go through for... You mentioned you were doing some due diligence or feeding some due diligence questions from some of the others, what kind of due diligence did you have with Blossom?

00:18:19 (Sebastian)

Yeah, so I think the largest amount was on. Do we really understand our clients? Do we understand the solution, how well they fit together? Because I think since this was seed stage, it was more the idea that, do we have an idea? Do we have a solid team? Can we keep iterating in case something doesn't work? And I have to say, for what it's worth, later on, they helped us quite a lot to see if we're actually progressing or not on this kind of like, client understanding journey, which I think was our weakest part at the time. But, yeah, I think the team combination with understanding of the problem space, like how the actual APIs work, the fact that there's all these disjointed systems together that we could actually understand, we knew who to speak to about them. I think that was our edge, that was the benefit that made them want to invest.

00:19:10 (Alastair)

And was it just the two of you still at this point in time?

00:19:12 (Sebastian)


00:19:13 (Alastair)

So they were investing in you two as co-founders. And so fast forward, how long were you going for? About two years. Yeah, about two years. And so if we fast forward to the height of the number of people, the team size you had, how many people did you get to?

00:19:28 (Sebastian)

Oh, maximum was 14.

00:19:30 (Alastair)

14, yeah, I guess that was the highest point of your cash burn as well?

00:19:36 (Sebastian)

Oh yeah that hurt every month.

00:19:39 (Alastair)

Yeah. That's why I to want ask you. So you get 3 million or thereabouts in terms of investment from Blossom and a few angels, and then that lasts you. And at what point? Well, how much were you burning at the height of the peak of your cash burn?

00:19:57 (Sebastian)

Yeah, this is embarrassing, but for the sake of transparency, I'll share it. But I think our highest month was €160k in euros.

00:20:06 (Alastair)

So I think, as you say, for transparency, some of these conversations are had by founder to founder. But a new founder can't always have that transparency from others and what's going, because you quite often only see the success stories and so founders that are going through hard times or burning a stack of cash and not knowing how many others are doing it, that maybe don't have a network. Actually, I think it's really valuable to be able to, and therapeutic to be able to hear that other people go through these challenges as well, and are at the height of, are burning that amount of cash versus how much they've raised and how much is maybe in the bank and their cash, zero dates and where they are along their kind of milestone product milestones or business milestones. And so at that €160k, how much revenue were you, did you get to any revenue? Did you bring in any revenue?

00:21:02 (Sebastian)

Yeah, we were making €1200 per month. I think that was our revenue.

00:21:08 (Alastair)

Yeah. And how many customers was that across?

00:21:12 (Sebastian)

That was across four or five customers at the time. Just like friends, basically, people who trusted us.

00:21:18 (Alastair)

Yeah. So these were super early, even before early adopters, these were just people that were like, yeah, we'll do you a solid and we'll use it. And were they actually using the software?

00:21:28 (Sebastian)

I think that's the tricky part. So, for us, one thing that worked very well was we understood that between my co-founder and myself, we don't have an expertise in accounting. We're not qualified. We don't know this world. So our first hire was an accountant in Estonia named Sandra, and she helped us a lot along the way. That's how we got those clients, we didn't make the offer for them to use the product. We made the offer to take on their accounting so that we could see how Sandra was using the product that was meant for accountants and kind of, the product, in theory, worked very well. Very disappointing to see that your friends, previous colleagues or so, they don't have a need for the product. They didn't log in just because they're your friend. They just didn't log in because they didn't need the product. They had our accountant, Sandra, everything got sorted. We didn't actually bring any innovation at that stage for them to use the product.

00:22:21 (Alastair)

And so the 14 people that you had, what functions did they span across? Because I know you had marketing, and we'll talk about marketing the right time to bring in marketing and having an understanding what your customers really need. But what functions were those 14 people across?

00:22:39 (Sebastian)

Yeah, they were split. I think maybe, let's say 60-70% of the team was still engineering. And then the rest, we had two people focused on sales besides Jasper, my co-founder. Then we had one marketer at the time, one designer, and maybe controversial as well, but I think it worked well for us. We had a Head of People quite early on as well. So that was the team set up.

00:23:01 (Alastair)

So actually interesting on the head of people, so small team, one person, full time, focused on the team themselves. What advantages do you get out of that? And if you were to do it again, would you hire a people person as early again?

00:23:15 (Sebastian)

Yeah. Okay. So I think this was more a bit of self-understanding. I know for myself that when things get going and you have a lot of work on your hands, for me, personally, I noticed that I sometimes forget how to check in properly with the team or how to keep the team growing in a steady, healthy way. And it just felt very unfair to not give that to the team. So we hired somebody who was just dedicated to looking after culture, looking after, do we have all the paperwork in place? Is it clear when somebody's joining the company what they have to do? Things like that? Yeah, I think it worked quite well.

00:23:53 (Alastair)

And were you still in the role of. I know you were a CEO and co-founder, but were you in the role of technical person? Were you in the role of engineer in the business or technician in the business? If you read rocket fuel or e-myth, or were you a CEO at the time?

00:24:11 (Sebastian)

Definitely not CEO, no. I think this was a very important lesson for me as well. I was, like, very wimpy CEO, I would say. I didn't have the courage to put CEO on my LinkedIn for first year. I thought… what message does it send to other people if they see this? Am I, like, the big wig boss? I think I've just been exposed to that from my previous days in other companies, and I just didn't want anything to do with it. So I very much prefer to stay in the weeds and all this.

00:24:40 (Alastair)

You're in your comfort zone.

00:24:42 (Sebastian)

Yeah, I think so. Yeah. It's like this kind of self-reinforcing thing. Like, if I just wake up tomorrow and I write this magical feature that will bring us 1000 new clients, why would I not spend my time on that? But you don't see the value that you're potentially missing out on that is outside of that comfort zone. And it took, again, one of our angels.

00:25:02 (Alastair)

So I was about to ask and what your investors were doing at this point while you were still, I think. Did you say in the weeds? No.

00:25:11 (Sebastian)

Yeah, I was still coding.

00:25:13 (Alastair)

Yeah. But I can't remember your actual terminology, the phrase you used then, but it was something like in the weeds, or certainly in the code. What were your major investor and other investors doing at this point? How often were they checking in? And what did they do around coaching you into the CEO role rather than kind of a lead developer or senior developer role?

00:25:35 (Sebastian)

Yeah. So our lead investor, we had monthly catch ups for a long time, and wherever possible, we would get questions to challenge to see have we grown? Have we actually learned more about our customers? And then one of our angels, his name is Jan Slopinsky, we had calls every two weeks, and those were, for me personally, those were the most helpful, I think, just because of his background. How many. I think he's Europe's most active angel investor. I think just having seen so many founders, he was able to kind of pinpoint and diagnose where I was having shortcomings.

00:26:14 (Alastair)

Were these one-on-one calls, were they?

00:26:16 (Sebastian)

No, they were just between Jasper, the three, him and myself. So, yeah, those were very helpful for me and I believe I got more value out of those because they were more directed at the function that I was supposed to perform in the team as opposed to the company overall and how we're growing and all that stuff, which was also very useful, but that was the focus of our main investor. Yeah, as a new founder, if you don't have somebody who can accurately, honestly tell you, hey, you might be having a shortcoming on this area, you spend a lot of time in your comfort zone and it's somebody you can trust, not somebody you can just take their feedback and just like, yeah, sure, whatever, brush it off. I'd say find that person early on. For me personally, I just lucked into it and it was, looking back, that was one of the largest force multipliers in my journey overall.

00:27:05 (Alastair)

Yeah, fascinating. And you still have, and we'll talk about kind of the story of Aurelia, but you still have someone on your conscience now, even though you're outside of Aurelia.

00:27:19 (Sebastian)

Oh, yeah. Like, I would say the voice of this angel investor is like.

00:27:24 (Alastair)

But you still actively have a mentor.

00:27:26 (Sebastian)

No, I do not.

00:27:27 (Alastair)

Right. No, but something you would definitely focus on the next time?

00:27:33 (Sebastian)

Yeah, it's so much easier. It's very lonely as a founder sometimes. Who are you going to go talk to? Your previous friends have jobs and you have a company now. You're seen as higher status, very different stress. What are you complaining about? Having rich people problems. But it's not rich people yet. You're a founder, it's early days founder. It's not even the fun stuff yet.

00:27:53 (Alastair)

Minimum wage, probably work out the hours and what you take from it. And at this point, were you paying yourselves?

00:27:59 (Sebastian)

Yeah, we started paying ourselves one month in after getting the money. Yeah, but we opted to pay ourselves basically, as you say, minimum wage. Like go for as long as possible, as least money as possible. Personally, when I look back at it, that's one of the stupidest things I've done because it adds so much stress to your life if you're not paying yourself, at least at the level where the market value. Yeah, like the budget would allow you to live without having to worry about trivial stuff. Doesn't add any value to the business you're building just adds stress to you. Stress, guess what? You're going to carry that stress back at home. Going to carry that stress back into your company or keep it in yourself or something is just net negative.

00:28:40 (Alastair)

What was the rationale behind paying yourself so little? To prove to investors that you were fully committed or something else?

00:28:48 (Sebastian)

I wanted to know that I'm making the right sacrifices for the company, but it was very stupid because this is not the sacrifice that's required. You paying yourself market value is not the biggest sacrifice that you're making. It's the focus in the company. It's the ability to take your ego out of the game and to see what's really happening here. Do we need more market understanding or do we need to double down on our vision and keep executing or something? I think that's the hard part, but it's easy to say, yeah, I'm just not going to pay myself too much. You seem kind of virtuous and is good, and if I look back at myself, that was an easy choice to make. Like, yeah, sure, I'm not just going to not pay myself too much, but the hard part is what you actually have to do in the business.

00:29:29 (Alastair)

So it's also hard though, because if you have a co-founder or co-founder as plural, then has to be an agreed consensus. And not everybody's in the same life situation where they can take minimum salary as each other. That can be quite a conflict between a founding team then.

00:29:49 (Sebastian)

Yeah, I would say so. I was lucky. Between Jasper and myself, we didn't have any kind of conflict on this. We just kind of saw it in the same way from day one. We never had any discussion about this or anything like that. We both knew what we were signing up to and we both agreed to go for little pay. But yeah, it's just something, when I look back at it, I'm surprised that I made that choice. It wasn't from a place of, it was from a good heart of like, yeah, I think I'm doing the right thing. But now when I look back I see that just paying myself enough to live and not have to worry about stuff, it would have just removed so much stress from my life.

00:30:27 (Alastair)

Yeah, interesting. I think it's a big conundrum that a lot of founders have as to how much to pay themselves.

00:30:32 (Sebastian)

Yeah, I don't remember who shared it, but I've seen a comparison spreadsheet floating around on LinkedIn a couple of weeks ago about how much founders pay themselves at different levels and yeah, looking at that, I face palmed and I was like, yeah, why was I so stupid?

00:30:47 (Alastair)

But, yeah, I see a lot of those as well. So the product and the product team keeps going, keeps moving along towards this vision. At what point did you start speaking to the market? Or did you speak to the market early on and actually the sample size was too small, or you spoke to the wrong part of the market, or you heard what you wanted to hear, or you didn't listen to some of the feedback or where did it… Because ultimately, I think from us chatting, the product and the market didn't align. That's what I've heard from you. But tell me, why didn't it, how did you get two years along and a few million quid into it before you realised that? Yeah, so what happened in the early days? And then I guess we'll talk about kind of what were the ultimate realisation point of no product market fit as well. But, yeah, take us back as to what was skipped then, and what would you recommend to others?

00:31:56 (Sebastian)

Yeah, so for us, we didn't see the warning signs early enough. I think when I look back at it, you have three to five people that you're speaking to, maybe like design partners or early customers or something. If you're one month in, you think you're doing great. Like, we've got three, five customers. The trajectory seems to be good. You move one, two more months in and you still have three to five customers. You might be thinking, okay, it's a bit rough, but hey, we're learning so much. We can keep going. We'll grow. You get one year in and you still have three to five customers. Like, alarms are going off. And so I think that's the gotcha is for me personally, if I am going to kind of give myself any advice for anything in the future or go back in time or something, I would say three to five people that you're speaking to is the danger zone. You're starting to build something for this audience that you have in your mind. But it's so small, it's not an accurate enough sample size of the market that you're going into. Unless your market is three to five people in all of the UK, for example, or something, then sure, by all means, go ahead. But for us, that wasn't right. And you could see the symptom was that whenever somebody would ask us, what's your ideal customer profile? We could not answer that question. We would blab around. We'd be like, CFOs, finance person, accountant, it's for everybody. I think that's one symptom that I can tie back to this original root cause of. We were speaking to three to five cfos, three to five accountants, three to five people in finance, ops, positions in companies, and we were seeing problems in all of these areas, and we were stretching ourselves so thin, thinking that we're going to come up with the greatest product on the market, it's going to solve the problem for all of these people. Without realising that all we're doing is just kind of being wandering around different problem sets that are too far disjointed. And it really started to click when we went through Early Adopters Hub. After we got a larger audience there, we got to speak to 16 accountants, and that's when it became clear. We went over this three to five people for the first time in the company life. And then it became obvious.

00:33:58 (Alastair)

I think we'll dig into a little bit of that, because that's diving deeper into the market and going through a structured program, an independent program. But if we focus back on the origin or the original part of it, where you spoke to three or five, or had three or five customers, and then that kind of plateaued for the first twelve months or so at that point because that was still quite a while before you went through this kind of accelerator program or Early Adopters Market research program, what were you doing at that point? How often were you checking in with them? Because if you go to your website, you got a very slick website, until you dive into actually what is the product and what does it do? It looks very well executed. So what was it that was with up to 14 people, you were out exhibiting, selling or trying to sell. What was it that didn't put your ear to the ground again, kind of to really understand the market at that point?

00:35:09 (Sebastian)

Yeah, other than my own shortcomings, I think, or something like that, I would say it's very easy to, at least for me, it was very easy to be distracted at the time. I didn't have a structured way to approach customer discovery. I didn't have a structured way to do validation, any framework like that. All I had were these almost like, I want to call them, like Twitter threads or whatever you see online. That's going to teach you today. You're going to have a small little nugget about, go and find this thing and speak this way to your customers or this audience and you'll learn this extra thing. So it was flailing. It wasn't going towards one point with purpose in mind or something like that, and it started to change when we did that. So for us personally, one of the biggest benefits of going through the structured program, going through Early Adopters Hub, was seeing how somebody who's way more experienced actually does customer discovery. That was the first time it took two, three calls. And then I realised, oh, we've been doing it so wrong for so long. It's very easy to lead somebody in a conversation. If you're hypey and you're excited about the tool that you're building, you're selling to somebody. It's very easy to get people...

00:36:21 (Alastair)

Mirror your body language, mirror your emotion, mirror what's going on, and probably get along the hype train alongside with you. So the Early Adopters Hub, for people listening, the Early Adopters Hub is a… Well, it's pivoting a little bit as to what exactly it does, but we'll describe it as a type of accelerator to give market validation, or market research and feedback from customers, from use cases. In this case, it's a particular set of accountants, of 70 or so accountants on a platform where anything to with accounttech or fintech or anything related to that, that they would use, give structured feedback through a structured methodology and series of workshops independently run by Yohan and Jack, who are the founders of the Early Adopters Hub. And so you went through that program and there you would do group workshops and you do one to one sessions and get feedback, which is probably brutally honest feedback, I would think, from a lot of those users or potential use cases. And so that's when you got a bunch of proper market research and validation around the direction of the product and what's working and what's not working. At what point did you realise we need to pivot quite a lot here, or we need to do something? Was it in that program? Was it during the calls? Was it afterwards? On reflection, was it going into it? At what point was the. Yeah, we've gone down quite far, but we need to backtrack here and we need to pivot a little bit.

00:38:07 (Sebastian)

Yeah, I would say it was midway through the calls. It's such a real strong feeling. You end the call and you take a moment to reflect on what the feedback you got was or what the person was telling you about what the problems are. You compare with your product and kind of the avenues you were taking, how far along you were going, as you were saying, and you feel it in your stomach, you kind of know it's too far. I remember one of the calls, somebody got excited at the prospect. I don't know what got into me at that point, but I asked, if we could take one little part of the product and build it on top of their existing tech stack, would they be happy to buy it? And that was the first and only time I've seen, like, an honest, genuine smile and excitement in one of these calls. And that was, for me, like, a moment where I realised we've been trying to build this whole thing without speaking to people, because if they'd be happy to pay for one small, little, tiny feature, but when you put it together in the whole product, it's not good anymore. Build it on top of what they have and different story. That's when I realised that, yeah, this is too far gone. Kind of like afterwards, at the end of all of the calls, when we did kind of just a summary of what we found, it was apparent that we would have had to iterate for next six to eight months to achieve anything that's close to what the market wants or that group of accountants would consider, yeah, this is a great product, I'm going to sign up to it.

00:39:33 (Alastair)

Yeah. What's the feeling like when… you talk about the feeling in your stomach? What's it like when you had that realisation? What was going through your mind? Obviously, you take in third party equity investment and you've got 14 people in a team. As a leader, as a founder and the CEO, what were the feelings that were running through your head at the time or the emotions that were running through?

00:40:01 (Sebastian)

Yeah, I think there's a lot of anxiety. I think that's the point where I started to separate my identity as, I don't know if people talk enough about this, but when you start something, at least for me personally, I was the company…

00:40:14 (Alastair)

It's all encompassing and engrossing in your being because you live, breathe, dream, all of it. Right?

00:40:22 (Sebastian)

Yeah. I had nights where I was working. I had mornings where I'd wake up in a shock state of like, oh, I don't know, some dream or something that you have that's bad. And so I think that's a bit of a mistake if I look back to it, because you're not thinking clearly. You're very emotional in your decision making. It's not rigorous. You're not seeing what's really happening. You're seeing what's kind of projected in your emotions. I think this is also another point, is like, whatever personal things you're carrying with you, your own insecurities or something, you will bring those and project those through the company. And so for me, I think that point when we were going through these calls was the first time where I actually had the split, and I saw, oh, hold on, the company exists, and I exist separately, and these two can exist separately, and it's fine for them to be this way. And I think that's eventually what allowed me not to be carried by strong desires or passions or something like, yeah, six months of iteration. Let's go. Let's burn all the cash and kind of, like, keep going this way. Maybe it would have been fun if I look back at it, like, yeah, why not? But I think it was just a wiser, calmer thing to do.

00:41:29 (Alastair)

So at that point, you were thinking, it's another six months worth of work here to get something remotely right and fit for who we're trying to sell it to. And you did have the Runway, or more or less, had the Runway downsized the team a little bit to get to that point. What was your decision making criteria for, yes, we're going to pivot, or no, we're going to shut up shop?

00:41:57 (Sebastian)

Yeah. So I wish I could give you some kind of logical framework. I only have pieces of that. I only have some questions and some bits that I was asking myself, but a large part of it for me was this kind of, like, almost without the voice kind of logic inside of you. I don't know what to call it. Like, intuition or something. I was paying attention to the motivation in the team. How's the team culture overall? Is it drifting towards one direction or another? I was seeing the excitement that we had in the first year and how much of a dread it felt like right now, for example. And when you put all of that together, it was becoming apparent that even though we had a Runway, just enough to kind of go for another try with the team that we had, it was just another fantasy that, yeah, if all stars aligned, then we would go for it. So I had to be a little bit more pragmatic and just see, like, this is just not going anywhere. We're putting ourselves in if this happens, and if this happens, if this happens, like, I don't know, a pancake stack of, if this is successful, then we will be successful. And I just had to take the pragmatic approaching of, like, no, maybe let's.

00:43:06 (Alastair)

Just close it, because founders are eternal optimists.

00:43:12 (Sebastian)


00:43:13 (Alastair)

And also, sometimes at the back of the mind, you have to be a pragmatist. But generally, they are ever optimistic that, yeah, it'll work out. The money will come from somewhere, the customers will come. So it must have been hard for you to go, okay, I'll put that aside. And all this two years worth of work, the kind of the below market salary that you've taken with the fact that you've got slice of, or more than a slice of equity with the business, and that will pay off at some point. And was any of that going through your mind at the time?

00:43:44 (Sebastian)

Oh, yeah, for sure. There's all these balanced trade off kind of questions. Yeah, for sure. And it's not something I think the difference, maybe one thing that helped me was that I put the mission first. For me, what was most important from day one is that somebody in some way, would solve this problem of needing to carry data manually between systems. I didn't care if it was us or anybody else. So because I had this kind of detached mission from the start, I was able to go back to it and kind of see, well, it doesn't matter if it's us eventually, but I can't ruin this team. I can't ruin these people's lives. It's more than just me. It would have been a bit selfish to just kind of keep going like this. So had to call it take our learnings. Everybody, I think, walked away. The team chemistry was pretty good. So I think we had, like, a pretty tight knit team. So I know that whoever is going to go and do other things, they will kind of bring their ethos or this mission, and at some point, maybe, I don't know, 2050 will end up with this world that's more automated and you don't need to better.

00:44:48 (Alastair)

And so how did the conversation, at what point in the conversation did you involve or the decision, did you involve Blossom and the other founders? Because it's a difficult conversation to have to say. I know we can't talk and say how much, but, hey, we burnt through a few million, and here's a little bit less than you anticipated back, or a lot less than you anticipated back, and a little bit less than what you gave me. But here you go.

00:45:17 (Sebastian)

Yeah, so we didn't want to alert the team or anything like that. So for about two weeks, me and my founder went through this is a methodology that was created by somebody called Jason Cohen, also inspired by somebody who was called Steve Blank. Wrote a very good book about customer discovery, et cetera. We went through an intensive session of killing ideas. So we took everything that we had that we put on the shelf ideas that we thought, maybe one day we'll try this. And we went through an intensive, like, two week period where we just tried to validate them, see if there's maybe, if we're going to pivot anyway. Is there anything that we can pivot to that within two, three months is going to take off? And we killed off seven, eight ideas, I think. And it was clear that none of them had any, could hold any water. And because we were doing this in a more structured way, it was easy for us. Like, it took maybe one week, line up, a couple of calls. We knew kind of what questions, what learnings we were after became a lot faster. So at that point, it was clear between my co founder and me that, okay, this is definitely not going in the right direction. And then it was just a conversation between two of us, and that was it. When I look back at it, maybe it would have been wiser to actually speak to Blossom about all of this while it was happening instead of involved in that. Yeah, I don't know why. Maybe this is like, I think it's just my own psychology or something, but I didn't want to go kind of bother them with all the stuff that we had going on. And I realised afterwards, we just gave them a heads up that, hey, by the way, we're closing the company. Here's an update on how we're doing. And just so you know, we're closing the company, which I don't think is the best thing to do. They put their trust in us, they invested in us. They kind of wanted something, they wanted us to succeed. And then I think it's just my mistake that we didn't go back to them and say, like, hey, yeah, this is what's happening. What do you suggest is here between my co founder and I just spoke about it and made a decision and just went for it.

00:47:11 (Alastair)

I mean, that is the portfolio game. It is a risk and reward, right? So it's high risk, high reward for a VC, but nonetheless, having them as part of that conversation, because they've experienced it many times before. And this was your first solo venture, first venture outside of another company, finding your own business. And what did they say? Did they say, well, yeah, we should have had this conversation a little while ago, or what was their reaction?

00:47:47 (Sebastian)

I think it was just kind of professional. They just kind of handed us over to somebody who would be able to handle all the legal stuff and that was it. Yeah, I've had a few conversations after posting on LinkedIn that, hey, we're shutting down as well. Some people wanted to know what happened. I think people are curious. There's this kind of hunger of tell me about your failures. So I can maybe take some advice and go and send.

00:48:12 (Alastair)

It sounds so horrible when it's said like that, isn't it? But let me learn from your lessons so I don't have to experience them as well.

00:48:20 (Sebastian)

Yeah, and with great pleasure. And I know that other people will make the same mistakes and I think that's still fine in the end.

00:48:28 (Alastair)

And what's happening with the technology? Because obviously your site is still up. The technology you've built, there must be something there to cannibalise.

00:48:37 (Sebastian)

Yeah, I think so. The code base, we weren't able to sell off anything into other companies or anything like that. So the code base, all of it's just going to fold? That's it. And for as long as we have Google cloud credits, the website and the app will be up. It'll be up, but it's already not working because as part of the liquidation process, you cancel all of your memberships.

00:48:58 (Alastair)

Subscriptions for AWS or whatever else.

00:49:01 (Sebastian)

So I think it'll go down soon and the domain will go out again. A funny story is a domain actually belonged to, I think, one of the Lehman brothers or something. We acquired it from a lawyer and all this, but I don't know, all of these assets will make their way back into the world.

00:49:18 (Alastair)

Is it? Is it?

00:49:19 (Sebastian)


00:49:20 (Alastair)

Okay. They're quite rare themselves. Maybe the company could sell the.

00:49:25 (Sebastian)

I hope so, yeah.

00:49:26 (Alastair)

What does it mean? Why did you choose the name?

00:49:29 (Sebastian)

Oh, I was deep in my fantasy world. I like history and I like the roman empire and everything to do with it. So Aurelia is the name of Julius Caesar's mother. And I thought, oh, cool, we're going to build an empire. Is this API that's going to sprawl everything? We're going to connect all these separate pieces. We're empire builders. So what more app name for the thing that will give an empire than. Yeah, I don't know.

00:49:55 (Alastair)

I like it. I like it. Part of me feels as a.com, they're pretty hard to come by. I think you should somehow retain the.com for yourself and use it for another venture. I think it's pretty cool. So you didn't quite get to kind of paying customers with a small amount of revenue. But what sort of metrics were you tracking as you went along in the business? What was important to you? I guess cash burn was probably like one of the most important things in cash. Zero date. But you tell me what was important. What were you tracking?

00:50:28 (Sebastian)

Yeah. So I was closer with the product side and I was looking at engagement a lot. We had this weird setup where if the product is successful, you hope to see little to no usage of it because you've set up the automations they run in the background, which now when I look at that, I kind of like there's.

00:50:45 (Alastair)

But you can also have no engagement if there's nothing set up as well.

00:50:50 (Sebastian)

Which is what happened with us. I was looking at those numbers, trying to see when people interact with parts of product. When our own accountants were using the product, what were they using, how was it working? So I had mix panel open, and I was just following any kind of engagement metrics, some custom funnels and things like that. Later on, when we hired a product marketer, I started to care a lot more about the top of the funnel side on customer acquisition. So what numbers were we getting from where we were publishing, where we were active? Were they leading to any kind of interactions outside of those platforms? Did they convert into anything? I think that's the point where I started to understand more about what my role was as a CEO and how the whole machinery is supposed to fit. And that's when I started to go from top of the funnel down the whole customer acquisition process to see how do customers convert? What do they care for? I put a lot of attention into brand, all of this stuff, but maybe I think that was just too late. If I could do it again, I think that part is super important.

00:51:49 (Alastair)

Well, that leads me on to what's kind of the main thing you would do differently next time.

00:51:54 (Sebastian)

Yeah, many words rushing forward too. All want to go out the same time.

00:52:02 (Alastair)

Which is great because you've learned so much from the journey you were on. Right. But if you could distill it down, what's the main thing that you'd want to do differently?

00:52:12 (Sebastian)

Yeah, I would say just understand the difference between you're searching for product market fit versus you're executing on product market fit that you found. When I started, I didn't see any difference between those. To me, they were just one journey. What do you mean? Like start a company, build iterate. Everyone says iterate. What would you not like about that? But in my mind, there's very different life in the company when you're searching for product market fit versus when you're executing on product market fit that you found. My mind, if we just wanted to search for it, it could have just been Jasper and myself for the longest time possible. Don't spend much cash, keep your business lean, find something that starts to click, and then. Okay, then you double down, hire a team, et cetera. As Steve Blank again in that book, the four steps to epiphany highlights this perfectly. I didn't read that book until two years in, so I face pawned myself with the book a Bunch of times because it highlights this problem very well. I think we just jumped the horse. We just went straight into let's build a company, hire a team, all these things, and then you realise, oh, actually, if you haven't actually found something that clicks with people, none of this is going to save you. You can't iterate your way, product wise, into a product that people want unless you're very good at finding that kind of thread in the market.

00:53:28 (Alastair)

Do you think the success, well, I use the word hesitantly, actually, success isn't the right word. But do you think the fact that you were able to raise 3 million so easily actually worked against you because you got the money and you could just keep going without really finding product market fit and proving it to someone because it came by that quickly and that easily, do you think it worked against you?

00:53:56 (Sebastian)

I wouldn't say so. I would say so. For what we raised, I think we actually got the right advice. At the time. We were hoping to build an API business and I think for those it's important to be well capitalised because it's going to take a while until you're going to bring some money and there's just a large cost to building the whole first version of the product. So I think that actually helped us not having to worry about cash in the bank. It allowed us to free our minds and focus on the customers. I do think that around that time there was this craze of how fast are you hiring? How fast are you growing? It's my own insecurity as a founder that I fell for that I didn't.

00:54:33 (Alastair)

Have to, trying to prove yourself with those kind of vanity benchmarks.

00:54:38 (Sebastian)

I just kind of took it as like somebody asks, how big is your team? And because I'm insecure about it or I don't really know what was happening, but I just took it as like, oh yeah, my team, I should worry about that. Who are we hiring next? How are we growing? As opposed to having some backbone, some direction, some purpose and going, I don't need a team right now. I'm just searching. I don't need to execute yet on found product market fit or something.

00:55:01 (Alastair)

It's even more awesome to have a leaner team and the revenue or the business size, but just a higher revenue per person. I guess the last question, (Sebastian), is you've talked about what you would do differently, but what would be the one piece of advice you give to other early stage founders, aside from what you've from that?

00:55:21 (Sebastian)

Yeah. Well, let's see. We talked about mentors. We talked about a bunch of stuff. I would say maybe if this applies for others. For me personally, it was a great source of sleepless nights. There's a lot of advice that encourages founders to go from top down, go from what's your vision? What's the ideal future looking like? Convert that optimism into something, put it on a one pager and see what's your worldview, and then try to execute, kind of brute force your way down into the world from that, like, one layer at a time. And then there's this other more pragmatic approach of, like, do customer discovery. Don't mention your idea. Do customer validation. I think understanding what game you're playing and playing that game very well is very important. If you try to play both at the same time, it's very painful. So my advice would be, no. If you're in a very open space, you're innovating for the first time. There's no competitors. There's nothing like that. Then, okay, maybe the vision play works very well. But if you're in b, two B SaaS, and there's five other companies in a similar market, or maybe even in the same market, you're trying to compete, you're trying to take customers away from them. You need a more structured approach. So go follow the more pragmatic stuff. As a playbook, it exists for a reason. I wanted to be the visionary in the playbook scenario, and it didn't work out too well. So, yeah.

00:56:41 (Alastair)

(Sebastian), great advice for all those founders out there. You've been super transparent and very open and authentic on this. So thank you very much for sharing your lessons learned. And, Aurelia, thanks.

00:56:51 (Sebastian)

Yeah, thank you.