CEO Speedwagon: A conversation with Kate Chernis from Lately

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Kate Chernis 0:00
and my dad one day, shook me by the shoulder lovingly. And he was like, you can’t work for other people. And there’s no shame in that.

Alexander Ferguson 0:15
As a rock DJ Kate Chernis suffered through an oppressive work environment until she finally realized she needed to set up on her own. She read two chapters of a book on startups, and a week later had $50,000 of venture capital. This journey eventually led her to co found lately a tech company that automates and centralizes core marketing tasks. In this week’s edition of UpTech Report, Kate tells us your unique story, the challenges of marketing, and how embracing your quirks can be the best business practice. Well, thank you, Kate, for joining me. It’s fascinating stories I see. Okay, from radio hosts, then to marketing strategist running a marketing company and then now a SAAS startup. That’s an interesting journey.

Kate Chernis 0:59
Yeah, it’s been kind of wild. But you know, what’s amazing is when, when your life starts connecting, I think you only get this like, I’m 45. So you get it when you’re older. And that’s the best part because then you can see all the pieces coming together. You know,

Alexander Ferguson 1:12
then how did lately start the SAS platform? It’s been 2014. You started. Yours? How did it begin? And how did it now get to where you are today?

Kate Chernis 1:23
Yeah, so. So I’ll just back up a little bit and tell you a story right before lately because it all connects kind of but so here I was, like you said rock and roll DJ. I was broadcasting to 20 million listeners a day at XM cool gig, right. And the bummer was like, I mean, you know, there’s not a lot of women in radio still these days. And definitely There was sexual harassment, which was par for the course. But what was more annoying to me was I didn’t get the credit that I deserved, like I was just constantly kind of ignored or not validated. And it was really, really frustrating. And my body started reacting, like I just started, like getting really sick. And I was just unpleasant. Like, I hated my boss, and I hated my whole job. And so I moved to a different music related career. And it was the same thing, total boys club, like squashed all the time. And so I was crying. I just kind of sucked as a person. And my dad one day, shook me by the shoulder lovingly. And he was like, you can’t work for other people. And there’s no shame in that. So it’s like, Oh,

Alexander Ferguson 2:31
what a wonderful realization like, you know, forget other. I can’t work for other people. It’s much better if I just do it on my own. I can I can do that.

Kate Chernis 2:38
Yeah, and I didn’t even know that that was a possibility. Because he hit it on the head without knowing like, I did feel shame. I was like, this is like school, why am I not getting an A when I’m like doing a work, you know? And so then my husband gave me Guy Kawasaki Art of the Start. And like, like in the second chapter or something, it says, Don’t plan just get started. And I was like, Well, then why am I wasting my time reading this book? And who like, seriously, like, that week, I went to a meeting, it was an unusual meeting where a customer was delivering a product by hand instead of mailing it. And it turns out that these two guys were angel investors. I didn’t, didn’t know that. And I just was myself. I was being kind of obnoxious complaining about the state of the music industry. And they were like, We love you. Oh, let’s start a company. Here’s 50,000 bucks smells like

Alexander Ferguson 3:26
oh, sorry. Wow.

Kate Chernis 3:28
You know, my husband was like, I just gave you that book. Like, what happened? You know? So, anyways, I was doing this music related company. And as I was marketing that, someone else said to me, Hey, you’re really good at marketing? Would you like to consult us? We’ll pay you like, a lot more money. And I was like, Yep, I’m, I’m done with music. Yeah.

Alexander Ferguson 3:50
So you realize the marketing was really your, your niche that you knew well?

Kate Chernis 3:56
Well, I was a fiction writing major, which you could make the argument.

Alexander Ferguson 4:02
You draw the picture of what something could be.

Kate Chernis 4:06
Yeah. So I like writing. And I could see that a lot of people weren’t really didn’t enjoy it or weren’t that good at it. And then I’m also like a really organized person. We were talking earlier about, like the state of this room, which is pretty blank canvas. And the closet is a mess. But my cupboards are fabulous. You know, so I’m really into being organized. And so this person who, who approached me, they put me on a Walmart account. So this is where our story starts, right? So suddenly, I was project managing this huge marketing program. It was Walmart, collaborating with National Disability Institute, United Way Worldwide, they had Bank of America, at&t, the IRS, and 10s of 1000s of small and medium businesses. So lots of different budgets and different skill sets. And so I organized this in one hell of a spreadsheet, because that was my nature’s like organization. Right. So I like pulled everything together so I could understand it for my own self. And then the person I was working for was like, You got to share this with the group. And so it became our Bible. Actually, what I did was I just developed a basically a playbook for everybody, whether it was a small business, or a nonprofit, or a large company to participate in this program together. And the way lately came about was I was just, you know, I met a friend who was my now my co founder, Steve. And he kept asking me about my spreadsheets. Because I use them for all my, my, my agents, all my clients, I’m agency clients. And I was like, What is with his duties, like obsessed with my spreadsheets? And then he started harassing me, Alex. So he was like, listen, we need $25,000. Like, what I’ve been in radio, I worked my whole life for 25,000 bucks, I’m buying my first house like 45 bucks. And then he was like, and we’re gonna make wireframes. And I’m like, what? I don’t even know what that means. And we’re going to automate your spreadsheet. So I was like, Don’t touch my spreadsheets. So he did it himself. So when they did the money out of his own pocket, this is like after two years, and he paid Jason who now my other co founder to build wireframes, which are like the blueprints for website, right? And they came over and they showed me what was the beginning of lately, and I’ll never forget, it was a Sunday night after Christmas. And I was a consultant, right? So I took vacations when my clients did so I was on vacation, which I didn’t get very often. Sunday night after Christmas. I was like, Are you kidding me? And when they showed me what they did, he said that after that I was a lot nicer.

Alexander Ferguson 6:44
You saw it, you’re like, okay, alright, I see it now.

Kate Chernis 6:48
Oh, yeah. And I forgot the whole bury the lede there, which was I got, I got Walmart 130% ROI year over year for three years with my spreadsheet. So that’s

Alexander Ferguson 6:58
why it was working. It’s not just cool. Spreadsheets. Work.

Kate Chernis 7:02
Yeah. So that was 2014. And, and then in Steve was a serial entrepreneur and an investor and he actually had a successful successful exit before. So he knew this journey, and I’ll never forget, like, we’re having this conversation. It’s like, let’s start a company. I’m like, okay, and I’m like, but I have to be the boss. He’s the CO Don’t worry, you can be the boss. And now I know what that means. You know?

Alexander Ferguson 7:30
You get all that comes with that.

Kate Chernis 7:32
Yeah. And all the sleepless nights. And he was so funny. He was like, are you ready? Are you really ready for this? And I was like, yeah, man, I didn’t know what I was doing. You know? How would I know? But he did it. So whenever I’m really having a bad day, I definitely blame it on Steve.

Alexander Ferguson 7:48
Blame, Steve. I like it. So yeah. For you, then. Did you just jump in? Like, how long do you say, Okay, now I’m all in on lately and pushing this forward?

Kate Chernis 7:58
Yeah, it was pretty quickly, actually. Because I just consulted with my already business partners who were really smart investors. And, you know, we figured what the hell I mean, there’s, like, what do you have to lose like, this is a wild ride. Let’s take it. And I really liked Steve and trusted him. And I liked Jason, who he paired me with already. And so we started by so we made a pitch deck me and Jason made a pitch deck. And we didn’t even know what we were selling. Like, what is organization marketing? That sounds like so boring. And how is that possibly sexy? But we raised that was in January or February of 2014. And then by October, we had raised $250,000. It was crazy. On an idea. I mean, this was like, me being convincing to it was friends and family. But it actually wasn’t it was mostly angels. I’m just somehow I didn’t even know. So the funny thing that happens, Alex, when you start asking people for money, they either run away, or or they introduce you to other people. And like I realized suddenly that my network was much more valuable than I thought it was. Not only with people who had money, but people who wanted to help, right. And that’s the best thing about this journey, especially being a woman. You know, I leverage it because it’s here, right? But people it’s like being married. I don’t know if he’s, are you married? Yes. Okay, so So you know, this is true. So when you when you get married, there’s all the hula and all the craziness going on. And about a couple of weeks beforehand, it takes on a life of its own. And it just goes without you. And people rise to the occasion. They just start doing things. And I had the wherewithal to just let them sort of control it because I was like, What the hell let’s go for the ride, you know? And being a startup entrepreneur, whether you’re a female or not, is the same way to people. I’m every day strangers want to help me and it’s the skill that you have to have as an entrepreneur is to know to let them

Alexander Ferguson 9:59
do you You feel that you found product market fit the people are really are, are understanding what you’re offering. And you’ve got scale opportunity.

Kate Chernis 10:09
Yes. And which It’s so wonderful to say that, first of all, I can’t believe it’s been six years. That’s amazing. But it’s taken us a long time to change the message so and so that people understand like, so what lately sells is artificial intelligence that instantly transforms blogs, videos, or podcasts into dozens and dozens and dozens of amazing social posts in one click, that’s what we sell, right. But all the organizing we talked about before, so behind the background, we give you the ability to publish that content. But we also give the ability to stack accounts to syndicate the content. So if you’re a very large company, and you want to have your employees talk about the company, as well on their marketing, you can use lately to help help do that, and help control and create consistency, but also make people feel like they’re not spamming the world with annoying business messaging.

Alexander Ferguson 11:08
Now, that whole second piece of being able to engage in your workforce and your employees and team for amplification. Was that always in there? Or when did that piece come into part of it?

Kate Chernis 11:19
Yeah, so it was in the spreadsheets as Walmart, it’s how I got Walmart 130% ROI, because I taught that whole network to be together, I called it together networking back then. Now we sort of say it more like, like a rising tide lifts all boats, but in this case, lately gives you a tsunami, right. And we’ve found our customers. And by the way, it took us forever to just describe this, right? Because we didn’t even know how to say it. And I’m doing it badly. Now, as you can tell, right. But we found our customers using it for that. But then also for, like selling for sales work, as well as executive thought leaders wanted to use the same kind of idea. So they didn’t feel dumb, or like franchise marketing. That’s a big one for us. So like, if you have, you know, a central marketing team here, and you have all these little locations outside, how are they doing? Maybe not so well? Can you help them?

Alexander Ferguson 12:18
So it’s almost being able to systematize like micro influencers, whether it’s your employees, your mini franchises, they’re like all these tiny micro influencers, that you’re able to systematize the flow of information, and then expand and amplify. I’m gonna steal that from you. That’s really good. Yeah. Good. Have you found that these enterprise? Or are where you’re focusing now, on your efforts, those who have large employee bases or lots of franchises? Are you still focusing a lot on SMBs?

Kate Chernis 12:53
Yeah, so we pivoted last year from SMBs to larger companies. Because, frankly, there’s more money there. However, we built a self service product. So the reason we’ve been successful with these larger companies is I built a product for you to use, I didn’t build it for like some giant marketing team at Walmart to use, right. And so we know that we have the capability to go down market, when we have the time and budget to devote to it. Right. So that’s also where my, where my heart goes pitter patter, because I love the idea of giving one person the ability to do what I did for Walmart, like, you know, for nothing, basically.

Alexander Ferguson 13:32
So the your heart is with SMBs and be able to help anybody. But right now for scalability and revenue opportunities, you’re focusing more on enterprise or larger scale opportunities to, but maybe being able to come back to SMB focusing on Well, technically, they can use it still anybody? You’re just not putting your money?

Kate Chernis 13:54
Yeah, well, yeah, exactly. So what we learned was a couple of things that we are able to use small business marketing to target larger businesses. So we dog food, our own products, right. I don’t know if you’ve heard that term before. But so right. For those who don’t know, Purina, I believe kindness, so they started feeding their own dog food to their dogs. And then they featured those dogs in the commercials. So that’s what we do with lately as well. And we found that when we were doing that, it gave us the ability to eliminate cold leads, right? So our customers, there’s so much content, we’re creating people comment on it, or share it or like it, and then we go after those people at first because it’s a warm lead, and then we vet them to see what their capacity is. And then we make conversations and then get them into a demo. And so that process works, whether it’s a small business or a large business, but we haven’t had the the budget, frankly, to devote the automation of that process. So it’s very human driven, which isn’t scalable. All right now, although we have tinkered with it, so we know it’s possible. It’s just not what’s happening at the moment.

Alexander Ferguson 15:08
Got it? Okay. So your current space that you’re in how many customers are on your platform at the moment?

Kate Chernis 15:14
Yeah, we have 281 subscribers now.

Alexander Ferguson 15:16
That’s awesome. That’s awesome. And your team, you’re based in New York? Yeah, we’re

Kate Chernis 15:21
based in New York.

Alexander Ferguson 15:22
And how big is the team at the moment,

Kate Chernis 15:24
there’s four of us who are full time and another seven who are part time or consultants. That’s creative, creative, it’s

Alexander Ferguson 15:32
great. To grow from here, the the technology behind it, let’s talk about for just a moment, the artificial intelligence this is nessa, your core area go that organization is the actual spreadsheet that they started off of? What can you share of just how it is different from other things out there, whether it’s I don’t know what buffer uses, or some other things out there. But just tell me how yours is slightly different, or you’ve made it work?

Kate Chernis 15:57
Yeah, so lately is not a social media tool. We’re content writing tool. So we use artificial intelligence to extract short form content from long form content. That’s what we do. We then give you the ability to publish it across social media, because, of course, you want to do something with the content once you have it, right. So we’re a much it’s a platform as well, it’s not just a tool or a feature. So it’s a pretty robust, powerful platform, I guess you’d say?

Alexander Ferguson 16:26
Do you know if it did you guys use a prebuilt? Artificial Intelligence like machine learning algorithm from Skype? Or do you build your Skype from Microsoft or Amazon or Google or are you did you develop your own algorithm?

Kate Chernis 16:40
Yeah, so version one and version 1.2 was 100%. us and then we had the opportunity to integrate with IBM Watson. So a little cherry on top, which has been great. Yeah, but it’s all ours.

Alexander Ferguson 16:52
Be sure to check out part two of our conversation with Kay Chernus, in which she tells us some of the personal measures she takes to enable the success of her business and some advice on new ways of thinking about the demographics of your market.