The Fear of Founding | Peter Mahoney from Plannuh

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Peter Mahoney 0:00
People tend to focus on tactics when they’re marketing. They don’t think in the form of a coherent plan that’s knit together into a series of broad thematic campaigns.

Alexander Ferguson 0:19
Peter, I’m excited to continue our conversation now hearing about your journey. How did you get to where you are today? Tell me your story.

Peter Mahoney 0:27
Yeah, it’s a should I started birth, it actually, it might be helpful. I was actually my first home was on MIT campus, where my dad was a grad student. And in then he became an entrepreneur. And so I was literally born to be an entrepreneur. And then the shocking thing is, it took me 50 years to get there. And I, so I knew I wanted to start a company, I from the very early days, it took me a long time, just life happened in the middle. In fact, I, I experienced this problem that I had around, being able to figure out what was going on with our plans and our budgets in as a CMO. So I really struggled with doing with doing this. And in, I saw this great opportunity. And I basically ran out of excuses, there was no reason not to do it in the way that I jumped off the fence to do this was, as I was leaving my last company, I said, If I send an email to the 1000s of people in this company, and tell them, I’m starting this company, then I have to do it. So that’s what I did. So I sent them an email to everybody in the company and said, in fact, what I had to do is I should register the domain. So I could point them somewhere to say, no, it’s real. So I registered the domain, I got it all set up, I pointed them to the site, and then I was committed from there, and it was the best decision I ever made.

Alexander Ferguson 1:57
I love it, that getting it just the decision I’m going to do it is is one big hurdle to then move into it. Did you bootstrap it? How did you get funding? What was that process? Like?

Peter Mahoney 2:08
Yeah, it was a really interesting process. Because I had this, I had this conversation with my wife. And she said, what you’re leaving this big job with this big public company, in you’re going to do what and? And I said, Don’t worry, it’s gonna be fine. I’m going to try this out. It’ll be kind of cool. And, and she said, Okay, she humored me, and, and I said, and I’m going to spend a little bit of money. And she said, Okay, you know, I’m down with that, you know, we try to communicate on those things and be good partners. And so I defined x was the amount of money I was going to spend on this thing, when we got to 6x. And, and then it was sort of time to do a reset. And so yeah, you know, it’s going great, I’m really excited. And along the way, literally, she was so excited about what we were doing and the response we got. But it was it was a little unexpected, I decided to kind of keep going and keep funding it. So I funded about the first year and a half of the existence of the company. And what that entailed was bringing in a small number of key staff to help me with sort of the product development, that kind of stuff. And we hired a team in in Ukraine to help us do some of the development so doing some of that. And then along the way, we started about a year and a half in we I started raising capital via a convertible note, which is a vehicle you can use before you actually get to a venture round. And those investments convert into shares in the company in the future. So that’s that’s the vehicle we used. And and that was really successful. We got some really fantastic early angel investors into the company. And then in January of this year, it’s 2020 I think the longest year ever, we closed our first institutional round a seed round with was co led by Google’s glass Google’s a gradient ventures, which is their early stage AI fund. And a firm in Boston called Glass wing ventures that’s also an AI based investment fund.

Alexander Ferguson 4:22
That is an interesting journey of Alright, let’s invest a little bit then it becomes 6x then realizing for the convertible note some angel investing to now seed round. Would you recommend that same process to someone else?

Peter Mahoney 4:35
I’ve learned a ton in this is one of the one of the reasons I really wanted to go just do this. Because there’s no there’s no way to really learn how to build a company. Besides building a company. I’m convinced that you can read everything in the world but really understanding it, you just have to go do it. And and I was fortunate to surround myself with some great advisors who were really helpful I think given all that, there’s some things that I probably would try to do differently. First of all, I think the idea of if you can bootstrap, Bootstrap, I mean, it’s, it’s an amazingly powerful thing to be able to do that. That’s not always possible. If you’re developing a pharmaceutical, you know, you need 10s of millions of dollars to do that, if you’re developing hard technology, it’s difficult to do. But if you can get customers early on to pay maybe with some services, things like that. So as long as you can do that, the better off that you’re going to be in a but then when you need to, when you need to raise raise capital, there are some amazing sources of capital that deliver amazing value. So we’re thrilled to have now the the partnership of two really premier VC firms, and they’ve done amazing things for us, they’ve got great resources to help us figure out how to take this journey from, you know, a, we took a $4 million investment from them to take that to really drive growth and get future investments over time. And really, by understanding us deeply and understanding how we fit versus some of the peers in their portfolio, and the portfolios, they follow, we get the benefit of the hive mind as we start to build the business. So it’s great if you can hold on to infant as much as you can for a long time. But there’s amazing value you can get from your venture partners, if you pick the right ones.

Alexander Ferguson 6:36
Making that that traction. It’s like you got your MVP, and you built that and you’ve got some customers, and that proves it and then getting more funding becomes easier once you have a few customers. What does it like to get your first few customers? What was that process? Like?

Peter Mahoney 6:50
Oh my god, well, it was difficult and amazing. So the the, the the amazing thing is, every milestone is just such an incredible experience, sometimes scary and frustrating, and sometimes just joyous. So when you when you build something in show someone, you spend a lot of time early on waving your arms and showing people PowerPoint decks and they go, I think I get it. But when you show someone the product for the first time, and they say, Wow, that’s actually really interesting. That’s exciting. But the The incredible thing is when you get someone to actually pay you money to use this thing you built, I mean, what a feeling to do that. And in the strange thing is one of the things we did very early on, we had a slightly different business model, we we assumed that, that it would we’d have more of a freemium model. So we’d get put the thing out there and get a bunch of people to sign up and make it a really low cost sort of simple to get up up and running kind of system. It turned out that people had much more complex problems than we thought and much more significant. And they needed more help in to afford help, they needed to need to be more expensive solution in it needed to be more comprehensive. So we learned a lot from that, by by putting the product out there, we had lined up, you know, kind of a couple of friendlies to get us to get be an early customer who we’d work with. The most amazing thing is we literally stood up the Commerce website to get those first few customers. And someone came in in scooped him and came in someone we never known, actually two or three companies we had no visibility into, and they became paying customers. And it was the most amazing thing. And it proved to us that there was just a significant market a significant need out there, that people would stumble upon us and go all the way through and pay us money to get access. So it was it was just an amazing experience to do that. And of course, flash forward a year because we sell annual contracts. What’s even more amazing is when people pay you more money to renew. And then they did initially that’s a nice affirmation. It really is. It’s it’s it’s an amazing, amazing thing. And of course everyone I’m sure everyone would love to say they have zero churn, not 100% of the people, we’re we’re a fit, you know, anyone who says that would be totally lying to you. But we have a very high percentage of people who stuck with us. And a large number of people expanded their application fairly significant and that’s an amazing feeling to

Alexander Ferguson 9:37
there’s an interesting takeaways from from what you just shared there first, is freemium cheaper, coming to the realization knowing who are your target market, what do they really need and sometimes you may have to adjust then your your pricing structure and what you’re delivering to best fit it to grow. And to it sounds like a happy problem if the need is so great to people or something stumbling across Your service, I’m guessing it’s because the SEO there must have been searching for marketing planning software that

Peter Mahoney 10:06
they got that some of it, some of it is there just a fair amount of searching. And people search for things like marketing planning software, budget templates, bunch of benchmarks, all sorts of things that we’ve got some spent some time in optimizing. So you

Alexander Ferguson 10:22
didn’t do nothing you you did invest in good content marketing as a CMO, you

Peter Mahoney 10:27
absolutely and and I’m a huge believer, in fact, one of the things we’ve done is we we released a book back in September, called the next cmo a guide to operational marketing excellence. And it’s been an incredibly valuable tool for us. Because what it does is it codifies our worldview, it the interesting thing we did, we literally do not include the name of the company, in this book, outside our bios that says what we are, because independent of our product, there’s a series of processes and philosophies and approaches that are really important for marketers to understand so that they can deliver great operational capabilities in marketing. And we thought it was really important to, to write that down. And it’s been an incredibly valuable tool for us. In along the way, one of the things we did is that because it takes a while to write a book, one of the things we did is are the chapters of our book became our content calendar for our blog along the way. So we created six months of blog posts, that all felt pretty coherent for some reason, because it was part of a master plan to knit together to become a book with some fairly heavy editing to get it there. But it was that was a great approach for us. And in absolutely to make a long story only slightly longer. The idea of people are searching for these kinds of solutions in in general, even more than a solution because people don’t know that there’s something to solve this problem they’re looking for help generically. It’s might be expertise, it might be some content, and in when they discover our content, and then say, well wait a minute, you mean, there’s a platform that will actually do this for me really effectively at scale, then they get super excited.

Alexander Ferguson 12:20
You just packed a lot of ideas and tips and information right there from writing a book button by doing that writing a bunch of articles, turning it into a book, but realizing that people are searching for help, they need help. And then you show them a solution after a nice clear trajectory for that, which you’d like to think every good cmo would know that, but sometimes it’s helpful to hear it all nicely. After the fact

Peter Mahoney 12:44
it is. And by the way, it’s very easy to get so ingrained in your thing and your audience that you forget those things all the time. So, so yes, it’s as easy as it feels to say retrospectively. And by the way, it’s not like everything was perfect along the way. You know, in fact, one key learning from going through this process is that you got to experiment with a lot of things, experiment, measure, expect to fail a lot in take the feedback from those failed experiments in folded into what you’re doing everything from our business model, and our pricing and our positioning in our marketing, in our product itself is a ever refining feedback loop. So it’s it’s critical to be able to take in that feedback and adjust.

Alexander Ferguson 13:31
What are you seeing some common mistakes people are making with marketing. And in today’s environment,

Peter Mahoney 13:38
there are a lot of them. So one thing that was really outed in the last year is that people were way over exposed in Event Marketing. Everybody wanted to do an event. And it’s it’s it’s a quote unquote easy way. And to to pack your plan by saying I’m going to string a bunch of events together some trade shows and seminars, and it’s going to be my plan. And I in it, it is an important part of certain marketing strategies, of course, to do event based marketing, I’m a big fan of it in the right mix. But if you’re overexposed, as a lot of people found in then all of a sudden, the world changes, then it’s they didn’t have a lot of people didn’t really have a discipline of more digital transformation that they needed to do to get better at digital marketing. So that’s a big thing. But the other meta problem people have is that there people tend to focus on tactics when they’re marketing. They don’t think in the form of a coherent plan that’s knit together into a series of broad thematic campaigns, and in the best marketers are really good at building a set of core campaigns and the outcomes of those campaigns. should be aligned to the expected outcomes for your business objectives. In other words, if I want to drive growth, I should have a big growth campaign. If I want to launch new products, I should have a big product launch campaign that lasts not just one tactic, it’s an email blast, it might last, you know, quarters or years, in actually some of the best campaigns we’ve probably all seen. I love the IBM Smarter Planet campaign as an example, they took that thing and for years, they they really started build built in, built on that thing. And as you start to, as you start to reap multiple years of benefit, there’s really this combining of impact that you get by continuing to invest in a single broad campaign. So that’s, that’s the other big meta problem people have is not organizing around campaigns.

Alexander Ferguson 15:58
There’s a wealth of knowledge and to always grow in when it comes to expanding and growing in marketing, and getting clients. But also on the other side of building the team internally, there’s a lot of learning and growing there any tactics that you can share that you’ve learned in the past several years of developing your team.

Peter Mahoney 16:17
Yeah, there are a lot of things that are different, of course, from you know, I had spent 13 years at a multi billion dollar public company. And it’s different in the people are different in a lot of cases, to get people who are crazy enough to go to some company, especially in the early stages, where, where they realize that wait a minute, the money from this is coming from your checkbook, and if you get sick of paying money, it’s done, right. And so the early people, it’s just finding those early people. And in the the key at, at the seed stage that we’re at now is you need to find people who are excited about learning and changing and growing with a company. Because it’s very different from someone who’s in an established company who may be a deep expert. So say you’re a you know, deep expert in it as an example. And you’ve done this thing 20 times, you could do it 20 more times in your career, that’s incredibly valuable experience to have when you’re in a big company that needs that kind of rigorous stuff. In a small company, everything changes all the time. And you need people who are open to learn, who embrace change, who look at it as something that’s exciting. Don’t look at, especially at a traditional career path, they don’t say, I want to be a senior manager. Now I’ve been a manager, now they want to just try something new and learn. So finding those people, and getting people excited about the ride that you’re going to take and excited about the vision. That’s the most important thing. And if you can do that, almost everything else works itself out.

Alexander Ferguson 17:58
Have to understand find that right person understands the situation is agile and ready to grow and learn. How big is your team now?

Peter Mahoney 18:07
We’ve got 18 People here in the US and 10 in Ukraine right now. So, so decent size in hiring a fair amount to

Alexander Ferguson 18:15
I imagine it changes as you grow the culture and trying to keep that properly knit together. And especially distance as you have two different areas. Any tips or thoughts to share there?

Peter Mahoney 18:26
Yeah, in fact, that all happened very quickly around March when we got rid of our office in in went completely virtual, because we had originally got rid of it. Yeah, yeah, in fact, we had been we’re about half the size back then of people. And in we had a really tight team with a tight culture because we’re all a little tiny office altogether all the time, that obviously in a pandemic is a bad idea. So it was really important for us to establish some one some great tools. So we we use, you know, video heavily we use a collaboration tools like Slack and JIRA heavily to make sure that everyone’s sort of on the same page. And and then the other thing we do is there’s some cultural things that are really important to deeply embed in the company to make sure that there’s there’s some kind of a bond that brings us together so as an example we we have a twice a week we have our coffee talk meeting to replace the time when people would come and chat over coffee. And and we have a literally no agenda people show up or people that doesn’t matter and they can chat and catch up and talk politics or talk. What’s going on it would it doesn’t matter at all in that kind of thing to keep your book connected. And the other thing that we’ve done, I need a prop.

Alexander Ferguson 19:56
I like props. Props are good is we

Peter Mahoney 19:59
We, we have a mascot, which is a groundhog. And it’s a long story for why we have a groundhog as a mass a mascot, but we really embrace the idea of velocity. So moving fast, and just everything has to be done faster all the time. So we announced recently what we call our planet velocity award. And it is a groundhog trophy. It is the world’s ugliest trophy. But it is the most coveted thing to get around here, because it’s sort of a little piece of our culture. So little things like that go go a really long

Alexander Ferguson 20:37
way gamifying the the culture mindset to keep people moving forward, even if your distance, I appreciate that, for you looking forward, what kind of challenges do you see you’re going to need to overcome both externally with your clients being able to continue marketing this environment and internally with the team?

Peter Mahoney 20:57
Well, externally there, there are a few challenges that you get to first of all, as you as you grow, you have different kinds of problems, you need to scale to make sure that you can maintain the kind of really personalized engaged support that you give to your clients today, you want to be able to do that with from hundreds of clients all the way up to 10s of 1000s of clients. So that’s, that’s a really important transition to be able to make in that’s always a little bit difficult. I think as we get more on the map, I think it’s gonna introduce a different level of competition, and people are going to right now we just kind of mop the floor with sort of, there’s some old legacy tools out there. And but I think I think as we make more noise and really define the segment more, I think that that you’ll have a different competitive dynamic out there. So that’s always a challenge, when when you get there, I’m sure there will be some technical hurdles that we need to leap over to continue to, to continue to evolve and improve the product at the pace that we’ve done. And then internally, it’s about sort of keeping the team focused on the core mission in happy and transitioning. And it’s, it’s interesting, because what happens at this stage is that just like I said, you need those crazy people who do really well at that early stage, and a lot of them will transition and grow with you, but not all of them well. And there so there there’s you have to get used to the fact that sometimes some of the core team people who are sort of established people, they may not be the ones who are so psyched about doing sort of a, you know, a series B con company versus a seed stage company, it’s just a different vibe in some ways, and there’s a little bit more process and procedure. So those are probably the internal hurdles that you have to get through is sort of navigating the team through that through that growth in in growth is awesome, you know, you can draw a beautifully smooth curve, but the reality is that people don’t have a smooth curve there it’s it’s more of a stair step function. And in so it’s a little tricky, especially at the early stage when you have to go from from literally one person doing an entire function to to have the second person you usually get to the point where it takes one and three quarters people to do it and you’ve only got one person so that kind of growth is a little hard

Alexander Ferguson 23:26
for you what what books audio books, podcasts, journals, sites do you go to and have been enjoying and would recommend?

Peter Mahoney 23:34
Well, if you my favorite book is the next CMO. I love that. No, it’s It’s funny, I’ll tell you that my go to my absolute favorite blog that I I I read religiously, is Cal blog by Dave Kellogg. Dave is is a real amazing operational genius when it comes to running SAS companies. And I was lucky enough to get convinced him to join my advisory board. But he does an amazing blog. It’s Cal blog, the from from a book perspective, I do my I read so much for work that I My My pleasure reading is a little bit different. So there are two books that I’m just starting right now that are completely separate from that because you’ll tell that I’m a political junkie, I’m reading fear from Bob Woodward. And I’m reading proof of corruption but from Seth Abramson about the the the current administration so it’s a little bit more on the political side. That’s where I tend to spend my my fun reading. And that’s that’s what I’m up to these days. And then lots of podcasts. We have we have our own which I actually don’t listen to because I record it

Alexander Ferguson 24:53
you record I see your video podcasting Pro that in the background on that.

Peter Mahoney 24:57
Yes, exactly. So we do a fair amount of A which I love because it just creates great conversations with, with marketers, which is what we want to do. But there’s just some amazing, amazing content out there on the podcast front.

Alexander Ferguson 25:12
Last question for you, what kind of technology innovations do you predict we’ll see in the near term next year, so and long term, 510 years?

Peter Mahoney 25:20
Well, in the next few years, I think you’re gonna see more and more application of the application of some of these AI techniques, in a lot of what feels like kind of mundane, mundane ways. I mean, you see these sexy demos of AI, for things like machine vision and robots that jump and spin and things like that. But the real application that’s driving a lot of the growth is, is AI solving some messy data problems, the way that we apply it in, in some of these areas, I think long term, the data is, is a huge opportunity and a huge issue when it comes to, to most companies in and I think you’re gonna see a dramatic shift in the way that disparate data systems, including legacy data systems come together in a more intelligent way. And to provide real insights about what’s going on inside a company and outside a company. And that is just for most companies who have been around for more than a couple of years. They’ve got a boatload of old legacy, things where lots of things are locked up. So I think transforming the way data is accessed in a lot of that is going to take advantage of some of the some of these AI techniques that you see being deployed in in more kind of enterprise applications where we tend to focus.

Alexander Ferguson 26:47
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