Scrappy tactics and a huge post-COVID pivot | Owner’s unconventional journey to product-market fit | Adam Guild (Co-founder and CEO of Owner)

Brett: Thank you so much for joining. 

Adam: Thanks for having me. I've been a long time listener of yours, so it feels surreal to be on this side of the table and very happy to be here. 

Brett: Well, let's start. What's the first business you ever started?

Adam: It was this Minecraft server that I started when I was 12 that initially wasn't supposed to be this business.

It was this way. I was having fun online and making friends, initially playing on other people's Minecraft servers that at some point realizing that I could build my own. Which quickly evolved when I realized that I could also make money from that Minecraft server. That's the point that I started leaning in and figuring out how to make it distinctive and known within the Minecraft community, and learning a lot about growth marketing in order to scale it to be as big as possible, which over the next four years grew and grew and grew to totally consume my life because by the time I was 16, it had reached millions of players, was generating hundreds of thousands of dollars in profit.

Then led me to drop out of high school halfway through 10th grade to focus on scaling it up and then on building my own independent games for that community. 

Brett: What was going on from a parenting perspective that you were allowed to go do this? 

Adam: I would say a free range parenting philosophy of letting my brother and I explore our interests.

We didn't have a ton of limits on the amount of time we could spend online, and we were generally encouraged to do what we found interesting. Without limitations, we never had our parents stopping us from watching R-rated movies or any of the other usual limitations, which. At the time was a very controversial philosophy, but I think ended up leading to developing more maturity and wisdom through exposure to the real world pretty early on.

Brett: Is your brother sort of equally entrepreneurial? 

Adam: I would say so. He is a huge inspiration to me. He, when I was starting that Minecraft server at 12 was 10, and at some point when I started making money, I needed somebody to be the full-time social media manager for the Minecraft server. 'cause one of the ways that we were growing it was we had these big meme pages on Instagram that were bringing together the Minecraft community with memes and news posts when there was new updates to Minecraft to keep people informed.

So I went to my 10-year-old, 10-year-old brother who was the only person that I could afford to pay $5 a month to be a full-time social media manager. Then over the course of the next few years. He built those pages to hundreds of thousands of followers and started to build his own meme pages within various other Instagram niches.

He had this comedy page and this fashion page, and various others that got pretty big. Then at some point, when he was 14 or 15, he started building up his own social media, following through posting on Instagram and then TikTok, and now about 10 years later, he's one of the largest social media creators in the world.

He's got more than 80 million followers. 

Brett: So how did you go from this teenage Minecraft business to starting owner? 

Adam: When I started focusing full-time on building games, which was what happened when I dropped out of high school, halfway through 10th grade, it was first scaling the Minecraft stores up, and then using that community of millions of players to build my own mobile games, I started to feel very conflicted.

There were certain things about that experience that I loved. It was so much fun. Day to day, and it was a great environment to learn software engineering and growth marketing in. But what I started to hate about it and hate about my life as I thought about my future was I felt when I looked forward 3, 5, 10 years of what my life would become focused in gaming, that it was basically  scaling what I viewed as this negative impact because I was obsessed over how to get millions more players to ultimately waste time on my games so that I can make money.

That's what you do as a gaming company. And that felt wrong to me. It, it didn't feel like something I wanted to spend my life doing, but I also felt kind of trapped because I didn't have a plan B, I was literally a 10th grade high school dropout, didn't even finish 10th grade, and I knew there had to be some way to use that skillset that I built in software engineering and growth marketing to actually help people.

But I wouldn't know what that way would be until about a year later I built the first version of Owner for my mom's dog grooming business. Then, so I completely transformed her life.

Brett: It seems like gaming was one of the things that set you on this incredible trajectory in life thus far. So why didn't you see gaming in that way as this positive thing that helps people develop these new skills that makes them more entrepreneurial, that helps them develop some sort of mental plasticity?

Like why did you put it in the empty calories bucket? 

Adam: Because I knew that experiences like mine were anomalies. I've met a few, but I also had spent time with thousands of our players over the course of those five years and got to know the people that, on the other end of the spectrum were living vicariously through their gaming identity.

That were literally spending 80 plus hours a week building their faction within our Minecraft server or building out their their base. And while I. believe in Agency and the ability to make personal decisions. There were some people that were clearly addicted to gaming and, and using it to replace every other element of their life, and there were far more of those than these anomalies that were able to find great meaning and success through playing games.

So as I was introspecting about the impact I was having, while there were certain people that benefited through having this way to explore the software engineering world in that Minecraft server community that I'm still friends with today, I think the vast majority were actually using it as this escape from life, almost like the Matrix where they were plugging in and replacing every other element of their life with how they were playing those games.

And that is what the gaming industry is. Monetized on. There's always this extreme power law where there's whales of players that play way more than the average and spend thousands or tens of thousands of dollars. We even had some of those in the Minecraft server world players that spend tens of thousands of dollars after spending years, 80 plus hour weeks playing.

And the idea of scaling around trying to capture as many of those people as possible to play on my games versus other games just felt completely empty, particularly when I had the contrast of that experience with my mom. 

Brett: Yeah, so you were starting to talk about that. So what, share more about it. 

Adam: I saw my mom open her dog grooming business with so much excitement early on.

'cause she dreamed of opening a business for many years and it saved up to do it. Then it finally came time to open, and that excitement quickly turned into worry as. It was initially very difficult for her to attract new customers. The, the customers that she was able to get, loved her, loved her services, loved her vision of having this dog salon and boutique for the dog lovers of, of West Hollywood.

But it was hard for her to attract the critical mass of those people that she needed in order to sustain the business. And what started to happen was slowly the cash was starting to run out. Um, every month she was losing money at first, and the salespeople from Yelp ads or Facebook ads or various others swooped in and basically said, we can help you drive more customers.

Just sign up for our ad packages. My mom was, at the time, desperate for customers, so she went along with it. It sounded reasonable, but ultimately they weren't able to produce the result that they promised. And they took thousands and thousands of dollars from her. She not only was scared about losing our business, but losing our house, which she had taken out loans against to start the business with.

And I saw my mom in this really terrified place. We talked about it one night and she asked for my help to, to figure out how she could grow this thing. But I, I was very worried that I wouldn't know how to grow a physical brick and mortar business because it felt so different to be growing games where I was a player myself.

So I started experimenting of, of course I agreed to help and, and started. 

Brett: But you were doing this not with, oh, maybe there's a, a business opportunity yet. You were just helping your mom out at the time. 

Adam: Totally, yeah. 

Brett: Was this already after you decided you were interested in finding a new opportunity outside of gaming or that happened at the same time?

Adam: I had that feeling, but I didn't know what to do with it. I didn't think that I had an option other than continuing to build up these games, which were basically funding my life. So when I, I saw my mom struggling and we had that conversation where she asked me for help. I, I jumped in and started experimenting with a lot of the things that I'd used to grow the Minecraft servers.

We initially tried social media and built up her page to a large amount of followers. Interestingly, that didn't work. 

Brett: Why is that? 

Adam: There's a intent related reason why social media never works for local businesses, which is that when people are browsing Instagram or Facebook or TikTok, they aren't browsing with an intent to buy dog or egg services, or now that we serve restaurants to buy restaurant food, they're there to be entertained ultimately.

So when you're promoting a service for people to buy, it's difficult to channel this entirely different intent of being entertained and having fun into the intent to buy. And then the other macro reason is that particularly back eight years ago. The Instagram algorithm that drives discovery on new posts is extremely global in nature.

So we'd have these posts that would get hundreds of thousands of likes, but then as we went into the insights, those people were coming from all around the country, or in some cases all around the world. And my mom's customers are really only people within five miles of her location in West Hollywood.

So the idea that we were getting all of these thousands of impressions and likes was basically just a vanity metric that wasn't translating into sales. And we needed to figure out a channel that would work for each of those dimensions, both driving a large amount of impressions and. Ensuring that those impressions had the proximity to her business to make them viable customers and the intent to buy.

But this is all in retrospect, after spending eight years now obsessed in this space, at the time I was pretty perplexed about why it wasn't working. I, I started to pick up on some of these things, but basically just continued testing the whole spectrum of, of strategies. We tried direct mail and receipt ads.

Wasn't working, wasn't working, wasn't working, and then we tested the strategy of search engine optimization and conversion rate optimization. That worked like crazy. It, it was so effective. Even though SEO tends to be something that takes time to kind of fully be effective, the answer is yes. It takes time for terms that are globally competitive.

 Ranking for best shoes is hard because you're competing on a global stage with Nike and Adidas and all the rest. But when you're competing for these long tail keywords that have a huge amount of intent in a specific city, like Best Dog grooming in West Hollywood, it turns out that nobody's optimized.

Or particularly eight years ago, nobody was optimized for best dog grooming in West Hollywood or best dog daycare in West Hollywood, or all these other terms that now drive her thousands of customers. And uh, when we started testing this, it was basically just the first business that was actually optimized for these local terms of which there are hundreds of queries every month locally with intent to buy and translated into sales bananas like over the next year, I saw my mom go from struggling to then crushing it.

She's the top rated Dogger in all of California now, hundreds of them. And she's built a amazing team. This wouldn't work if she didn't have strong product, product, market fit and customer love, but it was the ultimate top of funnel and it still is. And it was seeing that finally my work was having this positive impact, not just financially on my mom, but personally.

I was inspired to build a business around doing that for as many people as possible, no matter what it took and quickly refocused from gaming to building a business around that.

Brett: Can you break that apart a little bit more? Like you saw this working for your mom and that what, what was the exact next thing that you ended up doing?

Adam: When I saw the transformation in my mom, I started thinking about where the biggest group of people like her was that I could help because I knew early on that I wouldn't be able to build an ambitious software company serving the dog grooming market. Then in doing a ton of research and discovery and talking to different forms of business owners, from salon owners to various others, I met a series of restaurant owners that made me realize that the best place to start.

Would be in helping them both because they could benefit more from that specific strategy, and because it was the largest group of people with the most pressing need of making this online shift successful that they're going through 

Brett: In that discovery phase, did you just like knock on the doors of all these businesses or did you call them?

What were you talking about on the calls as you kind of iterated your way towards restaurants? 

Adam: I did a lot of door knocking. I also did hundreds, if not thousands, thousands probably of cold emails that were saying, Hey, my name's Adam. I. I would love to be able to help your restaurant with SEO. I just did this for my mom's dog grooming business.

Would love to chat about how you're thinking about this. I was not very effective at cold outbound. I was rejected many hundreds of times before the first person gave me a shot. And when I'd walk into restaurants trying that strategy all throughout Los Angeles where I grew up, I had a problem, which was not only was I 17 years old, but I have a baby face.

So when I was 17, I looked like I was 12. So I would walk into these restaurants and they were not taking me seriously at all. It looked like I was their middle school intern or something walking in from my first day at work. 

Brett: So when you walked in, what was the type of conversation you would have? 

Adam: I wouldn't ask, can I talk to the owner here?

'cause that would make me sound like a salesperson. I'd walk in as though I were a customer, and then I would quickly try with visual cues to figure out who the owner was and strike up a conversation that way, and then chat them up and say, I would love to learn more about how you think about growing your business online.

I'm building a company in this space, but the first step is I, I need to understand how you think about this, what you've tried in the past that hasn't worked. I, I just had this awesome experience with my mom and it's, it's helped her business and I'd love to be able to help yours too. I'm not trying to sell you anything right now.

I don't have anything to sell, but I wanna figure out how I can be most helpful. This strategy completely flopped. To be clear, it only worked through brute force of hundreds of attempts that yielded a few conversations. And in those conversations, the big takeaways for me were, our restaurant owners would say to me, Adam, the key is driving, dine-in and reservations, because online ordering totally sucks for us.

We lose 30% of every order to delivery platforms like DoorDash and Uber Eats. We lose all of our customer relationships on those platforms. If you're gonna build something, build something around helping us drive dine-in and reservations, because that's how our business is designed to run. And I took them literally and focused around that.

So then built this specialized website builder that was around helping restaurants drive dine-in and reservations, and was hyper optimized for both search engine optimization and conversion rate optimization for that job entirely focused on a restaurant for the next two and a half years. Ended up building it up, bootstrapped to hundreds of thousands of dollars in profitable revenue heading into 2020.

We were so excited because we had just signed PF Chang's as a customer, which is a bootstrap startup, was a godsend. It was. Not only a large amount of immediate cashflow, but that contract had the ability to expand into over a million dollars a year through their portfolio of hundreds of locations. 

So it felt like after years of grinding and thousands of rejections, things were finally starting to work.

Then March of 2020 hit, which was so brutal, the third week of March and fourth week of March were when the Covid lockdowns were mandated across the United States. 

Brett: The whole thing is about getting people to go and physically, 

Adam: yes, that is what we sold everybody on. That is what we were optimizing for.

That's what all of the different websites were built around. It was around helping drive the reservation and dine-in intent into customers for restaurants, and it was counter positioned against online ordering because that's what we'd hear they'd say. Just drive, dine-in, not online ordering. And it was, we're gonna drive more of the types of orders that make your business more profitable.

Dine in. And then in two weeks, that wasn't even a thing in the restaurant world anymore. So we lost not only our product market fit overnight, but all the customers that we just spent two and a half years grinding like crazy to initially acquire and build relationships with. And as a bootstrapped company, that was our funding and we had to get back down.

To a skeleton crew of me and one other person. Even then we had four months of cash left to figure something out, or I thought I'd have to move back in with my mom or something. It was a very scary time after a few days of, of being truly just petrified thinking, if there's a way out of this, I, I don't see it yet.

I, I started calling all of our previous customers and asking them, how are you thinking about this? What do you need to be successful in this time? In those conversations, they were now screaming into the phone what they'd been saying for years, but in the most extreme possible way, saying, Adam, online ordering is killing us.

GrubHub is killing us. They're taking 30% of every order. Our profit margins are just 5%, and if this continues going on, we're going to lose everything. So that's what inspired in that last week of March, us committing to refocus the entire website builder around online ordering and build the online ordering module to our product, which we then launched in May.

Praying to God that this thing would take off and work. And then thank God it took off over those next 10 months. We went from no customers, no revenue, about to be no money, to then thousands of customers, over a million in revenue, over $10 million in venture raves from all these famous investors. It felt surreal and we had all this newfound momentum towards that original vision of building the software that makes local business owners successful in the online future.

Brett: And take a step back. When you spent this time doing what would be considered customer research, you reached out to thousands, talk to hundreds of different small business owners. What was the level of conviction you had before you built that first version of the Dine booking product? 

Adam: I didn't interpret them not responding to my cold outreach as them not being interested in what I was doing.

I interpreted it as them being extremely busy business owners that are constantly being bombarded by salespeople and just wanting to stay focused on growing their business. But I didn't take it personally and I didn't ascribe the meaning of. oh They don't care about what I'm doing, which maybe was wishful thinking, but it was wishful thinking.

That served me because it ended up leading to then doing enough outreach where I'd have enough conversations and I was committed to making it work regardless of how many times I had to be rejected. So when I had those few conversations, I continued the wishful thinking and I'm like, Ooh, it sounds like if we can drive them more dine-in and reservations they'd be interested in in buying that and paying a lot of money for it.

And one of the things that we did in the early days that was extremely important was we had a very high price for restaurant owners. We were charging $2,000 a month as a website builder around driving dine-in and reservations, which to put. that into perspective Typical website builders that restaurant owners use are Wix and Squarespace, and they're 49 a month products.

So we were 20 x the price. And in order to command that price, I thought to myself that we've gotta deliver an ROI that is commensurate with the cost. 

Brett: How did you decide on that pricing strategy? 

Adam: Knowing that we needed to be profitable for those first two years, and that was the only way to be profitable.

And knowing that it would give us a huge amount of signal if they were willing to pay that much money for a product, which ended up being a, a huge godsend. That still carries through to the business today. We're still by far the most premium price product, and it ends up being a really good forcing function for developing an excellent product that focuses on the outcome and ROI and doesn't just get lost as another tool of software that they can maybe use.

Brett: So did you have a few restaurants say, we will pay you $2,000 a month? Yes. If you can build this. And that's what gave you the conviction to go build the first version. 

Adam: Kind of, when I say kind of, I mean, it was a very long time before we got any restaurant owner to take the meeting with me, uh, from a lot of cold outrage and door knocking and cold calling and all the rest, and the first few meetings didn't go that well, but maybe meeting seven was with this restaurant owner, Morton Cog, the owner of Tortilla Republic in West Hollywood.

And after emailing him seven times and then cold texting him, because I realized that I could find people's cell phone numbers online using background check tools and basically docx him and used that to break through the noise, I cold texted in. He was intrigued enough to take the meeting. Then in the meeting, I, I gave him the whole presentation.

I, I demoed for him what I'd done for my mom. We had a very scrappy product, but it was still a product. We, we basically had forked WordPress. Built a version that was super opinionated that had all of the best practices for restaurant owners to drive SEO and conversion in this extremely contrarian way.

When I say contrarian way, I mean. From the very beginning, we've taken the view that all small business software before owner has been built incorrectly with the assumption that customizability is king. The story that small business software companies tell themselves that leads to this assumption is we need to build a tool that helps small business owners bring their vision to life that they can customize with their website builder Wix.

They can choose between thousands of templates and then figure out what headline and subhead and the call to action to use what structure to put on their homepage. Sounds really good in theory, but then in practice, what I noticed with my mom using Wix and a lot of other local business owners that I had met at that point, they make mistake after mistake, mistake against best practices of driving sales and then jeopardize the only result that they actually care about of sales.

Mm-hmm. So from the beginning, we took this very contrarian stance that customizability is stupid. What we actually want Is this proven system that has all of the best practices out of the box in a way that the small business owner can't screw up and we're not gonna do customizability. So it was this version of WordPress that had been built to enable them to modify a few sections of the website, but mostly use this very rigid structure of the sections that needed to be there to rank at the top of Google and to drive maximum conversion for dine-in and reservations.

So that was what I was showing them, and he was very skeptical. Naturally he is like, wait, why? And I, I explained that there's, there's 90 plus factors that Google factors in to whether you rank at the top, that many of them are very technical things, whether your images have alt tags and whether your meta title has the right keyword in it.

And basically this just does all those things for you so you don't have to think about it. He's like, Adam, I'm not sure about this. What's your mom's dog room business called again? And I told him, Mo, it's Groom on Nemo Street. And he's like, oh, that's where we take our dogs. And I said, how did you hear about Groom?

And he said, Google. And I said, yes, that that is what we're doing for your restaurant. When we currently Google Mexican restaurant and tacos and all these other terms, SDOs, the Mexican restaurant down the street is beating us, and he's like, SDOs has terrible food. That is ridiculous. We've gotta beat them.

Instead, he said, $2,000 a month is a lot, but if you can prove to us for 90 days that you can meaningfully grow our sales, we'll pay it. Got him set up that day. Then over the course of 90 days, he saw his sales rep more than $10,000 a month. It was crazy because there's so much search volume for all these different restaurant terms.

Even today, interestingly, there's millions of Google search queries related to restaurant discovery in the us and it is the best way for restaurants to drive discovery. It's still not DoorDash. Uber Eats. The vast majority of restaurant discovery still happens on Google, but that was especially true eight years ago.

And his sales popped. Then he is like, this is awesome. We're paying 2000 a month. And I'm like, yes. We got our first customer. And he is like, I didn't mention this because I didn't wanna get your hopes up, but we also owned taste this American restaurant down the street. Can you do this for taste too? Yes, we can.

So then that became two customers. He studied a point to of a very happy customer using this product that then in future cold outreach led to an increase in response rate and more credibility in demos. It was still a ton of brute forcing for those next six months to get a few more customers paying that price point.

But it got up to six figures in ARR at which point eventually I'd had enough between cold outbound. I didn't wanna scale a business around that because it was so brutally hard in so many different ways, and I knew that if we could figure out a way to, instead of going to restaurant owners, have them come to us and already trust us as an authority in the space that can help them.

That it would totally shift the way these conversations went and a lot more people would be interested and buy and it would scale much better. 

Brett: So in that first six months you had, you ended up getting, how many customers 

Adam: First six months, maybe seven to eight customers paying two grand a month a piece.

And it was all driven by this sort of just outbounding hold outbound brute force and cold texting people. Even the finding people's cell phone numbers through these background check services online, like in Intes and a bunch of others, was great. 

Brett: In that first six months, were you questioning, are you doing the right thing?

Adam: I was so energized by what I was seeing in my mom's business and now Morton's business and a bunch of the other early customers, Mauricio's business. We had all these great group chats going on with their managers and their business partners, and so I, I didn't like question. This idea of is there enough market pull I, I wasn't familiar with any of these startup terms or startup content at this point.

I was just like, I'm gonna build a business around this no matter what it takes. Did you have anybody trial the product and then churn in that first six months? Yes, I remember very well. I had gone to this restaurant conference and met the owner of this other Mexican restaurant that was in Arizona and he seemed very interested.

We did the same paid trial type of thing where free trial, but if it works, you pay us money. It actually worked. But there was a disagreement with his marketing person 'cause this was good scaled up brand with a few more locations then we were used to, and I think in retrospect that the marketing person felt threatened by me and sabotaged the pilot, which was a bummer 'cause I'd spent a bunch of time on it and I was very sad about that.

But those first few customers actually lasted a very long time. 'cause I was not only the person who sold them, I was their customer success manager. I was checking in with them constantly. I was making them weekly loom videos. Like, Hey, just reviewing the progress that we've made. We'd love to hear about your sales lately so we can map this back to the amount of new discovery we're seeing.

And basically walking them through, through Google Search Console, the Google Business profile, like how their results were trending over time. And I think they really loved both the personal talk as well as the real sales results that they were seeing that justified the cost.

Brett: Maybe share a little bit more about what that looked like for those first five or seven customers.

So you had this early prototype, what else were you doing to make them successful? 

Adam: I would split this into two different parts that made them successful. The utilitarian part of how much in sales, this is driving me and the emotional part. Which is how do I feel about using this product and do I feel like I'm making progress?

I think most people would assume that the utilitarian part of sales, sales, sales is 90 plus percent of the equation of whether they continue to retain and use the product. But I would argue that it's at least 50% emotional, if not more, and 50% sales oriented people need to feel like it is emotionally meeting their needs of making progress.

And there's also this interesting emotional need of feeling smart and ahead of the curve in using cutting edge technology that relates to software products. Is there social status that is gained among their business partner and their general manager and all of the other business owners that they know because they're using a cutting edge new product?

And the way we met those emotional needs was I would do monthly progress calls with their entire team, so that would make them feel like they were getting state of the art, technology and service, and they felt smart for making the decision to trust us and use our product. And we would constantly get back to what are you seeing in your sales figures?

And it was the combination of those two things that led to those customers retaining for a very long period of time and also being happy raving fans that would then refer their friends.

Brett: Did you think at all at that period of time, am I creating a consulting service or a software business, or did you always know there was a path to create a high leverage, high gross margin software business or just weren't even thinking about those types of things?

At the time, 

Adam: I was definitely thinking about will this business scale to the global impact that would make it worth all of this sacrifice and grind, which a consulting business would not. I was also balancing that with.

we need to build extreme Love with our earliest users and loyalty with those earliest users to be able to really deeply earn the right to sell more customers. And if I have to provide consulting like services to achieve that, that is a very good trade because providing the consulting like services to them where I was giving them all these weekly updates and hearing their feedback ended up having them treat me almost their CMO of their business where I got to see how restaurant groups operate with Morton and Mauricio.

And it was through that relationship building and exposure that then I was able to develop a clear perspective on how our software should evolve over time and what specific needs we could evolve to meet. 

Brett: I also assume there's some irony. When you were building the company and that you were helping people with a great product, get more customers, and you had built a great product and service and it was hard to get new customers.

So there was something meta about that. I guess 

Adam: there was, and it weighed on my mind heavily that we should be using the strategy we were advocating to other business owners to use to grow our own business after a ton of cold outbound, to develop that initial group of a few customers that were very happy, paying us thousands of dollars a month each.

I had enough of cold outbound at some point and it was just too brutally hard to get attention. And it also just felt weird or wrong to me that I, I was having to spam people with good intent, but still spam people with getting them to take my meeting. And I wanted to develop a model where they would instead come to me.

So I, I thought to myself, how do you develop the type of re reputation and authority where people come to you for help in solving the problems that your software solves? And the example that came to mind was actually, I love Neil Patel's content online. That's where I've learned a lot of online marketing stuff.

What if I became that authority in our space in publishing extremely valuable content on how to grow a restaurant? So I started writing blog posts on it, which did pretty well. And then I decided that as somebody who had no credentials. that I needed to figure out a way to get some level of credentials or authority to, to make when they would come to me, these conversations go better.

So I started realizing that there's a bunch of restaurant specific publications that all write for lists of restaurant owners about how to run those businesses. And that if I could write for them as the online marketing authority for those publications, that that would both help my blog do better, drive some traffic, and also position me more as an authority.

So I started now cold emailing all of the editors and owners of these different magazines to ask if I could do some guest posts for them. Almost all of them ignored me for a long time. 

Brett: That seems to be a pattern with you, a lot of the cold, outbound, no one interested in you.

Adam: It was a pattern in the early days until Barbara Castiglia, the editor in chief at Modern Restaurant Management Magazine, probably felt bad for me because she'd ignored me so many times and she's like, okay, we'll we'll try one guest post, but it's gotta be really good.

And we'll, we'll see from there whether you can do recurring column Star magazine. So I'm like, challenge accepted. Let's do it. And this was early 2018. I wrote this guest post that I'd researched so extensively and tried to the best of my ability to make great on the best restaurant marketing strategies for 2018 that then she posted in her magazine, which was also an online publication.

The online version of this went super viral. It went really, really well. It was her number one story of that year. 

Brett: What were some of the things in the article? 

Adam: It was me doing a lot of research on how the largest restaurants and most successful restaurants were growing. Oh, taco Bell and Chipotle and all these other groups that people admire are driving growth.

And then distilling that down into simple language that would help restaurant owners learn from what the extremely well-funded, successful restaurant groups were doing, but in a tangible way that felt actionable. Posted that article, it did super well. This was literally their number one article that year, which was so exciting.

And then I became a recurring writer, not only for her, but then I did outreach to the others and I'm like, Hey, I wrote for Modern Western Management Magazine and did very well. Can I write for you too? And so over the time I wrote for two publications and three, then four and more than 10, and also was writing my blog.

And what I realized in this process of content creation was that it was almost learning more about our customers in ways that would benefit them, was also becoming a distribution flywheel for us. But the work that I was doing to research all of these articles and write them was. Improving my abilities as a communicator to the restaurant community because I had now all of the language that restaurant owners tend to use to describe these different things at scale that then I could boil down to independent restaurant owners.

And it gave me much more depth of understanding of the broader landscape of restaurants. And it really started to drive us a lot of leads with super high intent people that had read the article and were like, this was awesome. I'd love to learn more about how I can work with you. Uh, and then I'd be like, I've got a great product that makes the number one strategy easier to do.

And they're like, let's do it. And, and so it started being this content flywheel first with written content. Now with video content, we've got a very popular YouTube channel in the restaurant community and Instagram page in the restaurant community that basically does the same thing of sharing what is working best for the most successful independent restaurant owners and the most successful large restaurant corporations.

In a very tangible and actionable way with the rest of the restaurant community, we've become the Moneyball of a restaurant where we're constantly keeping a pulse on what is working and then sharing that with the community. And this content has driven us millions of views over time and has developed a cult-like following, which I say in the most positive connotation of that word.

Among restaurant owners that want to take this more proactive role in making sure that they're successful in this online shift. 

Brett: So as you sort of started to figure that out in month six and nine and 12, and this is all pre pandemic, did it now start to feel like people were lining up at the door? Or was it still a slow grind customer by customer?

Adam: It felt a lot better than the cold outbound stuff. To me, it felt like people were lying up at the door, but I wouldn't truly know what that would feel like until a year and a half later when we executed that post pandemic pivot and added the online ING bot to our product. That's when things went hyperbolic.

I thought it was great that we had a few dozen customers that had come to us from the inbound stuff. 'cause as somebody that has spent months grinding the outbound stuff, that was awesome. But what was really great was when we lost that online ordering product in May. We had hundreds of demo requests every week.

We had so many demos that I had to create group demos to fit all the restaurant owners in that wanted to chat with me, where I'd bring a group of three and four restaurant owners that had requested a demo, and I'd show them all the software together from this.

was such a grimy period of the company from like 7 AM Pacfic 10 Eastern till 7:00 PM Pacific. I was in demos all fucking day that had booked inbound and it was group demos, a lot of them. So three or four restaurant owners together would be seeing the software and then signing up. That was what real people lining up the door would feel like, and that's what real product market fit feels like.

I had a very weak version of product market fit if that, with the old Dine-in focused website builder thing, that costs $2,000 a month. But when we launched this online ordering product, it took off. Do you think the company would be successful if the pandemic didn't happen? Yes, because I believe where there's a will, there's a way and eventually would've figured it out.

But that was a forcing function that accelerated it.

Brett: Maybe sort of as you're describing this, the original instantiation of the product had a weak product market fit, and then you found extremely strong product market fit. What was going on in that setup that kept it bounded in a certain way? 

Adam: The explosive momentum came from when our product shifted from being this nice to have to, this must have product to survive, which is how it was viewed when it was this online ordering product in May at the start of the pandemic.

That made all the difference in the amount of inbound demand and intent to buy even before the conversation started, and that's what real product market fit feels like. I realized in retrospect, the other thing that shifted over that period was I'd long had this suspicion that part of the reason why it was hard to acquire customers is because we were the most expensive thing that they could buy in the software world by a margin of at least double, probably triple at 2000 a month or a.

thousand dollars a month or we'd really discount And I thought to myself with this online ordering product, we actually have the payments blowing through the platform. So what if we could perfectly align our incentives by just charging the ordering customer of the restaurant, which the restaurant calls the guest, a dollar 50 fee on every order we could make more than what we're currently making and make it a no-brainer.

Easy yes for the restaurant owner to say yes when they need this online ordering product that helps them drive direct volume. So that was what we relaunched in May. It was partially the online ordering module, but it was also partially this new business model of it's going to be free and we're gonna make a dollar 50 for every order so that we're incentivized to drive you as many orders as humanly possible.

That combination of like free and extremely relevant needed product is what led to that explosive traction and growth. 

Brett: Before we talk a little bit more about that pivot point at month 18, what was the product and service that you were delivering? 

Adam: It was just a more advanced version of that. 

Brett: And it basically allowed you to create a website and then you did the SEO optimization on the backend.

Adam: Not quite. What differentiated owner's product is this very contrarian view that restaurant owners don't need another tool to figure out how to create a website, because when you're creating a website with a website builder, the way that works outside of owner even today is it is on you to figure out.

All of the different thousands of little pieces of that website. So from the very beginning that WordPress based V zero of our product was, it is not going to be on you to create the website. We're going to create the website based on this structure that we're constantly testing for all of the other restaurants that we're using to figure out how we can make it perfectly, not only rank at the top of Google, but also match the intent that a customer has when they're evaluating which restaurant to go to.

When you are a potential new customer of a restaurant, first landing on their website, you're asking yourself first, what type of restaurant is this and what makes them distinctive, which we realized we could boil down to a really pithy phrase as that restaurant's headline that would also as a subhead include the most important primary keyword for them.

Then. One of the next questions you're going to ask yourself is, is this restaurant popular and can I, can I trust it and rely on it to order food from this restaurant? So we quickly pull in social proof in the form of reviews that we take from Google and Yelp on the restaurant's website, because more than 70% of new customers of a restaurant are factoring in reviews to determine whether to eat from that place and so on and so forth.

And that was even the product at that point. It was a nascent version of it, but that was basically what we were selling and why people were willing to pay more for it because it was much better at driving sales growth. 

Brett: So going back to the pivot, explain a little bit more detail. What was that first version of the new widget that you shipped in May of 2020?

Adam: It was the ultimate way to convert. Your website visitors into direct online orders, which is a combination of both creating an easy user experience of going through, loading up your cart, getting through the checkout process, and the right incentives for the guest to actually want to order directly from a restaurant instead of ordering from the delivery apps.

The big mistake that restaurants even still before owner make is nobody tells the guests why they should order directly from the restaurant in their own interests. They all say it's better for the restaurant order directly, and while that resonates with 10% of the population that are making these decisions based on what's better for the restaurant and the restaurant owner, the vast majority of consumers are making the decision based on what is better for them, which is the combination of either value.

or convenience on the value side, this is the one that's easy for independent restaurant owners to win on that we made easy in that product to understand, which was, where do I get the most bang for my buck and save money? So we basically showed them, you're saving this much money in fees on every order.

'cause it's not just 30% that these delivery apps take from the restaurant, it's also 20% on average that they're charging the consumer. So you're not gonna be paying that 20%, you're saving multiple dollars on every order. And then we also added in a loyalty program as a fast follow, which gives them free food every two to three orders to make it significantly better value in ordering directly from the restaurant.

And it was this original messaging around, we're not just going to put an online ordering link on your website, but we're going to optimize it to. Maximize the amount of people that actually want to use it and understand why it's better for them to use it so that you're able to drive a lot more of these orders directly to you and not through the channel where you lose all of the profit margin and all of the customer relationships.

Brett: And it was still fulfilled through Uber and DoorDash, or how did the food actually get to people? 

Adam: Yeah. It was also, in most cases, fulfilled through delivery partnerships, including with those two. In the early, early days, it was just one of those partnerships, but it was enough to cover all of the restaurants that were signing up.

And the magic there is that it doesn't just save the restaurant money and save the consumer money, but it also ends up being a. More profitable, more sustainable order for those delivery apps because they don't have to spend any money in acquiring or retaining that consumer demand when it's fed to them via API call.

The driver tip also tends to be more when people are ordering directly from the restaurant, which offsets the driver cost and ends up making it higher gross margin.

Brett: Do you think you could have started the business with that product or you actually needed the pandemic to get product market fit for it?

Adam: If I knew then what I know now, we would've started with that product. The pandemic accelerated the. Product market fit. It took it from strong to extreme in first round terms, but it was already pretty strong because everybody, even before the pandemic, was extremely frustrated and concerned with how the delivery apps were impacting their business.

And were looking for a way out. Even in those discovery conversations that I'd mentioned, people were saying, online ordering sucks for us. I made the mistake of taking them literally online. Ordering sucks for us. Just drive, dine-in. Okay, literally, I will do that, but I should have taken them seriously and asked myself, is there an even better way to solve this problem rather than circumvent the problem?

The solution they were proposing of just drive dine-in was circumventing the problem, but the online sales growth was already very clear. This is the fastest growing segment of restaurant revenue by far, and has been for the past 15 years, and clearly it's the future. So if I knew then what I know now, it would've been easy to start with this value proposition and it still would've gotten.

Significant adoption and then would've been accelerated even further from the pandemic. 

Brett: Maybe you could talk a little bit more about what happened next. May you launch the new ordering product you're doing group demos. Talk about what happened like in the most specific way, how you chose to grow the business Over called the next 90 days into the summer of 2020.

Adam: That was when we raised our first round of venture capital, which accelerated the rate of progress in pretty much every dimension of the business we were able to invest in having a. A few engineers and build up a sales team. So it wasn't me doing all of the sales and support. We got a support team too, and went into company building and scaling mode with those additional resources, at which point we started to hear from customers.

Adam, this online ordering thing is awesome, but it's so annoying and expensive and time consuming to have to use 15 other tools to power every other piece of our restaurant online. We're using Wix for our website, churn Out for our branded app, MailChimp for email, easy text for text message marketing, five stars for loyalty, and 10 other tools for every other piece.

Catering and reputation management. Can you do those things for us too? We started saying, yes we can, and one by one building all of those different point solutions into our platform to replace them so that we could build the only software that restaurant owners needed to be successful in this online future.

That's what took our growth from Pretty Good before to then. Bananas awesome. It took that product market fit to extreme because now it was solving a whole set of online problems for the restaurant owners and saving them huge amounts of money just in the subscriptions they could cancel when they were first signing up.

Not to mention the massive sales growth benefit that they would see when their email marketing and CRM and text message marketing were happening in conjunction with the data from their online ordering platform, which is what we've scaled into today.

Brett: Did you think about raising money? Before that point, or it just wasn't even really a consideration.

It, it was like a non-decision. 

Adam: I had thought about it, I'd fantasized about it. Really, it would be great to be able to do this, but for the longest time in starting off, I didn't know anybody in tech. I didn't know venture capital was a thing at first. And then when I realized it was a thing, I didn't think it was a thing that would be accessible to me.

I didn't know where to start. And was, in retrospect too, focused on building the business the bootstrapped way, maybe at some level out of pride or imposter syndrome. And then when venture capital became an option, which came with all of these people that could really help develop my leadership and product abilities and, and advise in all these different ways, it felt like this huge blessing and superpower that I'm, I'm still extremely grateful for the whole story of that.

How that happened is bananas, if you're interested.

Brett: Yeah, go for it. 

Adam: It happened through the Thiel Fellowship because I'd applied for the Thiel Fellowship a year prior and I hadn't gotten it. And then I reapplied. 

Brett: No, I thought Thiel Fellows are to get you to drop out of school. You had already dropped out. 

Adam: I was four years after dropping out of high school when I got it.

Which we are working on evolving the program to be even earlier. Yeah. This year in particular, which I'm

Brett: What made you think of a, of applying to it in the first place? 

Adam: I'd heard that there was this program that was trying to prove that college wasn't necessary to be successful. That gave young people a hundred thousand dollars grant for not going to college.

And that sounded pretty awesome with somebody that already wasn't going to college to have not only the money, but the resourcing and network behind that. So I, I had applied, I, it wasn't impressive enough to get it. The first time I applied, the second time I'd applied, I thought that I'd finally be able to get in because this was after we'd signed PF Chang's as a customer, which alone was worth over a million dollars a year.

As that revenue expanded for us, we had all these dozens of independent restaurant owners loving it. This was still pre pandemic pivot. Things were really going well in the business. When I'd applied, it was end of 2019. 'cause we had just signed PF Changs. We were heading into 2020. Then by the time the interview came around to start going through the process of discussing more about what I'd built and how I saw it developing, our revenue had been flattened weeks prior by the start of the pandemic.

And I, I was so intimidated going into these conversations because all of the progress and traction that I'd applied with was wiped out from the pandemic. We had just launched this online ordering thing, which was just starting to take off, but we were also very close to running out of money. So I remember getting into this interview terrified.

So I explained like it was previously this other thing that was what had driven those impressive revenue numbers. Now we've got this online ordering product that's really starting to take off and I've got way too many demos. Then I can even sign up. And that's starting to work. But it's very early and honestly, we're also about to run out of money.

And I, I went and told the whole explanation of how, and John Andrew, my interviewer stops me and he's like, Adam, how'd you get into this whole world? And I told him, well, it all started with Minecraft servers. He's like, Minecraft servers? No way. What were your servers called? And I told him some of the big server names.

He's like, oh. I was the owner of Nirvana and we realized over this very beginning of the conversation that we were semi competitors in the Minecraft survey days. We were each major server owners and operators and knew of each other's games. And now fast forward, what was it, six or seven years later, we were in this other context of each building startups.

And he is like digs in more on, on how the business is going and the online ordering product and the traction we're seeing. And I show him my calendar of how many demos I've got booked and he, Adam, you finally found product market fit. After three years of doing this, you can't let it die Now. He knew we were very close to raising outta money, so he is like, I'm not.

An angel investor, but I really believe in what you're building and think you've had incredible perseverance to get to this point, so I'd love to make my first ever angel investment in you and help you find some investors to get the right amount of resourcing behind this thing. 'cause I think you could build something really special here.

And I, I felt like I. I was in a fantasy. I, I'm so grateful still for him having reacted that way. 'cause it ended up totally changing my life that day. He introduced me to the partner at RedPoint that had led his first round at coder, Alex Bard. And Alex jumped on with me, learned more about what we were building and how it was growing.

Not only was Alex extremely experienced in building small business software, but in a past life he'd owned a restaurant 'cause he was very passionate about hospitality and food. So he deeply understood the problem we were solving. Over the course of an hour long conversation, he's like, Adam, this is awesome and I really believe in you.

I'd love to be your first investor. Let me talk to the team. But I'd love to get a partnership meeting together where we could discuss what it would look like to, to work together. But I'm, I'm very interested and would love to be a part of this, which I'm also extremely grateful to Alex. 'cause we were such a shit show in those days in so many different ways.

And those two at the very beginning of the process. Just meeting them ended up totally changing my life because it was just a week later that we had this signed term sheet of this seed round and all of these people that I'd admired for years like Naval Ravi, K from AngelList, and Sean Rad, the founder of Tinder and all these other great people, Kimball Musk, who was a legend in the restaurant industry as somebody that had actually gone in from tech, became our first group of angel investors, and I started learning so much from them and got this newfound momentum and life breathe into the business as that round came together.

And this extreme gratitude to have venture money to use on this journey rather than building in the most scrappy, time consuming grindy way possible. 

Brett: What do you think were the benefits of not raising money until that point, if there were any? 

Adam: I would say the biggest benefit of not raising money until that point was the mindset it instilled.

Of being and feeling extremely blessed for the awesome thing in the universe that is venture capital. The ability to invest in your product and building your company ahead of where revenue would otherwise fund has very much. Shaped the way that I build the business today. So it was partially extreme gratitude for and never taking the blessing that is venture capital for granted.

And partially those two and a half years of being a semi product builder, semi support rep, semi salesperson, BDR au, doing all these different functions. Gave me a huge amount of perspective, both in how those roles work and in our customers lives, because a lot of them were treating me as their outsourced CMO and CTO for the restaurants.

I was being invited to their partnership meetings of restaurant owners where the business partners would get together and talk about the business and ask my advice on things. So I was able to learn their businesses at a much deeper level than if I had the resourcing to start to hire a customer success manager or hire a support rep, or hire an account executive in having to play every role myself and then being invited into their businesses in that more intimate consultant like way to be able to really deeply understand their needs and how they.

Thought about their world. 

Brett: You started to talk how you went from a single product company to a multi-product company, and a lot of it came from your customer saying, Hey, you built this amazing ordering thing. Can you do messaging and you know, email messaging, tech messaging, et cetera, et cetera. What do you think you got right about the product or the way that you went about things that gave you the permission to then do a second and third and fourth product?

Adam: I would say it was the combination of them feeling like they had a direct line to the founder and CEO. Unlike with those other solutions, they were basically speaking to support reps or AEs that they weren't able to give that same level of feedback to business owner, to business owner. That paired with the fact that we'd earn their trust by making a promise of, we'll help you grow your sales, and keeping that promise, there's a huge trust shortage in business, but especially in the restaurant world where they feel like.

Over the past 20 years, there have been all these faceless corporations that have promised them great things would happen for their business if they signed up for their products, and then feel like that trust was abused and misused the way restaurant owners would say it is. They built huge, multi-billion dollar businesses on our backs while making our business much harder, eroding our profit margins, taking our customer relationships from OpenTable in the late nineties to Yelp in the early two thousands to a variety of other examples we could name.

That's how they feel about technology companies. So the idea that they both had a direct line to me as the founder and CEO, and that I'd earned their trust through making a promise of, I'm gonna help you grow your sales and drive direct business. And keeping that promise led to them wanting to be proactive thought partners in our product roadmap and thinking about how they might be able to use this trust that they developed in us to solve all of their other online problems too.

Brett: So how did you decide what the second product was gonna be? 

Adam: The combination of hundreds of conversations with our customers and. Trying to distill which of their needs was the single most important to solve, which was interestingly reviving our website builder and making that a necessary pairing to the online ordering product.

Then it was adding our CRM email marketing and text message marketing, because in those customer conversations I'd hear them say, this is really important. We also want this to work in conjunction with our website, which at the time we kind of had to fragment off for most customers for a different complicated reason about how they were previously set up.

But the online ring product was going really well as a standalone product, and then we bundled it with the website and bundled it with the CRM, and it was able to more holistically work towards both meeting their perceived needs of, I need something that does this for me. And it also was able to more consistently and scalably drive the outcome they were buying the software for, which was growing sales profitably when these systems were.

Integrated and worked in conjunction using each other's data. Like the online ordering product is able to drive more sales if it has a high converting website pair with it. And the high converting website drives more opt-ins to the email marketing and CRM, both as a function of the lead capture forms on a website and through the online ordering product, which then we can automate messages to drive more online orders and website visitors.

So there's this beautiful synergy to each of these products where they work even better when they're combined. 

Brett: How long after the May launch of the ordering product did you then launch or relaunch the website builder? Did you feel tension to just focus on the core? Because you had these people pulling this sort of out of you, and I assume that you were just overwhelmed with demand and it would be easy to say, let's just for the next couple years focus on this ordering product.

Adam: There was definite tension because the conventional wisdom, including a lot of the advice we were getting is you've gotta become a best in class point solution before you think about going multi-product. And this was at a point where our point solution had just started to work and it kind of saved the business.

But that point solution was still not ideal by any stretch of the imagination. It was buggy, it had uptime issues like the idea that we'd go multi-product while that thing was still barely working, but it just found extreme product market fit on the need it was solving and and immediately start going multi-product was extremely counterintuitive to a lot of the people that were.

Advising us for good reasons and good intent. But I knew that there would be a huge advantage from a business model standpoint and unlock from a customer value standpoint to adding in these other components while we optimize the online ordering system because they all work so well together and are able to drive more of that sales growth.

So this is one of the moments where I actually had to just trust my own instincts as a founder to go multi-product, and that ended up being one of the best decisions we ever made because it improved everything. It improved the customer's results. They were seeing more sales growth. It improved our retention rates.

It created a higher perceived value and willingness to pay. We ended up reviving the subscription model in addition to the transaction fee model that we were making. So we ended up monetizing in two ways as a result of being able to offer this more holistic solution. This was before the compound startup was coined by Parker and still at a point where it was pretty contrarian to start going multi-product so early.

Brett: When did you launch the new website builder? 

Adam: It was less than a year after the online ordering product took off. That it, it actually didn't just get launched, but we bundled it. We said You can't buy one without the other. 'cause they work so well together, which we still do today. Like you've gotta adopt the whole system.

'cause the whole system is designed to work together and if you're buying us to grow your sales, this is what it takes to maximally grow your sales . 

Brett: What was the process to get to that decision? 

Adam: It was grandfathering in the people that just wanted to use online ordering. I explained to them why it would be so much more advantageous to add in the.

Website and add in the CRM and email marketing and text message marketing. A lot of them ended up converting and we basically offered to convert them over for free. Like saying You don't have to pay the subscription cost. I just wanna drive you more sales. Some people chose to just stay with online ordering 'cause they were for whatever reason attached to their prior website builder or email marketing software.

But it, it was few relative to the overall base at that point. 

Brett: And the decision to force the bundle was that the impact was so significant or there were other underpinnings to the decision. 

Adam: It was purely the calculus that the restaurant owner is buying our software to grow their sales profitably. And after seeing what happens when all of these different solutions work in conjunction versus working independently, it would not be in their best interest to just use one of the products as a standalone.

So we've gotta develop a customer experience where they use them all together. That will not only give us the ability to retain customers for longer and make them happier. But it also makes it that we can charge a higher price for new customers when these things are working in conjunction and the end state is one software that does everything you need to be successful in this new online world.

Brett: Did you spend time thinking about, in kind of this next phase of the business, sort of what's all the competition out there? How do we become a monopolist in the category? What's our competitive advantage? How do we develop a moat? 

Adam: I've definitely thought a lot about each of those questions over the past seven years of building this company, and especially in the past four or five since the post pandemic pivot.

And where I've landed on my overall philosophy here is I've got a very clear vision of what the end state needs to be to drive as much value as possible for restaurant owners that trust us to power their restaurant in this online shift that's happening. And I also believe that competitors should be viewed as.

Resources to learn from. Not that they should ever drive strategy or be this looming, terrifying threat within the business, but resources to learn from is the way that I've viewed them from even early on, from reading a lot of biographies of great entrepreneurs over time, which specifically I, I take that to mean that you can think of them as free research and development factories where they're constantly running a bunch of experiments on the same group of customers.

And when some of those experiments work well, it makes a ton of sense to just shamelessly copy that approach to that specific product in order to bring that benefit into our platform. So we've done that a bunch of times over the years where we see something working well for a new product that a competitor releases, and then we learn from that and distill the best parts of that and build it into our own.

Brett: When you think about the SMB category more broadly. There's obviously examples of some companies who have been wildly successful, but also there's thousands of startups that tried to sell to local restaurants and businesses that either got stuck and they themselves kind of got capped at X millions of revenue or just the whole business was always upside down.

What have you sort of figured out in maybe a more meta sense that might be useful to other people that are specifically thinking about other things that they want to do for this specific customer segment?

Adam: To summarize my thinking on how to make the very brutally difficult economics work of serving local business owners and restaurant owners.

It comes down to making sure that the LTV to CAC ends up being very favorable well over three. And the way you do that is both dropping CAC through finding resourceful creative ways to distribute the product and maximizing LTV through delivering so much value in the product that you're able to charge a high price for it.

Ultimately, we're doing both. At Owner on the drop in cac, we've got not only this massive content marketing machine that. Is developing a large community of restaurant owners that trust us and are learning from all of the resources that we're putting out there for free, which then ends up making them wanna become customers.

But we've also got now our AI Greater and AI website generator that makes it so that restaurant owners in a matter of minutes and for free, can start to experience the benefits of growing their sales through owner before they give us any money at all, which ends up giving us customer acquisition costs in the future that look more like Squarespace or Shopify with lifetime values that are even greater than toasts over time because the attach rate is so high once you earn the trust on free products.

On the ensuring lifetime value is very high. That comes down to figuring out what the dollar ROI is on adopting your product. In our case, it's both sales growth and more importantly, profit growth. How do we reduce costs and drive sales in a way that makes it so that they profit, that they make for buying our full platform today at $500 a month or $6,000 a year is well in excess of $6,000 a year.

So we're constantly measuring what that number is and how much sales growth is happening on average of our customers, and optimizing it further as we add in more products so that we're ultimately able to acquire people with these very easy to use low cost solutions in the form of content or AI greater, or AI web, website generator, which have been massive growth levers recently, and are the future of how our business is going to grow.

And then on the customer journey, developing a value ladder. That gets them quickly from experiencing value and trusting our company, so then wanting to experience more of that value and being willing to pay more money so that they're worth far more than they cost to acquire. 

Brett: What about sort of a, a, another meta question, which would be, what are the things that you've figured out in building this company that would be helpful to the next 17-year-old that's kind of looking for their startup opportunity and get going?

Adam: The team you build is the company you build. That's what I wish I'd figured out years earlier because it would've turbocharged our rate of progress. First of all, I have to give credit for that quote. It's a Vinod coastal quote who I've learned a huge amount from in watching all of his interviews and writing on this topic.

But it is the single most important thing that I've. Learned as a founder, that ultimately team is everything. Results of all kinds from a product perspective and from a growth perspective are downstream of team. So with that insight, I would've spent a lot more time obsessed with ensuring that I had a group of people that had superpowers, even in those earliest days.

Finding a really strong co-founder TTO is one of the biggest unlocks in our entire journey, which is a crazy story in and of itself, and I, I would've spent more time doing that, less time doing the brute force sales and onboarding and support work, which. To some degree was valuable, but I definitely passed the point of finishing returns and spending thousands of hours doing that in the early days from the level of insight that I was gleaning.

So first team you build is the company you build. Second, there's this other great quote from one of our investors that I spiritually believe in. I don't take literally, but I think he has a really great point, and it's the Naval Ravikant quote that the reason you do sales is because you don't know how to do marketing.

And the reason you do marketing is because you don't know how to build product. Now, I don't take that literally that if you build the best product, you don't have to do sales or marketing. But what he is getting at there is that there's massive leverage that comes from having a truly best in class product that people really love.

It makes the sales and marketing. Significantly easier. And I saw part of this in action when we went from having very weak product market fit post pandemic to then extremely strong product market fit in that pandemic pivot. But I've seen it as we've invested more and more time in product that it ends up making everything so much more efficient.

So if I could go back in time to that version of myself when I was 17, 18, or 19, spending all of that time brute forcing sales and customer support and all these other functions, I would've spent a lot more time thinking about the product and where things were going and how to make the best possible product and a lot less time doing the more manual, consultative service-based elements as well.

Not that those don't, don't have value, they have great value, but there's a point of diminishing returns that I, I passed by many thousands of hours. 

Brett: Why? Why was that not intuitive for you in the moment? 

Adam: The way I thought about. Business from the Minecraft server experience and then starting what would become owner was basically that.

The way team building works is that you figure out what jobs need to be done and you find people that have that skillset to do those jobs, which is this attitude that implies that you are the mastermind behind the business and that you've gotta get a a thousand helpers to help execute your vision. I think that's the way business is often portrayed in movies like the Social Network or various others that I'd seen, and that's how I assumed it worked.

What shifted in that is I realized that if I'm building a business where I am the person that is the best in the business at every one thing that I haven't built. A great team and that my job actually as a founder was not to be the hero that could do a thousand things in the business really well and hire a bunch of helpers to execute those things, but actually to find people with real superpowers that are much better than me at owning specific parts of our business or parts of our product.

And then. Do everything in my power to get those people on our team and then set them up to maximize their impact. The analogy I like using is in the Avengers, there's this character, Nick Fury, where most founders think in the superhero analogy that it is their job to be Iron Man or something, or the hook to have superhuman strength and this superpower in the case of Ironman, of this incredible suit and a thousand helpers to constantly do the engineering on the suit where they go and, and save the day on every little piece.

But the, the power of the Avengers is there's this character, Nick Fury, who doesn't have any of those superpowers of his own, and he humbly acknowledges that. But his superpower is actually constantly scouring the world for people with their own that can be a part of this bigger team and bigger mission.

And then convincing them to join this bigger mission and setting them up for success in a way that the Avengers are able to operate much better than any one of them can do independently. So that's how I view I. My role as CEO, now more than 30% of my waking hours go toward recruiting and specifically that form of recruiting.

We've got more than 20 founder types throughout the company with superpowers that have previously started companies. Many of them have raised millions of dollars in venture capital or one hackathons and are extremely capable builders. And we basically set them up for success and being able to make that type of impact through roles internally.

And it's partially that archetype. The other archetype that's extremely valuable for scaling a company is looking for people that Vinod Kla calls the gene pool engineering of a team, of asking oneself what are the biggest risks that we face in scaling up this company? One of those risks in our case, for example, is making the customer acquisition model of acquiring thousands of small business owners really efficient, so that even with a.

High endemic churn rates, which small business owners always will have. There is a really efficient distribution motion that ends up still making the LTV to C equation work. And so I asked myself then in this process, what are the companies that have successfully de-risked against that and still built really valuable businesses?

Two that came to mind were Shopify and HubSpot. Each built amazing businesses serving small and medium sized business owners through extremely efficient distribution strategies. So when it came time to look for our first sales leader, I met a bunch of the people who had built each of those companies and ended up recruiting our amazing now, CRO, initially, sales leader.

From initially having built the Shopify point of sale business from inception to tens of millions of dollars in revenue. 'cause he had so many relevant experiences to draw from and an extremely capable network that he'd already worked successfully with in solving a similar challenge that he could bring to us and de-risk that potential pitfall of building a small business focus software company.

Our marketing leader, David, was the head of marketing at HubSpot Asia, which he basically created this nascent market and made it very successful for HubSpot and similarly. Has a series of learnings from being obsessed for years with how to acquire small business owners effectively with a similar value proposition that he could take to this new experience and de-risk against that possibility.

Our, our team is built in one of these two archetypes, either industry veterans with amazing experience to contribute or founder DNA types, and the combination of the two unlock superpowers where you both get the founder intensity and extreme ownership mindset from the founder, DNA archetype. And you get the extremely relevant experience and network, and often intensity from industry veterans as well who have successfully de-risked the company.

So I, if I could go back and give myself advice, it would be to more clearly understand this secret of company building and spend a lot more of my time doing that in the early days so that I could develop a. Even stronger team faster. 

Brett: Maybe you could sort of talk about this in a little bit more precision.

How do you know which tool you need industry expertise or founder DNA in any given slot? 

Adam: I've stopped thinking about recruiting as filling slots in the company altogether. When we find somebody that is excellent in one of those two areas, we often create roles for them. This is the right answer. As a scale up post PMF, I wouldn't advise myself to do this pre PMF 'cause we didn't have the money to do it.

And even if we did, it wouldn't have been a bad idea. But post PMF, this dynamic changes where, in my opinion, the potential of the company ends up getting capped by the strength of the individuals on the team. So when you find extremely strong individuals that are in either of these two archetypes that either have extremely relevant experience or amazing.

Founder type builders. We basically create roles for them and it has worked extremely successfully. A lot of our highest impact people are in these types of roles. 

Brett: What about when you sit down with a candidate, regardless of sort of how you would sort them, what do you look for that you think is differential relative to other talented founders?

Adam: I have studied how the best VCs evaluate founders and built my entire interviewing methodology around that, looking for the traits, mindset, and values of the individual. Entirely in my interview, I, on the skillset dimensions, don't assess those in an interview. I assess those via references, which I do a huge amount of references on any key hire, and a lot of our team has interviews that are designed to tease out those elements.

But when it comes time for my interview, I'm asking myself, is this person a force of nature? Do they have evidence of extraordinary ability? And some of the questions that I find most insightful are simple, open-ended questions like, what drives you or what books have been most formative to you, or what experiences have been most formative to you?

Conducting the conversations so that I can really deeply understand. What is that? The essence of this person, what they're motivated by, how they see their future developing, what superpowers they have, which I can often glean from these conversations, and I am able to develop a sense of who is going to be most successful at owner from those conversations.

Brett: What about sort of the, in inverse of the question, which would be, if you had to reflect on why you've turned out to be an excellent founder, other than perseverance and, and grit, what would you say? 

Adam: Perseverance and grit are absolutely critical parts of the equation, but what I would add is the humility and self-awareness to constantly identify as a lifelong learner with.

Much to learn in a long way to go, which manifests in spending huge amounts of time trying to make myself better through reading books, taking courses, listening to podcasts at a much greater degree than other people would consider reasonable. We're talking over a hundred books a year, plus a lot of courses and podcasts.

I allocate time to consistently making myself better because I acknowledge that the person that I am today, the leader I am today, the CEOI am today, the contributor I am today is not good enough for the next stage of scale and to have any chance of being good enough. I've gotta be extremely proactive in making myself better through doing the things that condition my mind and give me the wisdom and lessons of, of people that know more than me, ultimately, so that I'm able to learn not just through my own experience, but through the experience of other people through.

A huge amount of time around that. 

Brett: Where did that come from, or what's the source of that? 

Adam: When I dropped out of high school, I had this fear that I was going to fall behind everybody that. Went to fancy colleges and was on that, that traditional track. So I promised myself that while my traditional education was ending, that my self-guided education would ramp up.

I started immediately from that point, reading hundreds of books every year, listening to any business podcast that I could find. We're talking tens of thousands of hours over the past 10 years. The reason I've listened to a lot of these episodes is this is one of the resources that have been useful to me.

And initially it came from that sense of fear that I would not be good enough to develop the life that I wanted or to get the things that I wanted, that I wasn't good enough, ultimately 'cause I wasn't, and that I needed to become good enough through having the humility of, first of all, acknowledging that and second of all, doing everything in my power every day to make myself.

The type of person that was capable of achieving what I wanted. 

Brett: One of the things we haven't spent a lot of time talking about yet in detail is even though for most of the company's life, you've figured out this really unique demand generation engine, which was the guest posts in these important magazines and publications, content, early on, video, et cetera.

Most of that demand was then converted into customers through what would be considered a more traditional sales led motion. More recently, I think you've started to experiment with some really interesting sort of opportunities in in, in a much more product led motion. But maybe you could talk about how you thought about the role of sales led versus product led, you know, once you started to pivot into the post pandemic ordering product.

Adam: Such a great question because we're now seeing our fastest growing revenue segment as being product led seven years in. But we actually started, as you mentioned, with a very sales led model with that called outbounding, and then me doing all those group demos. So the way I think about this is when you're first starting out and have limited resources to sell to small business owners.

There are great advantages in initially having a sales led motion because it forces you to talk to customers extensively at every step of their journey, and it creates a higher perceived value on whatever product you're selling. There's a reason why all product led products are close to free because they don't have the level of perceived value or trust on the front end.

That commands a high price point. So in the early days when we had to command a high price point to be profitable or wanted to quickly accelerate our go-to-market engine. It was beneficial to have me and then a sales team explaining how the product works and what the benefits were and people were willing to pay more for it at that point.

What we've also realized is that to build a generational business with millions of small business owner customers, that we've gotta make the distribution model continuously more efficient and in order of magnitude more efficient to break the distribution bottleneck. That tends to stop small business software companies from growing well, and that is making it so that the customer is able to self-serve and experience as much value as possible as quickly as possible with.

Parts of your product so that when it comes time to expand into the full product, they already have that foundational trust in what you're building because they've used it and they're already partially onboarded and sold because of that. So the way our motion is looking now is a lot of our new customers are coming through this self-serve flow where they use our AI grader and AI website generator to first diagnose all of the problems with their restaurant's online presence.

In less than a minute, it produces this very detailed report that they can follow on everything their restaurant is doing wrong that makes them problem aware. And then we present this one click solution of if you want a website that addresses all of these things and doesn't take you more than 10 hours to fix them, which it would do if you followed this report.

It's just very time consuming stuff. Then you can use this one click solution that we've generated for you in the background because that then ends up giving the restaurant owner the confidence that this company is solving an important problem. 'cause they're first problem aware and that they've built a great solution that they can start using in a matter of.

At that point, there's so much trust and problem awareness, and so solution awareness that those customers can quickly ascend into higher value paid products when we deploy the sales team and it basically augments the output of any given sales rep or onboarding specialist when people come in. So problem aware and solution.

Solution aware and trusting that they've already used the product for benefit, which is ultimately the model that HubSpot and even Shopify to a large degree have iterated towards in making the model efficient in serving very small business owners. 

Brett: And so there's still a light touch sale involved in there, but they're really primed through this workflow that you mentioned.

Adam: There's a light touch sale involved to get them to start stepping up the value staircase. We're structuring our experience as a value staircase. It started as just this platform that they'd have to leap onto. There was no staircase. So it, it requires a lot of trust to make that leap of faith and start paying $500 a month in this industry where the average restaurant owner is making 50,000 a year in profit.

So 6,000 a year is a lot that has worked for the people that were the most problem aware and solution aware. But it's left out the people that are less problem aware and less illusion aware and less trusting of a software company because they've been burned so many times. So what we've developed is these lower rungs on the staircase in the form of our AI greater and AI web website generator that enable them to, in minutes get value, drive profitable growth through implementing all of the different things that we call out about their online experience and having this one click website builder.

But then to get them to ascend into large LTVs, we have the sales team walk them through as a trusted consultant behind the product that they're already using that can help them activate it and use it further. 

Brett: How would you articulate what product market fit is? 

Adam: I would describe it as the effect that occurs when a.

product Meets really pressing customer needs and solves them both functionally and emotionally for the people that have them, which is a spectrum. There's degrees of product market fit from weak to extreme. I love that first round post on this and very much subscribe to that belief. 

Brett: We always like to sort of wrap up with basically the question, who's the person that's kind of had a disproportionate impact on you in, in, in terms of building this company and what is the thing that they sort of imparted on you?

Adam: There's so many people that come to mind that have been so extremely generous and kind and helpful to me and have had an impact on me. It, it's very hard to choose between them. One of the. Taught people that comes to mind is the one that introduced us, Jack Altman, because in addition to being an extremely helpful investor and partner in building this business in all sorts of tactical ways that have shaped how we've grown and how we've thought about building team and building product, there's all these tactical things that he's imparted, but the most formative thing that he is done for me.

Is believing in me before I fully believed in myself, unconditionally believing in my abilities in a way that was really helpful in all of the ups and downs of this journey, because I admire it and look up to him so much that when he felt that way about me, it helped me get to a place where I felt it more about myself and has been extremely comforting and valuable over the years in a way that I am eternally grateful for and feel extremely blessed to, to receive from him.

He's one of the best friends and mentors and partners that I could ask for 

Brett: Such a great place to end. Thank you so much for joining. 

Adam: Thank you for having me. It's been an honor.