His free app hit 200 locations and nobody used it, then he raised $25M. | with Tushar Mishra, Co-Founder & CEO of Delightree

0:00The first mistake we made was launch an app. And our assumption was we make it free. We sign up a bunch of customers. They start running a few checklists. As they get addicted to the app, now we turn on monetization and then our revenue would go like this. So we quickly got traction. So we got even more excited. Now we just need to turn the faucet on. And that moment never happened because since the customers were not paying anything, they did not have a lot of skin in the game. and we would see there's actually nobody using the app in these businesses. It is really hard. Like that is the moment.

0:33Like when you sell, you have whoever is buying the product. If you don't do anything in the next two to three weeks, like set them up, get them excited. Anything after that is 10x harder. Basically, you have to go through the whole sales cycle all over again and you're setting yourself up for failure. It's increasingly becoming easier to build software so that barrier is like getting eliminated now, which means that that focus on PMF becomes even more important, which is, okay, how do you actually stay disciplined? How do you have a thesis around what you're building? How do you keep active, which is resilience?

1:05And there's so much noise around, which is, hey, this company started in four months. They hit 100 million naira, right? So like people think like that's normal. Those are outliers. That's product market fit. Product market fit. Product market fit. I call that the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit.

1:26Tushar Mishra: I mean, the name of the show is product market fit. Do you think the product market fit show has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests. Thank you. Dushar, welcome to the show, man. Thank you, Pablo. Great having to share my insights with your audience. It's going to be a good one, man. So, I mean, you founded Delightree, just closed a$25 million round from Excel, raised about$50 million total so far. And you've built this kind of AI-powered software for franchises.

2:03So if you think, I mean, the way I think about it is if you're a franchisor and you're going to sell franchises over time and people are going to open up different franchises and you're going to want them to run a certain way, you need a playbook for the franchisees. And in the past, that was like a PDF document and a bunch of different things. Now it's all powered by Delightree. Absolutely. Yeah, that and much more. Even though franchising is a massive industry and I'll talk more about it, but most people think of like Subway and McDonald's. So imagine your local McDonald's. When you go to a local McDonald's, there's usually a lot happening there.

2:32So there's, you need to train the employees. You need to make sure the stores run exactly the same way, no matter which one you go to. You want to run like LTOs and new campaigns that you want to do across hundreds of locations. So how do you coordinate between all of that? How do you make sure employees have the best experience? How do you keep your team trained? answered all their questions. And essentially, these franchises are the brand's customers. So if you open a local McDonald's, you're essentially paying royalties to McDonald's every month from your top line. So you expect more support from them to help you be a better operator, to help you make more money.

3:09And so all of that support that you expect, we basically enable brands to deliver that to franchises and frontline employees working at those locations. So let's start where we always do with the PMF moment. You were telling me that, you know, at first you were selling to kind of small locations, you know, franchises with like three to 10 locations sort of things. And then you landed a really big one. Maybe walk us through kind of what happened there and why that was PMF for you. So essentially, we were sending out like a bunch of these emails and we got one brand, which had about 50 locations back then and was growing really fast.

3:43They got interested. We signed them up, onboarded them on the app. they started using it. The moment that I knew that we have product market fit or it was working was when the CEO called me. She invited all of her HQ team members to an Airbnb. This was in Dallas and invited me there and wanted to do a full day session of how they're using the app, what all we can do to make their experience better. And in her own words, they had assumed they would need to hire more people to sort of ask their opening more location. But because of the light tree, they were able to do it with the current capacity that they had.

4:21So they wanted to go really deep and start to use more and more of the app. That's when we knew that something is working. Somebody is actually willing to spend their time and not just their time, but all their corporate team members in trying to help this little tiny startup and is actually seeing real value to their business. So I think if I kind of say back to you, like the key piece of all that, yes, it was a big customer, but it was the fact that they were making it core to their operations that felt like product marketing fit to you? Absolutely. So they were not just making it core to their operations, they were making it a part of one of their key strategies on how they would grow.

4:56And when was this, by the way, like what year?

4:58Tushar Mishra: This was 2023. When did you start the business? We started the business late 2020. Okay, so it's like two and a half, almost three years into the business when you have this big product marketing moment. Absolutely. Where were you at before that? Like what kind of customers were you selling to and kind of How are they using the product? So before that, we were doing a lot of iterations of the product. So we would launch a product and then we would try to improve it. Most of our customers were six units. Somebody who was using in California, they had a small restaurant. And was that still like franchisors or this was somebody that just owned like six restaurants?

5:33They wanted their managers to kind of like use the app. It was a mix. So it was still not completely focused. So some of them were non-franchisey. They just had six restaurants. and they wanted the manager to use it. We had one or two like franchisees, but none of the brands. So this was the first brand that we really got. How did you close this brand? Walk me through the kind of sales process. It's always hard to get your first meaningful logo. Yeah. So we were sending out a lot of outbound messages. We got them interested. We walked them through the demo. They really thought that what we have built solves the current burning problem that they have, which is they're trying to grow and open a ton of locations, but they don't know how to support those locations.

6:13And so they decided to give us a try. What we knew from our experience back launching the first product that we'll probably get into was free means nothing and we'll not really get feedback. So we basically told them the pricing. We agreed on a pricing. We signed an agreement. We told them as part of the agreement, we give you like a one month pilot. But if that is successful and these are the success criterias, it rolls into a full annual contract. They agreed to that. They were like, okay, if it doesn't work, and they had a back out clause. So if it doesn't work, then we don't owe you anything.

6:47We were confident that we could sort of make it work. So the next one month, we did the onboarding, they set up a few workflows, and they started using it. And then organically, they signed up all 50 of their locations. And so now let's go back a little bit in time, like late 2020, you started this business. What were you doing just before you started this business? Like, what's the kind of origin story here? So before starting Delightree, we used to run a company called Servader, which was doing customer experience management for multi-location businesses. So it was a similar kind of industry, but not particularly focused on franchises.

7:21We had hotel chains, restaurant chains, detail chains, and our customer. And they would use Servader to aggregate their customer reviews from different online channels and then have one dashboard where they could look at those reviews and reply to those reviews. We exited that company in 2020 before sort of starting Delightry. And sort of there was an overlap between when we were trying to do both those things. Where did this idea come from for Delightry? During the last few quarters of running the last company, what we were really trying to do was this whole space of aggregating reviews was commoditized, right?

7:55There were so many vendors that were doing it. We thought our differentiation was this NLP engine that we had on top that would analyze unstructured text data and tell them what's happening across different locations. This was before NLB was still not a solved problem. The world has changed so much, man. It's absolutely insane. Exactly, yeah. And now you can just, like on Google, ask, hey, analyze all my reviews and tell me what's happening. It's crazy, man. Yeah, so while we were trying to find out, like, how do we grow? And we knew that our company was profitable, but we knew that in order, what we wanted to do was really something big.

8:29And so in order to differentiate, We were trying out new different things. And one thing that was really bothering us was, even though we're giving these insights and we think our analytics are so great, nobody's actually using them. What was happening was you had these marketing teams who were looking at the dashboard. If there's something interesting, they'll pass that on to the ops team, ops team to the regional manager, regional manager, store owner, store owner to the guy working there. And there was no tracking of any of this happening. So one feature that we launched during the last few quarters of the company was we would automatically create a task from the inside that's getting generated and send that as an email to the GM of the location.

9:07And that started to get a lot of attention from our customer. So it's, for example, like, oh, bathroom's really dirty, one star. Oh, you guys are getting the bathroom. Just a stupid example, but something like that? Exactly. So we get a lot of reviews, bathrooms are dirty. So we'll send a task to the GM of the hotel saying, hey, clean the restrooms and click a picture. Gotcha. So it was that simple. When we launched that, our customers started asking, can we create our own tasks? Can we add like schedule or a deadline to the task? Can I have this task repeating? Start getting a lot of these questions, which got us very interested in sort of this problem.

9:43We thought there were so many to-do list task management apps, like shouldn't this be a solved problem? But turns out it's not because the way these businesses work is very different. You have frontline team members, you have HQ, you have somebody who's at the location, you have local compliance laws, you have a bunch of different things. So we knew majority of the world work as frontline employees don't work behind a desk and software for them will look very different. So that was a very, very exciting problem sort of for us. That's when we got an opportunity to also exit our last company. There was a channel manager who was already selling to hotels and we had a lot of customers.

10:19They wanted sort of our solution. So we decided, okay, let's just focus on this. So that was sort of the genesis of Delightry, which is this insight that we had from our last company. So this is kind of the idea of the task management piece, right? So walk me through, who do you decide to build this for? Like in the old company, you were tied to whatever customers you had. So you built them for those customers in the hotels or whatever. Now you're like, okay, task management for somebody HQ to the stores. Like, where do you go with this? So since we were already sort of in this space, multi-location physical businesses, we knew that space really well.

10:50And he knew that this problem is more exaggerated when you have multiple locations, and especially when you have employees in the location who don't work behind a desk. So who cannot use something on your desktop, you need mobile as the main way in which you'll interact with software. So we wanted to focus there, but we still were not very clear about who the actual customer would be. And the most natural, intuitive place for us to go to was some of the customers we had in our old company that were interested in sort of this kind of thing. One of them was incidentally a franchise owner who had a few subway locations.

11:26And they decided to be like our design partner or somebody who's building the app with us. But very foolishly, since we were coming off that high of our last company, we thought, yeah, we got this. And so we built the app and we quickly launched it and quickly scaled that to about 200 locations, which is reach out to other owners without knowing. So there were some people who owned like a median store. So we had people who owned 7-Eleven locations. We had people who owned Burger Kings. It was mostly in sort of that food kind of series. We had one guy who owned like a few Planet Fitness locations as well.

12:00So those were typically customers. There was one brand which was not franchisee at all. It was just a chain of restaurant. But those are the guys that we eventually like signed up on the platform. You're generally from the space and you have access to these customers. And you had most of the idea, right? But you didn't get that PMF moment until like almost three years later. What happened? Like what was some of the big learnings that had to happen in those three years to kind of get you there? The first mistake we made was launch an app. And our assumption was we make it free. We sign up a bunch of customers.

12:31They start running a few checklists. As they get addicted to the app, now we turn on monetization and then our revenue would go like this. So that was sort of the main purpose. And we quickly got traction. So we got even more excited. Okay, this is working. and now we just need to turn the faucet on and it's going to like, we'll scale to a million in revenue. That moment never happened because since the customers were not paying anything, they did not have a lot of skin in the game. They found the concept interesting. They would set up one or two different checklists, but then nothing would happen after that.

13:03So they rolled that out and we would see there's actually nobody using the app in these businesses, right? Like there's nothing happening. So we knew that what we have probably makes sense from a problem perspective because the messaging is sort of working, but we still don't have that repeatability. I don't have a way to reach out to those customers in a repeatable manner. And we definitely don't have product market fit because none of them are actually using the product and none of them are paying us a single dollar. When you get this 50 location customer, they're finally willing to pay you, you know, post-pilot or whatever, they're willing to pay you.

13:36What was the difference between them and the customers you've had so far? So number one, we were ruthless with our qualification. Because we'd had that sort of experience and within those two and a half years or so, we multiple times had those experiences where, okay, there's something working and you get really excited and now you feel like you got it. And so we were very cautious to watch for noise versus signal. And so the first thing we did was we were ruthless in our qualification. so we basically gave them every opportunity to not use the product which is why you're selling and you're giving demos you're talking about okay here are the use cases here are things that you're talking about that we would never build or we would not build focus on who this customer is and can i find more customers like this or is it i just found somebody who has a problem that i'm looking to solve for and i'll walk through we had a system basically to do that and was part of like like a big list that we had.

14:33And then eventually when you start onboarding, work very, very closely right from onboarding to make sure everybody's set up on the app. They have actual use cases and they have something that they can measure to know if what you're doing is working for them or not. So qualification, knowing that they actually have a problem and this is a customer that I can find again and again. A lot of focus on onboarding, which is making sure that actually set up for success. and third actually setting those success criteria so that us and them have a clear understanding of what it means if this works for you you mentioned you have like a list on qualification let's go through that yeah so we did it in two different ways so number one qualification was the messaging qualification for example if i am tomorrow if there's a bike repair shop that comes to me and says hey i have the same problem can you solve it for me versus there's another business like the one that we signed with 50 locations, which is a franchisor, what is the difference between them?

15:35Right? So in messaging, it's really important. Or when you're doing outbound, like repeatability becomes really important. There needs to be something that is common across these customers, they need to speak a shared language, they need to speak or have shared goals that now I can scale across. So that was first level of qualification, which is knowing and basically being non-delusional to yourself knowing that is this the actual customer that I'm building for? The second level of qualification comes in customer commitment. And the list there basically starts from how sharp is the pain? Because if the pain is not sharp enough, they just like you, then there's another right reason they would actually not use the product.

16:14So how sharp is the pain? Second, is this pain sharp enough that they would actually pay for it? And third, do they understand what will happen if this pain is solved. And the third part is more nuanced because a lot of times you would find, especially when you're trying to do something new, you would find a lot of customers who want to solve the problem, but they don't know what the final outcome looks like. So they have a fantasy in terms of, I want you to come and train our employees, right? Maybe that's the solution that they have in mind and the output that they have is, hey, now if you would be strained because you would give them a certificate.

16:48So those were the three things that we used to really qualify them once the messaging or the ICP qualification was done. So this is kind of on the market side. In other words, by the time you set your line to this customer, you knew more or less what you needed. And, you know, they happen to be a franchise or they happen to have 50 locations. So their need kind of is a fallout of that. Had you also made some big changes to the product over those two? I mean, obviously you changed the product over those two and a half years, but was there any big things you can point to in the product side of the product market fit equation that also puts you in a place where you are ready, let's say, to deliver real value to this customer?

17:21Absolutely. So, and I can talk through some of the evolution there, right? So when we started out, it was simple task management. People set up one or two checklists and then they didn't set anything up. So nobody used it. When we started having conversations and these conversations are not about why aren't you using the product. We just want to understand, okay, let's go back to the pain. You still cannot figure out if somebody opened the store at 7am. How does that person know that they need to open the store at 7am? What are the things that they need to do in order to open the store at 7am?

17:50So start to do more research and try to figure out how they think about the problem. That's when we learned that most of what these employees do at the location is coming from this binder that's often in the back office called standard operating procedures or ops manual. So the first product evolution was we said, OK, you have this ops manual. We would make it digital. Right now it's in pen and paper. Your brand, when they want to make a change, it takes too long for you to actually teach something to the employee. You need to refer back to the pages. If they need answer to a question, they need to ask you.

18:23So you make it digital, they can ask questions whenever they have a problem, and then rolling that out becomes easy. So there was just a digital SOP. So now there are some companies like KnowHow, and I think Train will start that way that do that, like documenting your ops processes. So that was sort of the first iteration. Now that worked, and we got a few customers who were really interested in this. In fact, we got one convenience store chain that had about 28 locations, and they were just starting to franchise you and they were like, okay, no, we really need this. But that's when we started hearing, this is great.

18:55We have these SOPs, but eventually what we want to do with these SOPs is actually teach employees these SOPs. And today how we do that is we get these two hour long videos from each queue that the 16 year old kid doesn't want to watch or doesn't actually understand anything if they watch. And so it's mostly the supervisor that I'm paying more than everyone else. I'm paying 35 bucks an hour. He's wasting two, three hours sort of every day to teach these employees. And because my attrition is extremely high, most of these places are running through new set of employees every few months. That is a big, big cost for me.

19:35So the second evolution was, okay, now how do you take these SOPs and make it teachable, coachable to that frontline employee? And this is where the first discipline and product market fit was important because when you get into the realm of training, depending on who you talk to and who you listen to it's very easy to start building an lms and lms is a learning management system like there are big ones it's scorn we'll again move to that two hour long video that no kid wants to watch so our approach to that was again outcome driven hey you want to teach this guy he's on tiktok all the time so i'll have these like whatever manual that you have i'll break it down into snippets that they can watch and by the way you can just record a video, you don't need high level production of somebody like cutting a veggie, here's how you saute and actually upload it in your training.

20:21So that was the sort of the second evolution of the product, which was a big, big unlock, because that's how we got a ton of like new leads and new customers. So from a positioning perspective, like literally Arimed used to say TikTok style training, and we got a ton of leads sort of through that. Now, as we started to do that, and these businesses started to take us seriously and wanted to use this or roll it out or test it out, we now started getting more, which is an extension of that. So now you've taught my customer what to do, but I still need to find a way to figure out if they've actually, if they're actually doing that thing or not, which is again, going back to the task of the checklist portion.

20:57So now I have the SOP, I've taught your employee, but now from that SOP, I can also almost make that SOP actionable. So I can generate a list automatically from that saying that here are 10 things that you have to do every morning, right? And then instead of forcing it on them, every day, I can pick and choose. So here's a new employee, they have to do it every seven days, and then it goes away. And then it randomly comes in and we do a check. So that was sort of the third evolution. From there, it came, okay, now you have my SOPs, you have my employees, you know, I have this Excel sheet that I have to maintain, but I actually add all my franchisee information, this is the owner, this is where the location is, and then here are some of the things that I save on drive?

21:39Can we all put it in your platform? So that's how you slowly start to move towards that system of record kind of approach. So that's something that you learn by customer. But at the same time, we were also doing research on the market and on the industry and trying to understand, really talking to everybody from large brands to small brands and try to understand what does their tech stack look like? Like what are the gaps there? Or what are the things that they're using? What are the things that they're not using? And we came very clear that there's really not a lot of tech built for this industry.

22:09There are a few legacy providers, but then it's a scattered point solution approach to solving every problem. There's no underlying system of record. It's either that or using Sheets and Excel and printouts, etc. So we knew that the opportunity to actually aggregate these use cases in one single place was really, really, really, really valuable. This happened before this customer in 2023 that you're aggregating this or is that after? Parallel. Parallel, okay. So you were kind of like ready for them when that happened. Exactly. So when we landed this customer, we had most of these elements already like baked out, where now the customer could sign like a$50 ,000 agreement with us for a year.

22:51Now, fast forward a little bit, you signed this customer and then I'm looking at your fundraise history. I'm curious what happened in 2025, like at least based on Crunchbase, you can correct if it's wrong, but you know, he raised 5 million at the beginning of 2025, another 14 or 15 million at the end. And then just about a month ago, he raised another 25. So it seems like there's some real inflection point that happened since the last year and a half. Is that accurate? Yeah, what led to that? So I think the biggest shift has been as we got this formula right and those initial customers that we had really started to get the value, we started to get a lot of referrals.

23:23And every event that we would go to, there would be a customer who's using Delightry and they would say, oh my God, Delightry is so amazing. It's helping us. We stopped using these four things that we were doing and now just using sort of the light tree and I get all my work done. That was important. But most importantly, we had amazingly overwhelming feedback from owners. So franchisees and frontline employees who are actually using the app, they were getting a lot of value from it. So that rolled into us winning sort of a lot of deals. So for example, in Q4 of 2025, we were still three reps, sales reps in our team.

23:55Out of those three sales reps, one of them hit 2.5x of their quota. The other one hit almost 3x of their quota, which is we closed more revenue in Q4 of 2025 than we did in all of last two years. What's quota, for example, for a rep? So back then our quota was about 800 ,000 a year. Okay, so these guys are closing a multimillion. Yeah. And that, like if I kind of say back to you, if like mid-23, you land this first one, you know, you probably roll with them, you know, to the end of 23, and then you start kind of truly running a motion, going outbound, but it's kind of like you're hunting, because nobody knows you for most of 24.

24:29and then as people, you know, the referrals start to trickle in, they started building themselves. And it's really in 2025 when you start to see that kind of pull from the market because the growth is kind of self-fulfilling. Yep, absolutely. As of 2025, we grew almost like more than 4x from start of the year. And it was happening in two ways. So one, we were signing up new logos, but also some of the logos that we signed in 2024, they were also growing. So we had a brand who started with us when there were less than 10 locations. They grew to about 100 locations. So our NRR was also climbing a lot.

25:04Well, what's NRR? Like over 120, I assume? End of 2025, it was close to 140. Wow. Okay. Yeah, so that's like best in class is over 120. So you're like best, best in class, 140. So we started to get that. And because the product was sticky, we didn't have a lot of churn. So any churn that we had was during onboarding. So when we sign a logo, and this is again, which is once you find product market fit, you get good at like one thing and then you have to start to get better at the other thing, which was we were still not great at onboarding and we're still learning. I'm really worried because listen, like you've been listening for like what, 10, 20, 30 minutes now.

25:38Clearly you like it. And the thing is the next episode is way better and you're gonna miss it. You're gonna miss it because you're not following the show. So take your phone out and hit that follow button. Onboarding is the non-sexy thing I keep hearing about like over and I feel it with my companies. It's like, you've got to figure out onboarding. It's so predictive of future retention and expansion. It happens right away. You've got to get on it. It's pretty crazy. Absolutely. That was the biggest block. Like we had a ton of logos that we signed that could just never onboard. And because we didn't have a great process and we could never take them there.

26:09But if you had the onboarding right, it's a sticky customer. At the time when somebody buys is when they're most excited. And then if time rolls, and later on you hire a CS person and they're like, oh, this account's dead for three months. You can't re-engage. Like your champion's moved on to the next thing. People are like, oh, this tool doesn't work. I tried it once already. It's shit. You know, it's just like minds are made up. So you've kind of lost your window. It is really hard. Like that is the moment. Like when you sell, you have whoever is buying the product. If you don't do anything in the next two to three weeks, like set them up, get them excited.

26:39Anything after that is 10x harder. Basically, you have to go through the whole sales cycle all over again and you're setting up yourself up for failure. When did you hit like a millionaire R, for example? Mid 2024. 24. Okay, that makes sense. Yeah. So that first key customer takes you a year to get to that million. And then 25 is when things really take off. Yeah. Okay. So let's, let's jump into kind of the tactical pieces that that, you know, this is where we really go deep. And, you know, I think the hope for founders listening is that we give them something they can, they can copy, right? One of the things you talked a lot about is how the product evolved over time, and how you obviously iteration and, you know, listening to customers is key things every founder knows about it at a high level, but then it's like, you know, at a high level, how do you really implement it?

27:21You were talking about, you had a process early days, maybe still now, but early days about listening to your customer and acting on that feedback exceptionally fast so that the next demo was different than the previous demo based on the things you heard. Maybe tell me a little bit about that and we can try and go deeper and just kind of pull out as many of the learnings and the outcomes of that. Yeah. So what we would do is, number one, we were very clear about, we want feedback from strangers, so people who don't know us. And we want feedback from strangers in the notion that they are looking to buy the software, not just for helping out a startup, right?

27:56Because that's when you actually get real feedback. So we used to send out a bunch of these sort of emails and we had a system for that. It was by industry. We had two different kind of messaging. And when we would get a demo book, it could be a real sales call. You show them the product and we would actually, even though we do not have that built out, it would be a Figma prototype. And now you could probably build a prototype on Cloud or something. But back then it was a Figma prototype, like clickable prototype. And that's when we get real objections. Because we would talk about pricing, okay, here's how much it costs, this is the product.

28:29So that's when people would actually say, oh, but my system is this, can it have, so I wrote some of these things down. But one interesting one that came out of that was, when you complete a task, so we had you click a picture to basically show an evidence of you've completed the task. Now, this prospect asked us, what if somebody uploads a picture from, like they clicked yesterday, saying the key in the restroom? They're like, okay, now that is, that it's true that that could happen. So that's when we decided to, basically in the next prototype, we did not have an option to upload anything. It was when you click the button and automatically just opens up your camera.

29:08Then to further type it, we said, okay, every picture that gets clicked here is actually geostamped and timestamped. So now, you know, it was clicked when it was supposed to happen. So these are the small iterations that you are doing while sort of you're doing this. And then within that, you also have to be very clear about what are the things you don't want to do. So in these calls, we would also often hear one popular request was scheduling. Do you also have scheduling as a feature? And we knew that's a big space, but we knew that there's so many vendors doing scheduling. That decision is not made in HQ, but it's made at the location.

29:43So I'm selling to HQ, that feature is useless for me and they're not going to pay for it. And then most importantly, there's not a lot of differentiation in what I can do in scheduling today. So I can do scheduling, I'll be another scheduling vendor and it just confused my go-to-market. So we start ignoring some of those things. So as you start to do those iterations, being very clear about your hypothesis, the problem that you're solving and your ICP becomes important because that's how you stay disciplined. So that was one thing that came out of these conversations. We would make those changes the Figma prototype.

30:12And in the next demo that we'll have, you show the new one. And we reach back to the old one saying that, hey, okay, we added these things. Do you want to look at a new demo? Sometimes they would say yes. And some of those conversations would actually turn out to be an actual customer. Yeah, the thing about the Dive Deep Pro, you touched on a little bit was, first of all, you only take feedback from true ICP customers that are actually thinking about paying your product. I think this is something that, especially first-time founders, get wrong too often is, they'll ask just about anyone and everyone, hey, what do you think this product?

30:42Like, what do you think is missing, right? People that are tangential, this and that. And asking is not a problem, but taking the stuff too seriously is a problem because then you end up adding a lot of things from people that have no skin in the game. So they'll just say things just to kind of say things and there's no reason why their opinion, frankly, is relevant at all. So I think that's one piece. But the other piece, maybe a little more nuanced, you talked about scheduling. How do you tease apart customers, even legitimate customers, ICP customers, will very often, especially if prompted, right?

31:12So it depends, maybe that's part of it, but like, especially if prompted, they'll give you advice, they'll give you opinions, feature requests, whatever. How do you tell which ones to build and which ones not to? Like, what's the framework for teasing those two apart? That's a great and a very nuanced question, right? So the way I think about that is, there are two things that you are trying to balance every day. And this is why when you talk about product management, a great product manager is not the one who is just making a list of all customer requests and building that in the product. A great PM is somebody who has a vision, who understands the problem really well, and who has a vision for what the outcome of that problem would look like.

31:53And now you need customers help in framing out the nuances, right? Which is I, on my own, cannot make a decision of what the org structure, that setting should look like on the product without really understanding how these organizations are structured. So that's the approach that we took. So while we were having these conversations, giving our demos, we had a perspective on the industry, the ICP, and the problems that we were looking to solve. So we knew that our ICP was the franchisor, which is the brand. We understood very clearly what are the things that they care about, what are the things that they care about that they can also pay for, that they have the budget for, and what are some of these problems that are common across most franchisors.

32:38So that's one sort of vector. The second vector is what does the competitive set look like? Like what's out there in the market? How does that work? What are people using those things for? Why do they buy those things? How much do they pay for it? And understanding that really well also becomes important. So because you have these two, now you have a perspective and a view on things that you want to do and things that you don't want to do. So you want to learn from customers on how they actually work, what their workflow is, and then make a assumption about the solution, build out a prototype of solution and then see their reactions to the solution and then iterate on it rather than asking for problems and creating solutions to those problems.

33:23Especially on the feedback, I think I really like the point that you mentioned, which is, yeah, there are a lot of people who would give you feedback, which is great. But I've also seen there's usually a selection bias in getting feedback because the kind of people who typically respond to give you feedback are more on the early adopter side who anywhere on the frontier of like different things. They have seen a lot more. They love to give input feedback. They're more tech forward. And so building your worldview based on what you're learning from them can also be dangerous. And then in certain markets, you can build a large business with early adopters and eventually scale.

34:00So understanding your market where, okay, early adopters, how much depth do you have in that market? And is what they're saying makes sense, even if they're actually paying you money? Like, I think we all understand that simplicity matters. But at the beginning, when you have effectively a blank canvas, it's easy to forget that. And I think even with AI now, if anything, this is more of a problem because a feature request only costs less than it ever did. so why not do it has a weaker response. But in the past, it's like, well, it's going to take three days, not worth it. Now it's like, it's going to take three minutes.

34:31So why are you fighting it? And what you might miss there, this ties into your early adopter point, is early adopter tech types, like they understand technology in a way that, by definition, the later adopters don't. And so they're more willing to have a product with a lot of features, a lot of things like, you know, kind of they can go and configure it the way that they want and that's maybe fine for them. But the average people, the masses, if you will, like they don't want all that stuff to be cumbersome. Simplicity, and I would argue for most people, honestly, and for most products, when you really boil it down, like that's what's hard is sometimes stripping it versus adding.

35:06So it's a risk that it's just kind of hard to see it up front. You start saying yes to things, you start adding things. You're like, okay, well, then if you have this view, then we should do that. And if you're this type of person, we do that. And when they start competing, all of a sudden, you know, your product is just so cumbersome. and so hard to understand when you see it for the first time as a new user, it's confusing. And so that's what I think you're also watching out for when you listen to feedback a little too much. And I think one quick thing to add there is a great example is playing out for us in real time here.

35:37So if you look at like OpenClaw, when that first, like it was all early adopters and everybody, like it was complex. There were some agencies that were charging you to set up your OpenClaw and people want to do it and more complex workflows. And then you compare that with Muse now. which is how do you strip that down, make it super simple for somebody who can actually use it every day. That is extremely important because when we would go against the legacy provider in the market that we were trying to replace, they had a lot more features than we did. But people hated it. They hated it for the reason that it was complex.

36:10It was too cumbersome. The UX was a mess. Mobile app did not work. So we knew that if we do the same mistake, we can add the same features. Like that's not the hard bit. But unless you think about the problem from first principles, a great example of that is the training example. If I want to build an LMS and build it feature by feature, I'll build the same version of an LMS, maybe slightly better UI. But if I think about the problem for first principles, which is I need to teach a 16 year old how to quickly start being productive in a pizza store, then I think about that separately. I know that that guy grew up with Google, so I need to have great AI source so they can get just-in-time answer.

36:53I am standing in front of a point-of-sale system. I need to be able to ask, hey, how to apply this coupon code and do it instead of me teaching that in a video or in a silly motion graphic sort of thing, which most LMSs were doing. So let's change gears here, jump to kind of tactical number two. The first year, especially, like you think about 2023 to 2025, and maybe still now, but especially at the beginning, it was kind of pure outbound. as I understand it. And you had a system for driving experiments in outbound. Obviously, everybody's told you got A-B tests. Again, these are things everybody knows high level.

37:25And yet, when you look at operators, there is a very big difference in terms of execution and how well some people do it versus others. Tell us a little bit about how you structured outbound in order to have experiments and figure out the messaging that worked, what converted, what didn't, etc. So number one, we actually made it almost very, very experimental and very handcrafted. What we did was we created a list and we divided that list by multiple different parameters. So one, by number of location, which is the size of business. Second, by industry. And third, by the actual role of the ICP in those companies.

38:03And there were different permutation of these different roles. we then had multiple emails that we had written down and for each of the email we had two sets of subject lines that we were testing and then in the email copy we tried to keep the messaging consistent for a specific sort of icp or a specific kind of email and experiment with what grabs their attention in terms of the use case like what do i reach out to you to solve like that actually works. So don't change that I'm selling instead of a franchise operating system, I'm selling LMS or try to change within that franchise operating system what are things that grab your attention more.

38:46And we started measuring sort of the open rate, response rate, all of those things and started sending out these emails like by hand. We did that. Along with that, we also reached out to these people on LinkedIn and tracked that all on a sheet. And at the end of every day, we would track how many opens do we have on them and you would call these people because you would know that some kind of interest and you would call these people and then also know like what are we learning on those calls. So once you start to do this, you get a very good sense of what from a messaging perspective sort of good work.

39:18So for the first year, 2024, all of the leads that we generated, a majority of the leads that we generated were just through outbound emails that we were sending out and doing a little bit of calling on that customized or that curated list that we had. I don't know if you have it in front of you, if you can remember, but I'm curious on hearing some of the differences, like, you know, what did your best email look like versus your worst email, you know, or best subject line versus worst subject line? Do you have some of those examples you could share? Yep. So number one, our most replies actually came from email three, not email one.

39:51So we would send a cadence of email. That was one. Second, our best performing email was actually the one where we added a screenshot of our mobile app with the brand's logo on that screenshot. Because how a lot of people, they're just scrolling through, but if they see their brand on that screenshot, they feel that somebody has put actual effort in sending this out and they actually now read it because there's so much noise now more than ever because now AISDR is writing all emails. But that gave us that right to attention, which is now they were paying attention. So that was sort of our best performing.

40:28The worst performing email was where we made outrageous claims. So oftentimes when we think of, when you send out an email and say, I can help you make this much, I get hundreds of these emails a day. Yeah, I can help you double your views. I can help you double whatever, some big, big thing. Sure, you can. I mean, I'm doing this, and this is my 100 % of the focus. If I can't, what magic sauce do you have that you can? It's, you know, it's interesting. It's like we all have obviously a bullshit detector. We always have like a spam detector, like built in all of us because we get so many emails and whatever.

41:01So you're trying to find a way for you to not get, yes, like you don't want to get caught, spammed by the actual like email provider, but you also don't want to be flagged as spammed by the person. And I don't mean them actually flagging as spam, but it's kind of like you're scrolling through your emails like, yeah, yeah, that's spam, spam, spam. This person's sending a thousand of these. Why would I even read it? Like if you didn't take the time to write it, I'm not going to take the time to read it until you find the one like in your example, for example. This is ever changing because the bar for personalization just goes up.

41:28It used to be if you just had a first name in there, you're like, oh, my God, they know my name. They must be, you know, I've done research. Now, obviously, that's not the case. But like in your case, when you were sending these out, you know, having a screenshot with a logo in there was different enough and implied somebody took time and sent me a one like personalized email. OK, maybe I'll stop on like, oh, interesting. And maybe I'll actually read what this person has to say just because they took the time to reach out to me. And that kind of signals that, you know, there's a reason for it, you know, and so it's worth me investing my time as well.

41:57Absolutely. And so personalization I've seen done so poorly because sometimes you would just be look at their LinkedIn or some AI tools also do this. Hey, you went to this school. I am a great fan of that school. Yeah. So that didn't become. And this is why we actually had to do it manually because we were literally in the night. I would create those screenshots, add them to the email and send it out. What are you finding works today, by the way? So maybe that's a good question because things have changed. Like what are some of your best outbound, whether it's email or LinkedIn or whatever? What's your protocol these days?

42:28So today, at least on the email side, hyper-personalization down to the level of, okay, I understand you're a VP of ops. I have other VP of ops that I can reference within my customers and what they are doing. Looking at the last few posts or LinkedIn posts that you have, looking at open job roles that your company has. We do a lot of this enrichment through clay opening or looking at number of locations that you opened last year, number of locations that you're opening now. we actually also look at the FTT data so this is a FTC mandated document that a franchisor needs to have where they have a lot of details about like what the tech fee is how much revenue does that location make so we take all of that data in and then personalize it so now it doesn't look like gender AKU from x school but looks very I have done enough research on your brand even if I haven't personally written that email at least I've done that research in going through the depth of finding different information about you and putting them all together.

43:26That but better than email what works for us today is calling. Calling and along with calling actually doing hyper personalizations in terms of sending them something. So we've started to do dinners like in cities and we send them like a postcard inviting them to dinner. We send out so we had this golf ball that we personalized for like that name list that we sent out. So that level of personalization and actually sending them sort of something, especially for the contacts that are engaged that are now in my list. So almost have an approach. So you have email, there's certain people who will engage with that.

43:59There's certain people who already book, which is great. Now there are these people who engage with that. So I'm going to call them. Now I call them, I get some insights about them. Some of them book, a lot of them don't. But now I have more material on them where I understand their business better. So now I do one more level of personalization versus now I'm sending them something personal, right? I'm sending them a text message. I'm sending them a gift card. I'm sending them something to sort of bring them in. So almost like that's target approach. But just relying on email today is probably not the best approach just because there's so much noise there.

44:30How are you finding LinkedIn? Like I've had some founders tell me that LinkedIn reach outs, obviously everyone's doing them too, but it's like the upside is you're one click away from them seeing your profile, which adds a little bit of credibility at least. Do you find that that converts a bit better than email? Yeah. So we don't do that on an automated scale at all. We do it very manually. So we have STRs who, so what we do in order to enable them better is we have, we centrally manage a lot of content. So my team would write, like we build like an internal thing on Replit where you would have these different posts that you can post like as an STR from your account to make you more credible.

45:06So when somebody is going, it's not like a generate STR. The only posts that you have on your LinkedIn are like some random sales shop that you liked because you're not getting your quota, right? So that and then you actually personally reaching out and also cross-referencing a lot of people, which is again, going back to the basics of the fundamentals, which is spoken to three people in an organization. I've gotten more information. Now, if I can name drop them, or I know that you went to event where you also met this other customer who's actually one of our customers, referencing them. And in that level, you can automate a lot of that now to an extent, but at least on LinkedIn, we do it on a one-to-one basis.

45:42That makes sense. I think, yeah, I think it's like, you want as many of these things. Credibility, I think, goes a long way. Obviously, if, you know, the example is like, if you're Bill Gates, like, you can email anyone, they'll open it. Just stupid example. But obviously, the more credible you are, the higher open rates, right? Different, just for the sake of being different, also works because it at least stops the scroll, whether that's a LinkedIn scroll, whether that's an email scroll, anything that looks different than the rest of the things, just more likely to get open. And then the third one is, you know, kind of this personalized piece, which is really more than anything about, is this email perfectly crafted to me, which signals either you took the time to do it, or even if I know it's done by AI, it resonates so much that I don't really care that AI did it.

46:23The message is such a fit for me, I still have to look at it and respond, hopefully, because it just solves a problem. Yeah, it's signaling that you understand my business. So that means you probably have something that can solve that problem for me. And then going back to the metrics part, so So outrageous metrics like I'll 2x your revenue, that gets ignored. But very specific metrics that you can stand behind actually help. So some of the metrics that help us in like our email is a we can help you grow location count with less headcount. Here's how. We can help you reduce time to open your location by this much percent or by these months because we help X customer do it by this month.

47:04Like those things people get behind. Exactly. It adds credibility and it adds personalization. Like for me, if you send me an email, like I'm going to double your views on the BMF show, I'm like, ignore it. But if you send me an email and be like, hey, we work with this brand and this brand, here's their YouTube thing. Here's their like average views before we did it. Here's average views after. I'm actually going to open that. I'm going to click them and see, and if they're relevant, you know, my chance of a reply is actually pretty high. Perfect. Well, Tushar, we're at the end of time here. Anything you want to leave founders with, like any last piece of advice that you find yourself giving founders, especially early stage founders pretty often?

47:34I think it's increasingly becoming easier to build software so that barrier is like totally like getting eliminated now, which means that that focus on PMF becomes even more important, which is, okay, how do you actually stay disciplined? How do you have a thesis around what you're building? How do you keep active, which is resilience, which I see because of AI and our influence building things are fast. People just abandon things very early on, right? As soon as you get no signal, you're back. But to build a great business, and there's so much noise around, which is, hey, this company started in four months, they hit 100 million naira, right?

48:13So people think that's normal. Those are outliers. That's going to happen. But if you really want to build a business from ground up, it'll take, resilience is not changing. It'll take resilience. It'll take actual point of view. It'll take a perspective on the industry, about the problem, first principles. All of those things are still relevant. And then AI makes it iterations faster, but it doesn't reduce the number of iterations you'll need to do. Perfect. Well, Tushar, thanks for joining us, man. It's been great. Absolutely. Thanks a lot, Pablo. It was a pleasure. You remember like the first person who told you about Bitcoin, the first person who told you about Uber?

48:51You want to be that person because being first is cool. So be a cool person and tell your founder friends, send it to them on WhatsApp, put it in a WhatsApp group, put it on a Slack channel, let people know about the show, let people know about this episode. Don't let somebody else beat you to the punch and share it with your founder friends first. Remember what Ricky Bobby said, if you ain't first, you're last.