How Solving His Dad's Online Review Problem Led to Big Business with Eric Rea: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. are brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Billion Dollar Moves. Today, we're pulling a timeless EO Fire episode from the archives so the giveaway may not be active and we'll be breaking down how solving his dad's online review problem led to big business. To drop these value bombs, I have brought Eric Rhea into EO Fire Studios. Eric is a co-founder and CEO of Podium, the messaging platform for businesses. And today, Fire Nation, we'll talk about how not to let a couple of opinions weigh you, back up your own intuition with data of your business, and there's always going to be competition.

0:44If you're not innovating and taking leaps of faith, you're not going to scale your business into so much more. And a big thank you for sponsoring today's episode goes to Eric and our sponsors. The Gold Digger Podcast, hosted by Jenna Kuchar, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Gold Digger podcast helps you discover your dream career with productivity tips, social strategies, business hacks, inspirational stories, and so much more. One of my favorite recent episodes is titled, How I've Built an Unmatched Team Culture, an insanely important topic for all business owners to dive into.

1:16Listen to Gold Digger wherever you get your podcasts. Wondering how to leverage a virtual assistant to save you time and money all while growing your business? Get Belay's ultimate guide to working with a virtual assistant today. Just text FIRE, that's F-I-R-E, to 55123 to get started. Eric, say what's up to Fire Nation and share something interesting about yourself that most people don't know. What's up, Fire Nation? One thing that you would not know about me is I have four kids under the age of five years old. I had twins during the pandemic and it's been a wild ride. Wow. Well, as we shared Fire Nation at the beginning, we're talking about how solving a parent's problem led to big business.

2:03And now Eric is quite the parent himself. I mean, four kids under five. God bless you, foe show. And I, Fire Nation, am excited to chat with Eric because he's rocking quite the company these days called Podium, which is the messaging platform for businesses. So in plain English, Eric, let's explain to Fire Nation what Podium is, who uses Podium, and why. Yeah, that's great. So Podium is a messaging and payments product built specifically for local businesses. And so our customers are any business that has a physical presence that does interactions with their customers in person. So if you're a brick and mortar business, you're using Podium if you want to maximize the conversations you're having, the message you're having with other businesses, with other customers as well, obviously.

2:56What's maybe a quick example of one of your favorite companies that uses Podium? This is one of our longtime customers. We have a carpet cleaning business that's in the Western United States. They have dozens of locations and they use Podium to interact with their customers from the time somebody finds them on Google or their website, all the way through scheduling an appointment and through paying for that appointment and then following up. And then most importantly, getting those customers to come back again and again and use them and their services. I mean, Fire Nation, this is the thing that a lot of businesses just don't quite grasp is you work so hard.

3:36You work your little booties off getting somebody to visit your site or to read some blog posts you wrote or to hear you on a podcast. And then they go check you out. And then the conversation ends because you're not following up. You're not messaging them. You're not nurturing them. You're not communicating in any meaningful way. And guess what? They slide into your competition's funnel. It happens all the time. And the worst part is you don't even know what's happening. You don't even see it happening. Podium, in my experience, has been that company that keeps you focused, keeps you drilled in and keeps your customers on board with you.

4:10So when it comes time for them to make the purchase to go all in, you're top of mind. You're the person that they've built relationships with because you are staying in touch, in contact. That's why I wanted to bring Eric on because I just don't know of a company that does it better. And I want to kind of tell Fire Nation about some of the background research I did about you. I saw that your job before you started Podium, Eric, was actually working at the UN at the International Atomic Energy Agency. So to say the least, a little different from what you're doing right now. So at what point did you know that you were an entrepreneur and you made that jump into Podium?

4:49I've always been an entrepreneur. My father's an entrepreneur. He started a tire shop and some gas stations. It's a little different than software, but I always knew I was an entrepreneur. Even when I was 10 years old, I used to gather up all the neighborhood kids and give them plastic bags and we'd go gather golf balls at the nearby golf course. And then I would wash them and give them to my dad. So I've been an entrepreneur from this time I was 10. The reason I started Podium and the whole reason Podium exists today is when I was in high school, I worked at my dad's tire shop in Canada. And I worked in the front, I fixed tires, I helped customers.

5:29So by the time I graduated from high school, I had this experience and this understanding of what it was like to run a local business. And I didn't think it was helpful at all at the time. But fast forward, I went to school, studied in computer science and business. And while I was in college, I started an e-commerce business. And so this is in 2012. I started an e-commerce business. I was selling iPad cases online from my dorm room. I thought it was an amazing business at the time. It turns out I didn't understand gross margins very well at the time, but, um, it blew me away that I was running this business from my dorm room and I had 10 times better technology than my dad's tire shop did to drive commerce.

6:19And just for context, my, I had built that e-commerce business on Shopify, which is a fantastic platform. And I just thought, I didn't know why there wasn't something like Shopify but built for local businesses specifically and so started I got together with my co-founder Dennis Steele awesome classmate of mine and we started looking around and we just couldn't find anybody building a platform that would help drive commerce for local businesses like you had Intuit doing you know back office accounting things and Square doing payments, but there was just nobody doing what we thought was this obvious problem, which is these local businesses are just not equipped to handle somebody finding them online and then taking them through that funnel of consideration, negotiation, scheduling, payment, actually rendering the service or delivering the good, and then getting them back again and again.

7:15We just didn't see anybody doing that. We started Podium with that in mind in 2014 with nothing but a couple thousand bucks in a bank account and just this idea that we could build something big. And fast forward to today, we have over 60 ,000 businesses that use our product. And yeah, to say that we happened upon a massive market that was being underserved is an understatement. I mean, Fire Nation, I can't tell you the amount of times I've literally yelled at my computer screen saying, I'm trying to give you money, company X, Y, or Z. like Z, like you're making it so hard for me to give you money.

7:52Why won't you let me give you my money? Like it's frustrating. It's just like, I know these brick and mortar businesses, they're trying hard and they want to make the sale and they want to do right by their customers, but they're overwhelmed. They're swamped. They're taking this really difficult, hard road when it doesn't have to be that hard because there's companies like Podium that really make these things simple. So if you're listening and you're a brick and mortar, if you're a regional business, your look, whatever it is, like make it easy on your customer. Don't let your customer yell at the screen.

8:19Like I yelled the screen sometimes like take my money. Like you're not letting me do just that. And one thing that you did that I thought was pretty cool, Eric, was you made this jump into this amazing startup incubator that I know a lot of my audience has heard about called Y Combinator. And they ultimately made you one of their largest investments in your most recent Series C. So what was that transition like between creating a simple product, helping your dad out to becoming such a high growth SaaS platform? Now, of course, Fire Nation SaaS being software as a service. Yeah. So in the beginning, we just were trying to solve the problems that we saw my dad's tire shop had.

8:58And we didn't, I mean, we know, we knew there was a huge market of local businesses, brick and mortar businesses that needed something like what my dad was experiencing. But at the beginning, we were just thinking if we can solve his problems, then we can probably solve problems for hundreds of other businesses. Little did we know it's actually millions of businesses that need this. And so we started selling the product door to door. We built the product in two weeks. We thought that the initial product could be this really simple MVP. We built it. We started selling it door to door. And what we realized, and this is through tons and tons of iteration.

9:37I think it's actually part of the formula of success that we've figured out is through like months of selling door to door and then getting rapid feedback, we realized that this problem we were solving, like 80 % of the businesses we'd walk into would want it and buy it. And it just seems so, it seems so rare that you would walk into a business and 80 % of the time they would buy something from you. So we knew we were onto something from the beginning. We knew we had some kind of product market fit, even though we didn't really know what we were doing because we were both first time founders of a software business.

10:13But, you know, we did that, raised a little seed money after we had gained some traction. And then we applied to Y Combinator. This was in 2015. And I actually watched this morning, Dennis and myself, we watched our original video that we sent into Y Combinator to apply. And it was actually hilarious just how much we didn't know. But Y Combinator accepted us into their 2016 winter cohort, which was only four years ago. And they did that because they saw that we had product market fit in this really interesting market, which was a local business. And by the way, I think one thing to add is we started out solving problems for businesses like My Dad's Tire Shop.

11:03What's been really cool for me to see as a founder is we now serve some of the largest businesses in the United States. Some of our customers now are the largest retailers in the United States or the largest healthcare providers in the U.S. I think one of our customers is the largest healthcare system in the U.S. And so this product has actually grown from this simple thing that helped my dad's tire shop to a platform that serves not only small, local brick and mortar businesses, but also some of the largest businesses in the United States that happen to have these in-person interactions with their customers.

11:36And it's just been, and so we went through Y Combinator in 2016, and that was fantastic. That took us to our Series A funding, which was led by Excel and Google Ventures and a few others. And then earlier this year, during the pandemic, right after I had these twins and the house was crazy, we're all working from home, we raised$125 million, led by Y Combinator again. And it was just really empowering to see that Y Combinator, which we felt so honored to get into their initial batch in 2016 as a seed company, to see them double down on podium and make it their largest investment at the time, it's awesome.

12:23And we feel really grateful for the folks over there. Fire Nation, we're going to get some specific direct advice from Eric for you entrepreneurs who are listening, who have business ideas that are in the SaaS space, that software as a service, and more when we get back from thanking our sponsors. I'm all about lifestyle freedom. I want to be able to do what I want, when I want, and there's no better time to kick your feet up poolside than the summertime. But to achieve this lifestyle freedom I speak of, you and your team need to work smarter, not harder. That's why we're so excited about HubSpot's integrated AI tech.

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14:12It's time to get out of the administrative weeds of your business and start investing your time back into things that grow your business. To help you get started, Belay is offering Fire Nation the ultimate guide to working with a virtual assistant. It's packed with helpful content about how to leverage a virtual assistant to save you time and money all while growing your business. Just text FIRE, that's F-I-R-E, to 55123 to get started. So Eric, we're back and I really want you to take us to the moment. I mean, I feel like you've had a few over the years, but what was the moment you started believing that, hey, Podium is more than just a little business that you might flip someday?

14:51To be honest, when you are in the early stages, especially when it's your first business, which this pretty much was for me and Dennis, my co-founder, you're pretty terrified from day one that you're going to screw it up. Once we knew in the early, within the first couple months, we knew we had something really interesting and really valuable to our customers. And then for a really long time I think for like three years you're terrified of screwing it up but you can't let that fear of screwing things up because you don't know what you're doing it like that's just the the plain truth is we didn't know what we didn't know um the reason we were able to even get through all those first three years is we just met as many people as we could uh listen to podcasts like entrepreneurs on fire and actually like just listen to people that were that had been successful in things that were really similar to what we were doing, but also like learn from people that had not had a lot of success.

15:47And so it went from something that we felt like we should try and get, grow as quickly as possible and sell for the first three years. Um, to, and I think the point in which we realized it was something much bigger than something that you'd flip is I really believe it was meeting some of these really world famous founder CEOs. Um, like one of the founders of Airbnb and like the founder, former CEO of Groupon and started meeting all these people. And you start to realize that, yeah, they're they're really smart and they're really, really lucky, too. And we're not that much different than them. As long as we have the market opportunity, we should continue to go after this.

16:31So I think the thing that switched it in my mind, I think my co-founder Dennis's mind is we realized that we could do this. I think that's the most, it's one of the things that keeps people from building big businesses is like just the belief that you actually can do it. You got a belief, Fire Nation. You've got at your core, deep down, believe that you are providing a real valuable solution to an actual problem in the marketplace. And speaking of that, Eric, it's one of the most interesting parts of your business. You work locally with brick and mortar businesses, which is different than most companies you find on the quote unquote cloud 100.

17:11So what specific pain are these businesses feeling that you at Podium solve? The most important thing is a lot of these businesses that we work with, when you look up, so say it's a plumber, if you need a plumber, you look up plumbers near me on Google or Facebook or Yelp or whatever, you look them up. A lot of these businesses don't even show up, even though they've been around for 20, 30 years. they're probably the one of the most trusted businesses in their area they don't even show up and so we have this product um that we think is really important it's a reviews product that helps these businesses get reviews on sites where consumers are looking like google and facebook and others and we help them get discovered and that's the most important thing if you don't get discovered you don't even have the chance of converting a customer so we do that and then the other just this is the this is the core problem that we solve is from the time that somebody, a consumer says, hey, you look like somebody or you look like a business I want to work with or I might want to work with.

18:10We make it so easy for both the consumer and the business to make that connection. And whether that's on text message, Facebook Messenger, email, Apple business chat, whatever it is, it doesn't matter. We just make it as easy as possible for both parties to go through the commerce experience, go through the experience of, hey, I have a few questions. Hey, do you have appointments? Hey, can I schedule? Okay. Hey, here's a reminder. or we're coming to your house. And then here's the way to pay really easily. And we do that in a way that is so much more modern than the current status quo of these businesses, which is really like a landline telephone, sending letters in the mail, walking, having to drive down to a business and walk into it, which, you know, in today's COVID environment, that just seems crazy.

18:53But even pre-COVID, that just doesn't make a lot of sense when you can go on Amazon or a Shopify-powered business today and click a button and something shows up to your house in 24 hours. So we just, what I feel we're doing across the board with payments and messaging is we're elevating these local businesses and we're modernizing the way they do business to match the expectations that we as consumers have. Okay, let's get specific here. What specific advice would you give to Firing Nation, our listeners who have business ideas that are a little less, quote unquote, quote, conventional than your typical enterprise SaaS place?

19:29Like what would you want Fire Nation to know as they start their journey in 2021 and beyond? Yeah, so I said earlier that we met with a ton, as many people as we could, and we learned as much as we could about the road ahead. The one thing I would say, the caveat to that is we were also told by very experienced people that we should change our business model or the SMB wasn't worth trying to sell into. And we were told again and again that it was possibly a bad idea because it wasn't the conventional enterprise software as a service play or the consumer play or whatever. And it always affected us.

20:10I remember there's a specific experience where we went to this meetup or this person was speaking at a little event in Utah. We went and we really respected this person. They spoke. Afterwards, we met up with them and they said, hey, I'm really nervous about your business model to Dennis and I. We said, oh my, really? And they said, yeah, like you're selling to the wrong market. It's going to be too hard to penetrate the SMBs. And you may want to either go up market or just change your whole business model altogether. And I remember driving home with my co-founder Dennis that night and thinking, maybe we should, like maybe this person actually understands this more than we do.

20:47But But we kept going back, and this is the lesson, is we kept going back to this truth that we had, which was our customers were paying for our product. They were getting value. They weren't canceling. And more and more were signing up. And the fundamentals of the business were making sense. And so I guess the main lesson is don't let a couple of opinions sway you, but also back up your own intuition with the data of your business, which is like if it's succeeding and the numbers make sense and your customers like your product and they're not canceling, then you probably have something good. Fire Nation, there are always going to be doubters.

21:28Doubters are going to be everywhere. That's why you have to, again, going back to your core, your gut, your intuition. Do you believe that you are solving a real problem for a real audience? And if the answer is yes, drive forward with all of your heart and soul. Now, Eric, what do you want Fire Nation to take away from our entire conversation today? Give us that one takeaway. way? I think the biggest takeaway for myself over the last six years is we started out, my co-founder Dennis and I, we started out with no experience building a software company, very little money. We had no outside capital in the early days.

22:06We were selling the product door to door and it was extremely uncomfortable. We didn't know what we were doing and we figured it out. We pushed forward. And over the past six years, one thing you might think is, oh, they nailed it early and they've just scaled that and that's been the growth of the business that's not true we have returned to that uncomfortable state where we decided to do something new and bigger several times every six months it feels like we're going into this new unknown in our business and taking a leap of faith and getting back into that uncomfortable stage and every time we've done that this is based on the research of our customers our intuition our instincts the data But every time we've done that, we've been rewarded again and again.

22:53And so my biggest advice, it's great to develop product market fit in the early days. And that is the key to success early on. But once you get there, you can't rest on your laurels. There will always be other people trying to compete with you. And basically, if you're not innovating and not taking new leaps of faith, you're not going to be able to scale the business. Fire Nation, stick with your guts. stick with your intuition. There's so many things that I've learned from Eric today. I hope you're taking away these value bombs as well. And Eric, if Fire Nation wanted to connect with you, if they wanted to connect with your company, give us a call to action.

23:31How can we learn more about Podium? Yeah. So you can go to Podium.com. And if you're a business and you want to sign up for Podium, we have a freemium version of our product. It's awesome. It's called Podium.com slash starter. and you go there, you can sign up and start using Podium today. No credit card for free and it's an awesome way to get started. Fire Nation, you're the average. Of the five people you spend the most time with and you've been hanging out with ER and JLD today, so keep up the heat. And if you head over to eofire.com and type Eric in the search bar, the show notes page will pop up with everything that we've been talking about today.

24:07Best show notes in the biz, links to all of our things that we chatted about. And Eric, I wanna say thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Thanks, John. Hey, Fire Nation. Today's value bomb content was brought to you by Eric. And if you've had your big idea, you would be ready to ignite. And my free training will get you to your big idea in less than an hour. Fire Nation, visit yourbigidea.io today. And I'll catch you there or I'll catch you on the flip side. The Gold Digger podcast hosted by Jenna Kuchar is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

24:50The Gold Digger podcast helps you discover your dream career with productivity tips, social strategies, business hacks, inspirational stories, and so much more. One of my favorite recent episodes is titled How I've Built an Unmatched Team Culture, an insanely important topic for all business owners to dive into. Listen to Gold Digger wherever you get your podcasts. Wondering how to leverage a virtual assistant to save you time and money all while growing your business? Get Belay's ultimate guide to working with a virtual assistant today. Just text FIRE, that's F-I-R-E, to 55123 to get started.