Do You Have “Founder-Market Fit”?

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch.

1:58How do you build an AI-based company when AI is changing every day? This is a question worth considering, no matter whether you work in AI or not, because think about what all these new AI companies are doing, or at least are supposed to be doing. They are building products with ever-changing technology in an ever-changing landscape competing against old solutions and the absolute unknown of whatever competition comes next. So in the face of all this change, some things must be steady. They must have an incredibly clear vision, a deep understanding of their customer, and a confidence that they know things that other people don't.

2:41Today, I wanted to hear what that is like and how strategically you approach entering such a competitive, fast-moving market, which is why I spoke to the founders of Nectar. Hi, I'm Isma Urezi, and I'm the co-founder of Nectar Social. Hi, I'm Farah Urezi. I'm the CTO and co-founder of Nectar. And you are sisters and co-founders, correct? We are sisters and co-founders, yeah. Super excited to be here. Nectar just came out of stealth at the beginning of June, and I first heard about them from my friend Sophia Amoroso. Her name is probably familiar, the bestselling book Girlboss, the company Nasty Gal.

3:18Anyway, now she runs a venture firm called Trust Fund, and she told me she invested in Nectar without even seeing a pitch deck. Without a pitch deck. And don't worry, we'll talk later about how to get investors without a pitch deck. But here's the thing to know about Nectar, Sophia was far from the only person very impressed with these sisters, Misbah and Farah. Their startup, Nectar, raised a massive$10.6 million seed round, and its customers already include Bobby Brown's Jones Road Beauty, Soda brand Olipop, Viral California makeup brand Tower 28, skincare device brand Solowave, and more. So what is Nectar?

3:57Nectar is an AI-native social operating system. That's their language for it. So you're probably wondering what the heck does that mean? Yeah, I was wondering that. We specialize in three core things. We work with some brands that are very digital first, going deep on the scaling like every business is now through platforms like Meta, TikTok, Reddit. And we help them scale how they talk to their community. So managing, responding to DMs, comments. We do a lot of real time listening through AI because a lot of the content inside of social platforms is now video and audio based content. So there's a huge gap there.

4:32And we help them connect the dots to be able to say Jason 123 on Instagram is also Jason at Gmail in their store. And this is all of a social activity, all of a shopping activity so that they can better understand who are these fans on these platforms and whether they're existing customers and new customers, you know, low engaged, likely bots, etc. And as I discovered, they are very thoughtful about what it takes to build a company in an ever changing landscape like AI. So this conversation is really a delight. I'll give you a tiny taste of it right now. This is the starting point that they think any founder should have when thinking about how to enter a market like this.

5:14It's a term that I like to call founder market fit. Founder market fit, which is to say, what problem is a founder especially suited to solve and why? We talk about that, about how to identify the right problem to solve, how to impress investors, and a really smart and surprising strategy for getting your first customers. It is all coming up after the break. All right, we're back. I am talking with Mispa and Farah, the co-founders of Nectar Social. And let's pick up with that idea we left off with, which was Mispa saying that if you want to enter a market, especially one as competitive and ever-changing as AI, then you need to think about founder market fit.

5:57Here's what that means. This is where both Farah and I fit kind of neatly into the space that we're building in now. For context, if we go back pre-Nectar era, I spent the last decade in product. I was a product leader at Meta, leading a lot of recommendations platform, algorithm, brand creator monetization. So lots of relevant spaces and problems to the problems that we're solving now. And we'll double click on those in a second. Farah, maybe you can share a little bit more color on what you were focusing on Meta as well. Yeah, I think there's a lot of key things that you hit in your question.

6:30Firstly, in terms of our background, like Miza mentioned, we were at Meta. I specifically was leading a lot of the engineering efforts on groups and Facebook communities and seeing how that branched across multiple platforms. And so real time understanding the shift from what used to be a ton of feed oriented content, finally following your friend networks to now being topic based. and seeing more and more consumers spending their time in those surfaces and also in private messaging. We had so much visibility into the entire horizontal landscape of problems like how are SMBs facing issues here?

7:00How are the biggest enterprises kind of scaling to these workflows? And we found that many of these brands were taking six months to implement any solutions in order to scale to the community volume in an authentic way and still struggling at best, having to hire 40 people. And then in 2023, with the launch of ChatGPT 3.5, we were like, this is now a solvable problem. We can finally start weaving all of these different touch points together in a way where a business, whether they're mid-market all the way up to enterprise, can scale in a way that they never could before and start connecting the dots in a way they could never before.

7:33I think for Nectar, the key thing is that we aren't a point solution. We are really a comprehensive end-to-end solution for social, starting from all the way from organic and paid community management to social listening to being a social CDP, basically. And because of that, I would say the AI difficulties come even more so, where we're trying to go beyond just simple, you're seeing a huge, I would say, saturation of like vibe coding and small prototypes here trying to hack around, you know, fix singular problems and Nectar's coming at it with a really robust infrastructure that's nimble and able to adapt to the changes that are happening every single week.

8:09Does that mean that there was a moment in which the two of you, given the visibility that you had into this ecosystem at Meta, looked at each other and said, you know what, we are seeing things that others are not. And maybe they'll see them later, but we get to see them first. And so if we move really, really fast, we can beat others to market. Is that basically what happened? You're nodding. A hundred percent. It's never like I woke up one day and I decided I was going to quit and I was going to work on this. It was more of a slow burn situation where it's like you're seeing the problems. You get a front row seat to a shift in consumer behavior to what Farah was describing.

8:44You get a front row seat to, you know, the customers of Meta even of just what are they asking for? And you're seeing the disconnects and you're seeing, OK, there's clearly a huge opportunity here. And then you're layering on the advances that are happening on the AI front. And you're like, OK, this is the perfect storm. This is where there is a meaningful opportunity. And you're looking around your shoulders and you're trying to see, OK, who's going to go after this problem? Who's going to work on it? And then you realize you should probably work on it because you've already been thinking about this problem space for the last few years.

9:14And so I think that epiphany came to me personally first. And then I worked on Farah. I was just like a natural fit on that front. And we always knew we were going to work on something together. We'd been side hustling, building out different projects since we were in middle school. And so I think it was just a matter of time on that piece as well. And I couldn't Farah to quit and join me on this journey a few months later. and then the rest is kind of history. Yeah, I think for me personally, so I went to Stanford and I feel like everyone and their mom is trying to do a startup there, right? In their dorm room, they're going, you're just in the heart of Silicon Valley and that's one of the options basically right in college or right out of it.

9:49And I had an allergic reaction initially. I was like, I don't wanna just be throwing stuff on the wall and seeing if it works. I went to Meta for five years and I think when this approached me and she was like, this is a huge opportunity. I was finally kind of like, okay, this is a real problem to go after. There's such a clear gap in the market, and we are so uniquely positioned to develop the perfect kind of end-to-end approach for this. Yeah, right. So in other words, don't just chase something for the sake of chasing it. Wait until you see the thing that you feel like you're distinctly positioned for.

10:18I'm curious, Farah, especially because you just described this filter almost that you put on this to ask, is this a problem we're solving? Are we the people to solve it? How might you articulate that to others who are seeing their own insights in a market and wondering if they are the people to solve it? Was there something that you asked of yourselves? Was there some way in which you evaluated whether you were really well positioned to chase this? And I don't know if there's an easy answer to that. I think there's a leap of faith there in terms of being able to understand in a large organization, like, for example, Meta is a big tech company.

10:59And I think this is always a jump that folks are thinking about. How do you go from that to leading your own organization to having something that's less structured? How do you build that operationally? And that's always a little bit of a leap of faith. And so for us, I think it went back to kind of we always had a core thread of being entrepreneurial, doing side hustles, doing projects from a very, very early age. And for us, it was also a matter of not if, but when. And we knew we had to do this at some point. So I think someone will always want to have that thread of energy where they have that inner intrinsic desire to go out and be their own person, build their own thing, be a builder inherently, and then just make sure they jump at the right time and right problem.

11:39Yeah, I think the right time, right problem is the hardest part because I probably shot down north of 100, 200, 300 ideas over the years. And where I was just like always constantly thinking, if you saw me at a social party, if you like talk to me, I would always be just on the fly incubating different ideas to go after different problems to go after build something that I always had that itch. And I think it's just it's that threshold that you need to hit where you're not going to be happy doing what you're doing because you want to go after it and start the zero to one and that's who you are.

12:07And it's scary taking that first step. And it's not easy. And you don't really, there's a lot of ambiguity around what's our run rate? Does this work for us personally? Are we going to get funding? Do we even want to go down that route? Do we want to raise capital? And so I think there are a lot of questions that first-time founders have to face that we went through ourselves as well. And we're down a certain path. Could we have done it differently? Absolutely. But there's infinite kind of possibilities on that front. And we're always learning as we go. So that's the exciting part. It reminds me of a framework that I heard from Naveen Jain.

12:38He says that any person considering pursuing a challenge and turning into a business should ask three questions. Why this? Why now? Why me? Why this problem? Why is this worth solving? Why now? Has something changed technologically in the marketplace that makes this the problem to try to solve now? And then why me? Why am I positioned correctly? which he argues isn't necessarily about your experience, which is what you two are building off of. But also, he says, this is also just, do you have a unique perspective that other people don't? Are you able to ask questions that other people aren't thinking?

13:15But let me take this a level deeper, which is that this is also happening in a world of constantly evolving, very fast evolving AI technology. I would imagine, as a guy who's not building an AI company, so you tell me, it feels a little like trying to build a house on top of ground that's constantly moving around. It seems like it would be madness. How did you just conceptually think through the product that you would be building such that you felt like the thing that we're going to start building now will actually be relevant and unique by the time it is built and we're taking it to market, which even if you move fast, doesn't guarantee anything in today's environment.

13:58Yeah, I have some thoughts on this. I'm curious, Farah, if you have some initial thoughts on the AI front. The problems don't change underneath the hood. Like what you're trying to solve, the value you're trying to drive, that doesn't change. And for us, I think that was unique where we have never pivoted since we started. We came out with a vision of what we wanted to solve, what we wanted to go after. And that has yet to change. And I think when you're building an AI, it's very unique in terms of the, obviously, the technical layers and all the applications that come there and the underlying dependencies you have, but also in terms of where we are in SaaS as a phase.

14:30And so I think phase one, we're in this deeply co-pilot experience where you're thinking about how do humans interact on these interfaces? How do they leverage AI? How do you train them in the right ways to be able to maximize the ROI there? And so you're seeing the same patterns emerge in user experience, whether it's a developer for a platform like Cursor or Harvey for legal. And then even for Nectar on social, there's a similar embedded experience of how do you make AI usable and approachable and scale your team with it. And the second phase is, okay, how do you move, now that you've driven confidence in these flows in these AI agents, how do you make this more asynchronous?

15:05How do you just let them go off, do their thing? And how do you figure out how to monitor and moderate those pieces? And they're still tackling the same problems, but I would say what's changing rapidly is the emerging user experience patterns to make sure that, you know, you get the right adoption and you're actually safely kind of walking people through achieving what they need to achieve with AI. So you said to start, the problem doesn't change. So what is the problem as you would articulate it in a very non-technical way? And then it was interesting what you said there then about the evolving user experience or user journey and how that is a thing that's changing.

15:40Can you, in plain language, unpack the start and the end of your answer there? So I would say in the world of social, one of the key values and problems we were going after was being able to scale your brand voice and so many different touch points. And in the old world, that meant training literally a team of 10 to 15 people on your brand voice, you know, what to reply on, all the topics, having a Google Sheet or a Google Doc that's always running and then hoping for the best, opening up multiple tabs, you know, seeing, hey, is this person actually a customer of ours? what our products use, which I saved to this person and hoping for the best.

16:14And now in the new world, there's still that problem of like, how do we respond at scale? How do we respond in the right ways? But you can go so much further because of AI. And then, yeah, go ahead. And then the secondary piece of that is brands still don't understand out of if they have a million followers on these platforms, who are those people? Who are their most loyal fans? How many of those are existing versus new customers? how much revenue they're actually driving by investing in those touchpoints. Do they need to care about how they show up? Do they need to even pay attention? Do they need to respond in a timely manner?

16:51I think difficult to quantify that, and it's really difficult to understand that. So those were, to Farah's point, like the scale your brand voice, the understanding of community, the personalization piece, those problems don't go away. They don't change. We're resolving them with AI now because it's 2025, and it makes sense to do. But even if AI did not exist, we'd still be trying to solve those same problems. Unpack that a little bit more for me because I feel like that's a really valuable thing that you just landed on there. Even if AI didn't exist, we would still be trying to solve these problems.

17:18AI is now just another way to try to solve this problem. Farah, I liked the way that you described solving the problem before, which was hiring a large team and training them on your brand voice. And now there are technological abilities to do it a different way, but it's still solving the exact same problem. Yeah, AI is just another tool in our toolkit, right? It's not the reason why we're building the company at all. But it is accelerating and way cooler to be able to build in this space. And it definitely feels like 1990s energy, especially every time we're headquartered in Seattle, every time I fly down to the Bay Area, especially it's like, you can feel it, you can feel it in other founders, people are excited, it feels still very early in terms of the potential.

18:00But the problems are still there, and you still want to solve them. And yeah, exactly right, Jason, to what you're saying. AI doesn't exist. We're still solving the same problems. So how do you then take this thinking? We're identifying a problem. That problem exists. Everyone is grappling with that problem. Two, we've got a solution that is going to be compelling enough for very early clients, your first people on board to find compelling enough to take a bet on you with. It is obviously much easier to walk into a room and identify and talk about a problem that people already know versus there are so many AI solutions that come across my desk every day that seem to be a solution in search of a problem.

18:44So if you're speaking the language of a problem that people already have, I understand why their ears would perk up, but then they're still going to ask, well, why this? Why this one? It's unproven. You've raised a bunch of money. that's great. Congratulations. But I don't know that that necessarily means that you're the solution that I'm going to start reorienting my entire social customer experience around. How do you start communicating that? Twofold. One, the way we like to operate as founders is we don't describe what we're doing. We don't say this is what we'll promise you or like over promise.

19:18We just show. So for us, we went heads down. We had a clear vision of this is what we need to build. And we just spent the first six months heads down, build, build, build. We did passively actually try to engage customers in the same time of just like building other solutions adjacent space to get them warmed up and whatnot. So that was interesting. Can you give me an example? What does that mean? Okay. So interestingly, we were going after a lot of brands, beauty brands, fashion brands, et cetera, that sell into retail. And so there was an adjacent problem that we discovered when we were first starting to chat with folks on the marketing side of these brand teams that was around being in retail and the struggles of understanding how much revenue they were driving into retail.

20:03Because to win in retail, it's a very cutthroat game. You are playing just like the wars against everyone else and you're trying to move up and you're trying to get shelf space and it's super hyper-competitive. And so that's one thing that we noticed very early that's adjacent, has nothing necessarily to do with Nectar right now. But we were like, okay, that's interesting. There's some solutions that we can build in that space. that are like very small solutions to just get our hands dirty, to build a relationship with those clients, have them trust us. And like we are solving interesting problems for them and provide some ROI early on.

20:37So one thing that we built early on, and this is around Amazon's Buy With Prime. I don't know if you're familiar with that, but they were doing a big push around being able to integrate into Shopify stores with Buy With Prime and OneTap Checkout. Yeah. I was at the Amazon event where they announced that actually. Oh, fantastic. And so we took inspiration from that and we're like, if Amazon is a huge retailer, has a bunch of clients and brands underneath them that find this valuable because of OneFlick shipping, there's also Sephora, there's also Ulta, there's also Target, there's so many other retailers, they could find value from this.

21:09we didn't think this was going to be the next unicorn business necessarily and it was not part of the original vision of what we set out to build but it was something very quick and scrappy that we could put together and so we ended up building buy with target buy with sephora that you can integrate one tap into your store run ads against that you know make it very one click easy for consumers to discover that your product is also sold in retail because a lot of brands were goaling against selling into retail so we thought that was interesting we saw actually a ton of positive feedback around that.

21:38We ran some studies in parallel. It took up maybe 10, 15 % of our bandwidth. But the vast majority, like 90 % of our bandwidth was heads down building out the real product. And we were just using this as a mechanism to get conversation started, get in front of the right buyers so that we can transition them into the full blown Nectar platform when it was ready. Huh. So it's then being able to reach out to these potential clients and say, hey, look, I know you're thinking about this right now. I've got a solution for you right now. So yeah, that'll get their attention. And it was peak like pre-Black Friday.

22:10So everyone was just like, you know, run, run, run, go, go, go. Need to drive a ton of sales into Target. Need to drive a ton of sales into this retailer. And so we were like positioning it really well timing wise right before Black Friday. We were like one tap, install this, drive traffic that way, etc. I think now there are some businesses that do focus on this problem space pretty deeply, but it ended up being a great hook for us to get in front of the right buyers. That's really clever. So heads down, build the product. Don't go around just hyping it. But, you know, along the way, you were looking around for opportunities to build something really quick and create some solutions.

22:44I think the show piece is really important. So we didn't show what the actual vision was for Nectar until we felt like it was a mature enough ready product. And I think going back to the earlier conversation around founder market fit, the reason we didn't feel the need to throw darts at the wall, get something out early, which is sound advice for most entrepreneurs. if you're going to Y Combinator and you're doing their summer batch program, you want to launch something in the first three months, right? You want to launch something sooner than that, and you want to iterate quickly, and you want to build in public.

23:12I think that's the traditional advice that's being given out the door to most founders. I think for us, we decided to stray from that advice. We were like, we know exactly what we want to build. We have high confidence in the problems that we're going after. We see the signals. We're, you know, worked on this at Meta, blah, blah, blah. And so as a result of that, we could go heads down for a longer period of time, build the right thing, then present that so that we're not losing customers initially. And so we've built something that's very sticky. When they onboarded with us, they actually truly felt like we thought through everything that they would care about.