SPOTLIGHT: He Said No to Bad-Fit Customers. Growth Got Better. | with Snehal Nimje, CEO & Co-Founder @ Outdoo

0:12Sam Jacobs: Hi everybody, it's Sam Jacobs and welcome to Topline Spotlight. If you don't remember, Topline Spotlight is a small segment of the Topline podcast and in our show we focus on understanding the background and a difficult challenge that a prominent CEO, founder, go-to-market operator, whoever our guest is, has faced and solved in the last 12 to 24 months. It's a show about overcoming adversity and also about the tactics that you use to move through a period of adversity and come out on the other side. And today we're really excited to have on the show So, Snehal Nimja. Snehal is the co-founder and CEO of a company called Outdo.

0:55Sam Jacobs: He started his first company during his college years, which was acquired, and later played a key role in scaling a consumer startup to over 3 million users. At Outdo, he drives product vision and long-term strategy with a strong focus on innovation and execution in the AI role-play space. Snehal, welcome to Topline Spotlight. Thanks. Thanks, Sam, for having me. We're excited to have you. So your title is CEO. The company is called Outdo. And I gave a little bit of a description, but I think it's important for the CEOs to help describe the business in their words. So in your words, tell us what does Outdo do?

1:34So we are an AI role play and coaching solution, which helps you to simulate very realistic voice and video calls, right? With multiple video avatars, multiple voice agents, give you instant feedback after those calls. And then you can implement like continuous coaching based on your, based on the performance of your team, your reps on real calls, right? And this essentially helps you to drive your win rates. It helps you to increase your ramp up, right? So it's a tool essentially built for GTM team members. And we're particularly focusing a lot on, you know, sectors that require compliance. So whether it be insurance, finance, even enterprise tech, right?

2:19Where certain regulations change, tech changes so fast, right? That's awesome.

2:26Sam Jacobs: Well, tell us a little bit about sort of where you are in your growth journey. How big is the company? Where are your offices? Because I'm talking to you today in Bangalore, but I know you're based in San Francisco. So where are you? And you can answer that however you want. You can say we're pre-seed to Series A. You can talk about your ARR. But if somebody says, where are you in your growth journey? How do you answer that? So we're very close to 1 million ARR right now based in San Francisco. In between pre-seed and basically the Series A at the moment. but growing pretty fast. I mean, so we are doing 20 % month on month.

3:02At the same time, you know, we are going after the mid-market and enterprise companies where, you know, things move essentially slow, but off late things have been moving much faster.

3:10Sam Jacobs: Yeah. Well, and also if you're, they can move slow and then very quickly, you know, if you sign a seven-figure deal, they can go from zero to a hundred very quickly. So, and you have, as you're selling into the enterprise, you must be like HIPAA compliant or SOC 2 compliant, or, you know, do you have all of the certifications that you need to make sure that you're capable of selling into the enterprise? Oh, absolutely. So when we actually went out to sell to the enterprise, this is the first thing which came up, especially since some of our customers are in the legal finance insurance space. So this is one of their filter criteria, right?

3:45Whether you are SOC 2 and HIPAA compliant and beyond that, how are you storing the data? Is the data encrypted, right? Like, are you running your own LLMs or you're using something which is open or third party. So they are very finicky or very particular about these points. And without these points, I mean, they don't even consider you, right? Even for the POC and POCs have become so common. And without POC, you can't even convert them into a customer. So, yeah, so it's one of the most important things. And I suggest any startup which is actually trying to go after enterprise, build your architecture, go for compliances from day one.

4:19Sam Jacobs: Yeah, that's, I think there's so many companies that start in SMB and then they want to move into enterprise, but they don't understand it's an entire strategic shift. To your point, it's about data architecture. It's about privacy, compliance, security. It's not just, oh, can we get a meeting with UnitedHealthcare? It's much more than that. So this show is about a problem, a business problem that you've solved in the last one to two years. So tell us about the circumstances surrounding this particular issue. What was the problem that you faced? And then we'll dive into how you solved it. So, I mean, last year, you know, when we essentially started with the AI roleplay product, the problem that we had was particularly around the focus.

5:04So we were trying to focus on all the different sectors in the mid-market enterprise sort of category, right? we were open to all i mean we were essentially lead hungry so we were just like you know any customer comes we'll just try to make them happy just try to please them in whatever ways we can just you know if they want a feature we'll probably build it in a day and we will ship it to them and then they would ask for 10 more features and so on so it became more chaotic from the product side our marketing pages went a little messy because we had added so many features so many settings so many of these things right so it became overall essentially very complicated and what we saw post two months of you know onboarding you know after POC or even as a customer the usage would essentially start dropping they would stop responding then you know we were in a bit of a fix like we were trying to figure out what actually happened so this was essentially we when we actually sat down and we analyzed, you know, what are we going through right now and why is there a dip in the usage and interaction and so on, right?

6:16Then we came down to the real thing that, you know, we were just focusing all over the place, just trying to onboard any customer, any mid-market, any enterprise company that was just coming away without actually understanding how essential the product is for them.

6:32Sam Jacobs: What did, I mean, that's a very common challenge with high growth companies because you're getting leads, they want to give you money. It becomes very difficult to turn away money. So how did you think about solving this issue? Because it's very difficult. Yeah, so we actually had conversations with all the customers who were liking our product, who are giving us a lot of product feedback. And I think when you onboard a customer and when the champion comes you know calls every two weeks and they provide you with feedback you know those are essentially the best customers so you know we sat with them we tried to understood or understand you know how big of a problem are we solving like is the product really really essential can you not do without our product right and then we figured out that you know certain sectors in finance and insurance is where our product becomes very essential because you know when they like take let's take example of here for customers in the insurance space they hire agents every quarter or so right and then they have to ramp them up quickly make them aware of the you know the legal laws and and you know every state has a different law right so let's say Ohio or California will have a different set of laws for you know selling insurance for selling say life insurance or PNC, the let's say property and casualty insurance, they'll have different, you know, compliances and so on.

8:00And every agent has to, let's say, clear certification. And without that, they can't actually sell. So we realized that, you know, there are certain nuances like this, which make our product very essential, right? And then we worked with them, they started recommending three, four more customers. So that's when we realized that, okay, let's just focus on one particular sector. Let's try to nail it down because then you start seeing those compounding effects where, you know, customers are recommending customers and then they are recommending more customers. And that also becomes like a bridge to move your POCs faster, right?

8:36And get into the consideration stage for many, let's say, enterprise companies. Yeah.

8:41Sam Jacobs: Was it hard? Because I think, you know, one of the things that you probably had to do is sort of turn off some of your demand generation activities. Talk about some of the challenges that you faced both on the growth side, but also internally. Yeah. I mean, so we had written a lot of content to acquire leads and, you know, our marketing team, which works really hard, they had to, you know, churn out those blogs and pages. And then when we took this decision, right, to filter out certain customers and focus on certain sectors and so on, right, a lot of team, especially, and I can really relate and understand right um the the sales the marketing team they feel i mean they they feel it's very difficult for them to say no to customers their pipeline actually uh you know goes down a bit um they might also experience certain things um let's say a dip in incentives for a limited time and and uh some of the team members we had to tell them some did leave and and and uh i mean everyone we are respectful to everyone's choices because i understand right we are here in for the long term so you have to decide and take some decisions from the long-term perspective right so we had to re-architecture a lot of content we had to remove a lot of content we had to reposition our things right so this uh does so uh what actually helped us like we would do you know a town hall every every 15 days right twice in a month I try to be as communicative like this is what we are doing this is how we feel things might move forward you know there might be a dip but it is for a let's say a quarter at max and we did experience that dip for a quarter but then when things started working then everyone was sort of convinced that okay this is something that was a right decision from the long-term perspective, right?

10:33Sam Jacobs: I mean, all that actually sounds pretty quickly. I mean, when you first decided, okay, this current strategy isn't working, selling to everybody and being all things to all people isn't working, to the time that you started seeing sort of strong, consistent momentum from the areas where you're choosing to focus, including insurance, how long was that period from start to finish? Yeah, so in three months, what started happening was we started booking some meetings, right? So for the first month, we were essentially thinking about pitching about sectors about talking to customers. Second month, we built some conviction, we crafted message.

11:17And after the in the third month, we, we had a plan, a three month plan of sorts, like in the first month, we should at least start seeing some meetings happen. right of course some of our existing customers they recommended two or three customers which actually helped us to get them into a poc as well so it was a step-by-step sort of a process but this over the next three months we built that some sort of a conviction i would say with you know one meeting happening in a week then three meetings happening in one week for every salesperson right and eventually we were at a stage where we're consistently booking like five to six meetings in a week, right?

11:55And of course, the approach changed. I mean, we, earlier when we were focusing on VP sales, now we started focusing on the L &D folks, right? Instructional designers. And we were booking meetings with them who were internally trying to pitch to their L &D heads, they were pitching to their enable heads, element heads, and so on, right? But the entire thing actually took like six months but in after the first three months of iteration we started seeing some you know very early signs which basically um let's say linearly increased over the next three months

12:33Sam Jacobs: well that's good idea be careful about selling the lnd that's what i'll say because it's they don't always have the mandate for the budget so i think you still have to make sure you're you're pushing above the power line but i'm loving that you got traction So if you reflect on what you learned and what advice you have for other CEOs out there, particularly on this early stage growth journey where you're looking for traction, you feel all this pressure to put up the right milestone so that you can raise more money and continue on the path. What's your advice for people? So, of course, I mean, from the journey that we have had, and of course, this changes and it's different for each and every sector, you know, and with AI moving so fast, right?

13:18One thing I would just say is, you know, try to understand and spend at least few hours, maybe the Friday morning, right? Why is something working for you if it's working and why is something not working for you if it's not working? Because, I mean, we got a lot of leads, but eventually it did not lead to some sort of attraction, right? And that's how we probably figured out that we needed customers who actually need us, who found us very essential. And not just for the sake of it, not just because they had some experimental AI budget and they wanted to try out a few things and they just did not commit later on, right?

13:58So it's very important to understand, right? I mean, are you really essential for them? And then basically, and those numbers could look small in the early days, right? That would have essentially saved us maybe the first six months of the year, right? But, you know, it will basically compound and build, and it will build your story. It will help you build those modes and so on, right? Just going and going after everyone without a proper thesis would essentially confuse you, could confuse you. Of course, every startup has a different story in different sectors, yeah.

14:36Sam Jacobs: I love that. So let me ask you a question that we didn't prepare for, but I'm sure you'll be able to answer it. So you're in the AI space, you're an AI first company. Yeah. And we talk a lot about on top line about what, and you mentioned the word moat, you know, that very sensitive word. When you think about the moat that you're building at Outdo, given that, you know, you were, you use Claude, you know, there's the ability to ship product has never been quicker for well-functioning technical teams. So product feels like it's probably not a moat. What do you think of when you think about defensibility as you look to grow that will enable Outdo to maintain some kind of position that it's not so easy for a competitor to take?

15:26Sam Jacobs: When you think about that, is it vertical focus? What for you is the defensibility that you can expand hopefully over time? Yeah, I mean, that's an interesting question. In fact, you know, in some of the meetings in the earlier part of the last year, we saw product managers joining the call. And I would get very skeptical, like why are product managers essentially joining a call, which is essentially focusing on the GTMD members. And then over time, when we saw the pattern, right, with three or four more such meetings, we realize they're just trying to maybe copy and build an agent but when we work with our customers we realize that it's not just like building a simple agent right essentially the problem is to solve uh the entire workflow right which has multiple things for example right uh when a person let's say a gtm member uh comes on our platform they they practice you know a voice role play or a video role play and then they get this instant feedback which is logged into their lms right they could also practice all this in their lms right so lms is an integral part of their workflow now then they do their real calls which are also being tracked by outdo and which is also pushing all the data into your crm or your mcp whatever you're using and then the feedback again comes back right to the person who's actually performing this role play so they can continuously improve right so this is a very large sort of role play there are multiple contexts which are spread across different apps and we help to streamline everything right so your workflow your integrations and your value become a continuously part of the product with the ai models and everything evolving right you don't i mean if you are let's say insurance company or a finance company you don't want to keep on updating your models keep on updating your workflow keep on updating your mcps i mean if you're doing that you're spending you're spending 3x or 5x more resources right and you will be outdated in six months or so maybe you can build a a poc which might just uh work a mbp which might just work for two to three months but you'll be outdated in that so that's what we have seen with some of the folks who have come who have tried and then they come back to us saying that you know okay we want we want a solution to the problem right we don't want something that is just working at a surface level right so these are a few things we have seen of course you know brand and things all those things matter and are more important which everyone says but when we work with our customers in our calls we try to see are we moving that metric, right?

18:18And that's what they care about, right? And we're just focused on that.

18:22Sam Jacobs: I love it. Stenhal, we're just about the end of our time together. But before we go, we like to get inspired a little bit. And so we get inspired by what inspires you. It could be famous CEOs or founders that you follow, great books that you've read, podcasts that you've listened to, ideas. But what inspires you? You know, who should we know about that's currently having an impact on your professional career? So, of course, I mean, I follow Jeff Bezos a lot. Of course, he's right now retired and enjoying his life, but he wrote a lot of essays and stuff. You follow him on Instagram, I guess. So he wrote a lot of essays and stuff before the GPT era, which are very, like, they're the basics of building a business, and that's what I still believe in, right?

19:12So, I mean, I just follow those and everything apart from that becomes a noise, right? So, yeah, that's one person who inspires me a lot.

19:22Sam Jacobs: I love it. If someone's listening and they're inspired by wanting to train their team, and hopefully they're in your ICP or you won't turn them away, what's the best way to reach out to you? How would you like people to contact you? Yeah, so you can reach out to me over email, which is snehal at the rate outdo.ai or on LinkedIn. You can, of course, check out our website, which is www.outdo.ai and book a demo and I'll be there for you. That sounds great. And by the way, folks, it's outdo with two O's. So it's outdo with one extra O dot AI. And it's snehal at outdo dot AI if you want to get in touch directly.

20:01Sam Jacobs: Snehal, thanks so much for being our guest on Topline Spotlight. It was great getting to know you a little bit. Thanks. This was fantastic.

20:14Sam Jacobs: Okay. And against all odds, you're still here. look if you want more Topline check out the Topline newsletter at topline.beehive.com beehive is spelled weird it is b-e-e-h-i-i-v.com topline.beehive.com or if you're a video person because video is great check us out on youtube topline-media is what you want have a delightful day everybody

20:46Thank you.