Gabriel Paunescu, CEO at Naologic talks about his experience of opening 7 startups at 3 different countries and raising money for some of them. He talks about creating a useful and cheap product and how to start new business in a new place or even a new country.
Gabriel's company, Naologic: https://naologic.com/
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And today as a guest speaker, we have Gabriel, who is currently the CEO at now a logic. Gabriel has thirty seven companies in three different countries. So, today we'll talk about immigrant founders once again.
And specifically, how do you create a start when you just move into a new city, or even to a new country? So, Gabriel, Alaska helped by giving us some background on yourself and on now logic.
Hi, constantly, thank you for having me. So, seven companies sounds like a lot, but there's a lot of failure. There's a lot of failure in that. So I pretty much. I started my first company at eighteen.
I built a game hosting system and, I don't know, I just always had a had a thing for computers. I didn't go to college because it just seemed too boring for me at that time.
So, I just went from technical challenge to technical challenge and I started the first company was alone. So I was a solo founder. So that was pretty hard.
But at the end of the day, I built the entire system. So, it wasn't that big of a deal back then there's quite a few years ago.
There was no real angel or VC even even Y, Combinator has haven't started yet. So there wasn't a texting. You just borrow money, buy what you need, make your servers.
And if you can do that, you're kinda stuck. So you have to go go and just get a job and do what everybody else is the one. So, I kinda had this rebel side and I didn't want to do none of that.
And on a funny story, actually that company, I was pretty successful we got in the first year and a half. I think we had almost two hundred customers. So that was a lot for game hosting.
And the thing is, the whole the whole company ended, because of a truck, there's a truck who passed by my street.
And it actually, it actually cut the fiber optic wire because the whole data center was in my basement. And then the,
by the time I got back online and I talked to the service provider,
and they fixed the cable,
it was like,
something later by the time I got back,
none of the customers wanted to to even hear about us.
So, that's that was pretty much the reason for failure there. Yeah, it was pretty painful. And then then I, then I moved emerging from Romania and after that, I moved to Paris.
We're actually Co, founded an E, commerce medical E,
which did pretty well and that's the,
that was the first time that I've really seen fundraising and real investment at the early stage. And it was pretty odd because our first investor who actually brought the other investors.
He became the lead, he was chasing us like, we, we, we my partner just bought a small ecommerce that was failing it was like, five thousand dollars or something like that, just to have a domain name and something up and running.
And then this investors started chasing us basically.
And he wanted to give us money, and we were like, wait, but we haven't even figured out what we're doing yet. I mean, it's an E, commerce it's something, but there's still a lot of things to do.
So, eventually we took the money, and that worked out that actually worked out pretty well in total over the next five years.
There were raised over two million euros there in most rounds and there wasn't a VC actually.
So, in that two million euros, there was just a lot of small investors, former executives companies that we were working with. We managed to get other founders on board that have different types that provide the different type of medical services.
So, it was kind of like a bigger angel network that we pulled off because the VC scene in Paris was almost zero. I don't I don't, I don't know, I, I didn't know any of them and I don't think there were any of them.
Yeah, so I went on and I, I exited that company because it was getting bigger, but it was also getting more boring.
So it was a lot of there's a lot of paperwork a lot of bureaucracy that you had to do.
So it wasn't that it wasn't that interesting to me anymore and that's where I started a company in Silicon Valley for the first time. It was twenty and twenty fourteen. I Co, founded an I. T.
company with somebody I met online of all places and we we started a we started the company and we're pretty lucky because he had exits.
He was from there originally he had exits in his previous company, work with big funds, like sakoya and others in his previous companies. So that whole network thing going on there, right off the bat.
So that was pretty lucky. That's how I first started seeing and understanding is that okay so this is how it happens. This is these are the terms that you get, and this is how you talk to people and all that stuff.
So, with that company, it ended up being a bunch of angel investment, which was pretty easy and later on, it was a bit of VC as well. And.
Throughout that that learning experience was the fact that even if you are known for something that you did a couple of years ago, that doesn't mean you're gonna be successful again.
So, that was very weird to see from the inside, having all the connections, but still not taking it all the way. See, so, that was the me that was, that was a. there was a bit fascinating.
And that was the exact opposite of what I thought and what I hear a lot of founders thinking is like, oh, I don't have the network. I can't make it, you know, like, I can't make it in the US work and all that stuff.
No, you can make it pretty well, even without the network, if you build a cool product and, you know, you know, what you're doing and you do it better than others. You have a very high chance of doing that.
And after that, I went on to build a small company called Satoshi, where it was pretty cool. You could buy Bitcoin with a credit card in the US.
But we got it was very expensive to keep the lights on due to legal and.
Eventually we had the clothes because Bitcoin had the down here. What was it? Like, two, three years ago. Bitcoin had a down year and it was very hard to fight that. It was very hard to find extra investment.
We had three, three, four hundred thousand dollars investment, and it was very hard to find the extra money and it was very expensive with the legals and stuff. Bitcoin is still really complicated.
The process any sort of payments or like, keep, keep, keep your keep the Bitcoin of your customer and custody and all that stuff. So, that let me do what I always wanted to do for the past few years.
I kept thinking about it, which is now logic, which is a local tool for B, two B companies.
So B, to B, companies can make small apps to collaborate with vendors with, with work with, with their workforce would employees without needing a developer.
So, it's an app store is basically like, our own app store where you pick a bunch of apps and you launch, or you launch your own instance and that's it. It's your data. It's your source code. It's your everything.
The journey is pretty fine. I mean, gain your startup destroyed by a truck. Literally, that's just epic. I love it but first question that one start here off is the University.
You mentioned that he didn't go to the university and I went to really pull up on this if you could go back in time to that time, when you were considering going to university or not would you change your decision now?
So, would you rather go to university, or do you think you made the right choice there? So, actually, this is a bit, which is gonna sound weird but my dream was to be a feature never wanted to be an entrepreneur or less start a business or whatever.
I just want to be a teacher and honestly, no, like, there wasn't any point in my career. In the meantime I didn't go through the whole thing.
In the meantime I was a contractor a bunch of times out of money or the contractor. I'm, I'm a coder. That's what I do,
but never in employment collaboration whether as a CO founder or working for others,
I've never had an issue saying,
we cannot do this because you don't have a university degree that never happened.
I never try to work obviously, if I would have tried to work for Google or Facebook, or whoever probably would be a problem, because they have their own set of rules. But otherwise, no, and I work with pretty big companies.
I did a bunch of consulting projects in the U. K.
I never had any issue and sometimes, like, so sometimes I feel that I can learn things a lot faster because I'm not tired because I didn't get tired in the University.
Yeah, you just learned way too. Many things, which don't don't serve you a lot. And I think the, the biggest downside is not the amount of information. The biggest downside. You don't learn how to learn.
You know, you just, you just try to be the best hard drive that you can. Where now the world is all about search, you know, you don't you no longer need remember absolutely everything. That's very good point.
And I think that they should actually create classes that teach you how to Google stuff, because that's important and being able to formulate your thoughts into, like, Super short sentences. That's cool. But we're not going to get there anyways. Yeah.
Let's move on to the major topic of today's discussion. No, starting a new company. Completely new place based on those seven starts that you've created. What's your major takeaway from those seven.
So whenever you go to a new place, you have to build your own network if you have somebody fine. If you don't have, you just gotta do it.
There's a lot of there were a lot of events before, and I met a lot of people, but you have to understand that ninety nine percent of the time is gonna be wasted.
So building a network is very time intensive. And also, you cannot, you cannot just select people by how useful they are to you because first of all that's visible. Secondly, you're an a*** if you do that.
So it's kind of it's kind of a mix thing between trying to create meaningful connections.
And actually, actually building a network what why I was lucky is because I'm by nature I'm an introvert so I don't have a lot of patients in social situations. So I just.
Leave very fast or drink and when I do, when I do connect with somebody, we stay connected for years, even if we don't if we no longer live in the in the same place.
And even if we're not hanging out, like, every week, we still kinda, we're still kind of remain connected. And there's a lot of people that I can lean on for help. And that's like, that's the biggest take away.
Just create meaningful connections.
And don't be one of those serial networkers that has like, a ton of business cards out to everybody, and initial note, special note for Silicon Valley.
Forget about events like the most boring and useless waste of time was attending events. There were on Meetup all across the Bay area,
ninety percent of the people they're there to sell you something that you never asked for and or pitch you a weird a** idea,
which they haven't even formulated correctly in the head everywhere else London and across the US.
Yeah, it's it's pretty interesting. You meet some pretty cool people.
That's perfect. That's perfect. Just like great advice and it's so relatable.
I mean, it happens when you go to those events and people just literally push their phone into your face, or literally put their cards into your pocket. I'm like, wait what the H*** is going on.
Yeah, greed buys great advice. I mean, I think that if you're, you know, an early entrepreneur, there's always a better way than just actually know there is not always a better way than just me up groups.
So, if you're just starting your weight start with the meet up, it's finding a lot of weirdos.
But if it's first of all, it's fun and you have those five stories, but you might run into someone who who's used at one.
I have a I have a definition I call it look for the people who are lost like, if you look around, I was looking around the searching for people like me, where, if you look closely at their face, they're just wondering what the H*** did.
I do wrong to be here and those are the people that you want to talk to, because with through some weird a** coincidence, they're, they're just like you are through some weird coincidence because, for example, I never had business cards. I don't make business cards.
I think they're stupid. Like, if we're gonna connect, we can connect with our business cards. Right, right that's very good point. Actually I was literally following the same exact strategy. I was looking for people who are just saying,
they're not talking to anyone and feeling like,
what's up but yeah,
let's move on and talk about the major topic over the whole in the whole which is fund raising.
So, looking back at your fundraising processes across all the different companies, what's your major takeaway from? That's what's what do you think was your major mistake? And what do you think was your major accomplishment there?
Well, to sum it up in the world of the words of some somebody, like very much with Carlos from the US for our Ventures, it's team team. So that's pretty much that pretty much sums up the whole investment scene.
It's all about the team and most founders, they go with look what we did look what we did technically, and without a business model, or with a business model that takes way too much money to build up.
The talent needed to execute or, or something that I, that really annoys me is without the homework. So, there's as a founder before you even go out and fundraise, there's a lot of things that you can do
You can study your competition very closely you can put up, you can put up some fake landing pages and pretend to be a customer to them. So you get their proposals and you see what they do.
There's a lot of things that you can do and cost zero money, you can call people for that, say nobody calls people anymore.
And the thing is, when you, when you when you, when I used to speak to founders, we were always talking to investors in the early days. We're always talking about the product is the product that we want to build and there's gonna have this.
And then it's kind of add that, and you just kinda end up in this feature diarrhea of, like, what the next feature is going to be the one that gets us all the customer.
And then the next one of the next one, when, when you never looked closely at your business model, and you've seen that your expenses, a way to hide, ever make any sort of money ever.
And also something stupid that I did is take money that's just as stupid as not having a business model. It's money is the fastest gateway for you to do stupid things a lot faster.
So, the, what I mean by that is, you have not.
Thought it through, or discussed it with other founders, or try to see what's on the market. You did not do enough research when it comes to customers and talk to enough customers.
So there's many many things that you should do before taking money. Any, if you haven't done them, don't take money. Just go work a side job. Whatever you called. Six, seven hours in the evenings.
You get half a weekend free one day's enough. You don't you don't have to take the whole weekend and you don't need money in those cases. Right?
And also something that that was a mistake in the past is not being brutally honest with the members of the team.
So, I've had cases where I had teammates, which I knew, they were week. I didn't know before we became teammates, I kind of saw it along the way, but I didn't address it fast enough.
And I didn't address it hard enough because in in the back of my mind,
I was like,
they notice and they're gonna change they're going to struggle they're gonna change but when you're building a startup,
there's no real time.
To learn, like, you gotta learn as you sell, and you gotta sell as you learn. There's no real time for you to go back to the drawing board and learn business or yourself half an MBA. Just for the sake of doing this.
There's not enough time for that. So brutal honesty is is needed early on. That's perfect. And I love the term feature diarrhea. I love it.
I'm probably gonna call the whole episode actual one to follow up really?
On that, you know, addressing the week teammates, because I've seen that personally, you know, that happened to me and I failed as well as a leader and I was curious, what would you recommend? So let's say, let's say I'm on your team, right?
And you see them performing really poorly I just lack some knowledge in some fields or, you know, I'm just performing poorly for some reason what we should do.
So, I would put a table together with the skills we need, and the skills we have, and next to each table, I would rate it from zero to five.
And the end result by getting those together, let's say we need programming. We need marketing. We need we need investor reach out. We need public speaking, because obviously you're the CEO you need to do some public speaking.
We need pitching. So you got to practice a little bit, you're pitching and we just grade that from zero to five. Now, there's a trick about it.
At the end, you get the strength of the team, but there's a trick if there's a zero everything goes to zero, because skills multiply. They don't add.
So if something is a zero, then we got a big issue. So we gotta shuffle up the team.
We've got to find a new team member, or you got to approve within a reasonable time span, two, three, four weeks that you can read and learn the s*** out of that topic and get better at it.
But like, in a really short time maybe it's doable. Maybe, it's not maybe it was just, I don't know, I've seen a lot of people freeze up when they need to pitch. Maybe it's just some emotional blocker that you can get through if you practice enough or it's marketing.
And is something more difficult that you can't really comprehend? It doesn't really fit with your personality and then we just shuffle the team. We look right and left if we can get somebody else on the team. Fine. If we can well, better to not waste our time.
So, basically, if you needs a, let's say.
So, basically, when you read every single team member based on those four or five criteria, that you mentioned, and then you kind of see if you're adding up to five, right?
Or no, it's actually zero to five on each skill. So, how strong we are as a team marketing right? Let's say, you're the marketing guy. Alright. Let's look at your past activity.
Let's look at results in your previous company whatever, and let's come up with a great, let's say three. Right?
But at the same time,
you're the CEO,
so let's look at your public speaking record,
and let's look at your pitching record and we see that you can speak publically because you turn red and you cannot do a cold call because you kind of lost lose your words because of emotions,
or the moment you have a zero in the table. Everything goes to zero.
Because if one of those components is missing, then the startup, the chances of the startups succeeding, they go almost zero got it. So to wrap it up.
Basically, if I'm struggling with the cold calls, you will try to we will try to get me on tracking within three weeks. And if I don't, I'm just gonna move on right from the top. Yeah.
And if you and we can try to find somebody. Okay, maybe we need a third Co founder right? Let's with sales experience.
Let's look around if that happens, find that happens but otherwise is the same problem is programming if you don't have a coder on the team, in your product is very technical, right?
On the one hand, you say yeah, but I can raise money and higher quarters. Yeah. But that means that in the periods that you're gonna be without money, which there's quite a few of, em, nobody's coding right? Because nobody's paying, therefore, nobody's coding and that's an issue right?
And also, for the companies who are less technical and any sort of coding helps that's that's fine. But if it's very technical, just like a, I see a lot of startups with a, I would do this way. I, this would they are.
But nobody on the team knows first. Yeah, exactly. It's like, okay, so it's gonna cost you half a million just to get your MVP, right? Because you got to hire data scientists who has some experience they're not gonna be some dumb a**.
So, you need somebody who actually knows what they're talking about. And the second problem is, how are you at managing a situation so, for example, let's say, I do marketing. I'm not a marketing expert.
I'll give myself one out of five and marketing, but I know how to look at some analytics. I know. I can research keywords. I know I can find some competitors. I know how to write a blog. Know how to do all those things.
I'm not the best and eventually I'm going to hire somebody, but it's not stop. Right? So, none of the things that need to move forward are stop at zero because we just look at each other. We can't really do it.
Got it nice that's now I could have understood that and that's basically what criteria for the CO founders only at this point, right? Yeah, yeah that's what they can do.
And most importantly, flexibility is one more thing that I found with picking Co founders is people who've stay too long corporate. They, they're they have a very hard time adjusting the startup life. Oh, yeah.
If it's one of those, if it's one of those startups where somebody famous or repeat founder, just make the next it, or just leave the company and boom, all of a sudden, they got twenty million in the bank from some fun.
Yeah, you can hire them because you're already pretty big you can hire, but otherwise it's it's really tough. It's really tough.
And I've, I've the only way that I've seen it being tested is if we start working together, like, I've done several times, where are we, you know what we're gonna build a company. We don't sign anything. We don't start a company. We don't incorporate.
We don't we start working together right? And, I mean, in one two months, you're gonna see pretty fast if, like, you don't have to quit your job, but you can see pretty fast. If this is something that's gonna go right?
Or is it happened to me a former Co founder was asking me or I, I need you to hire me three people and I was like, I need you to to get five customer conversations because you're supposed to be sales.
Yeah, yeah, but I need this for research. I need this person for account executive of what are you talking about but you need this pick up the D*** phone and call eight hundred people and get five of them to talk to us.
That's that's that's perfect description. I absolutely loved the approach that was starting to work together with potential Co, founder, just to see how they react to issues. That's awesome. Perfect time.
When you don't sign anything, they're gonna be the ones who are gonna who will want to walk away, because deep down. They're seeing their falling short and they notice is not really their thing.
So, they noticed that it's a waste of time for them as well. And they kind of feel bad towards you because you're, I don't know, coding, marketing, selling whatever it is that you do and they're just stalling. You know, they're just June.
That's perfect approach. Absolutely. Love it. And let's follow up real quick on the thing that you just mentioned, which is called outreaching of cold calling cold, reach out. What's your best? What's your best practice that you've tried in the past? I've worked out.
Maybe, it's called coli and it's in terms of reaching out to investors. So if you don't have a good warm intro to investor, what's your personal approach to reaching out to them?
I have never called called an investor, just customers I want to try like, I know they are. I know they're gonna be annoyed, but cold emails, still cold emails work pretty well for me.
But you just have to do your research, like,
really research look at that person see what they've invested in and see what the fund invested and make sure you reference one of their investments and why look at synergies between their portfolio companies and your company.
Because they're gonna look at the same thing. So if you, if you're proactive and you do it for them and say, look, these two companies, they fit perfectly we want to do.
And this is what we wanna do, and we will see perfectly in your portfolio, and also just understand that from many standpoints. A lot of VCs don't invest in competitors.
So, if you're a competitive might be wasting your time reaching them also, you'd be surprised that the number of really big VCs and, I mean, really big who answered the cold emails.
Like, I've had over thirty percent success rate and that's huge for anything but it was at least one hour research per person. So, even looking at their background looking at their reading list.
Because there's a lot of there's a lot of information out there. Like, you'll find that if you look for it and also trying to reach out only the funds who have our type of investment and right now we do enterprise investment with the early stage enterprise investment.
There's a lot of funds who say they do preceed, but it's a total lie. They don't, they just want to find the market. Yeah, because, like, I talked to a few and they were saying is, like, okay, we do precedes and I
asked, okay why is there?
No, preceed company in your cap in your portfolio? Well, how do you know there's no breezy company it's like, well, I've seen your investments and they're all like a hundred million and above and I've seen your credit above.
So, by definition you don't do. Yeah, I mean, we're just waiting for the perfect founder. Well, your fund is like fifteen years old.
You've been waiting for a long time to get Pre approach and by the way I want to pull up on that as well. So, how do you find those investors?
You know, who fit you personally do use some specific service crunch base to pay that annual fee of three hundred something bucks? Is it worth it? Or what kind of service would you recommend? Founders?
To me, nothing, Twitter, so on Twitter you can spark up a conversation actually, but you have to know how to give thoughtful answers and you have to know how to build thoughtful content. Not just be a salesperson is like I'm selling this and selling this.
You gotta know how to contribute and the Twitter community is pretty active and in the Twitter community, there's a lot of investors who, and a lot of big founders who say, okay, post your one liner here. This happened to me a couple of time.
a founder said,
post your one line there,
they were back by Andreessen Horowitz,
and they just wrote on Twitter,
put your one line description here and I immediately got cold emailed me from,
five investors just by just by putting the one line are there because they have an audience, right?
You don't have an audience not yet. Let's say you have a new Twitter account, you follow the people that you like and some people are gonna call you back or try to find your friends and contacts and all that. But.
You find a lot of opportunities. There's there's there's little things called investment, matching tools, which are just in some Google sheets.
I think I got, like, ten investors from one of those and I did end up meeting some, pretty cool funds. Also. There's a lot of investors who scour product for products and do after they see on product.
So, that happens along. I never paid for crunch based. I never paid for LinkedIn thing. It's a waste of
time and also crunch base.
If you look at the numbers and who updates it more later stage later stage yeah, you need warm intros. But if you have a company and you're making, I don't know, two, three hundred K revenue already right?
You're growing and you're close to seed. You're probably gonna already be in a network of founders, because you might work together, or you might have collaborate on something, or went to the same meetings or stuff like that.
Like, you already have a founder network, and the best intros are from founders. So, if you want to really be successful in finding investors, find the founders that, like, what you do.
Alright, great advice. And I've been told to use Twitter so many times, but so many different people both on the investing side and on founder side. I still don't use swear.
It's just something if they're stopping me from anyways, I have a person on my team on fundraising with you who does tours.
So, hopefully he catches all those opportunities, but we're moving onto the last question of today's app as a, which is a call to action. So, what's the one thing you want to lose her to do? As soon as the episode is over.
I want you to go and work on your pitch,
make sure everything has numbers in it,
make sure your business model works and if it's impressive enough,
you are gonna be surprised how easy it is to get investment without having a network.
Very good point. Yes, if you have metrics, it doesn't your network really doesn't play any role here. So great advice. My call to action will be go to the descriptions. This episode.
I'll leave a bunch of links that April mentioned, and also I'll leave a link to the form that you can fill out the form if you want to get mentors funding or something like that. And by filling it out.
Basically, I'll take personally look at that and decide if I can forward you to one of the mentors in my network, or to one of the investors who might be a good fit for you. So it's completely free somebody's doing for fun to help you out.
So, definitely go there, check it out and have a good day.