Aug. 13, 2020

Going through first stages of building a product without fundraising, and getting acquired - Mayur Motgi on Propl's acquisition.

Going through first stages of building a product without fundraising, and getting acquired - Mayur Motgi on Propl's acquisition.

Mayur Motgi, the Co-Founder and CEO at Propl, acquired by Jobox.ai explains how he managed to bring his company to an acquisition with no funding raised and he also talked about who should consider fundraising versus bootstrapping.

Mayur Motgi's LinkedIn: https://www.linkedin.com/in/motgi/

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Transcript

This is fundraising radio and today's guest speaker we have and Co, founder at that was acquired by Joe books and this episode will talk about this acquisition how it happened. 

How got to this acquisition and what mercies in the star world right now in terms of fundraising your independent Meyer allegedly called by you're giving us some background on yourself and on profile. Sure. 

Thanks. Constantine. So, a little bit about myself. I'm murky. I have been in the Bay area for the last ten years. 

I've been out of six different startups got acquired and one of them actually went up the last two years. 

I've been spending more time with small businesses and independence service professionals, and trying to understand how the well, 

they're doing in their business and how how we can help in some way advising and getting them to grow the business and acquiring our customers and spend a lot of time on Metro teaching these upcoming 

students of cosmetology and aesthetics and makeup on how to get themselves up their game show their skills promote themselves and in some way acquire those customers. 

And one of the things we realized we talked to. Most of these people was, they had enough time balancing the time between managing their business and actually providing good tell this. So, and that's how we thought about proposal was. 

Why, why don't we build something a product which actually handles the business side of it? And so that they can concentrate on adding more quality services? 

And so we can envision this as being an office manager, which handles most of your appointment scheduling and the communication between customers. And in some way provide you do a timeline of what's your customers have done in the past? 

And how, when they will be available for the next service, and how should communicate to them and then, in some way to help in providing them estimates and invoicing skin and take payments. 

Got it, so my first question is, you know, it's fun originally you? So my first question won't be about fundraising for prople. I know. You haven't raised money for it why is that? Why did you, why did you decide to not race? Yes, yes. 

So, I've been lying if I wasn't, I wasn't thinking about fundraising. I, I definitely was so and but the question was, what time should you raise? Right? 

And this is, this is very tough for startups to decide when a lot of people industries, and then get doing before the right this builds anything they go and raise money for us. 

It felt like, we, we kind of come from engineering background and we can build things, which sometimes can be, don't fall, but we wanted to build this initial and get some sort of traction. 

And then,
once we have this this free service, think about some, 
a premium service for them,
in terms of getting new customers and all that stuff and for that, 

what would you we will do is we will leverage the appointment information we have gathered from the app itself so we were, 

we had build the MVP,
we have a decent amount of traction, and we're seeing this information. 

In fact, what I was going and sitting in these beauty salons and and being the, there's the person at the reception itself and seeing what, what does the schedule look? Like, how much time does they have if they say there's a five hour service five hours or eight hours and. 

So, keeping track of all those things and seeing where are these steps and how can we can eventually do that and that's why we went actually upscale. Oh, so, Joe both can really early on, right? Yeah. 

So, we were there for almost a year and a half, and we had built and we have people using it and I can go into how we actually go to usage. Let's talk about that. So, how did the acquisition happen? 

Did Joe box just came in? 

Did they just shoot you a message like, 

hey, 

you're doing something nice let's talk and then got to the acquisition point, 

or reached out to them yourself yeah, 

so it was a coincidence that Jim who had worked for a start up, 

and I started working in a couple of months back, 

and we were talking back and forth at that time and and he told me about jokes and I was like, 

this sounds you re, 

this version and there the product they're trying to build. 

The the biggest difference was the demographic users they were going to was slightly different, they were more interested in the service professionals, which actually come to your house for service. 

And so the plumbers locksmith sent the crash assessment,
the carpet cleaners,
where the one switch they were concentrating on and their workflow, and we were more interested in users and or businesses,
which are brick and mortar,
and people come to them and get this done. 
So. 
Jim told me about this and I was, I was more curious on how had become what it was, because it was at a hyper growth stage and had built a big community of users. And then we just using that community to get an acquire more and more users. 

So I had a few questions for Jim and Jim. Why don't you come to the happy hour? 

And we can, you can talk directly to the people there, the operations folks, and even to the farmers in here more and how they would they, they do things and how they actually build this specific thing. 

So, I went to their happy hour, got, introduced to shy, who is the CEO and Co, founder at jobex, and give him a a short demo of what that looks like in. 

And his first reaction was, hey, this is our roadmap for two thousand and nineteen this is this is exactly what we want to believe for two thousand and nineteen. How can we work together and it wasn't about acquisition or the time. 

It was more about, 

like, 

how can we mutually benefit from each other's in some way, 

to get more understanding of how things are and, 

and in some way, 

like share each other secrets and what so, 

and that's how, 

and he and the the thing I wanted and foremost from him, 

at that time was like, 

tell me how you tell me what your product looks like stuff and he was is very, 

very, 

very, 

very open. 

He himself had been through the stages where they had started early and they were, they needed other people to help them out. So they were like, what do you need from me? 

And we were, I was like, I would love to hear more about optimal people and get an understanding of things and he was like, Here's your box it's open to you and you can come in walk by. Anytime you can talk to anybody. 

You can sit in our meetings, 

you can understand how things are and at the time it wasn't very clear to me that it's so small going towards the acquisition because it felt like it was going more towards the the side where we would I would get more understanding of them and then, 
in some way, 
help them get some of these features into their product. 

Right, nice. And speaking of the earlier stages through which job you said, you know, went through themselves, I'm curious. How did you managed to go through those early stages with no funding? Yeah. 

So, I think we're what we knew that if you had to build something, we didn't need when we need money to run our servers and all that stuff. But we, most of the team will engineers and all that stuff. 

And then, so, and I was doing most of the operation side of it and the businesses and all that. So it wasn't there wasn't an urgent need for us to raise money. And what we had we were very clear about this. 

We're gonna not gonna build a basic stuff and and then get see and hear more from the customers and tell them ask them what would they would need from us to make this more interesting get more information from them. 

So, it wasn't, it wasn't that bad in terms of getting to where we were, but we were soon getting to a state where we're saying, hey, now we have this information and we can do a lot more with it. 

So, 

should we raise more money and think about how we can get into more of that stuff and then get him build a bigger product and how see how we can actually do a user acquisitions customer acquisitions, 

which can go unconnected nice. 

Yeah, that's that's a great station. That's I assume that's where Joe box came in on that query rate. 

Yes, 

and so at that time and if if if I could talk about how the acquisition went and all that stuff and I think so as I spend more time in their offices, 

and I have talked to more people, 

it kind of like, 

I kind of understood what what they were talking about there's more of talking about, 

hey, 

what, 

if agile boxers to get a, 

what? 

If we all these features, which you have and profile was part of and what if you had a decent on a roll in the entire thing? 

So, until we actually got to the stage where I had said, hey, this is what I think we should do kind of a thing. 
I was more of conceptualizing what, what would happen if proper then what would be the next step and what would be the things without actually thinking about the acquisitions. 

And how did the acquisition itself happen? So, did you one day the, the founder Co, founder of jetbox just came up to, you know, we see that says Corey merger. Let's. 

So, let's acquire you or how did they get this you know, this specific proposal? Yes. Yes. 

I think at that time, the, the main question for shy was, how do we get integrate this product together and, and he had to be upfront and say this is what we think should happen. 

So, Chad, and I went on a had lunch together and went for a walk and then came back in the meeting and said, okay, this is what we think you and your team, and a great fit for this company itself. 

And obviously one of the things you have to give up is the use that you have right now, because we want to concentrate on on our segment of users because we haven't completely done what we want to doing there. 

But, I'm speaking to you more and understanding of what the vision is it feels like you and I are both kind of agree how there should be some way. 

So the question is, what, 

if you handle a decent fit in terms of scheduling and onboarding and stuff and give you that freedom to continue and I'm waiting back on that side itself and and, 

and be part of troubles itself.
And and at at that time, it was all about. 

My mind was completely racing and it was, I'm just trying to see what would we do with this company, which has. 

Has these amount of resources, and we can actually use those resources in some, something really interesting for their set of users. 

And and at that time, the question,
for me,
was, 

should I wait for her to, 

or to get to where drop boxes and then start thinking of what the next stages, 

or actually, 

actually accelerate the vision in some way for dialogue in combined way and start from thinking about what next and that then that feeling that potential this felt so much of 
interesting to me, 
and having spent a decent amount of time to think about it just felt right so we can, I took some time but after that I said, 

this makes complete sense I'm super excited and really grateful that you guys were being so open to me terms of understanding what what toolbox doesn't how it as it and super excited what comes next. 

Well, that's really nice. And the next came acquisition and you're still working with jobex right? Yes, yes. What's your what's your older? I'm just curious. 

Yes, so right now, so they have a product which actually has some more, or for these service professionals itself and then there are different aspects of it and how they get jobs and they get completed, go to the customer and get stuff done. 

And we had the most of the things related to that scheduling, providing an invoice and estimate actually going and accepting payments with, on onsite itself. 

And also, in terms of onboarding and making sure that we have that I can people and doing what's doing the user wedding and making sure that these people are the people they're saying if they provide that documentation for us. 

And so we can above that aspect of the whole thing. And, and it's been great. It's been amazing because we, we feel like things would have been a lot slower if we are, we're doing the same thing. Right? Right. Great. 

I mean, congrats on. The acquisition sounds like it went really smoothly and really organically so really nice work there. And here I want to move onto. What happens after the acquisition in terms of you personally. 

So, on our preacher, you call you mentioned that you were doing some mentioned as soon as well, can you talk a little bit about that? Yes, so I've been part of the stand for the angels and entrepreneurs group. It's happened through that being doing some angel investing. 

And being part of missed and exited Ventures and done being the mentor and master and in that case also. 

And I think the emphasis is again is more on advertising and connecting to people who have who can benefit from my experience in in a lot of ways. 

And so, and in the past, sometime also seen that, they're not one advice, and we want to get to stage where they can leverage. Most of their existing tool sets. 

For me, it's more of how I can be of help to then how I can actually advise them and if required invest in some way, and especially when they're in the early stages. 

So let's talk about current inquiries. So, right now, when this happens, epic is up there, no one really knows what's gonna be at the end of the spend dynamic if it's even gonna end what do you still invest? 

Or do you just wait for the ducks to sell? So what's going on? Yeah, yeah, so so one of the things which is common between companies like Slack and WhatsApp interest, Amsterdam and Rubin and Venmo is the other raised on launched into last recession. 

So, it would be, and if we finish with me to say that, he's not gonna do well after they did.
And so, what we are, obviously that we're doing more diligence and I'm trying to understand what 
companies are out there and talking to them and helping them. 
And seeing playing the waiting game and saying, hey, I really like what you have, but I would want to see here and we can help you get there. We can give you these kind of resources and something to get to get there. 

And if we feel like, you are doing those steps and all that stuff, we'll have to. Get get it right. Nice. 

So, while we're for your call again, you mentioned that you're looking for at least a really sound business model to to invest money in that company. What does it mean to have a sound business model? 

Yeah, 

and I think one of the things which has just become pretty clear right now is everybody's thinking about consulting they are, 

they will want to extend there and want to think about how they they can survive in some way, which is,
which is okay but I think that they should be thinking more about how we can try to make it. 

But the one thing which comes like, front and center normally, when you're trying to raise money is how you going to generate revenue. Are you gonna make sure that you are not playing this game just putting a lot of cash and at some point in time. 

So that has to be the first thing you think about. So, in terms of deciding on, what is your business model? Why you why your users would use it and whether they're ready to pay for it is becomes more and more critically. 

Right so another thing that I personally heard a lot in terms of, you know, investors being willing to invest versus not is if the company is doing something essential or nice to have, as they say, how do you so, what's your personal view on this? 

Can you give me a couple of examples of something essential and something nice to have so yeah, so I think I was just thinking about this. What if I had to start right now and what what would be the biggest difference? 

And I think and the reason why would be it might be in trouble right now, because the, the businesses which we are catering to are struggling right? 

Because, yeah, people don't want to go to salon right now we don't want to go and meet people. So, but the, what I could also think about in that time is people, at some point, want to go to get ahead. 

They want to get their nails done, but they want to spend as little time possible in the office. They want to go in there. Not read it all and get it then. 

So, what makes that critical the the way that we can that make that happen is if we have a appointment system, when we are very clear to the customer from the beginning, it's a. 

Your appointment is at nine am you will be out of there by nine thirty we will not make you. Wait it won't be more than two minutes. Wait and you will be on as soon as it's done and everything. So this is just an example of how we can actually catered the thing around it. 
It's a one of the things he has done right now is in all their business that they have a bad one saying, we are doing these things. We have sanitizing similar to doing the same thing. 

They're saying that hosts are clearly saying that we've cleaned things and making it safe for you to come in and stuff. 

So though,
the former example,
I mentioned it for profile is a part where you're being proactive about the changes, which is happening in the society itself and saying,
I'm gonna leverage that and build things,
which will take advantage and and provides services,
which are becoming more. 

And more critical, the latter is more of like, making sure that my existing the users who are on the business, which are trying to prior to service on my platform, they are giving enough information to the customers to make them safe. 

I'm doing it for. Right right. That's that's a pretty good description of how this can. 

Transit themselves and adjust themselves to the parameters so thanks for that and go back a little bit towards your personal preferences. What do you think are the three must have points on the beach deck especially now during do you think one of those must have points? 

Must have something to do with current buyers are not really. 

It would be nice to talk about it, but I think for me the three, most important things and this hasn't changed too much since dependent. Is it the first one? 

The most important thing for me is the team seeing how each team member contributes to the success of the product, or will contribute to the success of the problem. 

So, if we see a team, which can actually has all the pieces required to build this thing, we feel like yeah, they are going to there and they have the recipe for success we will continue, they will continue there. Right? And they have the best chances. 

I mean, we, we can never say anything for sure. But at least we know that they're having a successful. 

And for the second and third part, I, I usually think of it as starting a company, like writing a book when you first think about the first chapter and think about last chapter. 

So, and when the last shopper, essentially, where, what is the grand version? Where would this company want to be if we, if we were successful? What with the success looking for? 

And then you,
once you have that you start thinking about the checklist and then saying,
what would be my first concrete step to,
to make to make something up really something up there and and see how I can actually get enough 
traction,
enough understanding.
So that I can actually stock my journey and, and the checklist in between, it's just your journey to the. 

Right, right, right that's as good. And having a sound team is probably the most important part of the company. So you're right here and we're moving onto the last couple of questions. One of them is what kind of companies do like to manage. 

So you mentioned that you were doing you some investments, but mainly you're doing mentoring for the companies. What kind of companies do general metrics. So, is there some specific fields that you focus on or? 

Yeah, 

I think I kind of divided my advising and mentoring in in just two types of companies and one companies of the traditional companies itself, 

and some things and companies who can actually leverage from my experience and then scheduling user acquisition strategies and onboarding. 

So that's still remains and companies which are only in the stage, which want to understand, how would I go about doing this? 

I would provide and in terms of this and what are the existing to use without actually in some way and then the second kind of businesses are actually the brick and mortar, small business. 

It's spending a lot of time with people and seeing how they're getting affected by the pandemic and how they can actually make changes to their business. So that it can do. 

So the example I can take is recently I worked with a physiotherapy center in the greater Ella area, which, which are completely dependent on there customers coming to their. 

Oh, and getting stuff done and their average of customers is that, like fifty five and there is no in any of their they would wanna come back and go come back to the studio as they were doing before. 

So, what we did was we help bring their entire and classes on on online, using an existing management system. So now they are running all their classes online. It does. 

It they actually have one on one consultations with their patients, and we'll get all that stuff done. So,
I'm thinking about more and how we using leveraging some of these tools,
which we in Silicon Valley took for granted, 

and providing them to the smaller businesses so that they can actually continue to not just survive, but actually thrive in this in this state. 

Nice. Yeah, that's a really nice implication of, you know, something that Silicon Valley comes up with. So last question for day's episode is gonna be cultivation. So what's the one thing that you want to return to do? As soon as the episode is over? 
Yeah, I would say reach out to me on LinkedIn and I'm I'm very, very active on LinkedIn and going to 
people. 
So, if you have, you want to have a chat, you want me to understand what you're doing and how I can do it anyhow to them chat. To me, I'm. 

I will definitely make sure that we spend some time together and give you my thoughts and give you feedback on how things could be and, and even potentially think about how we can be involved in terms of something perfect. 

I'll definitely make sure to leave a link in the description of this episode. So anyone who wants to talk to my highly recommended, by the way check out the description of this episode there's gonna be a link to my ears LinkedIn and my personal call to action. 

Will be go to the description of this episode so I'll leave another link to the. 

Patreon so, our custom channel, where we have nice articles with summaries of multiple speakers, actually talking about one subject. So, like, there is recently an article that went out about how five different investors source their deals. 

So, like, if you want to figure out how to get in touch with those investors, organically that historical for you, so, call to action, go to the stripping this episode and take a look at the links we'll wrap it up here and have a great day. Everyone.