He raised $275M in the last 3 years. His 'boring' B2B startup is now a $1B unicorn. | Andrew Butt, Founder of Enable

Andrew 0:00 They might have had, say, a million products that they wanted to load into our system, and then they might have had, say, 200 users and we put everything in. Then all these users logged on to then start setting up all their agreements and the whole system just crashed. I remember on a Friday, there&#39;s the top people yelling down the phone saying, &quot;This has to be fixed by Monday because we&#39;ve got all these people allocated to pull this on and this is a disaster.&quot; My technical guys were saying, &quot;This is going to take about six weeks to fix.&quot; Pablo 0:30 Welcome to the Product Market Fit Show, brought to you by Mistral, a seed stage firm based in Canada. I&#39;m Pablo. I&#39;m a founder turned VC. My goal is to help early-stage founders like you find product market fit. Andrew, welcome to the show. Andrew 0:48 Pablo, great to be here. Pablo 0:49 I&#39;m really excited to hear about your journey at Enable. I&#39;m looking here on Crunchbase; anybody can see this stuff but since March, 2020, you&#39;ve really been on the venture train. Every year, you&#39;re raising 17, then 45, then 94, then 120 million. Every single year it&#39;s a bigger round which is like – from the outside looking in, everything looks like perfection. Everything looks like it&#39;s going exactly as you planned it but it took a while even just to get – I&#39;m sure that&#39;s not reality <laugh> so it took a while to get there. You started, from what I can see, in around 2016 and you were running another business before that. Maybe just to start, if you could set some context into what things were like when you started Enable, how you even started enable in the first place? Andrew 1:31 Absolutely. The Story of Enable Andrew 1:32 No, I&#39;m very happy to. I&#39;ve always wanted to run my own company. My father was an accountant, like a CPA, in the UK and he advised small businesses, and so I always wanted to start my own business. My passion in life was technology and building applications. As a kid in the nineties, late &#39;90s, I was building web applications and websites and all that stuff. I started my first business as a teenager in the nineties and really, that was just services, just helping people out, helping small businesses, building bespoke custom software for them. That grew and then I met my cofounder who really helped me to build that business and we&#39;ve got to maybe 100 engineers over the course of quite a few years. It was profitable and literally selling hours to build software. That was the core business. Some of our customers were businesses that were asking us to write software for them but others were actually software companies or people that had software ideas and they wanted to outsource the engineering to us rather than do it themselves. We were building other people&#39;s products for them and seeing how successful some of those became and really wanted to build our own product, rather than just building products for other people. We wanted to build our own product. I&#39;ll pause for a minute but that was the backdrop to what we then built in Enable. Pablo 3:00 To be clear, you were building – what sort of – I mean, was it websites, was it full-on products? What was the main sort of things that you were doing? Andrew 3:08 I would call it web applications which, of course, these days we wouldn&#39;t bother with because everything&#39;s web but back then, early 2000s and so on then, a lot of software was still client server. It was web applications and it was data management and process management for a whole range of different things. One of our big customers that we actually ended up investing in and built and sold to private equity eventually was all about health and safety and property management and compliance and that type of thing. We were building software platforms that would manage information and data. Pablo 3:41 You mentioned you wanted to build your own product and I see this often people have a services business and services, the challenge – you tell me but what I hear is you&#39;re always after that next customer, you&#39;re always after that next project. Having a product where it could be more recurring, more predictable, many people are after that. Were you constantly working on different product ideas through that journey? Andrew 4:04 Yeah, we were. In the early days we were building websites. Then we actually developed a content management system. This was, again, very early before content management really existed. Pablo 4:16 What year was this? Andrew 4:17 Oh, like 2001 or something like that, 2002 so going back a long time. That was an example of a product. Then we built something which was like a web-based database in those early years as well and several things but we didn&#39;t really focus on any particular one because we were driven by customer revenue and customer payments and so we&#39;d have to just build the next thing, whatever the next customer wanted us to build. Pablo 4:42 Where would you say the story of Enable really begins? Andrew 4:45 I think what we found is, from those very early years, so as early as 2001, 2002, one of the common requirements that came up where people would come to us and ask us to build software, was to actually manage rebates. My cofounder was running a large distribution company in the UK so he was very well connected with other distributors, manufacturers, buying groups, lots of people in the supply chain. They all had these different forms of rebates and we came to understand this was a huge part of their profitability. We were building, again, custom software which would meet their particular requirements and we did this for quite a few years. I&#39;d say by around, say, 2010 or something like that, it was clear that there was a real need in the market for a rebate management product because we just kept building them on a bespoke basis. Pablo 5:39 By the way, let&#39;s just go layman&#39;s terms here, like grade 3 level. Walk me through the world of rebates which is a bit esoteric, not something the average person thinks about much. Andrew 5:49 Sure. Absolutely. WTF are Rebates? Andrew 5:50 If you imagine how the supply chain works, 80% of global trade goes from a manufacturer through middle parties like distributors, buying groups, retailers, contractors and then eventually to the end customer. That&#39;s 80% of trade. There&#39;s very, very little that goes direct from a manufacturer to an end customer. Apple and Tesla might be two examples but virtually everything else goes through the supply chain. There are trading agreements between those supply chain partners so a manufacturer will have agreements with distributors, distributors have agreements with retailers and so on. Those agreements have lots of goals and objectives. It says, we want to sell this many products, certain value, certain volume to certain end customers and all sorts of other conditions. Then when those goals are met, the manufacturer will actually pay money to the distributor and the distributor will pay money to the retailer. It&#39;s like a pay for performance. It&#39;s just like in a software company, you pay the sales team a commission. Rebates are just like sales commissions, really, in the supply chain and they&#39;re all about driving behavior. Pablo 6:56 Money flows both ways because let&#39;s just take the example of – we just did an episode last week about selling couches online. Let&#39;s take couches. Manufacturer of couches, obviously, gets an order from a distributor, who then gets an order from a retailer. The money flows that way but what you&#39;re saying is, when certain objectives are met, money then flows the other way into a form of commissions. Andrew 7:15 Yes, you&#39;re right. The way that we do actually define a rebate, what is a rebate, is, a rebate is any funds that flows back through the supply chain. Like you say, everyone understands that we pay our suppliers but this is where our suppliers actually pay us so anything where our suppliers pay us is a rebate. Pablo 7:33 What are some of the key problems that you&#39;re seeing in the 2010s, 2015 area, right before you start Enable, around managing rebates? What&#39;s so hard about it? Andrew 7:43 What was hard about it is, if you are a distributor, you will have rebates coming in from many, many different suppliers and they will all be completely different because they&#39;re typically created by the manufacturer, although not always and you&#39;ll be distributing many types of products. If you are a construction company, you will be distributing bits of lumber and wood. You&#39;ll be distributing HVAC systems and boilers. You&#39;ll be distributing concrete and powder. There&#39;s so many different types of products. Every manufacturer has different rebates with different units of measure. Some of them might be – will pay you $10 per kilogram or $10 per ton or $10 per unit and then there&#39;s different tiers. It&#39;s really complex. Also, commercial teams get very creative, just like they are today. Buyers come up with all kinds of strange, weird and wonderful mechanisms that say, well, if you are selling to this customer and it&#39;s this particular product but you are not selling this other thing, then you can get this but only if – so you can imagine there was no software that could do that and all these companies were using spreadsheets to manage what was becoming all of their profit so that was the problem. Pablo 8:59 Who in the supply chain is using this? Is it more the manufacturers who are giving out these rebates or is it the distributors and the retailers that are receiving it? Andrew 9:06 Where we started was with the distributors so it was distributors receiving this. Then what we quickly learned is distributors belong to buying groups and buying groups negotiate these agreements on behalf of lots of distributors. We then started actually providing software to buying groups as well. Then we actually found the manufacturers were equally struggling to manage it from the other way around so then we started supplying manufacturers. We now supply the entire supply chain but it started from the distributor perspective. Pablo 9:37 Got it. Okay. Give me a bit of a timeline here. When do you start really moving from consulting and how do you do that transition from consulting to effectively a single-product SaaS, the classic model? Andrew 9:50 It was very, very slow at first and the services business was, like I said, profitable. We hadn&#39;t raised any investment and it was providing a fairly nice lifestyle. Pablo 10:01 Just so I understand, that services business, was that also strictly focused on rebates at that point or you were doing everything? Andrew 10:07 We were just building but it – yeah, that was a common theme of something we were building but we were building lots of other things as well. It was a comfortable business. We could see it would never be huge because it was just growing steadily and like you said, you have to always worry about where&#39;s the next customer and you&#39;re selling time so it&#39;s finite. Then it was probably somewhere like 2013 where we said, right, we should actually build a product. It was actually inspired by a Silicon Valley tour. My cofounder and I came to Silicon Valley for the first time ever and met companies like Intel, Citrix, Google, startups, DocuSign was an early startup back then. I remember meeting the founder and we thought, wow. Pablo 10:47 What brought you to the Valley? Andrew 10:49 We just had contacts locally who had contacts in the Valley and they organized this study tour for usually CIOs, like UK CIOs that would then bring over to meet Silicon Valley companies. That was quite inspiring. For example, we came up with the product name in Silicon Valley in about 2013 and we got a website and a domain name but it still was slow going and we were still mostly focused on the core business. I would say when we actually started writing code was probably 2015 or something – 2014, 2015 and then the official launch date of the product was 2016. Pablo 11:26 Walk me through a little bit more of that Silicon Valley tour because there&#39;s people listening from all around the world and it&#39;s harder to find but when I went through – I went to 500 Startups accelerator. This was a while ago but, I guess, similar era. It was 2013, 2014. There&#39;s something different about the Valley. I don&#39;t know how much you remember of that trip but clearly it inspired you at least to some extent. What was it that happened during that trip? What did you feel that was different there versus in your startup ecosystem in the UK? The Difference Between UK and The Valley Andrew 11:57 I guess as a Brit I&#39;ve always found Americans very upbeat and positive and can-do attitude and so that just struck me in general. I think the approach to building a software company is just totally different here to certainly how it used to be in the UK. I think the UK and other parts of the world are changing, by the way. They&#39;re catching up. I think in the UK the approach was, you&#39;ve got to grow out of profits which always means growth is very slow because if you make $10, you can spend $9 on the products and then eventually you might make $20 and then you can spend 15 but it&#39;ll take 100 years to actually build a global company like that whereas the Valley, once there&#39;s real belief and conviction and proof points that this has got the potential to be massive, then there&#39;s a huge appetite to invest. Pablo 12:48 It&#39;s similar actually, just that difference between I guess the UK and Valley and Canada and the Valley. I remember back when we went – this is different era, so the numbers aren&#39;t the same as today but we were here in Canada raising a $2 million valuation or something like that and we got into 500 Startups and day one was Fundraising 101. What the speaker was telling us was all about just hyper-confidence. It was like, you&#39;ve got to go home today, you&#39;ve got to look yourself in the mirror and you&#39;ve got believe that you&#39;re worth $7 million. That was just the attitude of, you&#39;ve got to be hyper-aggressive which was so different to what we were used to in our ecosystem. You&#39;re right, things are, let&#39;s say, coming together a little bit more, converging a little bit more worldwide but still, there&#39;s just more willingness to just go for it, I think, in the Valley in general. Andrew 13:39 Exactly. I think that was inspiring but I don&#39;t think – I never thought at that point that I would end up, for example, moving here and raising money in the Valley. That never occurred to me back in 2013 but it was just an inspiring visit that reminded my cofounder and I that we must get on and launch our own products. Pablo 13:55 Just so I understand the scale of it because it&#39;s also really hard to give something up that&#39;s working, even if it&#39;s not exploding, how many employees did you have at that time, 2013, 14, 15? How much revenue were you bringing in on the services side? Andrew 14:09 I would say we probably had, say, $5 million of revenue or something and we probably had about say 40 or 50 people. That was the scale. Pablo 14:17 Got it. Then you start working. Do you launch this with some customers while you&#39;re still doing the services business or just how do you manage that because it&#39;s just hard to do – I mean, it&#39;s hard to do anything and it&#39;s certainly hard to do two things that are very different at the same time. Andrew 14:34 Yeah. No, very true. That certainly was true. That&#39;s why it took so long, really. Imagine we decided in 2013 we wanted to commit and build a real product, not just custom software for rebates. Then we did it on the side so of our 40 people, whatever it was, we had four or something on the side who were – and we were using the small profit we were making from the services customers to then put into this product development. That&#39;s why it took us a couple of years to really get to our first real launchable product and we were doing it all at the same time so that was hard. I think what came later, which we can talk about, is when we realized that this thing had huge potential, we did understand we&#39;d have to shut down the services business because we just couldn&#39;t possibly do both. That was hard because we were then going from a somewhat profitable business to something which was immediately loss making and shutting off that revenue from services but it was the right thing to do. Pablo 15:35 Let&#39;s go there. I want to go back after but let&#39;s just – let&#39;s go there because we&#39;re already on it. How far along did you get on the product in order to have the conviction to shut everything else down? Shifting from services to product Andrew 15:45 We got to 20-something customers and 2.5 million of ARR or something on the product. That took us probably three or four years to do that. By, say, the end of 2019, beginning of 2020, that&#39;s where we&#39;d got to. Then the real catalyst was the Series A because we would&#39;ve just immediately gone out of business if we had shut down the thing that was generating cash when we had no capital, obviously, but we said, look, as soon as we close the Series A, then we&#39;ll start winding up the services and we&#39;ll literally write to our customers one by one and say, &quot;Unfortunately, we&#39;re shutting this down but we&#39;re going to do it over a year and we&#39;ll help you to make sure you can go somewhere else.&quot; Pablo 16:25 That&#39;s actually – that&#39;s a long time to be doing two things, 2016 to 2019 and you got pretty far along. I mean, 2.5 million ARR is pretty serious. Just looking back, would you have done it any faster or do you think that was the right way to do it? Andrew 16:40 I think I would&#39;ve done it faster. I think, again, I didn&#39;t know what I didn&#39;t know, of course, and I think now that I&#39;ve been in the Bay Area for four years and done the A, B, C, D and met lots of other CEOs and now – if I&#39;d had any of that knowledge, I probably would&#39;ve done it a couple of years earlier. Probably not more than that because we&#39;re, again, targeting quite traditional companies, manufacturers, distributors, retailers and they&#39;re only just really ready and embracing this type of product in the cloud. If we&#39;d been too early, I think we would&#39;ve not been able to get product market fit which I&#39;m sure we&#39;ll be talking about. Pablo 17:18 Yeah. Let me ask about that because I think when it – on the road to true product market fit, I think one of the earliest things is delivering value and just knowing whether there&#39;s even real demand. In your case it&#39;s so different because people were already paying you for that product just bespoke and all you were really doing was building it so that it would be a box that you could give to everyone the same box, let&#39;s say, in simple terms. How much work did you have to do to just understand if there was real demand or was that a given for you at that point? Andrew 17:47 You&#39;re right. I think we could see there was demand. I think we didn&#39;t know in the early days how much demand there was and so, for example, how many industries actually had these rebates and was it only distributors or would it also be other types of companies in the supply chain and was it just the UK or would it be other countries? We knew there was demand but we didn&#39;t really know how big the market was in those early days. Then I think also trying to come up with a standardized approach wasn&#39;t that straightforward because with bespoke you just build whatever anyone wants and you do what the customer tells you to do whereas with the products, you are really saying, &quot;This is how the product works; this is best practice; and no, it can&#39;t do that but, don&#39;t worry, because this is how you should do it.&quot; Then, of course, you get pushback and customers say, &quot;No, we are unique and that will work for us.&quot; That was still quite challenging to standardize on an approach that we could put into our product. Pablo 18:38 It seems to me that might be one of the hardest parts. I&#39;m curious if you remember any stories around building V1 and just making the choices between, here&#39;s five or 10 different custom iterations that we&#39;ve done for these different customers. This is what we need; this is what we need and then the debates around why or whatever. Andrew 18:56 One of them, which was really interesting, was customers wanted to be able to get their trading partners – so that means if you&#39;re a distributor, it would be your suppliers and if you&#39;re a manufacturer, it would be your distributors and your retailers – to log in to a portal and then access certain information on the rebates and maybe approve and sign off an agreement and various things. They all wanted a custom portal that was branded for their company and where they could control the users and set the permissions and that&#39;s what everyone wanted. It was actually my cofounder so I can&#39;t take the credit for this one, David, he said, &quot;No, what we&#39;ll do is we&#39;ll have a standard portal which will just be enable.com and every trading partner has to register on Enable.&quot; &quot;Our customers won&#39;t have a unique portal that they control. It would just be the standard platform that everyone – and then we will effectively own the trading partners because they&#39;ll register with us and then we&#39;ll make it many to many so that each trading partner can then see other trading partners.&quot; That was something where I thought that will never work because customers just will refuse to do that. When you went back to the bespoke customers, they didn&#39;t want that but what we found was with new customers, we just explained that was how it worked, that just is how it performed and they were like, &quot;Sure, that sounds fine.&quot; That was just one story and that&#39;s been good because we&#39;ve now got literally tens and tens of thousands of trading partners of our customers all registered directly with Enable and it&#39;s a many-to-many marketplace. That was a really, really good design decision that we made in the product. Pablo 20:29 That&#39;s a great story and just what moves to mind is, did you do any classic customer discovery as you were designing V1 or did you just stay – you had some exposure because of what you built and then you just put your heads down and built it? Andrew 20:44 It definitely was iterative and those early customers on the product – we did have a product but it was very narrow. Again, one of our skills back then, and hopefully – I think we do still have it but it was a particular standout aspect back then, was actually user interface design. Again, my cofounder, David, that was his real skill. Our software looked really good and in those early days we didn&#39;t have that much surface area but what we did have was very – had a lot of boardroom appeal and it was easier to sell. What that meant, to answer your question, is we would get the first few customers to sign up and then we were building the products with them because we had this small surface area and we had to actually build it out as we were implementing it. Pablo 21:30 What was that MVP and how did you decide what the smallest – you mentioned surface area. What was the smallest thing you could build that someone might pay for? Andrew 21:38 It was really a repository of agreements and nice tools to be able to create the agreements in a structured way and search them and view them and so on. Pablo 21:50 Like contracts, literally the contracts? Andrew 21:52 Yes, exactly, so the rebate contracts where we&#39;d say, &quot;This is between Pablo and Andrew and there&#39;s three different line items and first one is that I pay you 5% of all purchases&quot; and so on, so building that contract and having that in a nice repository that you could search and report on. Pablo 22:09 Before that, that would be, what, like a Microsoft Word document? Andrew 22:13 Yeah, exactly. That&#39;s a good point because very early you could create or the system would dynamically generate a PDF version of the contract from the data you&#39;d put in whereas before customers would have an Excel spreadsheet that they had to manually maintain and then a Word document, to your point, of what the actual contract was and then the two would often be different. Then I think, also, the calculation engine was really important so calculating those rebates by pulling in the transactions and reconciling them with the agreements. That probably was it. That&#39;s what we built first. Then people said, &quot;We need to do forecasting and we need to do cash collection and we need to do approval workflow.&quot; These were all things we didn&#39;t have and we had to – we won the customer and then basically build that out while we were implementing it. Pablo 22:56 What would you say was the main ROI of especially that early version of the product? Why did people buy it? Was it time saving or – Andrew 23:06 It was actually better than that. It was financial return on day one because most people weren&#39;t calculating these rebates at all or correctly. If you are the distributor, let&#39;s say, you typically would just rely on the supplier paying you this money. Pablo 23:22 You rely on your boss to give you the right commission. That&#39;s the – okay. Andrew 23:27 Exactly. You don&#39;t get a statement, necessarily. You just get the check and maybe it looks about right. What we found was we could run an audit where we would take, let&#39;s say, your top 10 manufacturers, take your Delivering insane ROI Andrew 23:37 last 12 months of your transaction data, put all of that into Enable and Enable would say, &quot;You should have received $10 million.&quot; Then the customer would say, &quot;Oh, we only got $8 million&quot; and so we could find that missing money very, very quickly. Pablo 23:53 Those are the numbers, a few million dollars left on the table, sort of thing. Is that common? Andrew 23:57 Certainly. We&#39;ve seen that many, many times. Yeah. Some of our early customers and ongoing as well, we certainly have found multimillions in a single customer. It&#39;s not always that much. It might be a few hundred thousand but it does run into the millions as well. Pablo 24:12 You&#39;re literally finding money on the table. Is that how you went into that audit you just mentioned? Was that early on part of your sales process like, hey, let us run an audit and we&#39;ll show our value to you? Andrew 24:22 I think I&#39;d probably be overstating it because we just didn&#39;t know much in those days and we weren&#39;t – we didn&#39;t really have a sales process. I think in the early days there was just – because there was just nothing available, there was no rebate management software in the market, we were winning customers who were desperately looking -- and they knew they needed it and they knew they were missing money already and we didn&#39;t have to sell that to them because they knew it already. Then they just found us and then they said, &quot;Wow, this is exactly what we were looking for.&quot; Pablo 24:49 This sounds like a classic hair on fire problem where people act -- there&#39;s nothing, I would say, more compelling in B2B than when you can go to a customer and say, &quot;We will make you more money.&quot; especially if that money&#39;s right there and you just help them literally find it , it&#39;s pretty compelling. Walk me through those first 10, 20 customers. You mentioned them coming to you. Was that really what it was, mainly inbound? They were just finding you. If so, how did you make yourself discoverable? I&#39;m curious how I landed them. Andrew 25:18 Of those first few customers, our first two, for example, apart from the distributor where we started and the buying group that they belong to, did just find us on Google and we just got Google inbound. One of those very early ones was in the US, for example, and, of course, we were not in the US and we were tiny. I remember this company and these are all still customers today, eight, nine years later. They would contact us and say, &quot;Wow, so you&#39;re not even in the US and you&#39;re a very small company but we really like the product. We can&#39;t find anything similar in the US so we&#39;ll sign up.&quot; I&#39;d say Google inbound and then, of course, word of mouth because when you are very, very small and you&#39;ve just got a few customers, there is always some of that as well. Pablo 26:01 It&#39;s something to get inbound when you&#39;re selling consumer or SMB. It&#39;s another thing to get inbound that early on when you&#39;re selling enterprise sales , big contracts. Did you realize at the time how big of a signal that really was? Andrew 26:20 No, again, we probably underestimated that. We were getting inbound for our services, of course, so we were familiar with getting inbound but when we saw some of the UK&#39;s biggest companies literally finding us on Google and asking us for a demo, that was – yeah, we did feel that that was quite exciting. Pablo 26:35 This is all the good stuff. I think from the outside looking in sounds like things were pretty smooth, pretty easy. Do you remember some of the – I&#39;m sure it wasn&#39;t the case – do you remember some of the struggles early on as you&#39;re getting those first customers, that first million or two in ARR? Balancing SaaS and Services Businesses Andrew 26:52 Oh, yeah. There were many of them. I think cashflow was extremely tight, extremely tight. I remember I would spend a lot of my time looking at the debtors&#39; list and saying, &quot;Which customers can I get money out of this week?&quot; I remember I sent someone in the office to go and pick up a check from a customer because I literally couldn&#39;t make the payroll without that cash in the bank. The cash was very, very tight so that was one challenge. Pablo 27:18 How common was that, that payroll was next week? Andrew 27:24 I&#39;d say we were never looking more than a couple of months out. It could be a couple of weeks out or it could be a couple of months out or maybe three on a really good period. We were running on an overdraft and the overdraft had covenants where we had to make certain amount of profits and that was tight and so it was just the whole thing was tight so that was one thing. I think the other thing, to your point, is trying to juggle lots of demanding bespoke customers, that kind of thing. They own you because they&#39;re saying, &quot;We&#39;re paying you to work by the hour to build everything we want&quot; with trying to, on the side, launch this product and this SaaS business, just balancing that I think was very challenging. Then we had plenty of technical challenges as well where, for example, one customer, who, again, remains a customer today – they were one of our first and they had a lot of users and a lot of data. They might have had, say, a million products that they wanted to load into our system and then they might have had, say, 200 users. We put everything in and then all these users logged on to then start setting up all their agreements and the whole system just crashed because with that combination of volume of products and the volume of users the whole thing – I remember on a Friday there&#39;s the top people yelling down the phone saying, &quot;This has to be fixed by Monday because we&#39;ve got all these people allocated to put this on and this is a disaster.&quot; My technical guides were saying, &quot;This is going to take about six weeks to fix. We got to rewrite aspects, not the whole system but certain things have to be rewritten.&quot; That type of thing certainly came up. Those are some of the – Pablo 28:57 How did you resolve that one? Andrew 28:58 Just real careful client management, really, so just, I think, over communicating. I literally got in my car and drove to their offices and walked around and showed interest and said, &quot;This is very serious&quot; and we had like daily conference calls and they were patients as well. They could have easily just pulled the plug and said, &quot;Forget this. It&#39;s no good&quot; but I think just trying to manage it day by day, really. What was exciting was seeing the common ground. There certainly were areas where we would get pushback and customers would say, &quot;We&#39;re unique and we need it this way&quot; and we&#39;d try and convince them that the way we were doing it was better and explain why but what was starting to happen was in different locations, so, let&#39;s say, US and UK and different industries, so, say electrical and automotive parts and construction, we found that actually the way that they managed their rebates had a lot of similarities and a lot of the similar challenges. We were using the same product and the same code base to supply customers in those different industries. Then we found, for example, that those customers wanted to invite their trading partners to use Enable with them because if you&#39;ve got – it&#39;s always at least a two-sided agreement so if you&#39;ve got both sides looking at it together on the same webpage, then that&#39;s hugely helpful to make it effective. Manufacturers would then come in and say, &quot;Actually we need this as well. We are actually struggling to manage it from our perspective.&quot; That was really encouraging when we could see common ground in different industries, different countries, different company types and made us realize this was a big problem. Pablo 30:40 Maybe what I&#39;d like to end on actually is, you mentioned running on cashflow and maybe a little bit of debt and that being, obviously, really challenging. Then at some point you raise a very large Series A, I believe – you can correct me if I&#39;m wrong, but I believe $17, $17 million. What was that process like of raising that round? Walk me through that and I&#39;m curious also what it must have felt like having gone so long bootstrapping and then finding yourself with that much money in the bank. Andrew 31:10 It Raising a Series A Andrew 31:11 was $17 million of Series A in total, you&#39;re right, but on day one, which was February, 2020, it was – I think it was 12. Then because the pandemic hit and we had other people that were interested, then we just extended it and it eventually got to 17 so that&#39;s just one point. I would say the Series A was the most difficult of all of the rounds. We were very fortunate that the B, C, and D were all preempted so really investors came to us and it was – whereas the Series A was really me, a couple of my team knocking on doors and, of course, no one had ever heard of Enable. We were this strange – and you can imagine the pattern recognition was not there because we were this UK company that had services and then we&#39;d built this thing and it was all very odd. It wasn&#39;t what Silicon Valley expects or what they normally look for. I was virtually on a tourist visa in the Bay Area. Pablo 32:05 Did you go down there? I&#39;m actually curious, beginning to end, yes, the whole process, how you thought about it, how you set it up. Andrew 32:10 I guess one fun story is, I was a member of a CEO group in the UK called Vistage. That&#39;s still around today and it started in the US and it&#39;s like a peer group for CEOs. I was in that peer group and we&#39;d meet every month and compare challenges and opportunities. I presented to this group in mid-2018 and I said, &quot;Look, I&#39;m at a crossroads because I&#39;ve got this services business that&#39;s steadily growing and it&#39;s profitable. Then I&#39;ve got this product which is a huge opportunity but it will lose money for years and it might fail but I can only do one. I need to focus.&quot; Everyone said, &quot;You have to do the product&quot; but one person in the room said, &quot;If you want to do this seriously, you need to move to California.&quot; Then he said, &quot;They know how to build software companies there.&quot; I thought back to that study tour and I thought, ah good point. I went home to my wife in June, 2018 and said, &quot;How do you feel about moving to California?&quot; and she was like, &quot;Yeah, let&#39;s do it. Pablo 33:24 You&#39;d already made the move, by the way, or you were still thinking ? Andrew 33:26 No. This was just like a month or two after contemplating that we might move. What was happening was we&#39;d got, by then, let&#39;s say a million of ARR or something but it was growing slowly because we hadn&#39;t got any – we were not focusing on it. What was clear is we would have to have a really good growth rate at the point we closed the Series A. I then had to basically divert resources between the services company and the product company and accelerate that growth. That took about a year. There were a couple of visits backwards and forwards to the Bay Area planning things. Then it was November, 2019 that we were just about to move – we were about to make the move. We&#39;d got our lease signed on an apartment and so on and we were meeting investors for real. I met a bunch of investors and said to them, &quot;I&#39;m going to be here in January full time but I&#39;m just showing you what we&#39;re doing. If you are interested, let&#39;s meet again in January.&quot; Then we actually got here December, January time. Part of that story was, a lot of the investors weren&#39;t interested, obviously, as always, but there were a couple who were and they didn&#39;t want to wait so they said, &quot;Look, we want to do this now.&quot; In the end we actually signed the term sheet with Menlo Ventures who led the Series A before we physically arrived in San Francisco. Pablo 34:49 What did they see, because, again, did they understand the space or what was it from their vantage point that made them excited? Andrew 34:56 I think they were very smart individuals and they didn&#39;t understand the space because there wasn&#39;t really a space here and no one else was doing this so I don&#39;t think they&#39;d seen this before but they – something resonated with them. Part of it was the network effect that I&#39;ve mentioned where you win a customer and then they want to bring all their partners with them and then they have other partners and so on. That was part of the interest. We just got their curiosity and they were impressed with the numbers because, like you say, getting to a couple of million while bootstrapping is or was unusual Pablo 35:27 You had gone from about a million to, what, two and a half in that year? Andrew 35:30 Yeah, that was the type of thing. They then took some time to do some diligence and to make some calls and speak to some customers and then they were like, oh, actually this does sound really interesting. They had that vision which most of the other investors didn&#39;t have back then. Pablo 35:46 How did it feel like when you closed that round and you—did you feel like, whoa, I can breathe all of a sudden? Andrew 35:52 Yeah. No, it was hugely, it was hugely exciting to go from a couple of weeks or a couple of months of visibility to a couple of years plus of visibility in one day. That was huge. I remember the day of the close. It was actually February the 19th, 2020. We had an all-hands meeting that day and we announced to the whole company, look, this is now closed. We&#39;ve gone from a few weeks of breathing room to a few years of breathing room. Now we&#39;ve got the fuel to really drive and focus on this and we&#39;re not going to be beholden to the services work where we just have to do whatever anyone wants us to do. We can actually drive our own agenda. That was huge. I remember originally thinking, if we could raise $10 million that would keep us going forever. We&#39;d never raise anymore. The crazy thing now, as you pointed out, is we&#39;ve now gone on and raised significantly more than that. I think the investment required to build a significant global company is probably higher than most people realize and certainly higher than – I think some people are more clever and they can do it with a lot less money but for me, it has been more expensive than I first anticipated. Pablo 37:02 Yeah, I mean, you&#39;ve raised nearly $300 million now, so. Andrew 37:05 Correct. Pablo 37:05 Congrats. By the way, one more question on that. Do you remember any – especially having it being your first goal round, really fundraising, do you remember any particular meetings, rejections? We&#39;re all used to getting no&#39;s as founders but every now and then there&#39;s just something that hits a little harder. Maybe they pinpoint something that&#39;s a little bit more of a doubt in your mind and you&#39;re like, ah, I wonder if they&#39;re right. Andrew 37:26 Yeah, definitely. I think one of the things is implementing our system fully does take a bit of time because we&#39;re connecting to the customer&#39;s ERP system usually, and we&#39;re pulling in all their transactions and then we&#39;re pulling in all their master data and most people&#39;s data quality is low. It&#39;s not like a Dropbox or a Slack where you can sign up and then on day one you are using the product and recognizing revenue. This is more where you have to implement it over a period of a few months. I think one of the big questions was, can that really scale? Can you really get, say, 1,000customers because if it takes a few months to implement each one, then how does that scale? I think that was a good pushback, which I thought – I wasn&#39;t sure we&#39;d be able to overcome. Pablo 38:13 We&#39;ll stop it there and I&#39;ll just end on the two questions that we always end on. The first one is, when did you feel like you had true product market fit? Andrew 38:23 I Finding True PMF Andrew 38:24 think probably a couple of moments, really. The first one, I think, was once we had, say, a dozen independent customers that weren&#39;t associated with each other in any way and they weren&#39;t friends and family. They were unique companies that had encountered us or we&#39;d encountered them and we had them all live on the product on the same code base then that was a really good feeling of, this isn&#39;t just some system we&#39;ve written for a couple of companies or that we&#39;ve persuaded someone to use. We&#39;ve actually got 10 or 12 distinct companies all running on the same code and getting value and renewing, for example, renewing their first year that type of thing so I think that would be a big marker. Then I think the other one was, after I came out here to the Bay Area and we hired an amazing revenue leader, a guy called Jerry Brooner, who&#39;s still with us today. He started to build go-to-market and get real customer velocity where we were signing up 5, 10, 15, 25, 30 new customers per quarter then that also – because originally we were signing up a customer every now and then and at the point where we were doing, say, 25 customers a quarter, net new, then that definitely was a clear signal. Pablo 39:37 Awesome. Then the last question is, if you could take everything you&#39;ve learned through your journey at Enable and go back to your younger self when you were just starting in, in 20 15, 20 16 with one piece of advice, what might that be? One Piece of Advice Andrew 39:52 I think it probably is to focus. If you can really go deep and understand something well, understand one use case which is impactful and then build something and create the messaging around something which is very targeted and very deep for that use case and then go and raise money and go and focus on that. That&#39;s the great way to do it. Most of us, and I was in this camp, just go way too broad. We build out way too much. We do too many things and we try and do – and then almost thinking that maybe one of them will succeed but I think you can never be too focused, really. That&#39;s something I still question myself on today. Pablo 40:29 Perfect. Thanks a lot, Andrew. Appreciate you sharing your journey. I look forward to seeing your stock ticker on Yahoo Finance in the coming years. Anyways, it was a great episode. I&#39;m sure followers will get a lot from your story. Andrew 40:43 Thanks for having me. I&#39;ve enjoyed the conversation. Pablo 40:46 If you listened to this episode and this show and you like it, I have a huge favor to ask for you. It&#39;s actually a really small favor but it has huge impact. Whichever app you&#39;re listening to this episode on, take It out, go to the Product Market Fit Show and leave a review, please. It&#39;s going to help – it&#39;s not just going to help me, to be clear, it&#39;s going to help other founders discover this show because the algorithms, whether it&#39;s Spotify, whether it&#39;s Apple, whether it&#39;s any other podcast player, one of the big things they look at is frequency of reviews. It&#39;s quantity of reviews. The reality is, if all of you listening right now left reviews, we would have thousands of reviews. Please take literally a minute -- even if you&#39;re just writing like, great podcast, or, I love this podcast, whatever it is, just write a few words. Obviously, the longer the better, the more detailed the better, but write anything, leave five stars and you&#39;ll be helping me but most importantly many other founders just like you discover the show. Thank you.