Rodolphe Barrere, Founder of PotLoc | How to Find Product Market Fit

Pablo 0:00 So this week I had the pleasure to talking with Rodolphe, the founder of Potloc.Potloc has a pretty spectacular story, so Rodolphe starts off and he's a first time founder. He's super young, his first idea, believe it or not was to crowdsource ideas for retail stores. So literally his pitch was you're a landlord, you have some open slots somewhere on a street, I'll stand outside of that retail store and as people walk by l'll ask them what they think should open here. I'll collect all that data and give it to you so at least that way you'll get the right tenant that will stay there for a long time. And he signed all of one customer and that's in spite of being all over the news like in Montreal he made a huge splash. That's how he started. Today his company is doing over ten million dollars a year in revenue and it's not doing anything close to what he started off doing. This guy has actually gone through five pivots. He got punched in the face so hard by COVID, that he went from pretty close to ten million a year all the way back to zero. He went ten to zero all the way back to ten million. What a spectacular story. Welcome to the Product Market Fit Show brought to you by Mistral, a seed-stage firm based in Canada, I'm Pablo. I'm a founder turned VC. My goal is to help early-stage founders like you find product market fit. Rodolphe, welcome to the show. Rudolphe 0:00 Thank you for having me Pablo. Pablo 0:00 We were chatting about this before, and I think you have a really unique story just because of the number of – now you, you've got real traction, over eight figures, lots of customers, but you went through five pivots to get to this place, which is not something I hear about every day. I think changing things around transitioning, pivoting is common, but doing it that many times, and to the degree that you did it – each pivot was actually pretty meaningful – is not normal. And so that's really what we'll be talking about today is how to find product market fit, as told through these five pivots that you went through. And we'll go through each idea but really focus in on the transitioning because I think what's really compelling here from a new founder's perspective is when do you know that you should let go of an idea and embrace a new one, right? You want to be not just scrappy, but relentless. You don't want to give up, and yet if you ignore what's out there, you'll miss some of the bigger things that are right in front of you the whole time. So I hope that'll come out as we talk through the story. So maybe just for starters, I'm curious what was the first iteration of Potloc? What was this first idea? Maybe just provide some context around that too. The Story of PotLoc Rudolphe 2:09 Again, thank you for having me. Super happy to share my story. It's a mix between a personal and a professional story as any entrepreneur that may be very, very quickly about me. As you can tell from my accent right away, I come from France. I grew up in France, moved to Montreal when I was 17. 31 right now, so I've basically spent half of my life in France and half of my life in, in Canada. So basically, it's very simple. I was studying in HEC Montreal. My co-founder, today's co-founder used to be my roommate, to name it Louis Delaoustre, and back in 2013, so 10 years ago now, we had that very simple idea. We're working in our neighborhood and we saw all these vacant stores and we're like, what would be great? It would be for the local residents to choose what new store they'd like to have in these empty stores because we're consumers in our neighborhood. We know exactly what's needed in that neighborhood. We know exactly where we would go, so it would be great to pick the locals brains basically in order to know what tenant or what merchant to install in a vacant store. We started with that idea, and we very quickly – we’re hands-on founders, so very quickly we picked up the phone, and you've got the phone number of all the landlord or the brokers right in these window displays, so we called the one which was the closest from our place, and we're like, okay, can we give a try to start up idea we have. Can we invade your local – your space and, and survey people basically. This is what we've done in December 2013. We revamped the space, cleaned it, and we had that massive coffee machine as well, and we're basically intercepting people with our buddy in the street and ask them to come inside, and we had a little type form. It wasn't even type form. It was a Google form on iPads and we're asking questions to local residents like what is your postal code? Where do you go to do your grocery? And a couple of easy basic questions. And the last one was what type of store would you like to have in this very vacant store? We've done that and it was a success. It was a popular success I must say before I think about pivoting. It was a massive success, to be honest. The company was not even incorporated that we were invited in all the most famous Quebec TV shows and radio shows. Everybody was talking about the power to choose your next merchants. It was collaborative, smart city. We're taking all the cases. It was – Yeah, it was perfect. The name Potloc did not even exist because we incorporated the company in March 2014, but in January 2013, you could, you can check online, I was invited in many TV shows speaking about Potloc, the new startup, and we're like, okay, man, we're onto something. For sure we're onto something, it's a popular success. We're onto something. We basically had a few phone calls from landlords because the business model was very simple. We're like we're helping landlords to rent long-term. So as a landlord, if you want to rent long term, you call Potloc, we are going to do a physical operation in your store, and then we're going to give you the data in order for you to know which tenant you should rent to. Pablo 5:29 That was the business model, and we had one landlord, my very first customer – I will always remember him [unclear] – called us one day, was like, okay, I've got a vacant store, I want to do your thing, it's great, blah, blah, blah. And it was like, how much does it cost? And I had no clue. I was like, okay, I don't know, 8,000, and he went oh, perfect. What's the name on the check? And I was like, Potloc, Inc., hoping the business, the name was available because we're too broke to pay the law firm in order to incorporate the company. With that very first 8k check, we had actually enough money to pay for the lawyers to incorporate the company, drain the bank account, and cash in the check. And, and thanks God, the name Potloc was available and the.com too. Rudolphe 6:14 We did that. It was our initial business model, very first one, and after that very first success we had with Luco, I took my, my bicycle and I was calling every single landlord of vacant source in town, right? Sad truth is after one year of hustling, and believe me, I can't hustle when, when I want to hustle. We had zero customer, and the end of the story of that first pivot is we've been so vocal, we've been so visible with that project that we got the one landlord in Montreal that was – actually that bought on our value proposition. All the other ones were like, well, I'm not going to pay you 8 or 10K without any guarantee that I'm going to find a tenant afterwards. It didn't make any sense for anyone, and all the ones that were represented by brokers – brokers don't have money to spend pre transaction. It didn't make sense for anyone. Pablo 7:12 Was this – maybe just a question on that. Was this the classic recent grad type idea, which I've had as well, many people have had where it's like truly an aha moment. There's no research or unique insight beside, it's just like – you just thought, hey, wouldn't it be cool if, and then you just went after it. Is that kind of the – what happened with this idea one? Rudolphe 7:31 Yeah, exactly. We had this idea in October 2013, and in December 2013, we were in that space intercepting people, zero business model. I remember I was, I was following some – I was still student back then and, and we had entrepreneurial whatever courses and, our teacher was telling us the map doesn't make the territory. Who cares about writing a business model? You need to – a business case, a business plan. Sorry. You should go in the field and try your idea out. And I was like, yeah, that's the best advice ever. And I still think it's the best advice ever, and this is basically what we've done. We had zero business plan, zero. We just tried out that idea. We had a false hope that it was a great idea, and it wasn't, and after one year we completed our studies basically and we had that project that was successful early. We had one customer, but we were in the middle of nowhere, ending our studies. We needed cash, and we're like, okay, what's the next move, basically, and it was time for the first pivot basically. Pablo 8:35 In that case, it was – just to summarize maybe idea one, you went into it with little customer discovery, it was just – you just jumped right into it, got a lot of hype around it, which I'm sure was a lot of fun, but ultimately after a year, you really had kind of nothing going for it, so it was pretty clear – there was really no question around is this working or is it not working. It just wasn't working. I think that was clear to you and your co-founder. What do you do at that point? Idea #1- No Research Rudolphe 9:01 Yeah, so within – we're salespeople, my co-founder and I, so we're like, no sales, no gain, no food on the table, period. When you cannot earn money to eat, it forces you to do pivot, right? It was not like we had unlimited cash to start that company, so then we made an interesting pivot, a fancy one. We're like, okay, perfect. We need to go online. It doesn't work because it's too manual, and we need to go online and we need to take the problem the other way around. Instead of registering vacant stores, we should register retail projects and have the local residents to back this project, vote for this project in their neighborhood. So we launched in 20 – end of 2014, early 2015 sort of a Kickstarter platform, except that you replace money by a local vote, basically. See what I mean? We had plenty of very fancy – it was, again, a massive success, pretty crazy. We had a hundred thousand users on the platform after six months, which is great. And basically, we're good enough to attract people, people like you and me, people who wanted to start a retail project. We had crazy retail projects. The one that did a massive hit at the beginning was the first cat cafe in Montreal. So you can go get a cafe and pet a cat. It's not my thing, but a lot of people love it, and it was on the platform, and people fought with their life in order to have that cafe settle down in their neighborhood. It was Griffintown against le Plateau Mont-Royal against Rosemont against all the different Montreal neighborhoods. We had all these fancy retail projects registered on the platform and plenty of local people voting for this project, and our idea was to ask to upsell basically the entrepreneurs behind these projects for them to have access to more analytics. Okay? If you wanted to know the profile of the, the people who have backed you, if you wanted to send an email to your community, all of these were up-sell features, but the truth is, we've spent the solid year working on that. Again, it was a success. Potloc.com was a hit, but we were able to get sometimes $1,000 out of this entrepreneur because – these retail entrepreneur, they're not rich people. They were almost as broke as if as us. Some of them were able to pay 1K, but it was nothing. It wasn't enough at all to put food on the table. Still today, the funny thing is still today when I take a walk in the city of Montreal, I recognize some of the stores that were on my platform eight years ago now that are open and running, and these people were serious about their project, and they did it without us at the end of the day because we closed that, but still, there are plenty of stores in Montreal. You can go to Cafe Sfouf, you can go to the Lab Room [unclear], all these retail stores that do exist today used to be on Potloc.com at one point. Pablo 12:19 Let me ask you something about your thinking as you went from idea one to two. Did you and your co-founders sit down and say here's what worked, here's what didn’t work? I'm just curious as to why you decided to do what you did and just what the dialogue was like at that point. Rudolphe 12:37 Basically, there is a sort of a intermediate pivot that I'm skipping to make – to keep the story short, but when we launched potloc.com initially it was with all the vacant stores in it, so it was idea one online, basically. See what I mean? Scalable idea one. And we're like – when you were going on our platform it was disgusting. It was it was pages and pages of destroyed window displays. There is nothing more ugly than an ugly store, than a vacant store, right? It's literally the empty window display, so we're like, okay, our platform is the less sexy platform on the planet. We need to take the problem the other way around. It's going to be way more sexy to back a retail project than to try to find a fit for a vacant store, so this is how we actually moved from idea one to idea two. We had a sort of intermediate step going from offline to online. Pablo 13:34 And I think, if I'm being clear, the part that you missed was effectively willingness to pay, right – was still kind of on the business model side. Rudolphe 13:41 Yeah, exactly. Pivot #2 - Moving Online Rudolphe 13:42 But we made one dis one major discovery. The second pivot, it – they found a lot of value because they wanted to open, and they were all wandering between neighborhood A, B, and C, and they have plenty of data, so they found a lot of value. And basically, what we discovered – it was back in 2015. Instagram did not exist, and then influencers were another thing. You need to jump a little bit in the past, and what we discovered is all these users, these 100,000 users we had on the platform, they were all coming from Facebook communities that these people had gathered, basically. The entrepreneur behind cat cafe had a Facebook page and plenty of likes, and it was posted back me on potloc.com to let me know where I should open, and he was sending massive, massive wave of traffic on our website, so we were like, okay, okay, social networks. It was a discovery back then. Social networks can bring tons of users. Again, don't get me wrong, it was a commercial failure in a sense that we're still not able to eat thanks to that, but it was a popular success once again. A lot of people were actually on our platform. Pablo 15:00 One thing that you kept throughout really all ideas is a focus on local data. Is that because it's something that appealed to you and your co-founder emotionally, or was there just something that you kept seeing – there's something there and you just kind of kept tackling it in different ways? Rudolphe 15:17 The sense of belonging to your neighborhood is very strong, and I still believe that, and it's still something we're surfing on in today's version of Potloc. It is something we've discovered. Maybe other people have discovered that in other part of the world, but we're like, okay, we're on something. I remember back then, the only startup – thriving startup that I was following that was actually on that same segment, was Nextdoor, which was kind of the – was very early for them as well, but they were the local social network, and this is kind of where we wanted to go, right? That was the initial idea. We're like, okay, the sense of belonging to your neighborhood is strong, and there's something to build around that. Pablo 16:02 It’s worth mentioning that that did really come through. As you say, each idea was a success in its own right. Sure, it didn't bring in a lot of revenue, but it did – it wasn't just crickets. It was bringing in a lot of attention, a lot of people that cared, which would keep giving you a signal that what people really do care about their neighborhood, and again, there's something there and you just kind of keep tackling it in different angles. So anyways, idea two is going, you've got MAUs, you've got visitors. What you don't have is revenue once again, so what's the next discussion? Rudolphe 16:43 The next one's very interesting, but I've seen a lot of startups starting with monthly active users, et cetera, but at the end of the day, we had very simple needs. We needed to pay the rent and buy food. When your startup is not paying you, and I'm an expatriate, so we did not have any family to back. Literally, if I wasn't able to pay the rent, I would've slept outside. I've got family in France. I could go back to France, but in Canada, we were expatriates. We're alone. Again, it wasn't a mental exercise. We are really trying to win money in order to live with our business. It wasn't a tough call to actually make it make a pivot. We're not paying the rent. We need to shift. We don't have money anymore. It was a very easy conversion. Pablo 17:34 Maybe a question on that. Did you even try to raise through any of this from angels or anything? No. Okay. Rudolphe 17:39 No, no, no, no, no. Pivot #3 - Selling to Cities Rudolphe 17:41 We worried start with tech startup. First of all, we’re 10 years ago. In Montreal you had only one VC firm, one accelerator that was on the fuel, applied there, and we've been declined, so it was just – we had one shot, one theme, and were able – we weren't able to enter. Period. No, no, not at all. We weren't raising at all, but we raised on pivot number three, just to give a teaser. How did Pivot number three arrived? That one is magical. Imagine we have a platform with all the coolest future retail projects of Montreal. You've got people working for the city of Montreal whose job is to revitalize dying commercial arteries. They're called Commission du Développement Economique. They're people working for the city or for the different sub-cities or neighborhoods of Montreal. And these people, they were calling us, they were like, okay, I'm managing [unclear] in the north of the city, which is really – it's not very sexy, right? We were like, okay, perfect. He was like, okay, what can I do to get your super hipster retail stores to open in my street? I was like, it's kind of defeating the purpose of the platform. I will tell my dear entrepreneurs to go open where it's actually a dying neighborhood. We all know that. It won't work. However, Mr. Commissary, I can actually work for you on serving your local population about what they want to have in their neighborhood using social network because we've realized with these entrepreneurs that social networks were – was a super powerful tool to actually bring voters or respondents on the platform. They were like, yes, why not. Actually, it's a good idea. You will help me frame which type of store I should attract in my area. Let's do that. I remember very, very precisely the first contract we had. The guy told us, okay, how much does it cost? I googled what's the maximum threshold for not doing an RFP because you're dealing with public, and it was $25,000. Okay. Tax included. I was like, okay, it's going to be 24,999, tax included. And the guy told me, okay, let's go. Let's do that. Suddenly, we go from trying to rob $1,000 to retail entrepreneurs to $25,000 contract with City X. Okay? We're like, okay, perfect. We're rich. Let's go. This is when we've actually started to do something, which is similar to what Potloc does today. We're basically setting local campaigns on Facebook. It was mainly Facebook back then, saying, well, we've got a survey about the future – the next future stores you want to have in your neighborhood. Help your city build your future, blah, blah, blah, smart city technology. It worked like crazy. We bought a car and I was riding my little Toyota metrics. I was meeting with every city console of Quebec. I've done all of them. We've signed with all the cities you can think of in Quebec. We've signed with them, Joliette, La Malbaie, Sainte-Julie all the different neighborhoods, $25,000, $25,000, $25,000. In 2016, we are just my co-founder and I, and we are generating $400,000, okay, 95% gross margin. We're the king of the world. This is when we actually are integrating an accelerator called InoCity, which was the – which was the smart city. Smart city was really the thing at one point. I don't know if you remember, but it was a trend and it was the smart city accelerator of Fund of Fuel. We made it to Fund of Fuel – Pablo 21:38 I remember when street lights were supposed to be smart and every power is going to be connected. Rudolphe 21:43 Exactly. Pablo 21:45 I’m still waiting. I'm still waiting. Rudolphe 21:47 Exactly. We're exactly in that trend at the good moment. We're a smart city tech. Build smart neighborhoods was our tagline at that time, etc., etc. We're in 2016. We're making good money. For the first time in our life, my co-founder and I were – we're clearing good salaries. We're able to actually start hiring our very first employees who are working on the platform. It was our CTO who worked on the platform, etc. Pablo 22:15 The product, at this point, are you effectively doing what a PR agency or a market research agency would do? I mean, you're just more clever in that you know how to use Facebook or is there a real product at this stage? Rudolphe 22:30 No. It was basically ultimate bootstrap version of what our product does today with machine learning a super fancy thing. It was literally we're creating questionnaires on Typeform, then we had a link, then we're creating local advertising campaigns on Facebook, bring people to fill our questionnaire. It was crazy by then, no idea of what is awaiting. Do we have enough female to male? Are we only serving – which trench of the population or the core or the reach or the – it wasn't representative at all. We aren't doing proper market research, but we didn't know so it was an honest mistake. Yeah, so we're basically doing that. At the end, Typeform was giving us a big Excel spreadsheet. My co-founder was crunching the numbers. Basically, you take all the questions, you cross them with the other questions that you try to find significant difference, deviations from the means. I was doing a big InDesign report, 50 pages and tell to the city councils what they should be doing, where the neighborhood giving my recommendation as an urban planner, which I wasn't. I was telling them what to do and I was – and literally the product was me printing out 30 copies of the report of 50 pages, distributing that to the big born whatever big meeting they all have once per month in these cities. Then I was talking for two hours explaining all the results of the survey work we've conducted with them. That was Pivot Number 3 and we did raise money on – Pablo 24:07 When you raised that money, well, how much did you raise? What was the story? Was the story to just keep doing that? Rudolphe 24:12 Yeah, so we raised – it was a proceed round. We called it a proceed round afterwards, $800,000 with Business Angels and BDC, actually, BDC super seed fund. The storyline was we're a smart city technology. We're going to conquer the world one city at a time, period. We're generating $400,000 of revenues with only, I don't know, we had 20 or 30 customers back then. It's scalable. We're going to hire account executives that are going to do what I'm doing alone today. We're going to actually approach all the cities and sell the hell out of them. That was the idea. Pablo 24:54 Where did you hit a cap? Was it going beyond Quebec or was it just dealing with cities in Hitting the Glass Ceiling Pablo 24:59 general? Rudolphe 24:59 We hit a glass ceiling in right after raising in January, 2017 because I was calling back – so everybody was super happy about the product. People were super happy. Our customers were delighted. I called them back. I was like, okay, so new year, new study, new survey. What do you guys want to do? They all told me the exact same answer. With Rod, we're super satisfied, but you gave us work for the next five years. Until the next election, there is no business going from us to you. I was like, come on. They were like, no, no. I mean, we have – our urban planning is made on a period of 5 to 10 years. They needed input when they were working on the big 5, 10 years plan, etc. They had these inputs, so they had no need for any extra survey work and had limited budget that was pre-validated, didn't work, basically. I was like, okay, so we have no repeat business with these guys. That's annoying. We knew we're still young funders, but we're like, okay, no repeat business. It's going to be… Pablo 26:03 That’s tough. Pivot #4 - Selling to Malls Rudolphe 26:04 It's going to be tough. We're making a good living, but no repeat business. It's going to be tiring, well, no repeat unless 5 or 10 years waiting time between two orders. It was way too long. It took us to Pivot Number 4. Pivot Number 4, so we're starting to build seriously the technology behind in parallel, right? We are hiring a bunch of devs that are working on all the statistical models. We're discovering what a representative sampling means. We're starting to seriously do the work we needed to do. We had inbound calls, true story, of shopping centers. I remember very well two brands. First Capital, which is still a big real estate owner in Canada, and BTB, I think it's more local one in Toronto. They called us. They were like, okay guys, I am a citizen of neighborhood X where you've done some work. What you do is fantastic. I need the same thing for my mall. They called us. My initial reaction was to tell them no. People answer for free on Facebook because they care about their neighborhood. Nobody cares about their mall. It's really not as sexy as a neighborhood. Nobody will answer to my surveys. It won't work. That time we had a tactic, which was it's a French expression that we made up. It was called PPP. PPP stands for paradis de paie perdu. In good English, it would be paradise for lost quotes, basically. It's, basically, we overpriced it in order for them to never sign it. That was our thing. I overpriced, I don’t know, it was – I can't remember the thing, but it was super overpriced. I was like, okay, so that they won't sign it because I know it won't work, but they did sign it. We’re like, okay, so now we have to do the work on not a neighborhood, but a shopping mall. The truth is we're snobbish. I was just a cool and young guy and I thought everybody was in love with their neighborhood, but people do have a sense of belonging to the mall they go every weekend. It was just my own poor judgment. We started to do the exact same work. If you think about it for a sec, there is not a lot of differences between a mall and a commercial street. The only difference is, in a mall, it's the same landlord that owns all the vacant stores, whereas in a street, it is usually several landlords. Not always the case, like in Montreal, you've got some couple of huge landlords that own a lot of stores, but basically, that's the idea. We did the exact same work. I forgot to mention that in all these things, we’re still putting as an upsell function the fact that we're doing an onsite event. On all these cities and all these malls, I was spending my weekends over there, still meeting with people physically. We knew it was really less efficient than a good old Facebook campaign, because in a day we're able to survey 100 people versus on Facebook we are able to get 1,000 people within the same day. It was crazily less efficient, but still, we're still doing that. I've spent, and my girlfriend who became my wife later, has done every single weekend with me intercepting people and asking them questions on an iPad. Pablo 29:32 Do you still go to malls? Rudolphe 29:33 We, well, I've got a trauma, for sure. With that, you've got pictures of me in front of Walmart intercepting people. We've done that for sure, 20, 30 weekends in these two years. You were literally doing that. Pablo 29:49 Why did you do it, by the way? You had employees at that time. Rudolphe 29:53 Yeah, early – well, yeah, early employees, well, four or five were all there. We were hands-on founders. I think at the very end, the last, maybe the last two or three onsite operations, as we call them, I wasn't there, but I've done the vast majority. We're putting all the money that we're winning, we're actually investing it in the platform. We weren't paying ourselves salaries. We had one or two employees and bunch of insurance, unpaid insurance, and then we're paying big price to have devs to develop the platform, which was the right bet to do. Now that we're five years later, it was the right thing to do. Long story short, going back to my malls, we do that for the two first customers, and they're super happy. We’re like, you know what? A company like Cadillac Fairview might actually be a better customer than city of whatever because these guys own several malls. They have money. They are conducting research all the time, etc. We decided to go all in on that as vertical. We started PotLoc not that long ago, 2017, 2018, 2019, so these three years we were a real estate consumer research technology. It was made for malls, big landlords that were hiring us to get data to know for new malls, to know which tenant they should rent to, to decide whatever, plenty of decisions, etc. By doing that, we also start work – we started to work with retailers as well. As you can guess, Abbott Mall and Walmart takes 60% of the real estate. These guys have a huge interest in watching the data as well. We scaled PotLoc these three years based on real estate and retail model. That's Pivot Number 4. I raised money on that Pivot Number 4. I'm not smart city technology anymore. I'm in the real estate and retail world. We raised our $20 million Series A on that one. Pablo 31:57 That one was, you mean back – this is Pivot 4 or 5, but you had real product market fit at this point. Reaching Product Market Fit Rudolphe 32:02 Yeah, real product market fit. We opened an office in France. We're 50 employees. We opened an office in France. I work with – think about all the big real estate landlords in Canada and US. We worked with them. We had Mall of America and Ivanho Cambridge and all these guys were working with us. We had crazy tech for them. They were able to serve shoppers and non-shoppers of their trade area because that was our mall. Because you can survey shoppers by intercepting people in your mall, but you can never get your non-shoppers because they're not coming to your mall by definition. You needed a tech like us to actually get people who live in the area, what we call the trade area, who should be shopping to your mall, but they are not shopping to your mall or your retail location for X, Y, Z reason. They needed to understand these reasons. We're the only company in the world able to do that, period. Pretty powerful, right? When you think about as a retailer or as a real estate manager, you need to understand these people who should be shopping at your place, who are not shopping at your place. You need to understand what you should be doing in order to get these people. We did that. We scaled the revenue quite a bit. I raised in July, 2019, led by Bright Spark. I think I might have pitched Mistral. Pablo 33:19 We did, but don't remind me. Don't remind me. Rudolphe 33:23 In 2019, 20 million series, well, it was two trenches, whatever, but 20 million Series A, paid by by Bright Spark with the premise of there are 50,000 shopping malls in the States, even more what we call big bucks retailers because we're going after big bucks retailers. This is our market. This is where – I mean, at this point where things are really hitting off, things are really going well, up and to the right. I guess a year later, you take probably the biggest punch to the face that you’ve taken up to this point with COVID and the shutdown of malls. Just walk me through how that plays out from a revenue perspective and just – I mean, you have a big team. It's not just yourself anymore. Just walk me through that, the chaos that that must have been. Pivot #5 - Post COVID Rudolphe 34:08 You saw it coming. It was obvious Pivot Number 5. Of course, real estate, retail locations, physical locations in 2019, everybody sees that fifth pivot coming. We're doing great. March, 2020, there is a virus coming from Wuhan that changed our lives overnight. We lost all our customers. It was as sudden as that. I remember we were doing a super start in January, February, 2020. We're at $800,000 at Q1, 2020, something like that in terms of revenue, in only January, March – sorry January, February, sorry, no, March. Then March, overnight, and Q2 2020, we are at I think $150,000, something like that. We go from $800,000 to $150,000 and we're finishing the contracts we had delivered before. We're still recognizing some revenue that we booked earlier. Pablo 35:06 Right, there's nothing really there. Rudolphe 35:07 We booked zero net revenue. Think about our customers. Were like, okay, we can survey your shoppers and non-shoppers in trade area. They're like, no, they're not coming. What's the point? We lost our value prop overnight. Okay, so interesting time. We prepared the layoffs. I was always getting ready to fight for bankruptcy, but the truth – it's not exactly the truth. I was getting ready to lay off people, but we had plenty of money because remember we closed our Series A in July, 2019 and we're burning a lot of money. I was sitting on $17 million of available cash burning $300,000 per month. I was like, we had free reigns to people that could a big maneuver. I made sure all the investors were aware of that. I'm like, okay, it's going to potentially kill a couple of your portfolio companies. Not us, because we've got money. Let me time to turn the company around. Basically, what happened is, back in December, 2019, one of my sales rep, his name is Gaspar, in France has been creative and accepted a deal. We had no sales engineers back then. That was out of our main practices. Basically, he said yes to Roland Berger, which is a German consulting firm, for a survey, which wasn't, for the first time in PotLoc history, linked to a one kilometer trade area or 10 kilometers trade area. It was on – don't even remember, on toothpaste, whatever, but at the scale of the country. He did that. He sold it. The tech was really ramping up at that time. We had pretty solid tech already. We put all the insights in there. We’re like, okay, that's the trade area. It's a massive trade area. It's the trade area to country, actually. These are the profiles of people we need to get. These are the questions, blah, blah, blah. We put that in our machine and worked. We're able to actually get a representative sample at the country – broad as a country. We've done two contracts, $15,000, $15,000. Back in March, 2020, I'm like, okay, you know what? They were super happy. We go all in on consulting firms. Suddenly, I had plenty of people who had background in real estate, ex-brokers from [unclear], suddenly, I’m like, okay, now guys, you call BCG, Bain, McKinsey and you tell them we have data for them, easy to collect, etc., etc. We did that pivot. At Q3 2020, we were at $1 million of revenue. We’re bidding Q1, 2020. Just we had one quarter completely down, and at two, three we're completely back, which was interesting. It was also boom for consulting firms back then because everybody was lost, all the different industries in the world. The consulting firms were flat busy. They needed data all the time. It was also perfect timing for – it was a massive behavior change within the society, right? We all started to work from home, etc. Everybody needed to serve the population, their target audience to understand, will you still buy my food if it becomes a subscription. We've tested crazy things. Will people ever go back to their hairdresser in person? Should we send hairdresser to people's home for the rest of our lives? We've done all these studies again and again and again. That was Pivot Number 5 and we skyrocketed with that one. We basically realized that the little technology we had built years after years for first cities, then malls, then retailers, was actually perfectly up and running for any type of survey, multi-country for any topic anywhere in the world. We end up today's value proposition, which is with PotLoc, you can ask the questions you want to the people you want in three days, wherever they are in the world. Today, the value, because I've only talked about what we've done in the past, but today the value proposition of PotLoc is we have access to the largest panel on earth, which is 4.4 billion active users. We can survey whoever you want everywhere in the world. You choose the questions you want to ask them. We guarantee to have faster around time, competitive pricing, outstanding data quality, because we're intercepting people on social media. We're not tapping into a panel of professional respondents, outstanding data quality and unmatchable reach. If you think about our fiercest competitor is an American company called Dynata. Their claim to fame is they have 62 million people on their panel. We have 4.4 billion. By definition we can get chihuahua owners who live in London, parents who live in Brooklyn whose kids are suffering from dyslexia, Irish dairy farmers. These are the things we do. We work – 70% of our business is made with management consulting firms. Think about all these big names. We have all of them. We do a lot of work for PE for VC firm. Mistral could be a customer if you think about any due diligence work you have to do. We can get your representative sample of any target you need to understand. We also work with big brands. We help them understand their personas. We help them track their brand awareness, all the different brand attributes they have over time, telephone interviews and consumer panels by social media. Now we're well positioned to become the category leader in our field. Pablo 40:48 That's awesome. I think I have a couple more questions. One of them pretty broadly is just, as you think through all of the pivots, something you said that comes out at me is how you were willing to let go of one thing and go all in on the other, how you were willing to listen to the next thing. Sometimes it was clear. You had no revenue and a city offered you some revenue, but other times you had revenue, like from Pivot 3 to 4, you had cities, and at some point, still made the decision to go all in on malls. What lessons, broad lessons do you draw from your experience? Just hearing you talking to an audience of you, but eight years ago, and I'm just curious, what lessons you would have – Lessons Learned Rudolphe 41:33 First of all, when I tell this story, it's a long version you're making me do today, but when I tell this story, it sounds like there are – not all of these pivots have been overnight pivots. First of all, that's very important. When we shifted from cities to malls while we were still selling to cities for a time knowing that we had no repeat business, but as we're ramping up, the sale cycle for shopping malls was longer. As we're wrapping up that, awareness in these firms were still selling to cities. We knew we were doing these pivots. I had pivots where it was black swan events like COVID. I had pivots where it was like, I need to eat so I need to get money at one point. I don’t have the luxury of time. I had pivots that were more progressive. The piece of advice is really the question I had all my life is the difference between resilience, because everybody's telling you to be resilient, and obstination, not being narrow-minded basically. You need to be resilient and focused and narrow-minded in a way, but you also need to take a step back and really realize, am I going in the right direction? I'm still doing that, right? There is a samurai Bushido say, which is always keep death in mind. What happens if in one month from now I have zero revenue, there is a black swan, all social medias are turning off, what do I do? It keeps me on my toes. I'm constantly challenging myself with business death to make sure that I am creating a venture which is solid, which is made on solid foundations. Pablo 43:23 Perfect. Then I'll ask the last question, which is what we always end on, and I know this is sometime in through Idea 4, but I'll still ask it, is, when was the first time you felt like you had real product market fit? True Product Market Fit Rudolphe 43:36 To me, when the phone rings with people placing an order without you outbounding to them is when you have product market fit. I had that with city councils. They were calling me. They were like, okay, and they were all jealous because the other cities did it. That is when I knew I had product market fit on that one. Starting at Pivot Number 3, we had product market fit. Today we have a massive product market fit with management consulting firms. We have several product market fits now, but when the phone rings and it's like net new people you've never talked to, you're like, okay, I'm onto something. Pablo 44:16 We'll Recap Pablo 44:17 end it there for a quick recap. You took us through the five pivots, five main pivots, I should say, that led to where you are today. I think through it, there's some lessons that come out of them. One of them is just be in the game. You alluded to this early on, but had you built a business plan and done all these things, you wouldn't have been in the game. You wouldn't have discovered – and this was my question originally, originally you didn't have a unique insight. You just had a, wouldn't it be cool if, and you just jumped into the game, but by being in the game, you actually started to unlock unique insights along the way. People care about their neighborhood. Later on, people care about their malls, which is not something that you would've known at the beginning, that cities care about this sort of data, came out only because you had been there in the first place and got the call. I think that's critical. The second piece is knowing when to let go of one thing to go for another, and understanding the difference between, as you called it, resilience and effectively stubbornness. I mean, not giving up broadly versus narrowly. You can give up on the thing that's not really working to go after the thing that has a better shot at delivering real value without pulling the plug on the whole thing and going to work somewhere else. Anyways, appreciate you sharing all that. It's been an amazing ride. Rudolphe 45:34 Thank you very much. Thank you for suffering from my French accent. I was looking for stubbornness as a word and I said the French word with an English accent. That works sometimes when I don't have the word. Pablo 45:45 I got it. Rudolphe 45:47 I got it. Well, thank you. Happy if my story can help others. As I say to my team, keep pushing, guys. Keep pushing. Pablo 45:55 Thank you so much for listening all the way through. It's been a pleasure having you here. 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