In this webinar, hosted by Ohio Innovation Technology Association (OITA), OITA president Nick York leads a discussion between NCV Managing Director Todd Federman, startup founders Bob Gilbreath and Gary Ellis, and KeyCorp Head of Payments and Analytics Ken Gavrity. Gary and Bob talk through the processes of founding their companies, Hearty and Remesh, respectively, and Todd and Ken provide industry-specific perspectives on engaging with startups as investors. The panel discusses the negotiation of partnerships between large corporations and new startups, the trials and tribulations of solving a major problem as a founder, and the rallying nature of the national startup ecosystem.
This conversation between investors and founders gives listeners a well-rounded perspective on the many moving parts behind startup growth and exits, and the fundamentals behind North Coast Ventures’ and KeyCorp’s investment strategies.
Watch the video or read the full transcription of the session below.
- Nick York, President of OITA
- Todd Federman, Managing Director of North Coast Ventures
- Gary Ellis, President and COO of Remesh
- Bob Gilbreath, Founder and CEO of Hearty and Ahalogy
- Ken Gavrity, Head of Enterprise Payment and Analytics, KeyCorp
- “Never let a good crisis go to waste.” - Nick York
- “By bringing decision makers together with the audiences that matter most to them, and empowering those decision makers to have real, real, true, live conversations that empower, engage, and allow for understanding of those audiences, we can improve decision making.” - Gary Ellis
- “You build a great team you can do anything.” - Bob Gilbreath
- “You have to take that good idea and that funding and you've got to build a world class team around you. You've got to have the right culture that empowers them to be the best at what they do.” - Gary Ellis
- “[An investment] opportunity can be smaller or it can be vertical, but it can't be incremental in terms of value, because no one really cares if it's just incrementally better.” - Todd Federman
Nick: I’m gonna start with Bob. Bob if you could just give us a little bit of the story with Ahalogy, and we’ll talk about your new venture in a second. But talk about that - you’re somebody who started to run it, to grow it, to exit it. All of that, so you’ve got a great perspective on that, but give us a little background on Ahalogy and how you got to where you are.
Bob: Thanks Nick. Great to be here. Yeah, you'd left out you had the start and the finish and all that you missed all the negatives hard parts middle there. But that's kind of the theme, you know, we started Ahalogy back in 2012, and the vision, the opportunity we saw a big picture was that the world of marketing is changing due to digital, it's hard to interrupt people with an annoying ad. It was getting harder, and we saw an opportunity of actually helping enable a world where the marketing adds value, it's something that people want to see. So that was kind of a thesis, we were looking for an opportunity to build a business around. And we saw an opportunity with the social platform Pinterest which was rising at the time said hey this is a platform that's all about great Ideas, inspiration, the marketing can be useful. This follows what other social platforms have done, they're going to create an ecosystem we could be a great part of that and we'll win together. So we launched, raised some money, including from North Coast, built our team built our product and our first couple of years where we had some big brands that piloted with us but our first few years was a struggle. Anytime you're building on someone else's platform it's a challenge. Pinterest was kind of slow to move, not, not as helpful as we would have hoped they could be. And we had a real kind of crisis where we're running out of money. My co founder left, you know, we were kind of starting to pick up the pieces. And it led to us saying, All right, we've got a, we've got to control our own destiny here, we've got to get profitable, not have to be relying on the next round the next round of funding, and we need to get off someone else's platform and build a product that we can just sell that led to us kind of shrinking our team down, but it was a real opportunity in the crisis because the people who stayed or the true believers, and we made it the company mission we said okay we've got, you know, X number of months to go before we run out of money, we need to figure it out, that became our whole everyone's job, you know, to kind of almost be a founder again. And it led us to try some different things and eventually we kind of fell into doing an influencer marketing campaign, and found that we could take 80% of what was great about our Pinterest business and turn it to this new growing area of influencer marketing, and in fact do it in a way that was superior to the competition. At the time, so that that that worked we pivoted classic there ended up doubling sales got profitable, and a couple years later had multiple offers from companies that are very large in the space, kind of working with the same companies we were and they said hey, look, you know, they were both like hey, we'd love to have you part we'll scale up. We ended up taking an offer with quotient technology, a company that started off as the first digital coupon, years ago and in Mountain View, and sign up with them, had a one and a half year urn out so kind of the total size of that acquisition was up to $50 million.
And we ended up hitting it. Three months early we maxed it out and then March last year where we got our checks and took the whole team to Cancun like the week before COVID. locked everything down, just in time. Still feel like the luckiest guy on the planet for all that.
Nick: Right. Well, that's terrific, and what a great story. there's so many, there's so many things in there that we'll unpack a little bit as we go through here but I noted down that never let a good crisis go to waste. Right. So you took it and did something great with it.
Gary let's turn and talk about Remesh a little bit. Talking about sort of you know the next generation and marketing and connecting with customers and what that means for companies, obviously you guys are in the forefront of a lot of that as well so tell us a little bit about Remesh, Gary.
Gary: Awesome. Thanks, Nick. Thanks, Todd. I appreciate the opportunity to be here with you and the rest of the panelists today. So, I started out as a political operator, way back in 2010. And it was really the 2012 central campaign here in Ohio that I identified a problem that resonated with me and was something that I wanted to solve.
And that was, It's super easy for, in this particular case, candidates to project out right they can get on traditional media they can get on social media, but a good politician a good candidate should actually be doing the opposite, in many ways right they should be creating a virtual table that they can get their constituents around and understanding them after all politicians are supposed to work for us. And the fact that the inverse was really how the world worked was somewhat mind boggling to me and I had this existential moment coming out of the 2012 campaign going. Do I stay in politics do I try to solve this internally, or do I do I look at in another direction I got really lucky I met over that summer, my co founder who timing and luck are two really, really important components of startups and I've gotten lucky more times than I can count and I'm appreciative for every single time that's happened but I got introduced to Andrew Konya, he was getting his PhD in computational and theoretical physics at Kent State. It's really important if you're going to start a startup in the tech space that people like that around the table because that's not me. And he was infatuated with the idea of how do you understand populations at scale. And those two ideas really merge together in many ways to create the premise behind Remesh, which is that there's a lot of decisions that are constantly being made across all kinds of organizations, private, public and and many more. And a lot of those decisions aren't that great, and by bringing decision makers together with the audience's that matter most to them, and empowering those decision makers to have real, real true live conversations that empower, engage, and allow for understanding of those audiences, we can improve decision making, and therefore outcomes and ROI. So that is what we set out to build and we moved to New York together and maybe we can get into that a little bit later in terms of why we decided to make that somewhat blasphemous decision to leave, leave our homes in in Ohio. But what we built was a web based application that allows a single person to have what feels like a one on one conversation but instead it's one to many with our tack which was principally machine learning, natural language processing, really facilitating that conversation. I will always think of Remesh as a communication tool, but the exhaust is really powerful actionable feedback.
Nick: Right, yeah. Well, thank you and we'll get into that and we'll get into how you can bottle up timing and lock and and package that next because I think everybody needs a little bit of that so that those are great points. All right, Ken, we're gonna, we're gonna turn to you now. And, you know, you come from, from Key Corp right so a big company. You're not the small startup but obviously, within that realm, there's a lot of different divisions and focus areas and you use a lot of this technology, so as head of enterprise the payments and analytics at Key. How do you think about the utilization of technology, how do you work with startups, how do you identify what real innovation is and, how does that get implemented in a more of a behemoth like Key.
Ken: Yeah, great. Well, first off, thanks for having me as part of the panel. I just think it's so incredibly important for us to regionally start to make these connections between the investment community, the startups and corporates that have been part of this community for about seven, eight years now. And when I've seen the corporations and the startups come together I think it's really powerful. I don't think we probably do as much as we need to, I see a lot of kindling of it around, but I think it's a huge opportunity for us. I would say personally the story behind how did I get involved in the tech community is really how I ended up in the payments job so my background is much more of a strategy merger and acquisition consulting background that's what I did, the majority of my career. And then I came to KeyBank in that capacity and so I was running strategy for the business half of Key, and Chris Gorman, who's our CEO now. What the President of the business side and he said hey, there's an area we need you to do a diagnostic and it's this payments part of our business.
Generally for most banks is a pretty good earnings contributor for us it's only been okay. Hey, just tell me what's going on in the industry and in this coming from more of that, that strategy background was a bit more of an outside in view so I spent my time saying, Okay, I'm pretty sure I know what we have here but what what's happening in the outside world. FinTech in 2012/2013 was really just starting to see its initial inflection point in financial services. So I spent a lot of time with venture capital groups, initially saying okay, what's your investment thesis, why do you think these small companies are going to take down the banks, and it's just really educational to really get immersed in the thinking. Here are the things that you're not doing today and to summarize that we can get into some of this detail later. There's really just much more of this software, and workflow mindset so we as a bank had a bunch of Payment Capabilities we can send money from place A to B, we send anywhere you want to go but we didn't have any context for why are you sending it there, what are the rest of the pain points that occur in that process. And we saw the syntax, getting just laser focused on well, why are you trying to send that payment there and if it's a business. What's the most important thing to you is it really that it travels, you know, instantaneously or is it more that you have the right reporting and the approvals and the visibility or confirmation of delivery and then goods were delivered. So there are all of these elements and workflow that we started to think about that clearly inside Key we just weren't thinking about that. Yeah, so that led to a really robust FinTech program that we've developed over time. We made a ton of mistakes, no different than what what Bob was talking about earlier, you know, partnering with a FinTech is hard for a corporate that there's a lot of inertia and how corporates do business and trying to open up that apparatus and work with a 10 or 30 person company is really hard. So we started to say, look, there are some things that we are not the best builder, but we see some great solutions out in the marketplace. We know that we've got customers that need these capabilities so how do we start to build some of these partnerships to build capabilities together, deliver them together. And now we're nine partnerships in - I invested directly in capital into six of those companies. They've all been fruitful so knock on wood in the sense that I think we go through our diligence and I'm happy to tell you what I look for in these companies but it's a big part of our business. And then the second half of what I do that the short version is head of analytics which supports all keys so from the consumer side all the way through to multinational businesses.
This really is the neural engine of Key and I think like a lot of corporations, you know we are lucky that we have access to an extraordinary amount of data, you know, we get called by Apple and Google and others who can't wait to have access to this data. And, but, you know, as a bank, I think, you know, no different, a lot in the industry, we just weren't great at accessing it's in a lot of different legacy systems that isn't well connected. It wasn't attached well to use cases. And so, you know what we really tried to energize over the last couple of years is how do we pick a couple of places where we can start using data much more like a FinTech and personalized experiences underwrite our customers better and be much more proactive in how we think about identifying their needs and getting ahead of even our customer asking for those capabilities. I'll stop at that.
Nick: Yeah, no thank you, that's great and we will want to unpack that a little bit on how you know companies connect with you, you, you said you're, you know, nine for nine I guess so your batting average is terrific. So, you must do, you know, really focused diligence, but so that lends itself to the questions and we'll get into it, of what companies have to do to be prepared to have a partnership like that with you guys so I appreciate that perspective.
So Bob, I'm gonna go back to you. You come back from Cancun, you said you got somewhere in $50 million range. You're the luckiest guy in the world and you decided to go back in to start up again. So what prompted you, what lessons did you learn, what's better about this time than last time as you think about bringing innovation into the marketplace, you know, another time?
Bob: Luckily we were on a great pace toward earnout so I had several months before we were done to do a lot of soul searching. And, you know, I think a couple things, pulled me back in one is that I realized, you know, being an entrepreneur for 20 years or something… I’m not that great having a boss, it's just the way it is.
That's the first thing but really it was more about the building process, it’s incredibly fun.
It was a couple of our other Ahalogy leaders, the three of us said, Let's go do something together. We kind of cover the major, major bases. Between us, and with technology and operations and finance, and we just got together and said hey we want to do this again, you know, and kind of our brief was, let's go for something really big, you know we've got some money in the bank, we can go without a salary for a while, let's take a big swing, and then let's do something that we're just really passionate about. And that led us to come back and say well what we loved about building our businesses was the people element, and building a great culture I think that it's really everything in business now it's, You build a great team, you can do anything, it almost doesn't matter what category what business, it is. And yet we also saw how most companies struggle to build great teams. So that became our vote. Let's build a company that helps bring in some things we've learned, and scale a positive impact on the world. And as we thought about building a company about building better teams we went down the rabbit hole and looked at something that had been a key to our success was just going very heavily into our networks, finding not just, Hey, who do you know, like really going deep, who's the best spotter of talent. You know what's the company that shut down, how can we grab the best people immediately even if we don't have jobs for them right away. We'll figure it out. And that kind of led us into seeing it fits, where the talent world is going now you can't just wait for people to apply, you've got to go find them. And yet, it's very difficult, you know, if you look at that we've all had that question of I need to find a great X. What do you do, do you text you email, do you LinkedIn, wait for people to respond on, you know, you get a handful of names, maybe.
The only technology is LinkedIn which increasingly is pursuing a world of let's connect everybody whether you know each other or not, and sell ads in your feed. And that can be very useful but what we're missing is the true relationships and so what we've created with Hearty is kind of a new way to just almost get back to basics and make it more efficient, to share the great people that you would recommend and love working with. So our concept is we have leaderboards, which are crowdsource lists of people with a certain skill interest or expertise. So we got like 230 of them right now you can go on and find, you know, leaderboards of project managers, people who are recommending, project managers, they've worked with and you can just go find them and see recommendations which are a lot stronger connections than a connection a LinkedIn connection for example. We've got angel investors, we've got Midwest VCs, we got top innovators corporate development people things that you can't even find a skill for on LinkedIn, we've already got it and it's peers, building these lists together. So we're really early, you know our kind of concentration so far in building the this marketplace is around Cincinnati, but people are enjoying it. I think it fits very well with where the world is going now, which is a positive. Let's help each other, let's pay it forward type of mentality. And we've got 1000s of people on, you know, just a month or two away from, from our official launch, we're getting people are finding jobs, people are finding peers that are networking in ways they couldn't before. So, we're pretty excited.
Nick: Yeah, that's terrific and I agree I think that, you know where the world is going is a big question and innovation, right, you guys are at the forefront of thinking about that and are fortunate to be in a position to to do that with a company and kind of, you know, make your way but those are the building blocks of something great, so I'm sure that I'm sure you'll be doing it again in Cancun a few years down the road but we'll see. So Gary you talked before about New York gave us the, you know that the teaser there the move to New York and so you've obviously had tremendous success and growth over the last, you know, four years or so, right, and what do you think the keys to that you know again you've got a pretty innovative product it's not something that you know, everybody intuitively knows how to use or can just kind of put in place, it's not you know you got to figure out how to do it best, I think, from what I understand, so what do you what do you attribute your growth to is, is it that move to New York or is are there a number of factors?
Ken: I think there's a number of factors and at different phases of our life cycle we've had to make different decisions and to lean into different directions and trends and I would start off by saying, I don't think there's one size fits all, for how to map out the right path to a successful startup, and I'll follow that up by saying, I'm not convinced that a successful startup yet it's great to be in the top portal of COD's charts, but I'm far from feeling like I have accomplished what I set out to do and kind of the eyes for is something that I do think is probably particularly helpful at across all the phases.
We certainly had a bold idea, and a lot of grit, determination, at the beginning to get it off the ground. I didn't start working full time on Remesh between 2012 and 2015. I only joined full time when we moved to New York. I went through TechStars and a lot of that was, how would be not a burden on the company but there wasn't, it wasn't a product and the core technology had to be built first and I think that's something that I've seen companies overlook which is, if you're a technology company, you have to invest in the technology first. It's super important to get that off the ground and be really so focused there. That the move to New York was in large part, driven by the challenges that I thought we would have raising capital, and finding count in Cleveland at the time. I mean zero disrespect to Cleveland, we had always thought we would come back here and I'm reporting live from Solon, Ohio and I'm glad to be back in Ohio. we're planning on shifting our global headquarters here on the other side of COVID we just had to get off the ground and we saw an easier path on the coasts than in Ohio.
You know, we burned a lot of capital, thanks to a lot of funders who believed in us. I'm a first time founder, I've made plenty of mistakes along the way I think learning from that is key, bringing in people who have been through the game before who you can trust and leaning into their knowledge, their expertise and being willing to grow with them. What Bob has just said was so spot on, it's all about the people and you have to take that good idea, that funding and you've got to build a world class team around you, you've got to have the right culture that empowers them to be the best at what they do. I've got a bunch of different departments underneath me, all of the people who lead those departments are better at that function than I am, and I've got to challenge them with some strategic stuff. We got to get alignment on a planet and I've got to resource them and get out of their way and let them do what they do best.
At the end of the day what that resulted in was unique powerful technology that has truly differentiated value. Ken is right, there's so much data out there and most organizations have a really hard time dealing with it, making it useful, turning their data lakes into something that is valuable. we've gone after a slightly different type of data, something that's custom primary that's generated in real time that's designed to answer specific questions that you're asking and the moment. We do that with unstructured text which is super super hard to deal with.
So we've got something that the market needs that hadn't been solved before and we've seen a lot of acceleration through the last year with COVID with remote workforces, and trying to understand how employees are dealing with new situations how customer behaviors are changing. It's grueling it's hard, but it's super fun and energizing I think it's a, it's a blend of grit skill timing and luck.
I think part of what has made us successful thus far is we've never been happy with where we are, or what we've done. We're always looking forward and trying to get to that next level. Hopefully that all leads to good outcome in the end.
Nick: Yeah, yeah, that entrepreneurial problem solver, right, that's what the key is. sometimes businesses or business people go looking for a problem to solve, and have a product that is not necessarily a problem but when there is a problem, that's when you have your biggest and best opportunities, even though it's hard, you're making your way. So Todd let's go back to you for a second. Bob and Gary talk about these new fresh ideas, and incentive startup and in the future, right, when you think about from an angel investor standpoint or from that VC standpoint, is that sort of the focus? that next big thing always? Or is there opportunity for the companies who are just doing something better or maybe something that's more related to what Ken was talking about. kind of some core functions at key but just improving that process in some way. talk about a little bit how you think about making those types of investments in companies, whether it's the unicorn and the big idea that no one's thought of or it's the unicorn that's from simply making things better as they are better widgets so to speak.
Todd: Yeah, I'd say the ideas we're looking for and the ideas most venture capital funds are looking for our big ideas, by definition, and although all VCs are different, there are some that are $10 million funds, some billion dollar funds, there's some that focus on software some that focus on life science, some that do early stage, some that do late stage…. the commonality though, is it's got to be something that's a lot better than exists today. I think the opportunity can be smaller or it can be vertical, but it can't be incremental, in terms of value because no one really cares if it's just incrementally better. You're probably not going to be able to attract a team that's really good enough and motivated enough at building something and you're probably not gonna get the attention of a customer. I doubt that any of those deals that you can partner with were 10% better than what he was doing before, right if they were 10% better or 20% better, It probably would not have been worth even looking at it, let alone going through a real partnership or in some cases an m&a process. So, yes, there's a meaningful risk reward trade off, and as investors, just for the investor model to work, to compensate for the risk that we take in the failures that we know will see in parts of our portfolio, there has to be a really substantive upside. Typically, looking for industries that are or will be billion dollar industries that are growing, that are attractive, where the opportunity is enough that there can be venture scale, and venture profitability. Gary mentioned burning dollars. We don't like to use burning and dollars right next to each other in a sentence, but it does take a lot of money to fund these initiatives and usually the opportunity has to be big enough just to justify that model. So, as we go through our initial assessment, or we go through a substantive diligence process, one of those common sense questions we're asking is just how much better is this? I would say about half the time when we say no to an opportunity or it fails in diligence, it fails because the opportunity isn't big enough or the problem that the company is solving, the solution they're bringing to market, is just not a meaningful enough improvement over what exists today to justify the investment and justify the model, from our perspective.
Nick: Yeah, that's great. Well I think looking at that and what's the big picture, what's the opportunity, right? One of the things I'd like to talk to all of you about now is this notion. I'm going to start with you, Ken. But this notion of partnering into a large organization, sort of the startup and the relationship with that corporate partner, whether that's a strategic partnership, whether that's an investment, whether that's just selling into the organization. You know what, Ken, when you look at sort of the startups and the technologies and you mentioned, you know, you said nine of them. What were the things that you kind of look for and kind of insist on in order to give it the time of day, I guess I'm just kind of to Todd's point. Talk a little bit about how you in your position, think about working with a smaller company with a great idea or a great new technology.
Ken: Yeah, sure. So just to give you a sense of the funnel, we probably looked at around 400 to 500 to get to those nine. So, on an every week basis, I will get the unsolicited sort of bought emails I get the intro from somebody who knows me well, who, two degrees of separation that person has just gotten seed capital funding. It gets to me in every way possible and it's really hard to differentiate these so we put a model together that we've been using now for the last couple of years. First up for key, what we start with is what customer problem do you sell? I don't play as early in the game as Todd does, so I'm not incubating ideas. I had a number of people approach me to say, look at all this blockchain talent that I have, what can I solve for you? well that's not an interesting question for me. you haven't solved the customer problem yet. So when you can look at the customer base, whether it's consumers with a small business or a large company, what need have you identified? And if you listened in so far, Gary and Bob talked about the needs that they've solved. It's very narrow, which is where the world is going. The world is getting hyper verticalized by industry or by use case. And so you have to really demonstrate that you understand that customer pain point incredibly well. And then you've got to be able to demonstrate that you built the right solution. the right solution might be software alone, but rarely is it software alone. most of the time it’s software plus some services wrapper, because it can't live by itself. I think a lot of the early companies that back in 2013 and 14 that we had that were much more software companies but they didn't understand how to build a channel partnership, how to work with a bank or how to deliver all the wraparound services that a business customer might need as we actually deliver it into the marketplace.
So, you know, it starts with what what customer problem you solve, then I moved from there into what you've heard a lot of from all the other panelists, which is quality of the management team, and, I would put this at you maybe to dimensionalize this a little bit. I'd take the third best solution to solve a problem with a great management team more than I care about the best software solution the best mousetrap in the marketplace. so a good enough solution that really still has that 10x value to the customer, but it's got to be with a management team that has the experience to understand a couple of critical things.
First is, what are you not good at today? Do you understand what your blinders are? what you don't do well and have you identified it too is, have you built a management team that can scale or do you have a management team for the size that you are now? that becomes a problem, so if you don't understand, if you don't have managers that understand what it is, what it's like to go from a $5 million company to a $50 million company to potentially a $500 million company. Then there are gonna be fracture points along the way, so those are things that I'm looking for, and it doesn't mean that they have to have it now, it means they need to know that they need it and that's part of the game plan.
And then the last thing for me in that line that we've got to align on, on the strategic roadmap forward. So we may align on the solution as it exists today, but it's incredibly important for me to have, particularly with the CEO and the board alignment., Where is your focus? like where are you taking this product or capability next, so we don't find ourselves at agreement now but in 12 months from now, as the evolution of the product goes down the path where the CEO wanted to take it, maybe that doesn't match up where I thought the world was going. And so now you've got tension in the relationship that's just hard to reconcile at that point.
These are all knowable discoverable things, maybe the last underpinning that I would put to all of this is there's nothing, there's no relationship where at the outset, you can codify it in the agreement whatever part commercial partnership we put together. there are going to be a series of problems that we did not think through, and so that's where the relationship and really getting to know each other and how you solve problems as an organization, we're going to have to deal with problems outside the contract that need to probably wait, make its way back into the contract at some point, but really start with, we need to solve this problem in real time with the spirit of what we set out to do together, and let's just get to the right answer. And that's been crucial in picking my partner's right.
Nick: Yeah that's great I think that the working through it process and the relationship is critical, it all comes down to two people. it's a lot of levels and you said that you take a management team over that the solution itself. And I think that's an important point that a lot of times gets overlooked. People think they have the best mousetrap, but but people really do matter. I think that's a point that you hear from a lot of good business leaders. So Gary talk a little bit about from Remesh’s perspective, you're obviously with a number of large organizations and kind of have that in a variety of types of businesses. you mentioned everything from politics to big corporate interest. So how do you go about introducing this innovative idea into a large organization, what's your experience taught you?
Gary: Yeah, you probably saw me nodding, nodding along to pretty much everything that Ken said and it's interesting to see his perspective from the other side of the table because everything that he's saying is what I'm looking for, but the other side of the coin. and for me the first thing that matters most is having alignment on the problem that we're trying to solve, it's a real problem. you've got dedicated resources to solve it and, to Ken's other point, we think of ourselves almost as an AI agency. Our technology is good, but you need people and you need people on both sides. That takes dedicated resources from us, and I have a well staffed customer support team and internal research support as well that is there to service the client as much as possible, but I also need a champion on the other side who is going to be investing resources not just here's a contract - hope it works! That's not going to work and we very much buy into the land and expand model, which is let's bite off a real problem that we have, something that is tangible that you need to solve today. Let's nail it, let's figure out what is adjacent to that that allows us to grow. We should prove our worth to you. And the biggest contracts that we have, the champions who promoted to three times under Remesh and now they're actually VPs and one of our champions is a C level and he started out as a director. We've won in many ways, and our net dollar retention is almost off the charts. When we tell people they're like what, that's insane! And it's because we invest early in the relationship, we make sure we've got a unified vision and we spend heavily at the beginning to make sure that we can deliver on what we say and we're okay with ROI and relationships taking a while because it's only once, you're really at scale, that you're going to truly see kind of the fruits of those investments.
So I think everything that Ken was saying really resonated with me.
Nick: Yeah, thanks! So Bob, just kind of build on that point a little bit. You're at that stage now with Hearty - it’s kind of new. You said you're not quite of the full launch, but you want to have that relationship for companies and help them build those networks and connect people.
So how do you do that at this stage when you're a known commodity and essentially you've been a successful entrepreneur, but your product or your service or what you're doing next is not. How do you start that conversation? when do you take the step towards engaging with some of those larger customers or users?
Bob: Yeah, we're doing something a little bit different this time. I think some of that is the nature of if you're trying to sell into b2b, and these were from our early customer discussions, it's a bear. I mean it's if you're kind of following the traditional path, it could take a year to get a pilot off the ground. And so in our case, we said, you know, we're going to be done if we kind of do that style and then they're gonna want every bell and whistle, everything else if it's that top down mentality.
So instead what we've been doing is offering something that has a lot of value for free, and we're allowing large companies startup founders to use and get value from our system. And so we've got recruiters at Kroger that have a problem. They have to find a data scientist, and they're not coming through the application portal. And by the way, no one's coming through the application portal in the future. So we've got a service where they’re on and finding talent, and we're learning, we're being able to show that there's value happening where they’re giving us notes on our product. And that didn't take up a giant pilot. That didn't take rounds of approvals and everything else, it's just having a system that someone can use.
I think that the bottom up model is what's happening in a lot of b2b markets now where somebody can pull out their credit card, somebody can get value automatically. If they're coming in and kind of forcing it through with real case studies of success, versus, let's put this in an 18 month timeline to maybe get rolled out and pushed to the people below.
Nick: Yeah, yeah. Thank you, well we're getting a little bit short of time, so I want to ask a question that's in the chat here. It's from Alex Michaels and I'll just read it so you guys can get it, and the others can listen in. So prelude to cinema just completed a crowdfunding campaign for a social network and sales platform to help artists hit hard by the pandemic gain fans and revenue. They were supported by jumpstart, Bernie Marino and others in the community, and they'd like to know how to reach out to others in the community to help support artists, so they can contribute to the economy here as things start to open up. so I think that's a specific question to that business, but talk about how that ecosystem of connectivity works, how it's worked for you, what are the things that you did that were successful. Todd, what role do you guys play? I know you play a tremendous role in connecting people, even if it's not an investment that you're ultimately going to make I'll open that up. Todd, you might want to start to give a perspective and then others if you got some, view into that it'd be helpful.
Todd: Yeah, I'll just say there's a lot of power in the entrepreneurial ecosystem. So many people are inclined to listen and to try to be helpful even when there's nothing in it for them and I think that's kind of where it starts, is being able to promote the vision, talk to people who are able to understand and retell the story. And, you know, in 2020 and 2021 to use the virtual environment as much as the physical environment because unfortunately, there just are not as many opportunities to engage. There isn't that serendipity of events and people and places and it has to be more deliberate, but I know in the major cities and in Cleveland there are entrepreneurial communities on all of the various platforms, and ways to get that out there. I think people have a soft spot for trying to be helpful where they can and entrepreneurs can and should promote themselves and try to have others support them.
Nick: Yeah, Bob, Ken, Gary, you guys got comments on any of that?
Bob: I’ll throw in what I like about this concept is that there's definitely a trend around community, people want it, they're looking for ways to belong. I mean, people are trying to make a community in b2b software. I don't know how successful that is, but if you have something that has a natural group that is drawn to it. You know it already, you're one step ahead of the game. We've been following some of the things that this question is about and at the end of the day, it’s got to do a lot of personal outreach, a lot of stuff that doesn't scale. I mean I'm making a lot of friends, I'm on LinkedIn, meeting people, connecting people, there's a lot of just creating the community by just sheer will. You know they're not going to just come to you, you got to go get wherever they are.
Gary: Yeah, definitely echo the sentiments from both Todd and Bob. we TechStars, which was the accelerator I went through in New York, has a gif first as their motto. And that's something that I really internalize and it comes around. The other thing that I think is super important here, and that's a fundamental way that I think about running a business is as a portfolio of experiments. You don't know, there's no silver bullet, what channel works for you isn't necessarily going to work for me and vice versa. Get out there, try a bunch of stuff, and then invest in what works and divest from what doesn't, right, it's, there's, there's no way there's no good answer to these questions other than start trying and work hard, right?
Nick: Yeah, no substitute for hard work. Ken, any thought on that as we're getting close to the end here?
Ken: Yeah, You know I just echo what everybody else said, I think networking is sometimes something that we just assumed happens, you know, or or we episodically do it. I think you have to be really focused on networking and through all the various types of channels you have. Exactly the way Gary said, I have the VC community that I very intentionally keep up with every quarter I make sure I'm talking to the same people to see how they're changing their investment thesis, what are they looking at now, what are they doing? the same set of entrepreneurs that maybe have exited companies, what are they up to now? What teams are they building next? what problem do they want to sell? I don't know where these conversations are going to go and I probably had more useless conversations than good ones, but you only have to have those once, and you realize that it’s not a pathway where you can mutually help each other. But ultimately over time that’s how you create a collection of people in various stages of the community that can both help you and who you can help.