SaaS Stories
SaaS Stories is my not-so-secret quest to learn what it truly takes to succeed in the world of SaaS—and I’m inviting you along for the ride! I have the pleasure of sitting down with brilliant minds and industry trailblazers to explore their journeys, uncovering the secrets behind their growth, the gaps they spotted in the market, and what really drives them.
It’s not all smooth sailing—there are challenges, unexpected turns, and moments of reflection where they share what they’d love to change about their journey. Think of it as a candid, insider’s look into the world of SaaS, with just the right amount of curiosity, empathy, and wit.
Join me as I dive deep, selfishly soak up all the insights, and hopefully share a little inspiration with you along the way—one SaaS story at a time.
SaaS Stories
Why Silicon Valley Banks on Market Experiments — Kate O’Keefe on Smarter Startups
What if you discovered that the key to your startup's success lies not in groundbreaking ideas but in rigorous A/B testing?
That's exactly what we explore in our conversation with Kate O'Keefe, co-founder of Heatseeker. Kate takes us through her journey from working with tech giants like Cisco and BCG to revolutionising market research with Heatseeker, a game-changing SaaS platform.
We also dive into the unexpected twists encountered during Heatseeker's development, where initial successes were found in competitor analysis rather than its intended market experiments. Kate and I discuss the common pitfalls marketers face when they mistake campaigns for carefully designed experiments and the complexity of controlling variables on social media platforms. By prioritising data-driven insights, we reveal how businesses can avoid misguided strategies, ensuring that their marketing efforts truly resonate with target audiences.
Our conversation wraps up with a closer look at the vibrant startup ecosystem and investment landscape in Australia, contrasted with the US market. Kate shares her personal experiences with building a diverse cap table and fostering an ecosystem of supportive investors. We emphasise the importance of attracting passionate team members and maintaining a clean cap table.
Welcome everybody to another episode of SaaS Stories Today. I'm excited to be joined by local Australian, although having a stint in Silicon Valley as well. Welcome, kate O'Keefe from Heatseeker. Thanks, joanna, I'm really happy to be here. I'm really excited to hear about your journey and, specifically, silicon Valley. I wanted to know what did that teach you about SaaS, about innovation, and then what inspired you to start Heatseeker as well. Tell us your story. It's a great question.
Speaker 2:So I was a couple-time founder when I took a job working for Cisco.
Speaker 2:I was working in Melbourne at the time and someone approached me and asked if I'd be interested in leading Cisco's at the time Southeast Asian innovation function and, as a founder with curiosity about what working in a really big enterprise would feel like that sounded pretty exciting. So I went and moved to Singapore for them in 2010. And, yeah, it was my job to help engineers, talent early and careerers in the business get their ideas, funding, support, development, patents, implementation and that role over a decade kind of grew and grew into, you know, the creation of startups for some of our biggest partners. Some of those startups still exist today and, yeah, I was headhunted by BCG to be the partner in charge of their design function in 2020. I thought it would be a temporary gig but I got here in Sydney for that job, home for the first time in 10 years in January 15, 2020 2020, about six weeks before the zombie apocalypse. That was covid, yeah, california, um. And. And while I was at bcg, I fell in love with the practice that they had that they'd really industrialize this capability. They had a running sort of they're called painted door tests or smoke tests or even a b test. So everything that we were building, you know for a client what the opportunity should be, what the idea should be, what the product should be, what the feature stack should be, what the go-to market should be should it be 10 off or free delivery we used to be able to test, uh, that through these panels of five, six, seven, eight ads that we would post on social media and we could get an answer back in as little as sort of five, six, seven days.
Speaker 2:And so when I left BCG in 2023, I was just sort of really haunted by this idea that someone needs to make this easy, someone needs to make this available to everybody.
Speaker 2:Someone needs to make a B2B SaaS platform where you can give it a question and it'll give you a panel of ads. It'll post them for you on socials, it'll help you find the right target market for your experiment, and then it'll bring the results back. It'll say, when you're speaking to this segment, you need this feature, or you need this buying driver or benefit emphasized in your marketing, or build this feature first, because that one is less going to be less popular with this target segment. And so, yeah, that's really the idea behind Heat Seeker. I had that itch. My cousin who was the CEO of her own consulting firm was a real AI addict and she kind of really helped me sense like the CEO of her own consulting firm was a real AI addict and she kind of really helped me sense like the power of like this moment in the history of the technology and how those two things my curiosity about disrupting market research and, you know, her real aptitude for the tools meant that we were able to start HeatSeeker together about 14 months ago.
Speaker 1:Amazing and, as a marketer myself, I completely agree with those A-B tests. They're crucial in learning more about your audience and what's working, what's not, and I think it sounds so simple but unfortunately it's not something that's quite common that people do. I think a lot of the founders and marketers will run one campaign. Three weeks later they'll be like oh, that didn't work, let's try something else. You know there's not as much A-B testing going on as there should be. Your experience with HeatSeeker. What are some of the really cool tests that are an absolute must for a founder wanting to, or even a marketer wanting to, launch a new product or try a new region?
Speaker 2:Yeah, it's a great question. So my favorite test by far is called a buying driver test, and that's basically where we look to test, like by segment, what is the most important reason why this user buys you. And it's shocking to me how few people really know, like. They know it's a quality product and people appreciate the free delivery, and people like this subscription model, or people like our security or whatever it is, or the service, or they like gym in accounts I don't know, but often they they can't put their finger on like in order. What are the real reasons people buy um your product and it's so important?
Speaker 2:A great example is we have a user who is a neo bank in europe. They're called waymo bank and their new cmo was given. You know a lot of quite expensive market research that had been done and all that research sort of showed that human-led customer support was the most important differentiator and buying driver for that bank. And so they were going to build a whole go-to-market playbook around the idea of human-led customer support. And so he was curious, didn't seem intuitive to him. But when everybody is clear and everyone's got everyone's read this research and what, how do you pivot, how you turn the ship. And so we ran this experiment where we lined up 12 different buying drivers for Waymo. You know, human-led customer support was absolutely one of the drivers we tested. We also tested, you know, 10 minutes to account setup. We tested easy integration with your accounting, easy billing, multiple currencies. You know competitive effects, all of those things that you think could someone could want to buy. You know a bank like theirs, and unfortunately human-led customer support was dead last in terms of paying drivers.
Speaker 2:I'm sure it's a reason why they retain their customers. I'm sure it's compelling. I'm sure it's in the mix. I'm sure it's why people buy a bank. They get off the phone and they have a bad experience and they go. You know, screw this. You know I don't want to work with you guys anymore, and they leave a bank for that reason. But push comes to shove, people don't buy a bank for that reason.
Speaker 2:And so that's what we found with that research. And with that research they were able to pivot completely, redesign. They go to market playbook you know the sales motion and now we're running experiments for them in different current, in different languages, in different jurisdictions, so they're able to kind of roll this model out. But of course, every market you go into, there'll be different competitors, different entrants. So making sure you localize and you test all the assumptions going into a new market. Now, often people marketers, founders like, well, this is our identity and our identity goes into every market with us and it's like your identity is so important and we have to be cognizant, aware of what are the buying drivers in that local market. You know, let's make sure that we're always emphasizing the real reason why people will buy your brand so important, isn't it?
Speaker 1:I was just as you were talking. I was just thinking, like you know a lot of companies. They do these massive strategy workshops. You know, days on end and the people who are in that room were the only decision makers decide. We think this is why customers love us. So let's create a ton of content around this. Let's put our top salespeople on this. You know, all the time, energy resources, money goes into this one thing. And then what if it fails? And you haven't really properly tested what is the real reason. So I love that.
Speaker 2:That's pretty cool yeah, and and of course we're usually not the target market usually you know you need dudes in a meeting room doesn't represent who it is that we need to sell to. And the other thing is that the process of decision making that way you know and I do it as a founder, I'm so used to choosing tools and tech stack and making decisions I often forget that you know the decision of what goes into the product, what goes, what the next feature should be, how we express this value proposition, what the brand ought to be, you know should really be, you know, exposed to our users. And what I find is that when you find you know a regular capability and regular cadence to expose these decisions to your users, you can move a lot faster. There's no point arguing, there's no point talking people into it. You know we can. Just your idea and my idea, both of them can go into the market as very incident experiment and so there's no point in us.
Speaker 2:Let's just we can brainstorm this morning, we can post the five best ideas in the afternoon. Let's come back in two weeks and double down on the two winners, and so in general, we can move faster and just shave out a lot of the convincing culture that's so prevalent in how we run our companies today. I love that.
Speaker 1:So what are some of the key things that you test in terms of messages? Is it about the features? Is it about the product, is it about the team? Is it about everything, really?
Speaker 2:Yeah. So I always say that great artists only ever make self-portraits, joanna. And so when I built Heatseeker, I really thought it was going to be for product builders like me. It was going to be for people that wanted to test their ideas, test feature sets, put their product roadmap in order of popularity. It would be about real sort of value proposition exploration. I really thought that that was going to be the use case and also giving product folks influence within their organizations. You know confidence. You know to move more quickly. I thought you know founders and product people would be. You know to move more quickly. I thought you know founders and product people would be. You know the real target.
Speaker 2:Of course, now that we're in market, what we're seeing, it's really marketers that have a real passion for this space and they're enjoying influence over product in that way. They're enjoying conversations about the roadmap and you know the feature set. In a way, they might not have been at the table in this, or at least as early as they would have liked in the past, which is great. So, um, what we find people are testing. We talked about the buying driver test. That's very popular.
Speaker 2:Talking about like value proposition and language is very important as an example. So I'm kate. Do I sell market experiments or market tests like what does better with what market? You know, with the target market? It's an example of one change in language where there's a material difference. Actually, market test performs a little better than market experiments. So you know, it's a lesson that I had to learn. You know, I'm not the target market, I'm not a marketer by training. So it's a great way to kind of keep refining your success language.
Speaker 2:And then, of course, we get into things like go to market, like should I sell this product by subscription at a discount? Should it be free delivery? Should it be buy one, get one free? Is this gift with purchase useful? People do use it to test creative. You know different photos and different, different, different creatives, but it tends to be quite late in the journey. You know, by then you know they've got this really rich body of data that they're using to make their product decisions, their their campaign decisions there and then and then getting into creative is quite late in the piece.
Speaker 1:Yeah, yeah, it's amazing how one little word can make all the difference when it comes to, like, people signing up and wanting to test out your product. It's, like you said, the difference between test and experiment. Yeah, I, I've actually found sometimes changing the color of the call to action button as well. It's like whoa, yeah, I noticed it a bit more. But, as as an entrepreneur, what kind of key lessons do you think you've learned from building your MVP?
Speaker 2:I mean, I think it was only six weeks between you know, when I first, you know, incorporated Heat Seeker with Fiona and when Heat Seeker's first iteration went live in market and it was interesting. You know, I had to run an experiment. I had to eat my own dog food. I wanted to build a market experiments platform, market research platform, and so I assumed that, like market experiments would test the best in an experiment I ran live in market. Unfortunately for me, it didn't. So what went a lot better was, you know, help me with competitor analysis, competitor research. So it's an interesting part of the heat seeker journey.
Speaker 2:I had to humble myself and say you know what? That's what the experiment says, that's what we're going to build. I know it makes no sense. We're building a market experiments platform. The very first feature we're going to put live in market is going to be you know, you put in your URL, I'm going to scrape your site, I'll use that as a search query and I'm going to create sort of body of knowledge about your competitive space and exemplars and foreign markets. You know that you can learn from and I'm going to present all that data to you.
Speaker 2:And what was interesting and I wouldn't have known that if I hadn't followed the, you know, if I hadn't followed the curiosity and followed the data, was that at least at the time, you know, 14 odd months ago, people didn't know, like people weren't searching online for market experiments. You know, now it's a bit more common. You know, maybe the set of the artist move, maybe people have heard about Heath Seager a little bit, but you know, at least at the time no one was Googling market experiments platform, you know, but they were frequently googling competitor analysis, and so what I was finding was this really interesting sleight of hand they would sign up, they would come for the competitor analysis and from there they could start a journey. That was, and if, if you're looking for competitors, you're probably in the research game, you're probably in the game of conceiving of something new and a new product, and so it was a really interesting example of how, you know, I hated the experiment.
Speaker 2:The experiment did not give me the data I wanted. I got something, a bad result, quote unquote. I followed the money and I did what it said. And you know, I invested quite heavily in, you know, a team to build this competitor analysis AI tool that would support people on this journey as heat seekers first feature, and I turned out. I did. I learned a super valuable lesson and it was all about how do I find buyers at the right moment and in an example like mine, where I'm creating a new category to some degree, you know the create the category of an experiments platform, someone who put you know experiments live for you on social media. You know that there's not a lot of comps for that live in market. Making people aware that that's something that they could even find is tricky, and so that's what I learned from the very first experiment we ran.
Speaker 1:Yeah, that's so interesting. I mean, people don't know what they don't know, right. So they'll kind of come on board thinking this is what I want to do, this is what I want to test, and then they're just completely blindsided by the results. So it takes them in a completely other direction, but I guess that's what needs to happen. What are some common mistakes, you see? But I guess that's what needs to happen. What are some common mistakes, you see? You know, specifically, marketers or founders making when they're testing these kinds of things, do you find there's a bit of bias at the beginning happening?
Speaker 2:Yeah, I mean we're obviously close to a lot of these challenges because we work really hard to create a platform that will solve them for you. I mean one of the biggest things we work really hard to create a platform that will solve them for you. I mean one of the biggest things we have is that people think their marketing is an experiment. So they'll create a campaign, they'll invest in creative. There'll be a couple versions of the creative, the campaign will go live and the campaign will fail, like the campaign will suck and you know, and we will assume all sorts of things were responsible for the failure. We'll assume it was the offer that was no good, or the product was no good, or the creative was no good and that's not an experiment. You know that's just a shitty campaign and it's not. Until we start controlling the variables and putting you know, testing for one thing at a time, that we know what is it that is and isn't working. Is it the product? Is it the offer? Is it the target market is wrong.
Speaker 2:We have to look at these things in sequence and we have to control the variables and test all of them at once in order for this to work and the social media platforms make it really difficult. The minute one of the variants in an ad campaign, you're nodding. You've been in marketing before the minute, you know one variable gets a nose in front of the other. You know the social platform doubles down on it like crazy to maximize your spend and your success, quote unquote. And so that variant which you know might have it, might have caught back up.
Speaker 2:That's the interesting thing about doing this. The way that we do it is often something will be ahead and then and then the order will change. And had I allowed it to take me down an algorithmic death roll, you know we would have thought we could pull out insights from the performance of that marketing campaign and it could have led us strategically down a dead wrong conclusion. So I think that those are some of the biggest issues is that people think that the activities they're doing are an experiment and unless you can tell me it was the product, it was the picture, it was the target market, it was the budget, it was, unless you're sure that that's what it is, and that's what you have to do. You have to split out all of those assumptions one by one and we have to test them one by one in order to get you the result that you're after, and that's how you use this sort of technique to give you a quick, low-cost way, you know, to support you in data-driven decision-making.
Speaker 1:It's so frustrating what you just said to social media. I've had this happen to me time and time again. They're like oh, this one got more clicks today, so we're just going to keep running that and assign very little budget to everything else. Good to hear there's a better way to test things. Can you maybe share one story or example with us where a test really surprised you? Sure?
Speaker 2:Well, other than the very first one I ran, where, you know, the concept of my whole business failed. Yeah, I mean honestly, it's very unusual for us to run a campaign or, sorry, an experiment and there's been not to be some real surprises hidden in there. You know, a great example is an influencer brand that was all about sustainability launched an experiment on HeatSeeker recently and the brand was all about saving the world, saving the planet, and it's the really, really special, it's the essence and DNA of what this brand is, and this is a very famous Australian and it was really exciting what they were doing. And then they ran a heat seek and sustainability was not the winning buying driver for the brand.
Speaker 2:You know it was surprised it was about, you know, it was about something that was more about who, who she is as an influencer and, um, you know, I think. I think those are some of the things like, like, what is an important aspect to your brand and what is a buying driver? And we need to know that and look, sustainability will always be central to the brand and we need to be mindful about what drives people to buy. And then what drives people to be retained or to stay or to tell people or to feel good about what they're doing. They're all different reasons. You know, we can test features and benefits and competitive advantages separately, but you do need to know, like, what causes people when they're doom scrolling next to their partner, second screening netflix is on, the phone is out what are they actually engaging with and parting with? You know, their email address or their money for, or waitlisting themselves for what are they actually buying? And I guess that's the interesting thing. You know, I told you the story about Waymo where they had all this paid market research. We hear that all the time that a lot of paid market research, where people have been paid for their opinion on a survey or paid for an interview, like you know, paid to fill something out.
Speaker 2:Look at the US election polls.
Speaker 2:You know what people say and what they do is really different. And what we really need to know, which is what the beauty of this ad mechanism gives us, is what do people really buy and what they say. You know what they say to look good or feel good, or I want to look like I'm really environmental and and great for the planet, but does that actually cause me to part with my credit card? You know when, when, you know when the when it's my credit card down, um, and so helping you, you helping you not fall into that, say, do gap, and it's the same within a professional context. You know, heatseeker works just as well in b2b. We run the experiments on linkedin and that's an even better example of when what I say in an interview I would do, and then when everybody's watching me and I'm in a meeting and I'm making a procurement decision and I've got to get that procurement decision past a lot of people, it's really different and so we need to get everybody those answers that's such a good point.
Speaker 1:It's um, I completely um, I'm not surprised with that sustainability thing that you just said. We've done a few campaigns and we found that, you know, dimension of ESG it's nice to have, but it doesn't seem to resonate with people, which is really unfortunate because, you're right, it is something people want to be, you know, associated with, but, like you said, it's not something that makes them part with that credit card.
Speaker 2:Yeah, and maybe we just haven't hit it yet. You know, maybe it just means that when sustainability is a theme, it needs to be more action-oriented. It needs to be, you know, the offer needs to be. You know, take a ton of plastic out of the ocean. You know. It needs to be more concrete. You know, it may not be just that the green isn't the answer, but just how we're doing green. We haven't cracked that nut yet. So I think, getting closer to that, how do we, how do we test for that? And it'll be. Of course, it'll be different by segment, so that's what that's.
Speaker 2:The other thing that we find all the time is that, just when we think we've got things clear in our head about how, all of a sudden someone will do a heat seek and find out that, oh my God, south Australia is their biggest market and they're recruiting the wrong influences and they need to be, you know, in a different place or in a different sector and all those sorts of pieces. So supporting people with more data like supporting data, you know, and we've all got them in our business. You know, we're all you know, and we've all got them in our business. You know, we're all you know, beholden to somebody who needs to be convinced as to the decisions that we're making and arming people with that kind of data so they can make those decisions really helps.
Speaker 1:Yeah, absolutely Coming back to your experience with BCG and also Cisco, I'm curious to know how did you find the different worlds of enterprise versus startup?
Speaker 2:Yeah, that's a really great question. So when I was in Australia and I was contemplating, you know, taking a job with this $200 billion American tech company, everyone said, oh, you'll hate it. You know you're an entrepreneur at heart and so we kind of expected to hate it. But I think in some ways you know, when you're a startup, it can feel lonely but you're also surrounded by people. You're always convincing someone investors, customers. You've always got stakeholders and suppliers, and so you know you're small but and suppliers, and so you know you're a small but you're in. You know you're in an enterprise sized galaxy of stakeholders and people that you're working with anyway to make something successful. Um, and so, yeah, I actually found the transition into a big US corporate wildly and embarrassingly easy and I really fell in love with the scale of it. I loved the scale of being able to touch and support. You know lots and lots of people. You know when they started talking about you know billions of people being touched by changes that we were making, innovations that we were making and how the internet was working.
Speaker 2:When I was at Cisco, I got kind of I turned into a bit of a scale junkie and it was interesting. It really like my first. One of my first businesses was a shoe company. I had stores in Melbourne and Sydney and I didn't realize that was one of the things I was lacking. I was lacking, you know, I could touch 30, 40, 60 people a week. I couldn't touch 60,000 or 600,000. And so it is some of the nice things about you know, moving into the space I'm moving in now is that you know we're able to help brands, you know, expose what they're doing to lots of people, often kind of under a stealth brand so no one knows, but in a way that helps them make decisions at scale. You know, and you know likewise, you know, as we build the Heatseeker business mainly pushing into the US again, you know being able to solve a problem.
Speaker 2:You know, I think this market research thing is a real problem. I think landfills are full of people, of products no one ever wanted, but lots of people told the survey that they wanted. And that's someone's career, that's someone's business, that's someone's family. You know that it's been affected by. You know poor decisions.
Speaker 2:You know, and I felt that pressure, like I've been at BCG and I was trying to sell, you know, a product that I knew was great, that knew that users desperately needed. But, you know, the client was nervous about the investment and so they said, oh, we're going to hire a you know a market research company to test the idea of what you're doing. And I got the results back and the answer that every result was pretty much 25 percent. And I said to the researcher how is that a thing? He's like oh, towards the end of the survey, when it gets long, people just click on the far left because they want amazon voucher. That's like, dude, this is my life, you know, and this is a product that's going to educate lots of people.
Speaker 2:Like this is it's a problem. And so, like I do think there's a real corruption and and and you know, every it seems. It seems to make so much sense on paper. This is expensive, you know, let's ask people if they want this thing, and so we do these tests and the results are unreliable. We know, as marketers, we've got a tummy rumble. We know we don't really trust the data, but we have to do it because we have to get someone to release the purse strings. And so, you know, I do feel that there's a real. I feel a real calling to put something forward that I really think can help you know, address that problem, and that's pretty satisfying.
Speaker 1:I agree with that. I've not had much experience in market research but I have gone down that road of you know, seeing that a lot of the surveys comes from people that are just after their voucher um, I think a lot of startups as well. They're finding a lot of traditional companies, like market research companies, quite expensive and unaffordable. So, yeah, you know, they probably opt not to do it and just go with their instincts.
Speaker 2:Yeah.
Speaker 1:Mistakes are expensive. I'm curious what maybe could be some enterprise thinking that startups should bring to the table and vice versa. How can enterprises adopt a hybrid startup mindset?
Speaker 2:That's a good one. I mean certainly. I think startups do a really really good job of like testing and learning, like release something, learn about it, um, have your heart broken and then kill your darlings. You know, kill it early, you know, and before your reputation's on the line, and like iterate really quickly, um, and that can be really really hard at enterprise level to do. There's brand risk, there's personal reputational risk and people don't realize that experimentation de-risks everything. You know. People think that a test and learn culture is about being a cowboy. It's not. It's about de-risking what we're doing. You know, how confident are we that these people are going to buy? You know, we put an experiment out and we learned. So, look, I do think you know to some degree, how do we get that test and learn culture into the enterprise? You know how do we get them to be able to expose their thinking. You know, run a workshop in the morning and then publish the best six ideas in the afternoon and come back in two weeks time and double down on the best two, like I think.
Speaker 2:I think that bringing that kind of thinking into the enterprise, um, the other thing is, I also find often in the enterprise it's hard to know how a decision is made. You know, I remember, especially when I was junior within Cisco, I would want something done or I'd want someone to give me money and I'd pitch it to someone. That would be like I'll go speak to Frank and I'd go speak to Frank and I've got no idea where Frank's involved and I'm just going round and round and round and what I learned is that great customer data is democratising. We can all agree that we should give the users what they want, like we. I'm sorry, frank, I took your idea and I ran it against my idea and your idea got half the engagement and response that my idea got.
Speaker 2:I'm sure I'll find a cleverer way to put that, but it's very freeing, you know, to be able to, you know, kill things and move on and be able to support your pitches within the enterprise, your ideas, your thinking, with really clear data sets. And you know whether it's by an experiment like mine, or whether it's just voice of the user. Whether or not it's, you know finding a way to get the voice of the user into the room, whether it's a dovetail reel or it's like in Silicon Valley, I used to have bullpens of real users in the room, you know, with decision makers and we'd make those decisions live together. So, yeah, I think that finding a way that enterprises can get that voice of the user and run experiments really quickly oh, I've got a visitor, I beg your pardon, um. So yeah, I think that can be enormously helpful and help enterprises move quite quickly.
Speaker 2:And then, in terms of what startups can learn from enterprises, yeah, I mean, I think enterprises often have access to amazing talent and people who are attracted, you know, by you know the big brand, and I think finding ways that you know folks that are early in their startup journey can work with first class talent, even if that first class talent doesn't want to work for you as an early founder, is a great way like thinking about your startup as like an ecosystem that includes advisors and vendors, you know, think about your startup within an ecosystem context and it feels more like an enterprise you might be able to find your ability to attract really absurdly, you know talented people in a way that some of those bigger enterprises do, and that helps you compete with them on that stage yeah, that's such a good point.
Speaker 1:um, with your experience at silicon valley, I'm wondering, like, now that you're in australia, you've business in Australia, how do you think everything compares, you know, in Australia versus Silicon Valley, like in terms of finding funding, finding good talent, you know, using AI, all that kind of stuff?
Speaker 2:Yeah, so look, the Australian startup ecosystem has come such a long way and is really, I think, at a really exciting moment in its trajectory. I left Australia in 2010. We had close to no venture capital sort of scene. I returned in 2020 and the scene is thriving. We're seeing that at all levels. I mean we do have great sort of world-class I would say. You know, we're building up to like world-class venture capital talent and, in addition, you know a thriving angel investment scene. You know more and more angel investments great, you know angel platforms Aussie angels helping people find great deals. Companies like virtual crowd-s know angel platforms Aussie angels helping people find great deals. Companies like virtual crowdsourced equity funding helping all sorts of folks that didn't get access to traditional VC to find funding. So it's a thriving scene.
Speaker 2:I think also, people in Australia are doing a great job of learning by getting involved. Becoming an angel investor, becoming an advisor, is a great way to learn more about being a great founder. The best way to learn like what are investors looking for is when you become an angel investor. You know what you do and don't like to see. You know how deals stack up, and so certainly for me, a critical part of my founder journey was becoming an eliminated partner in a US VC fund, becoming an angel investor in a bunch of deals following a syndicate, you know of a lead investor. I'm in Dom Pym's Euphemia syndicate and that helps me learn better about what a great deal looks like. I've invested on virtual and then you know, now that I'm a founder, it gives me a really different perspective about you know how to structure a great deal. You know how to think about my cap table and all sorts of things that are really important to great investors.
Speaker 2:So, yeah, look, I think the Australian investment scene is great.
Speaker 2:Obviously, the US investment scene is much more mature and much more competitive. You know, over there you can really feel that great VCs want great founders and they work really hard for them. You know they pitch you on how they're going to help you close your next round and how they're going to do it and who is in their network that will support you on that journey. They also act sometimes a little bit like talent agencies. Like you know, being backed by our gives you access to this extraordinary talent or advisors that will bring for you, but they can also be and this comes from their maturity a little bit more predatory. You know you often find they want management rights, they want board rights, they want all sorts of control of your company, and I don't see that as often here in the Australian sector. So I think it's interesting to compare and contrast. I'm very lucky that I have US investors on my cap table and Australian investors and institutional investors on my cap table, so I get a little bit of both best of both worlds.
Speaker 1:Yeah, amazing, really good to hear, and really relieved to hear, that Australia is keeping up and doing quite well in the world of SaaS. A lot of founders I speak to, especially ones that have, you know, bootlegged. They're like you know biggest mistake is taking funding or taking, you know, investors. What do you have to say to that? What would your advice be on that regard?
Speaker 2:Yeah, I mean bootlegging. Everybody bootlegs to some degree, you know. It's just the degree to which they care to talk about it. Things are moving so quickly now what people can build, how fast people can get a prototype, live in market. You know, my entire engineering team for my enterprise grade market research platform is three engineers.
Speaker 2:Because of how many ai tools and agents allow them to complete the job, how many amazing ai tools allow them to uat, test and ensure robustness, and so just things are moving so quickly so it's very difficult for me to advise people to take their time, go slower, don't take investment, because the window of opportunity you have, if it's a good one, won't be open for very long. And that's my question like, if you don't think anyone's going to enter into your opportunity space fast, is it really a good opportunity? Like, if it's a good opportunity, it's sexy and it could be worth a billion dollars. There's going to be other clever cookies out there, they're going to see it, and so, at least in my experience, I think I've always been of the opinion that you know you can own the whole pie and for it to be a little pie or you can have a big pie, you know, and then own a slice of that big pie. The other piece is that, in my case at least, my investors have brought me amazing intros, helping me with sales, helping me find partners, you know, warm introductions to other investors. So, like building an ecosystem of people in your corner that you can call. You know, I need three people in marketing who can test my product this afternoon, because I've got a.
Speaker 2:You know, I've got a big pitch. Can Can someone listen to it? I mean, there's an amazing ways that you can leverage an engaged investor community and, especially in Australia, they want to give you that help. They want to give you that support. They're learning from you. They're learning about your space, they're learning about AI, they're learning about technology and you're asking them, you know, on the value side, is this valuable, is? And you're asking them, you know, on the value side, is this valuable, is this not valuable?
Speaker 2:So I think that building an ecosystem around you, you know, is critical to your overall success and you know the process, at least for me. I mean I was pitching Heat Seeker. Before it was a thought, before it was a pixel on a page. I was already engaging investors and all of the no's, I mean they were never going to invest in me never but they were able to say your go to market seems small or the price seems too low, and all these little pieces of data that I could get from the investor community doesn't mean you're, you know, beholden to the investor community, but so valuable you know, free consulting, free help, free guidance, and if you don't mind like I don't if you don't mind lots of no's but you get all that value out of it, then it's been a really valuable journey that you've been on, regardless of the outcome.
Speaker 1:Yeah, no, I love that. I love that advice. It makes such a huge difference for a person who's got a team around them of advisors versus someone that's doing it on their own and they're only one person at the end of the day. You also reminded me, as you were talking, of a quote by Bill Perkins, who's a very successful founder as well, and he said I'm not necessarily the smartest person in the room or the richest, or any of that, but between me and my competitors, I'm not necessarily the smartest person in the room or the richest, or you know any of that, but between me and my competitors, I'm definitely the fastest one, so I'll go out and test things much quicker and learn how to do them much quicker, and that's what's gotten him ahead yeah, how fast can you put it in front of the end users?
Speaker 2:you know, and I mean, obviously that's what my product is about, but people can do it without my product like, but how fast can you put it and not ask them something, ask them to speculate, put a prototype or an ad or something in somebody's hands and ask them to response, to respond to that so you can get the data that you need to move faster?
Speaker 1:Absolutely. As a founder, what were your biggest challenges in scaling? What did you find worked incredibly well at helping you grow quicker? And then, what were some of the key challenges that other founders should be aware of?
Speaker 2:Yeah, I mean I think your approach to talent is really really important. I mean I think your approach to talent is really really important. What you find is when you're really early, you attract a different caliber of person than you can attract when you're even six months further along. Now, when you're early in your journey and a lot of things are unclear and you know you need prototypes built or you need to, you know, bring on a co-founder. You know, when you're early in your journey and a lot of things are unclear and you know you need prototypes built or you need to, you know, bring on a co-founder. You know it's often, you know it's difficult to attract, just like it's difficult to attract funding, it's difficult to attract customers, difficult to try to everybody. And so I just I just ask people to remember, like who you're able to attract early it's going to be really different about than who you're able to attract early is going to be really different about than who you're going to attract after six months or after 12 months. Um, and so, yeah, thinking through, like what are the right hires to hire when you know and who is more likely to join you at different times? You know, I mean in my experience know engineers are very curious cookies and they'll often join quite early if they understand the problem and they also really like solving puzzles and designing a tech stack. So if you can share a lot about you know the technical opportunities, sometimes you can get great technical talent early. And Heatseek is about 14, 15 months old. Our head of engineering I hired 12 months ago. So very early in the journey you know we were able to hire first class engineering talent.
Speaker 2:Product people tend to like they have to love the problem that you're trying to solve and so you've got to get really clear on that. You know, before you can find the right product person and they've got to really have an affinity for that question. And then I find you know design and marketing sometimes like the really great fits often come a little later. You know they've got to have some momentum and some stories they can tell. You know that they can be proud of. They've got to have a product that they can see, that they're proud of. So just thinking about where you're at, and so you know you might use contractors or fractionals or, you know, earlier in your journey. It's lovely that that has become culturally acceptable now. You know we used to call them contractors. Now they're fractionals On the way to. You know, a year and 14 months in, you know you close around or two.
Speaker 2:Obviously you're able to, you know, bring different people on the journey, and what can be difficult about that is the equity you've given away along the way, and so in my experience, you've got to make sure that the people you give equity to are people that are going to stay with you forever. You don't want a cap table that's full of people who are gone, that don't care about you anymore. They might not even like you anymore. You know either poor performers in the company or a fractional that was disgruntled, or a co-founder that's gone Work really, really hard like treat people on your cap table a bit like it's a marriage, you know, and you want people to be saying great things about you if they're on your cap table forever. So just think through you know how you manage that journey of who you can attract when and try to give away as little equity as possible to people who you're not sure are going to be there forever yeah, yeah.
Speaker 1:So I love that. I love that you kind of tackled the people, as you know, as the biggest challenge and but also the biggest growth opportunity. It's so true like if you can have the right people in the company, they will help you grow it. Um, boys thought when, when we hire great people, I always think I really don't want them to leave. You know, for whatever reason, they might do so in the future. So the best way to stop them from leaving is possibly by giving them equity, would you say that's a good way to tackle that problem.
Speaker 2:No, that's the worst way to tackle that problem. I mean, it depends, right. If you're inspired and they have founder energy, then giving them equity because they want to be there for the journey and they want to be able to tell the story of being you know, I was employee number one or two for the heat seeker brand and that's who they are then then it's great. But if it's you know, this person is a flight risk because they're disgruntled and they think they can do better elsewhere. That's not founder energy. They're not going to make your equity anyway. They don't think you're a winner, like that's. The other thing is like giving equity to people who don't think you're going to win, don't value it, don't realise that those shares are priceless and are going to be, you know, like the best investment that they ever made, that every holiday for the rest of their life is going to be paid for, you know, in the year they spent with your startup. So, yeah, I think, thinking really long term on your equity, it can be really easy when you're trying to get people to do things for you, when you don't have a lot of cash to trade.
Speaker 2:But equity is expensive. You know it's expensive, you know and it can really. You know it can really hurt you and having people out in the market who are equity holders but aren't passionate about you anymore can really slow you down in the future. So I'm very big on cap table hygiene. You know. I think it's great when investors can understand your cap table and there's no little rounding errors percentages, you know, on the cap table. You know, and everyone there is a raving fan. I think that's really important.
Speaker 1:Yeah, yeah, for sure, I think definitely save it for the go-getters, the founder energy, like you said. Love that word, yeah, the people that basically want to change the world with you.
Speaker 2:Yeah and yeah. And the people that will stay up late and take your call at eight o'clock, or people you know, I've got people in my team who'll call me at nine o'clock at night and say, shit, you pissed me off today, why didn't you let me do that demo. Like that kind of energy, that kind of ownership, you know, and that's what you look, that's the founder energy. Like that kind of, you know, I'm here and and I love this product so much that and that's the most important thing, you know, it's more important than what you happen to be doing and the dinner you happen to be having when I'm calling you to give a piece of your peace of my mind, those sorts of people deserve equity yeah, amen.
Speaker 1:Reserve equity yeah, amen, kate. My last question to you. I ask this to everyone, really just out more out of curiosity, and I just love this question, but if you could go back in time as you were launching Heatseeker, what is one big change you would make?
Speaker 2:Ooh, what's one big change I would make?
Speaker 2:um I mean you really you could have stumped me a little bit with that one. You know I'm kind of very iterative right, so I try a lot of things. You know there were a lot of things that I tried that I had to throw out. You know a lot of things. You know there were a lot of things that I tried that I had to throw out. You know a lot of things. You know, and even people that I thought would be great for the business, that you know didn't keep in the business. You know. But I do find you know the journey of building, you know making those mistakes and learning from them. Like that's so critical that I don't spend a lot of time thinking, well, shit, if I'd just done it differently. You know it's, it's how I guess, it's how you metabolize those learnings. You know.
Speaker 2:I mean I think um, and I had my time, had my time again, I probably would have pushed more quickly into the US. You know we're finding kind of easier to sell there. You know they just um only because they have a mid-market there. You know Australia, we have enterprises and we have startups. We don't have a huge well-developed mid-market. So you know we're finding, um, you know, selling into the US, you know, is really easy. So my pretend US accent that you probably heard a few times on this um, you know, I just got back from there last week. I'll be there again in two weeks' time. You know, I think that will be more and more part of our trajectory and the more time we spend there, the more I feel like and I think that's always an interesting thing for all Australian companies to think about is like now, things that you know in a SaaS world, your product is truly international. So, you know, are you selling here because it's the right market or are you selling here because there's people on linkedin?
Speaker 2:that know what you're doing, yeah, upselling here, and then all of a sudden you're stuck here and you, you sell, go to, you buy, go to market, you hire, go to market people because you're selling here. But is that really who wants, really wants your product like? If you know, if, if the world was your oyster, who would buy your products? And I think, had I asked myself that question earlier, I probably not that I wouldn't have loved and supported my Australian clients, but I probably would have, you know, hired there earlier and supported a push into that market more quickly yeah, absolutely.
Speaker 1:Actually the two most common answers that I get to that question, you pretty much nailed it. One was I wish I just enjoyed the journey better and I just didn't, you know, keep like doubting myself. And the second one is exactly what you just said I wish I dreamt like more, bigger or globally the beginning, rather than narrow myself to this market or just this product or that feature. Yeah, yeah, it's pretty pretty. This is why I love asking that question. I love that response. Okay, thank you so much for your time. I'm sure we've learned so much. I'm sure everyone listening to this now is going to go out there and do some, a whole bunch of experiments, maybe tackle uh, tackle it in a much different way, and so thank you so much for the insights. I love our little chat. Lovely to meet you. Thanks, joanna, lovely to meet you too.
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