What's up, everyone? This is Cortland from IndieHackers.com, and you're listening to
the IndieHackers podcast. On this show, I talk to the founders of profitable internet
businesses and I try to get a sense of what it's like to be in their shoes. How do they
get to where they are today? How do they make decisions at their companies? And what exactly
makes their businesses tick? And the goal here, as always, is so that the rest of us
can learn from their examples and go on to build our own successful businesses. Today,
I'm excited to be talking to Andy Cook, one of the two co-founders of a company called
Tetra. Andy, thanks so much for coming on the show.
Thanks for having me, Cortland.
Tetra is wiki software that's made to help teams share knowledge. Can you explain a little
bit about what that means and why people want what you're building?
For sure. So it's a knowledge sharing system for growing teams. What that means is we allow
you to take all of the scattered documents, emails, chat logs, GitHub issues, whatever
you have and aggregate it all into one central repository. And then we make that easily accessible
from your chat tool, primarily Slack, which is what most of our customers use. And the idea is
that Tetra makes it really easy to onboard new team members and answer repetitive questions.
The reason why that's important is more and more as knowledge workers become more prevalent in the
workforce. Most of the value is around getting people ramped up quickly and getting them aligned
with the mission as fast as possible. So the faster and sooner you can do that with new people that
you hire, literally the more progress and more money you're going to make in the long run.
Your co-founder, Nelson, actually came onto the India Actors website about a year ago and did a
written interview where he talked about Tetra. And at that point, you guys were doing just over
$23,000 a month of revenue. But where are you guys at now?
We're at 40K MRR in revenue.
That's awesome. How does it feel to have almost doubled in the last year?
Feels great. It was a tumultuous year with a lot of struggles and took a lot of discipline to get
through it. But now that we're in clearer pastures, I'm feeling good and I'm excited about
getting to 500K IRR and then a million and beyond.
Yeah. I want to dive into what exactly made this tumultuous year and what sort of struggles you had
to deal with. But let's start and let the high note to begin with. I think where you guys are
being sort of an independently operated company where you're doing your own thing,
you're generating enough revenue to, I assume, be profitable. Are you guys profitable?
We're not profitable right now, but we're default to live. So the goal is to get back to profitability
with our current funding.
So it looks pretty likely that you'll do that. How does it feel in general to be sort of living
the dream, not working for somebody else and doing your own thing?
It feels great. I mean, before I started Tetra, I was working at a software company in Boston
called Cambridge Technically called HubSpot. And that was a great place to work too. It's
one of the best places to work in the country. But the thing I really love about being my own
boss and running Tetra is that ultimately, the company is a great company to work for
or a crappy company to work for by whether or not I make that happen.
So my goal is to make Tetra a great place to work for and do right by our customers by building
the best products, which is 100% in my control. And I love that.
You are one half of the co-founding team, Tetra. You also work with your partner,
Nelson. How do the two of you guys meet and decide to work on this business?
So Nelson and I actually met a long, long time ago in seventh grade in middle school.
We both grew up in the same hometown. We bonded over skateboarding in seventh grade.
Fast forward like 15 years or something like that. My first startup Rentabilities was acquired
by HubSpot. And Nelson had been working at HubSpot for three years at that point.
And the management team knew that Nelson and I were friends. And they knew that Nelson had
a good understanding of how HubSpot worked internally. And I had a lot of startup experience
around how to get products out in the world very quickly. And so they teamed the two of us up to
build a skunk work style startup inside of the company. And we got to work alongside each other
for two years. So we've known each other for a long time. We've been friends for a long time.
But being friends with someone and working side by side on a team with them are two completely
different things. So I'm really thankful we got to test the waters of working together on HubSpot's
dime instead of just jumping into it together and hoping it worked.
Yeah, so that sounds like a dream job situation as well where you're inside of a company,
but you're sort of running a startup. And you're working on it with one of your best friends.
Let's rewind for a bit and talk about your past history and sort of what drives you. I mean,
what led you to become an entrepreneur? And why aren't you satisfied just working at a normal
desk job for somebody else? I don't know what led me to become an entrepreneur.
But thinking back to my early childhood, I've always been really entrepreneurial,
you could probably chalk that up to the fact that my dad owned his own small business,
he was a landscaper for about 30 years. So from an early age, it never seemed
weird to me to own your own business and be making money by selling things.
But I was always trying to make money as a kid. We would go out and collect bottles and cans
to around town, literally picking up garbage to trade them in for money.
We would start lemonade stands on the street. I had a paper route for years.
So yeah, just from like an early age, I just always was trying to make money,
probably because I didn't get an allowance. So it's like, you can only buy candy if you
made the money. So yeah, and then just it kind of snowballed from there,
like as I got into my professional life.
And how did that lead to the creation of your first business?
So my first company that I started was called Rentabilities. I started it with my older brother.
The backstory behind that one is my older brother started Alex's name,
started to learn how to do web design in high school. And then he taught me how to do web
sign and web design. And we both really liked it. When we were in college, we made a website for
one of my dad's vendors that he worked with for his landscaping business, which was actually a
rental store. And the rental store owner's name was Steve was like literally on two phones all the
time taking orders. So we were like, Oh, well, we can build a site where you can take orders online,
and like hook up your inventory management system to your website. Does that sound good?
And he was like, Yeah. So we ended up doing that, and selling it to him. And he did like
$25,000 of rentals through the site in the first year that it was online. And we were both probably
like 18 or 19 at this point. And, you know, being naive, we thought to ourselves like, Oh, well,
if this works for Steve, this will probably work for other rental store owners too. So we decided
to team up, give it a name, and then try to sell it to other stores. We ended up getting like 20
or so rental stores to buy it, like in the first couple of years, which was really cool.
Oh, great. So kind of didn't work the way that you expected.
Yeah. And it was funny, because like, when you don't know what you're doing, you do things that
you probably wouldn't do when you do know what you're doing. So like, I remember one of the
campaigns that I ran was I figured out how to go on Google Maps, which was like kind of new at the
time, get all of the addresses for the rental stores. And then I went on the business directory
listing for the state of Massachusetts and found all the store owners names. And then I hand wrote
them notes, like with some information about rent abilities and invited them to like a video
webinar series that I was doing at the time about how to get more exposure for your business online.
Because these were like, you know, 50 year old store owners, you barely could use the internet.
And like, we were savvy, young college students who like knew how to use the internet. And I
think I got back like 10 responses to that, like these handwritten notes, like people literally
just like called me or emailed me. And then I would go up and drive out to meet them and like
sell them in person as a 19 year old with like my khakis and my polo on. And that's how we made our
first sales. What was your goal at this point? I mean, what did you see this business turning into?
I got to be honest, there really wasn't any goal besides make money. This was probably about like
2008 or so. And like at the time, really like the lore of startups hadn't been developed yet. Like
people weren't really talking about angel investors and venture capital and like unicorn startups.
Like this was the year that Facebook got the like $2 billion dollar offer whatever from Yahoo,
and they turned it down and like that was heresy. So it's like a very different world. So our goal
is like literally just to build a business and make money and have it sustain us. And it was
really nothing more than that and to learn to like we're having a ton of fun working together
and learning how to do this stuff. So before we started this episode, you told me that this
business eventually got acquired by HubSpot. I wonder how you worked out that acquisition and
what that process was like for you because a lot of people listening in have never really heard what
it's like to have your company get acquired. So what led to that series of events?
I'll give the highlights because there's an interesting anecdote here. It's obviously like
a long three-year story, but the highlights are when my brother Alex and I were in school,
we heard this radio advertisement for this startup competition called Mass Challenge.
When I was about to graduate and we were going to go work on it full-time, our startup, so we
decided to enter the startup competition. It was the first year that they did it. It was based out
of Boston and we got in. Every Friday, they would have local founders come in and talk to the
startup founders inside of the accelerator. One of them that came in was Dharmesh Shah,
the co-founder and CTO of HubSpot. I had just read his book like a couple months earlier,
which I think actually inspired that whole webinar video series to reach out to the rental stores.
And so I was a huge, for lack of a better word, fanboy of his. So when he came in to Mass
Challenge, I was actually waiting for the elevator and I hear like, hold the elevator door.
And I open it up and look who walks in but Dharmesh Shah. So at this point, you think that'd
be the perfect time to give an elevator pitch to a potential angel investor, but I couldn't
even muster the confidence to do that. So I just looked at him and said, good luck with your talk.
And then he just looked up at me and said, okay, thanks. And then like, that was it. So I thought
I blew my opportunity. So anyways, then he did his talk. And because I was such a fan of his book,
I had it in my cubicle on the floor. So I went and got it and had him autograph it. We got the
talking a little bit. So that was my second chance. And then that following night, I went home and I
was doing a lot of blogging about like startups and my lessons learned at the time. And I wrote
a blog post called like 14 lessons from Dharmesh Shah or something like that and published it.
And it went viral like at the time, which on Twitter was like 200 retweets or something like
that. And Dharmesh actually commented on it. And then we became friendly from there. So he was
actually we raised funding like a few months later for rent abilities. And he was actually our first
angel investor. And so we got to know him more over the three years that we worked on rent
abilities. And when we ultimately decided that we're going to sell it because we didn't want to
really work on it anymore. Like we were pretty tired at that point. Dharmesh was like, you
should come work at HubSpot. I think that would be great. We have a perfect project for you too.
What do you think led to you guys wanting to sell your business and being tired of working on it?
Because most startups, you know, don't succeed. But they all fail for different reasons. What was
sort of the biggest challenge with rent abilities? I mean, the biggest challenge and like,
this is kind of trite, but they're underfunded for the scope of the project that we tried to take on.
The company started off really well, we had 20 customers, they were all paying us like a couple
thousand dollars a year. It was an inventory management system that let you take orders online,
we probably could have scaled that up to like a couple hundred businesses and actually had
recurring revenue that could sustain us and hire people and grow over time. But along the way,
we decided to build a B2C two-sided marketplace where we took all those store owners and hook
them up into a centralized marketplace to let consumers find whatever they needed to rent and
book it online and compare prices from other local merchants. And the tough thing about two-sided
marketplaces is you're really building two businesses at the same exact time. You're
building the side for the business owners. So that's like a whole SaaS offering for the most part.
And then you're also building the demand for the consumers and like have to build all the tools for
that type of stuff too. And like at our largest, we were four people. So it was just like really,
really challenging. And we worked our tails off. And everything we tried just, you know, we've got
traction. We did really well from like generating a demand and we figured out how to get merchants
to like actually use our system. But our biggest issue was we just kept getting disintermediated
on the actual transactions, where maybe the consumer would do the first transaction through us.
But then the following year when they needed to rent another bounce house, they would forget that
they rented it from rentabilities and just rent it from the store that they knew they rented from
down the street. Or the merchants would like try to get the consumer's phone number and just call
them directly so they didn't have to pay us a transaction fee. So it's just like death by a
thousand cuts. And, you know, after three and a half years of really sprinting on something
nonstop and running low on the funding that you raised too, you just like get kind of tired and
burned out. And we just decided like, and maybe maybe we let this one go and try to get some of
our investors money back instead of just like, you know, riding the rocket ship into the ground.
How do you recover psychologically from pouring your heart and soul into your baby for three years
and not having it work out the way that you want to? I mean, how do you start another company
after going through that experience once? The first time I would say I didn't recover well,
it took a long time. You know, it just was like, I guess in hindsight, I should have taken
like more time between the startup and then like going on to my next really intense project,
which was working at HubSpot on this like new startup inside their company.
So I didn't really give myself any time to recover, which was dumb in hindsight.
But now though, like I, I realized that starting a business for the long term is not a sprint.
It's not okay, I'm going to do this for two years, then I'm going to sell it and everyone's going to
make out great. Like to build something of substance really takes like five to seven years.
So now with Tetra, I've learned not to sprint and I've learned to give myself the time to
maintain my health and keep my relationships with my family and my fiance and my friends going and
really disassociate my own sense of self worth and my identity from my startup and have other
things going on outside of my life, which in the long run makes it much easier to run the marathon
and set up, you know, the only thing you think about is your startup. And so yeah, like diet,
exercise and things outside of your company, I say would say are important.
It's funny, because you we all hear this before we start companies and businesses, hey, it's a
marathon. It's not a sprint. It's going to take a long time. We're like, yeah, yeah, I get it. And
then we do it at least for the first time, we sprint anyway, it's very hard to internalize that
lesson until you've actually been there. And you've sort of put all your effort and energy into this
thing and gone as fast as you could and burned yourself out and realize that that didn't really
didn't really help you in the long run. For sure. And I think for rent abilities, it never
not until the very end, did it ever feel really hard. And I think the reason why is because
even though like, I'll be honest, like that problem space was not necessarily like the most
near and dear thing to my heart. Like I liked helping the small business merchants, they reminded
me of my dad, like helping people rent stuff. But like, at the end of the day, if you were to ask
me what is the one true thing that you like care the most about like helping people rent stuff
probably wasn't it. And like I didn't even own a house and I like I didn't I never rented stuff
personally. And so it's like working on rent abilities though, I was learning so much about
startups and coding and business and meeting all these people that's like that really made it great
right. With tetra now, what's much more important to me is solving the problem that we work on,
which is helping people build high performance teams so that the people that they hire actually
enjoy their work and like their life. So you spend eight hours a day of your working eight hours of
your day working literally one third of your life. And people should actually enjoy that. So now that
like I know a lot more about startups and I have a network and I actually don't code that much
anymore. Really like the solving the problem space that I work on is the thing that sustains me over
the long haul. So let's talk about tetra. You end up selling your other business to HubSpot.
You're working at HubSpot with one of your childhood friends. What leads you to quit that
job and go on to form another startup or sort of the early days of tetra? Nelson and I thought of
the idea for what is now tetra about a year into working on the startup style project that we were
working on instead of HubSpot, which was called lead-in. And the impetus for the problem was that
our team for the first year at HubSpot was just Nelson and I literally doing everything with like
no help from anyone. Like we did all the support, we did all the coding, we did all the building,
we figured out the problem space, we grew the thing. And we grew this like thing from lead-in
from literally no idea at 7,000 small businesses using it for free, but like having it on their
website within the first year. So then HubSpot gave us more budget internally, which they call
funding. And so they literally just had another engineering team that was working on a project
that they wanted to sunset and push them over to our team. So lead-in went from just Nelson and I
working on it to six people overnight. And that was compounded by the fact that these four engineers
that joined our team, they were in Dublin. So as you can imagine, like just the two people sprinting
as fast as they can on a project, you develop all this institutional knowledge. And then trying to
unload that onto four new team members all at once who are literally across the notion
was really challenging. And at the same time, Slack was starting to blow up. And we used it,
we're like, man, Slack is amazing. Like this is the best chat tool we ever used. And we had used
a lot of wikis and we thought like, why hasn't anyone just built a Slack quality wiki, like
documentation and asynchronous communication seem like a fundamental need for all teams.
Why doesn't this exist? And why doesn't hook up a chat, which is how we talked to our team.
So we came up with the idea, I think it was like January, February of 2015. The original name was
actually novel. So like the word no and an owl, and there was going to be an owl mascot. It was
a bad name. And then we like sat on it for nine months. But the thing was, it kept coming up for
us over the course of nine months. And so then that fall, we were like, we need to go do this.
The project we were working on was like kind of at a point where he was like kind of passed out
like zero to one point and where like they wanted to absorb it into the main company, which like
really wasn't that appetizing to us, like where we had this founder mindset. And also I was 28 at
the time too, wasn't married, didn't have a mortgage, didn't have kids. And I developed all
of this, like startup knowledge, working on rent abilities, and also knowledge around like,
how do you actually run a high performing team at Hubspox, they're a really well run company.
And so for both of us, it found it kind of felt like like, we need to do this right now, because
we don't have these responsibilities. And we can really focus on this. We don't want to look back
in five years, when like we do have responsibilities and say, we should have taken a shot on ourselves.
So like that really gave us the confidence to quit our jobs that actually paid us well to
then not take salaries.
So one of the first things that Nelson said you guys did before you wrote a line of code before
you actually started building the product that you'd envisioned was you spent six weeks doing
customer interviews and research. So you can sort of make sure that you built the right thing,
you weren't wasting your time building something that nobody wanted.
When did you guys do this before you left HubSpot after you quit? And what was the process like?
So we did it after we left HubSpot, I was really like we both were, but we were really cognizant
to not work on tetra at all while we were at HubSpot. Like one, it was in our contracts,
so like, then this is a common thing with all businesses, not just HubSpot, which is like
anything you build there, think about there belongs to the company, not you.
But like in reality, I'm a type of person who's I need to be all in on something.
And so it didn't feel fair to HubSpot to be like thinking about something on the side
while I still work there. So it was after we left, this was the same process that we use for lead
into where we didn't write any code for the first like eight, eight weeks and just figured out like
what are the problems that people have. And we did customer interviews, we created fake mockups.
And then we showed them to people and got people to agree to use a product in both both instances.
And from there, they're like, we just learned so much about the problem space that we were
working on. And it gave us more confidence to actually that people would actually use the
product that we were building. How did you know that was sort of the right way to go? I mean,
had you done it the wrong way before with the previous company? Or did you just sort of been
reading online and said, Okay, well, you know, what we need to do is talk to people before we
build anything is probably a mix of both reading, this is how you should do it, but also living a
lot of failures over the course of my life. I've built so so many things over the years where
I got really excited about them. I built them just because I was like, Oh, this is going to be
amazing. Of course, it'll be amazing. I want it. Everyone else can want it too. You build it,
you spend all this time you launch it, and then no one cares. So really, it was just kind of like,
from a standpoint of Okay, I don't want to just build things for building things sake anymore,
I want to build things that actually solve customers problems. And the best way to figure
that out is just to talk to customers or potential customers, and really learn what their problems
are to understand them. And then from there, that informs what the actual solution should be. And
then you can start coming up with ideas showing those to people. And then by the time you're
ready to build something, you should be fairly confident that like people actually use it. And
you're not hearing anything new or learning anything new from those conversations. And the
only way to learn something new is to really get something in the hands of someone.
How did this process work out for Tetra? You guys spend six weeks talking to people,
what happened once you actually built your product and started testing it with real customers?
So we built the once we decided to build the product, we took the mock ups that we had shown
to people. And we had like, maybe two dozen teams that said they would use the thing. And we built
an MVP, a minimum viable product on top of WordPress, in about like, six or eight weeks
or something like that. And it kind of was like an internal blog of sorts. But it was the exact
thing that we mocked up and showed people and they said they would use. So we built it, we gave it
to them. And lo and behold, no one used it. So the first thing we did from there was like, one,
don't freak out, the thoughts start going through your head of like, Oh, man, like, should we really
have quit our job? Was this a huge mistake? But then from there, we, you know, reached out to
everyone. And we said, like, why aren't you using this thing that you said you would use? And the
answer we got back over and over again was, Oh, yeah, I've been meaning to use that. But I just
keep forgetting. And we were like, Oh, okay, that's a problem. Because you can't use something if you
don't remember to actually use it or that it even exists, right? So from there, we kind of were like,
okay, what can we do to get into people's existing workflows? And fortuitously, slack launched their
platform around the same exact time, where they opened up the slack interface to actually like
have integrations in it. And so we were like, Oh, this is interesting. And we know like, there's
10s of 1000s, if not hundreds of 1000s of teams using slack. And we know like, it's really taken
hold in a lot of workplaces. So we went back to those teams. And we said, Oh, what if we took the
thing we had and hooked it up into slack, in this way, this way, in this way, and everyone,
their reaction was completely different. They're like, Oh, really that you could do that? Like,
is it ready? I want to use it right now. I'll pay you for it. So that was a much different reaction.
So then we were like, Okay, well, we can keep working on this thing, like the MVP that we built
that doesn't seem to be working. Or we can try something new with this new data point that we
learned. So we made the decision to scrap the entire project that we've been working on for
like three months and self funding and build a new version on top of the slack platform where
we actually just rebuilt a new interface and use the slack API as our database and our backend.
Like we literally didn't even store any of the data. It just was on slack's platform.
We did that in two weeks over the holidays. And then we launched that in January of 2016.
And we had like 200 companies sign up in the first 48 hours. These were like big companies like the
Texas Rangers and Walmart and like it was it was crazy. So then from there, we were like, Okay,
this is definitely a thing that people want. And we kept talking to people and learning like,
what do you why are you even signing up for this thing? What are you trying to do? And the problems
were exactly the same that they described to us. But because we were hooking into the space where
their team hung out all day, which was inside of slack, people would actually remember to use it.
So that was like the missing key. We had a good problem that we were trying to solve.
We had a good solution, which was like documentation, actually writing things down.
We had to hook into people's existing habit loops to get them to actually build the habit of using
our tool to solve their problem. So then we just like went all in on slack from there.
There's so much good stuff there that I really want to dive into.
To begin with, you guys spent six weeks talking to customers trying to figure out what problems
they had. And then you guys built this product that they weren't really engaging with, they didn't
really even remember to use. Do you think that you could have discovered this through your prior
questioning if you'd asked better questions? Or do you think this is something that you just had to
sort of learn about on the fly once it happened? It's probably more of the latter. I think it's
I think when I think it's really hard to get honest answers out of people, especially if you're
asking your friends and family, but even strangers. If you ask someone, would you use this? Chances are
they're going to say, yes, I would, because they're talking to another human who they know is pouring
their heart and soul into working on this new venture. And they're really excited about it.
And they don't want to squash your dream as the entrepreneur. So they'll aspirationally tell you
that they'll use something. And if you built it, they'll use it. But then when you actually build
it and deliver it to them, they don't, right? Because it's not actually like a hair on fire
problem that they need to solve. So it's a tough balance. And like, to be honest, I don't have a
perfect answer for it. But I like the general flow, or I prefer the general flow as a maker of
talking to people at first to kind of like gain insights instead of just building something
from the echo, but talking to potential customers to gain insights, learning what their problems are,
and then building an MVP as fast as possible and getting in their hands.
And ideally, you would if you're especially a SaaS company, you would get the customer to
pay for it before you've even like touched the line of code and built, build a thing and like get
their credit card from them because that really signifies like this is a problem that they really
have. And they're trying to solve and they show that by like actually giving you money to do it.
I think, you know, reaching the point where you guys have done all this research, you guys
have spent weeks building something and people aren't using it could be discouraging for a lot
of people. I mean, a lot of people will just give up and quit right then or maybe completely pivot
into a totally different business. How did you guys decide to double down on slack and focus on
that? And what kept you going despite sort of the bad news of what you would build and the research
you had done wasn't good enough? Great question. I'm a big believer in that a founder is number one
superpower is managing your own psychology. And what I mean by that is when the lows get really
low, you're able to pull yourself out from like underneath those and not give up, but also not
being fueled by high highs too is the only way that like only thing that motivates you to do your
work, right? So you have to really get good at managing your day to day psychology and having
discipline of, okay, I'm just going to keep working on this thing and keep trying to make progress
every single day, knowing that over time, the progress will compound and eventually result
in something that's valuable, right? But the other thing too, was we were really in like I,
I'm like, I like to be really transparent. And so I'll be transparent that we had made some money
off of the HubSpot IPO from working there too. So if nothing else, that was a safety net that I had,
where if we completely screwed up, and nothing worked, I knew I had some cash runway where I
could take time to find another job that I really liked and didn't just like have to take on a ton
of credit card debt or jump into something that didn't want to do. And that's a really fortunate
position that both Nelson and I were in and like took off a lot of the pressure as well. So that
helped us maintain focus. We just made sure we were disciplined. I think having a co founder also
keeps you accountable too, which I would recommend to anyone. And then from there was the fact that
the problem that we were trying to solve was really born out of our own need. And we knew that
it was a fundamental problem that almost all groups of humans have working together, which is
like how do you keep everyone aligned and get people on the team ramped up quickly. So we knew
there was something there. And from our own experience, we knew that existing solutions
weren't that good. We just didn't know exactly what the exact right way to solve it was.
This is a pretty crowded space that you guys are in. I mean, the problem that you're trying to solve,
like you said, there are existing solutions. And for a lot of reasons are not that good.
Why do you think that's the case? And what gave you the confidence to sort of enter this market
where you're really going up against tools created by companies like Google created by a
company is like Atlassian that have been around for a very long time.
We knew this was a crowded space going into it. And we thought that was a good thing. And the
reason why we thought it was a good thing was that there was already companies spending millions,
if not hundreds of millions of dollars on solutions that they didn't love that to us
signify that there was an opportunity where as product founders, we could go in and carve out
our own part of the space for ourselves based off of a really simple, easy to use product that
integrated with all of your existing tools. And we would get all the people who cared about design
and product and usability. And you know, anyone who wants to use super customizable product that
lets you do anything, they can use Confluence. Anyone who doesn't care enough about the problem
of having a high performance team just kind of like wants to cobble things together, they can use
Google Docs. But there is a subset of people and it's probably a pretty large one that want a
centralized repository for all their team's knowledge that's easy to use so that they don't
have to like explain how to use the product to everyone on their team and people can just pick
it up and it kind of just permeates their organization. That's, you know, it's scary
going into a space where you know, there's a lot of competition and 800 pound gorillas,
but it also means that there's an opportunity there too. So now you guys are at the point where
it's just you and Nelson, you've gone through this iterative process of talking to people,
building a product, listening to their feedback, saying why it's not working,
updating your product now to work with Slack. And you launch and you say you have 200 customers,
even famous customers like a Texas Rangers who are paying to use your product.
What was that process of launching like? And why was it such a success?
Well, I'm going to back up there. And they were not customers. They were just people trying out
the product to see what it was all about, which is a big difference, right? Like no one was paying
us anything for this. They were just hooking it up to their Slack account. The thing that we
validated was people would give us access to one of their company's most private tools,
which is their chat tool that has all of their internal chat logs. They gave us like 100% access
to try out this prototype, which meant to us, it was a huge problem that we were solving where
they were willing to give up that privacy to solve this problem. So from there, we realized,
okay, we need to actually own the content that's inside of the system and not have it
be hosted on Slack's platform. So we rebuilt how we threw out our version two started building
version three. So this is like three versions in six months, where we started building our own
version on our own platform hosting all the data that did the same things, but was a little bit
more robust, also hooked up to Slack as well. At that point, it was Nelson, myself, and another
contractor that we had who was an engineer. And the three of us just hammered out this version as
fast as possible, which took about three months. So at the same time we were building version three,
I was also basically doing full time sales as well. And I was taking all of these companies
that were signing up for our Slack version, because we were listening to the Slack store,
and talking to them all and pre-selling them on this new version we had launching in May.
And I actually took people's credit cards over the phone to validate that they cared enough about
solving this problem that they would pay us. And that was such a good filter to figure out like,
okay, is this new version that we're launching that's hooked up to Slack? Is that valuable enough
that people will pay us for it and basically signal that they'll use it in the future?
And the answer to that was yes, because we got like 20 prepaid
signups while we were also building the third version.
One of the most desirable things that you can reach in sort of a startup universe
is what's called product market fit. And that is being in a good market with a product that also
satisfies the customers in that market. Would you say that at that point,
Tetra had product market fit?
Personally, I don't think it's product market fit as this like Boolean milestone where once
you get it, then you're in the promised land. Product market fit is a moving target over time,
where at the time, yeah, we probably had product market fit, because there's literally no other
tool that did what we did that connected to Slack. So there was no other option. But like,
we didn't necessarily have product market fit of we were solving the problem that people had
well, because we were just missing so much functionality that people needed in the good
knowledge sharing system. Over time, I would say like, yes, we got to product market fit.
But then inevitably, you know, over the like the six months or nine months or so from when we first
started building the slack version, other companies started raising funding and popping up doing the
same exact thing that we did. And that kind of raised the bar for what product market fit actually
was. So we've been constantly building over the last two years or so, two and a half years,
trying to maintain our product market fit and get to the next point of product market fit,
you know, and I think it's just going to be a never ending process to get to that level.
I think that's one of the things that a lot of founders struggle with, which is
how much did you be building? How do you actually solve your customers problems in a way that
other solutions don't? How do you decide sort of where the where to draw the line between we
should build another feature, if we really want to land this particular customer, or, you know,
we should change our value proposition and sort of go into a different direction and pivot.
I know, like right now, you guys, on your website, don't say very much about slack,
but in the beginning days, you guys were sort of dependent on slack. So I guess what I'm asking is,
you know, how do you think about where to go next with your product?
In the early days of tetra, deciding to integrate and build on slack was the best thing that we did.
And the reason why is that we were one of the very first slack apps in the slack app directory,
we were probably like in the first 50. And so what that did was it opened up an acquisition channel
for us to get new customers or new potential customers to our site, without really any work
from us whatsoever. So the nice thing was that gave us a new cohort of potential customers to
talk to every week that had fresh eyes and fresh insights, that we could test our assumptions
against and like validate new mockups and the new product and see if they would buy the product.
So the learning loop at that point was super, super fast. And really, that was because we had
all these new customers coming in from the slack app directory that we didn't have to really do
much at all to get to come to us and they were highly qualified. And so we talked to them and
learned a ton. And then we would take all that learning and go build that into the product and
then repeat that over and over again. I think it's really hard for founders when you don't have that
sustainable acquisition channel set up and you have to go out and, you know, do outbound email
and calls and meetings to acquire new people, because that just takes up so much time and you
don't have enough time to code and do the acquisition at the same time. So I mean,
if I was to start over again, that would be one of the things that I would try to figure out as
fast as possible, which is what is a sustainable acquisition channel that I can set up for myself,
where I don't have to spend money on it. So it's probably like organic, for the most part,
or a directory listing on another platform, where it drives new demand to me over and over again.
So I don't have to keep going on trying to find new customers in the early days.
Yeah. So let's dive into this a little bit, because Nelson talked about this and your
NdHACK has written an interview last year that there really is more than just product market fit.
There's also these other dimensions that you really need to be looking at. So there's like,
how well does your product fit into any particular channels? Can you actually get what you're
building in front of the right customers at the right time for the right price? And there's also,
you know, your sort of pricing model. How do you make sure that your pricing model that you choose
is something that's going to allow you to target the right channels? So what you need to do is reach
customers through advertising, but you're not charging enough money to really afford ads,
then of course your business is not going to work. How have you guys thought about these other
channels? Have you tried anything else besides Slack? And how crucial have finding the right
channels and getting the right processing model been to the success of Tetra so far?
The framework that Nelson talked about in the NdHACKers post is called product market channel
model fit, summed up as the four fits. It's a concept we learned from the VP of growth when
we were at HubSpot. His name is Brian Balfour. His blog is actually co-elevate.com. And if you
just Google four fits, Brian Balfour, you'll be able to find that post. I highly recommend
all founders read that it was really transformational. When we saw that it's like, oh,
right. This is why startups are really hard when you're thinking about not just product and not
just the product in the market, but also how do you reach those people and how do you sell to them?
So for us, thinking about product market channel model fit, I would say we messed it up for the
first year and a half, two years, and we're just coming around to fixing it and then still work in
progress. And what I mean by that is for the first year or so from when we actually had the Slack
version, version three of Tetra working and out in the world, we were doing an outbound, sorry,
an inside sales approach, meaning we would have a salesperson, it started off as me, and then we
hired a salesperson, give a demo to the prospect and then get them to try to buy the product.
And the reason why that didn't work well was we charged like initially $5 per user.
So we would like spend all this time doing all these demos. And then at the end of the call,
the prospect would say, okay, yeah, I want to buy it. I'm ready to go. And we'd be like, great,
awesome. Like how many teammates do you want to buy for? Like your company is a hundred people.
And the prospect would say, oh, well, we're just going to start with three seats, like,
so it's $15 a month, right? And the economics of having a salesperson sell $15, $15 a month
subscriptions just doesn't work out at all. So from there, we kept raising our pricing to try
to support an inside sales team. But the two problems that we ran into were, one, the product
is really simple, and actually didn't really require a demo to learn how to use it. And in fact,
the people who got the most value out of the product, which were startup founders and engineers,
don't want to talk to a salesperson, they just want to get into the product and try it out and
poke around and see if it does what they needed to do. So we're trying to do inside sales, and no one
wanted to talk to us, the most qualified people didn't want to talk to us. And then also, because
we kept raising our prices to support an inside sales model, we actually priced ourselves out of
the range of the people who would want to buy it. So we eventually moved away from inside sales,
and are now using a freemium model where people try out the product first, and we don't talk to
them from a sales perspective, they just use it and see if they like it. And then if they do,
and the product solves their problem, they just buy it. So the model that we use, which is freemium
and the people that we sell to, which are startup founders, and engineering teams,
most commonly, that dictates what channels will actually work for us on how we reach those people.
So startup founders are always reading, they're always learning, they're listening to podcasts
like this one. So content has actually been a really big key for us, where we've put out a lot
of content around how to build high performance teams, why you need a wiki in your company,
all that type of stuff. And that's been performing well. And then also integrations work well for us
too, because founders and engineers are really concerned about productivity and efficiency.
And so having all of your tools integrated in one makes really matters to them. And so those
integrations get us listed in other platform directories, which then drive more qualified leads
to tetra. So those have been like our number one and two acquisition channels so far, we've tried
many others, and they haven't really worked. So right now, it's just all about doing more
content and scaling that up, where six months from now, we'll probably see those rewards.
Another thing you guys have done throughout the course of your company is actually hire people.
I mean, it's no longer just you and Nelson, you brought people onto the team as you've raised
money and made more money from your customers. What has that process been like? And how did you
sort of learn how to make good hires over time? So we've hired our team right now is six people,
soon to be seven. Our most successful hires are people who I'll say have a lot of potential energy,
meaning they have the knowledge that they need to do a job. And for whatever reason,
they haven't been given the opportunity to do that job yet. As a founder, especially a founder
without unlimited cash, and you know, like $30 million in funding from VCs, you have to get
really good at arbitraging talent. What I mean by that is you have to see the potential in people
and then give them a shot to do the job that they haven't necessarily been given the opportunity to
do yet. That can be really hard because there's a lot of learning that they have to do. And so
what I find works well is just like over communicating and being patient with people
and giving them the context that they need to make good decisions and do great work.
And for us, that means being really, really transparent around pretty much everything at
tetra. And I mean like almost everything, including how much money is in the bank account? What's our
burn rate? How many months of runway do we have left? And like we even recently decided to make
salary data transparent too, internally at least. And what that has done for me is allow me to create
a kind of collective consciousness with everyone else on the team, so that when they're making a
decision, they have all the same exact facts that I have as the founder, which makes for better
decisions. And really like at the end of the day, if you want people to make decisions and do
something the way you would, they need to have access to the same knowledge and information
that you have as a founder. And the only way to do that is to be transparent and centralize it
in one place and make it accessible for everyone. Let's talk about about learning. Let's talk about
sort of your process for making decisions. There's kind of this balance you have to strike as a
founder between learning on the job and learning before you really get to a problem. How have you
and Nelson navigated learning and figuring out what decisions you need to make? Do you have
mentors that you rely on? Are you guys looking at other companies as examples? Or are you just sort
of doing trial and error and learning lessons as you go? It's a bit of all of those. So we have
a couple dozen investors, which we're really fortunate to have. And they're all great,
most of them are former operators themselves. A lot of them are from HubSpot. And they're able
to help us with kind of one off questions we have about any specific thing. To be fair, they're all
really busy too. And most of them are running their own companies as well. So we try not to bother
them too much. A lot of the learning that I do is just from other sources. So like books or podcasts
or blog posts, like I love to read, we actually have a book club at Tetra, where we all read a
book together. But like really the most interesting thing about books specifically are when you when
you read someone's book, especially a business book, you're taking their most distilled cohesive
thoughts and loading them into your brain. And I feel like all these founders and I used to do
this myself try to spend all of this energy getting meetings with people and like so that they can
learn from them. And really, if they just read their book, they probably learn way more from them.
So like I'm a big advocate for reading books constantly, especially business books. And then
also just really what's helpful is talking to other founders as well. Like I have a lot of friends
who run early stage startups or friends who are a little bit further ahead than us. And that's
super helpful to because one, it's fresh in their mind, like all the struggles that they went through
and how they solve them. Whereas someone who's like, you know, running a $10 billion company
with 3000 employees doesn't remember what it was like to have three employees and no resources.
So someone who's like a little bit further ahead than you are the best mentors. And the two it
kind of acts as like founder therapy slash a sanity check to where it's like, okay, good,
everyone else's startup is on fire, too. It's not just us, which is like, you know,
kind of validating as well. How do you get people to agree to be
mentors and to be sort of coaches for you? Do you just send cold emails? Do you meet people
at conferences? So we're, we're really fortunate with tetra where we've like, I've been in the
startup game for, I don't know, almost eight years now. So I've built up a network of people over
time, which I'm really lucky to have done. Thinking back to when I was younger, when I was 20,
which I know is like where like that type of level is where most people are starting from.
The way that I built up my network in the beginning was one, we joined that accelerator
mass challenge. You know, we had to apply to it. But we got in. And that was hugely helpful for
like rapidly expanding our network. And there's a lot of other ones as well, like tech stars or
Y Combinator, if you can get in. And those are really, really helpful for meeting like minded
people who care about this type of stuff. And then from there, it was just kind of like going
to events and meeting people and then doing the work to keep in touch with people over time.
And making sure that once I had someone's attention, I didn't just like let that relationship
fizzle. So that might mean like sending them a progress update with like how the company was
going or asking them a question or, you know, just like sending them a thoughtful email like,
Hey, I read this, I thought you might find it interesting. And over time, like that helped
build up my network of people that I could rely on. Now, we actually have like official advisors.
So like Nelson and I, we work with an advisor, his name is Patrick Campbell, he runs a company
called ProfitWell here in Boston. And he's one of those people who's slightly well, he's a bit
further along than us. But like he really understands, he really understands what it's
like to grow a company. And he's he's bootstrapped his company too. So he understands the resource
constraints, the resource constraints that we have. And he's hugely helpful. And we just got to know
him by going to events that he was hosting, and then just like hanging out with him over time.
And then we asked him to be an advisor. And he's also a tetra customer too. So that helps.
And then we also were big proponents of mentorship here at tetra too, you know, sharing knowledge.
So we actually give a grant to all of our employees as well, and our management team
to go out and find their own mentors as well. So like people want to invest in them as well,
because as the founders, like you have access to these types of people, especially your investors,
but like if you're a manager, you might not. So we want everyone to be leveling up here.
And we try to make that possible. You mentioned earlier that one of the most important things
that you can do as a founder is to manage your own psychology. And I totally agree. I think
being a founder mostly comes down to a lot of decision making. And depending on where your
head's at, you're more or less likely to make the right decisions. What are some of the tricks and
some of the things that you do to manage your psychology as a founder, and make sure that you
can do your best job. So I'm still learning new tricks and new techniques and all that type of
stuff every day. One thing that I've been doing lately is I read this book, it's called the
happiness advantage, I think it is. But anyways, it's based off of like psychological science
where people who think about positive things actually rewire their brain to be more positive.
And as a founder, when you're constantly getting knocked down every single day,
positivity is really powerful. And it's simple things like thinking about three good things
that happened during that day. And they don't even necessarily have to be related to your company.
It might be like, I got to stand up in the sunshine for 15 minutes. And it was warm out
in October in Boston. And that's great, you know, but by forcing yourself to think about those
positive things and be thankful for what you have, to me at least, it gives me kind of like
a sanity check on like, oh, things aren't as bad as they might seem like. Yeah, we did have that
customer churn. But it's okay, like we'll get more customers in two weeks, and it's not a big deal.
So like, that's been really helpful for me. And like useful. What do you think is one of the more
surprising things you've encountered about making your business work and being a successful founder
in the last few years? For me as a B2B SaaS founder, the most surprising thing is how willing
your customers are to pay you when you just explain to them the reason for why you're charging
them. And what I mean by that is like, we've increased our prices a few times we've, you know,
we've given people discounts, and then later on, we're like, hey, we don't want to give you the
discount anymore. And every time we do that, it feels scary to go to someone and say, hey,
you're gonna have to pay us more. But every time we explain to them, hey, we're increasing your
price, the tool is much more valuable. Now we've built way more functionality into it. And also,
over the long haul, we need to charge money so that we don't go out of business or we don't
feel obligated to sell the company right away. And like, this will give you a long term tool
that you can have access to. Once you explain that everyone's basically just like, okay, cool,
sounds good. And they understand, and they're willing to pay you. And so for me, the thing
that's surprising is, like when you give people that context about how hard you're working and
why the tool costs what it is, they're willing to pay you because they want to support you.
Whereas it's like really scary to try to ask people to give you more money. And you shouldn't
be scared, you should just do it because the worst thing they're gonna say is no.
Yeah, it's counterintuitive to how much more excited often people will be to pay for a product
that's more expensive because it's better than they are to pay for a product that's super cheap,
$5 a month. Because usually that means it correlates with their product not being all
that useful, not having that many features, not being really ready, or as valuable as a
more expensive product.
For sure. And for us as a business that wants to be independent over the long term,
and not subsidizing their company over like off of venture capital, it's really important to charge.
And I think now there's people are used, people are scared of products shutting down randomly,
you know, like Google shuts down a product like once every month that millions of people use,
right? So people actually want to pay you to keep your product up so that you can have a livelihood
to keep working on it and keep delivering value to them and solving their problems.
On that note, you guys have raised money. You've, at the same time, really focused on
getting adequate rest and making sure you run the company the way that you want to.
And people often look at those as sort of opposites. People look at, you know, raising
money from investors is locking you into a certain path and having to grow your company a certain
way. How do you deal with this push and pull? Have you found that that's the case that you're not
able to run a company the way that you want because you have investors?
I think of money, like funding as a tool, and it's how are you going to use the tool? And I
feel like there's kind of this dichotomy that exists right now, or a spectrum, which is on one
end of the spectrum, you have the never raise money, investors are terrible bootstrap, which is
like the left side. And then on the other end, the right side, you have raise as much money as
you as is possible and build a unicorn or bust type of thing. I think that there's room in the
middle for raise some money to get going. Building SaaS software, just takes a long time, you know,
like it takes a long time to get the functionality and figure out what the problems that people
are going to pay for. But once you figure it out, and you also figure out your acquisition channels
too, so you can grow, it's hugely valuable because it's recurring revenue. And so raising a little
bit of money, or raising some money in the beginning takes some of the pressure off you as
founders, where you feel like you're gonna go out of business every, you know, month, it's really
hard to concentrate when you're constantly worried about your livelihood. So I kind of think of it
as like, a flywheel, we raised a little bit of we raised some money to get the flywheel going. And
then we wanted to charge revenue to make the flywheel keep going and get rid of friction so that
we could be sustainable over the long haul. And our goal in the long term is to build a big business
and, you know, it just takes patience, but we needed some capital to get going. This is your
second business, you guys are generating hundreds of thousands of dollars in revenue from customers,
you had a previous business, you've experienced fundraising at sort of pivoting into the right
product from the wrong product. Out of all your experiences and the things that you've been through,
what would your advice be for somebody who's maybe just getting started or considering starting
their very first business? What do they absolutely need to know? I think it's really important to
pick a problem that you are truly passionate about over a long period of time. And what I mean by
that is, it's really, it's really easy now to get a new product going. You know, like, cloud
infrastructure exists, Stripe exists, to take payments, there's always open source, you can
cobble something together. And so often people will get going on something because it's easy and
it's fun, and you're learning a ton in the beginning. And then when it gets hard, inevitably
like six to 12 months in, they don't have enough grit and persistence to want to stick with it.
But if you're working on a problem that you truly care about, it makes it much easier to stick with
the difficulties that you'll inevitably run in with. And for me, I've been thinking about internal
communication and cooperation for a really long time, because I ran into it on my first company,
Rentabilities. I literally just saw a tweet the other day from myself eight years ago in my time
hop, asking if anyone knew of a good internal wiki that would be good for a startup. I've been
thinking about this for a really long time. And the problem space is near and dear to my heart,
which makes it much easier for me to slog it out and get through all the hard times. So the advice
that I give, or like one piece of advice, there's dozens and dozens, but one piece of advice that I
like to give that's kind of intuitive is when you think of a new problem, try to talk yourself out
of it. And what I mean by that is like, don't just start working on it, write it down, write down
your thoughts, and then try to move on. And if it keeps coming up over and over again, over the
course of a few months, it means it's one probably a problem that you care enough about to solve,
and two, a problem that's coming up consistently for customers that's prompting you to keep thinking
about this. That's great advice. Just I think another way to sort of manage your own psychology
almost indirectly by making sure that the future you're going to still want to work on what you're
working on today. Thanks so much, Andy, for coming on the show and giving us your advice and sharing
your story. Can you tell us as soon as we can go to learn more about what you're up to at Tetra and
what's going on in your personal life as well? For sure. So start with personal life. I'm basically
Andy, I'm Andy G. Cook on basically every single social network, stub that one out early on. So if
you want to reach me on Twitter, it's just at Andy G. Cook. My DMs are open if you have any questions,
or you can email me directly at Andy at Tetra.co, and that's T-E-T-T-R-A.co. And then if you want
to learn more about Tetra, just go on our site, same domain, and then I'll give a plug to a series
that we actually published over the last few months about our journey going from literally
almost running out of funding to profitability over the course of a year. It's just a really
transparent look over all the difficulties and struggles that we went through and literally how
we almost failed. And it's on our blog, if you want to check it out. And the reason why we wrote
it is because I feel like when people hear about companies, it's always, oh, we're killing it. And
no one actually knows that your company's on fire internally. So we wanted to get people an inside
look about like, hey, we were failing, and we came out of the nosedive. And here's what that looked
like. So that other people would kind of hopefully find that valuable. Yeah, that sounds exactly like
what people need to read. Thanks again, Andy, for coming on the show. Thanks a lot, Kortlyn. Thanks
for having me. If you enjoyed listening to this conversation and you want a really easy way to
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