Photo: (Left to right) Blitzen co-founders Jesse Guild, Jordan Clark, Duncan McDowell and Josh Wright at the Web Summit in Dublin on Tuesday, Nov. 3, the day their product officially launched.
[dropcap size=small]I[/dropcap]t’s easy – often too easy – to get caught up in the excitement of life in a fast-growing startup community.
Each day seems to bring another new company with another clever idea, and in Waterloo Region, it’s been this way for several years running.
International press coverage is no longer a novelty, while national attention is practically routine.
A chorus of outside voices has singled us out for our resilience in the face of BlackBerry’s downsizing, for our stratospheric startup density (second in the world only to Silicon Valley’s), for the quality of our talent, and for our strong and supportive culture.
In other words, it’s easy – often too easy – to forget that the fate of all of this comes down to the individual efforts of entrepreneurs in this community. And for them, there’s nothing routine, assured or easy about it.
I was reminded of this on Tuesday, when I caught up via Skype with Jesse Guild, CEO of Blitzen. Guild and co-founders Duncan McDowell, Josh Wright and Jordan Clark were at the massive Web Summit in Dublin, where they brought Blitzen out of private beta and launched their business lead-generation and tracking software into the world.
Full disclosure: Guild and McDowell are former Communitech colleagues with whom I occasionally spend time socially. Then again, I haven’t seen a whole lot of them in recent months, as they’ve been heads-down on their way to Tuesday’s launch.
Much of that work has gone on behind the green-painted brick walls of 25 Oak Street in Kitchener, an old house that Vidyard co-founders Michael Litt and Devon Galloway bought and briefly occupied in 2012, before their video marketing software firm outgrew its stripped-down confines.
Litt and Galloway could have dumped the property, but kept it as a kind of halfway house they rent at discounted rates to promising local startups trying to gain a foothold.
As Guild and I spoke, I was once again impressed by the sheer nerve it takes to quit a job to build something from scratch, then pivot away from it in the uncertain pursuit of an even bigger opportunity.
Blitzen, which started the week sitting at the edge of that opportunity, has now taken a big leap toward it, and that’s where my conversation with Guild began.
Q – Why did you choose to launch at the Web Summit in Dublin?
A – Because it’s an exciting event. It’s got some really exciting speakers; you’ve got guys like Stewart Butterfield from Slack; the hip-hop artist Nas, turned VC, is here.
It’s a different type of conference. It’s not like Dreamforce, where it’s getting exceedingly noisy for a sales-and-marketing or lead-gen company like us to rise above all that. The summit here has its own individual streams; there’s a marketing stream, there’s an enterprise stream. So, we’re still able to target our audience, but it’s also an interesting, broadly focused conference on web technologies.
Obviously, being able to come here to Dublin doesn’t hurt, either.
Q – Is the summit meeting your expectations?
A – It’s definitely meeting our expectations, and exceeding them in a lot of ways.
It’s absolutely enormous. It’s a staggering amount of people; I think it’s close to 50,000 people here, and the logistical energy that must have gone into it is probably immense.
I think what’s been beneficial is that there have been so many people from Europe, people from Asia, who we probably wouldn’t be able to reach if we were at a U.S. or Canadian conference.
It’s just a really diverse group of people here, and tons of Canadians. I’m actually surprised by how many Canadians have made the trip.
Q – What changes now that you’ve officially launched?
A – Before, we were in private beta, so that meant we were just sort of selectively inviting people to use our product and give us feedback. It was mostly meant to work out some of the kinks, and to understand a little bit more about what the users and customers were looking for.
Now that we’ve launched, people can come to our website, www.blitzen.com, sign up and just get going and create an account for themselves, and pay for the product.
It’s really a self-serve product, but now we’ve removed a lot of the manual processes that were involved when we were in closed beta.
Q – Was it nerve-wracking? Did you feel ready to launch, or just ready enough?
A – It’s never ready enough. I don’t know who said it, but they said, ‘If you’re not a little bit embarrassed by the product you’ve put out, then you’ve waited too long.’
Not that I’m embarrassed, but there are definitely always going to be improvements that can be made.
I was definitely nervous; I had some sweaty palms going on just when we were pressing the launch button to merge and make everything go live.
But then, we also cracked a 10 a.m. Guinness and celebrated.
It was mixed emotions for sure; nervous, but at the same time, it was a year and a half of work all kind of coming together in a really nice way here in Dublin.
Q – Tell me about the road that got you to this point. How did it all start, and what were some key milestones along the way?
A – I mean, we can go back as far as kindergarten, when I met Duncan, or to Grade 1 when I met Josh, or high school when we met Jordan, and we all were friends, but we never really knew what we were going to do with our lives.
Then we all went off and did different things, but then came together later in our lives to become a team and be entrepreneurs.
Duncan and I worked at Communitech, Josh worked at the Accelerator Centre, and that sort of affirmed our entrepreneurial ambitions.
The next big milestone for us was when we built our product, Decision.io, which we then started selling to people, and we were accepted into AngelPad.
AngelPad was the moment when things really started to kick off. We quit our jobs at Communitech and the AC, and within one week’s notice, we moved down to New York, to Brooklyn.
That was a year and a half ago.
We were there for about a year, and then we were in the Valley for a while.
We then pivoted out of Decision.io, and we saw a bigger opportunity with Blitzen.
The next big milestone after AngelPad was when we raised a seed round earlier this year. We raised $500K from iNovia in Toronto and the Garage Capital guys in Waterloo, and Jesse Rasch’s fund, Hedgewood, in Toronto.
That gave us the funds to go and hire some engineers, and really accelerate product development over the summer.
Since then, it’s just been heads-down product work, and we’ve been ramping up on the marketing strategy and the demand-gen strategy.
We got into Rev, which helped us with our demand-gen and marketing strategy plans.
Then we got accepted to come to the Web Summit here. We were funded by the Ontario government to come here, and thought this is a really good opportunity for us to launch, because Dreamforce was earlier in the year, and we wouldn’t have been ready to launch at Dreamforce, and we thought, ‘Why not launch it in Dublin?’
It just seemed like a really good opportunity, because the timing worked out well, and it also gave us that extra kick that we needed to get the product out there.
Q – Your relationship with your co-founders is pretty unusual, given the length of time some of you have known each other. Not many co-founders can trace their relationships back to kindergarten. How has that affected the course of your company?
A – I think, in a lot of ways, it’s what has kept us going.
We’ve been through a lot of tough blockages; there have been hurdles in the way, and I think if we hadn’t had the strong relationships that we’ve had, it would have been so easy for things to fall apart at some of the more difficult moments.
The fact that we know each other so well – we know our strengths, we know our weaknesses, we know what we’re good at, and we all have these complementary skills, and we know when one guy is getting burned out and we’ve got to pick up the slack when he may need a rest – that deep, long-lasting relationship is what’s kept us going through some of the really hard times.
Just having that understanding of each other, when sometimes you don’t even need to say anything; you just kind of know what the other guy is thinking, it just helps keep us motivated and helps keep us from quitting, basically, because we can rely on each other for that motivation.
Q – You mentioned the pivot away from Decision.io. How difficult was it to accept that you had to change course?
A – It was difficult.
The pivot didn’t come about because it was a losing battle, but more that we saw a bigger, better opportunity with Blitzen, and we do still have customers with Decision.io that we continue to support. But we’re ramping down on the marketing efforts and the product development efforts there.
But nonetheless, it was difficult, and there were times on the team when we disagreed strongly on what we should do.
From the one end, we have customers, and that’s our lifeline, the blood that’s running through our company. And to give that up and pivot into an unknown can be very difficult, because we don’t know what’s going to happen next.
We know that we have customers that we can sell into Decision.io, but then the decision to pivot into Blitzen is pretty scary, because we don’t necessarily know that people will want to buy it.
Internally, we struggled to figure out, how are we going to do this in a graceful way, and we don’t want to just cut our Decision.io customers off; we value our customers.
Once we figured that out, there was a path and there was light at the end of the tunnel, and it all worked out from there.
But you still feel a little nervous giving up on one product and then going full-on and putting all your chips into the other side of the table.
Q – How much better has it been since you made the pivot?
A – Since we made that hard decision, it has created so much clarity and so much focus, whereas when we were in the midst of trying to balance the two products, or build the functionality of two products into one, that’s where we were struggling and having a hard time, especially around the fundraising.
It was challenging, because it seemed we lacked focus. But once we made that hard decision to go full-on, and focus on lead generation and focus on voice-of-customer surveys for small businesses, that clarity added to our product velocity, because then we knew, ‘This is what we’re doing; this is what we’re about, and now we can build it.’
And we were able to go out there and be able to build the product a lot faster. It made things more crisp and more clear, and it gave everybody on the team a better sense of direction.
That sense of direction just meant that we were confident in what we were doing.
Q – What can you tell me about the company’s performance at this point?
A – We’ve got over 1,000 signups, and in terms of growth, it’s been mostly just on getting the awareness, getting the signups rockin.’
We don’t have any booked revenue yet; we’ve been in closed beta and so we’ve just been getting people on it for free.
Now we’re going to be looking to convert our beta customers into paying customers, as well as converting people who signed up into paying customers.
We’ve got lots of traction on the signups; we’ve got some great companies, like Kik, Shopify and Uber, who are interested in what we’re building, so there are some exciting conversations going on.
Q – Will recurring revenue from Decision.io help you through this period, along with the seed round?
A – Interestingly, yes. It’s what actually allowed us to go without going too hard on the fundraising.
We managed to get away with a $500K round instead of having to raise more than that, because we had the revenue, and so that helped us bootstrap throughout some of this process of building the product, and it was definitely a source of cash flow for us.
So, we didn’t have to dilute ourselves too early. We were able to keep the dilution minimal, and for us, that’s good, because we’re a bigger founding team. We’re four founders, and some people would say that’s too big and that the dilution is too great, but we managed to get away with the smaller round, and with the revenue we had, we were able to bootstrap our way to where we are now.
Now that we’re launched, we’re going to be going out and raising a bigger round, a Series A, ideally later in the year or in early 2016.
Q – What role has your location in Waterloo Region played in the performance of the company, and why did you stay here to build rather than go to the Valley or New York or somewhere else?
A – Waterloo is our home, obviously; we grew up there and we’re Waterloo born and bred, but that’s not the main reason we decided to stay. We could have easily stayed in New York or stayed in San Francisco.
It’s because of the community, and because of the support system that we have in place.
When we go to a city like New York, you’re just in a sea of companies, or in San Francisco, you’re just sort of one of a million, and I don’t think you have the type of support system that you have in Waterloo.
And you have other founders who are willing to help out; guys like Mike Litt and Devon Galloway, who invested in our company. They’re trying to create a fund with Garage Capital where successful entrepreneurs from the community will participate and invest in that fund, and pay it forward when it comes to their success.
That’s something that you can’t really get anywhere other than Waterloo, because we have such a tight ecosystem in Waterloo.
Because we raised a smaller round, the burn rate was much, much lower. So, instead of paying $3,000 a month for an office in San Francisco, we’re paying much less here in Waterloo. Logistically, being able to actually build a company on a much tighter budget has been possible from Waterloo, and we’re able to find good engineers who are talented, but they’re not demanding the San Francisco salaries of $150K-plus.
We can make our money go a lot further. We raised $500K in U.S. dollars, and although it’s been troubling for Canada having the price of oil go down, and dragging the Canadian dollar down, it’s actually ended up working out in our favour. After we raised in U.S. dollars, it ended up being much more in Canadian dollars, so we’re able to take our money a lot further because of that, too.
Q – Last week, Compass released a report on Waterloo Region’s tech ecosystem. It highlighted the need for companies to quickly establish sales operations outside Canada, especially in the Valley, and not try to run sales remotely from Canada, but have boots on the ground in those other markets. Is this something you see doing with Blitzen at some point?
A – Yes. I would agree with what Compass is saying there, and I think other companies are seeing similar things.
For us, getting boots on the ground in New York or San Francisco has always been a part of our plan. We haven’t gotten there yet, but I think we do need to think outside of Waterloo.
Waterloo is a great city to start and to grow out of the seed to the Series A level, but then, once you get beyond that and it becomes time to really scale and really grow, I think it’s beneficial to get a presence in some of the larger markets like San Francisco.
Spending time in the Valley, as much as we maybe don’t want to believe it, really is necessary. You need to be in the Valley if you’re in tech. You need to have a presence there, and you need to be known in that ecosystem and in that community.
Although it’s a bigger ecosystem, it is important to be involved there, because that’s where so much of the capital is, and if you want to raise venture, that’s where you’ve got to do it.
When it comes to the sales side, I think you can get away with not necessarily being in San Francisco. You can maybe go to New York; you can maybe go to Boston. I mean, you’ve got HubSpot out in Boston, and they’ve built a very successful business there with their marketing automation platform.
So, it doesn’t have to be the Valley, but the U.S. is a massive market, so I think, as a Canadian company, it is definitely wise to get a presence there.
Q – What is the biggest challenge Blitzen will face in the short term?
A – Growth. Now that we’re launched, it’s about growth, and it’s about getting people into the product and converting them into paying customers.
We still have some development milestones, but at this point now, we really have to ramp up on the marketing, ramp up on the sales and really validate product-market fit.
Product-market fit going into our Series A – being able to definitely say to an investor, ‘Yes, we have product-market fit’ – is our next big milestone, and the only way to prove that is through growth.
Q – What has surprised you most about life as a startup co-founder?
A – It’s surprising. Although people say it’s hard, it’s still amazing how hard it is to be successful and to build a company, and to keep going and keep your head up, and to not want to just throw in the towel.
It is tough, and you really do need a good team; you do need a talented group of people to get you there.
I think a lot of people are under the impression now that startups are something you can just do, and you can just become successful, and build a product and sell it to Google, or exit for a quick flip, and that’s really not the situation.
It takes a lot of work and it takes a lot of luck, and I’m still surprised every day.
It’s been absolutely the most challenging part of my professional career, without a doubt. Quitting Communitech and going full-on and moving down to New York without any idea of what was going to happen was the scariest and most difficult thing, and it still continues to surprise me how hard things are.
But the reward of getting to the milestone, and the reward of being successful on our own terms – it’s amazing to me how rewarding that feels. It’s a great feeling, to be able to hit those milestones and achieve success.
It’s those small victories; like today, just launching is a huge victory for us.
That’s what surprises me – just how tough it is being an entrepreneur, even though people tell you it is.
Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo looks at the issues, people and events that shape Waterloo Region’s technology sector.
