SaaS Interviews with CEOs, Startups, Founders
EP 555: Sudo.ai Raises $2.3M at $10.3M Post Money Valuation to Fix CRM Space with CEo Francisco Larrain
30 Jan 2017
Chapter 1: Who is Francisco Larrain and what is his background?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
Chapter 2: What problems does Sudo.ai aim to solve in the CRM space?
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the $100 is Zach Faron. He's a 22-year-old Apple employee, and he's listening to the show and loving it. For your chance to win $100 every Monday, simply subscribe to the podcast on iTunes now, and then text the word NATHAN to 33444 to prove that you did it to enter.
Folks, many of you reach out to me and you say, Nathan, so many guests on your show talk about the importance of batching. But whenever I try and batch, you tell me this. You go, Nathan, they don't book back-to-back times. Or they don't show up after they book.
Chapter 3: How does Sudo.ai plan to improve data entry for sales teams?
It's frustrating. The answer is, guys, you have to use smart tools. I use a tool called Acuity Scheduling at NathanLatke.com forward slash schedule. I'll tell you specifically how I use it later on in the episode. Coming up tomorrow morning, you'll learn from Andre Breeze. He's the Bant CEO.
Chapter 4: What is the current status of Sudo.ai's product development?
They've invested 32 grand in monthly recurring revenue, helping companies get higher quality leads with a touch of professional services. Top drive, what's going on? Nathan Latka here. Our guest today is Francisco Lorraine, and he's been an entrepreneur for most of his life, born and raised in Chile.
Now, previously, he founded a company called Zappedly, a payments technology company that was backed by Eric Schmidt's venture fund and acquired by Groupon. Before that, he ran a $2.5 billion special situations hedge fund with Trigger Power. We'll get into that in a second. And most recently, he led the project engineering team of 100 plus people for Groupon's local business.
Now he's working on enabling high quality work for corporations and their teams. We also have his co-founder and head of product with us, Amit. Guys, are you ready to take us to the top?
Hey, how are you?
So, you know, we're talking to a startup when you see the head of product chugging Red Bull at like, you know, 11 a.m. on a freaking Tuesday. Amit, what's going on, man?
Late night coding, man. Late night coding. Lots of issues to work through, lots of problems to make sure we get this right.
So what's the breakdown here? Are you guys, Amit, are you doing all the coding or Francisco, are you doing coding as well?
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Chapter 5: How much funding has Sudo.ai raised and from whom?
No, we have a team of about nine people now and we all code and we all get our hands as dirty as possible to make sure that this thing moves quickly.
Amit puts his hands dirty on the product and I try to build and manage the algorithm part of the system.
So, Francisco, before we get more into what Sudo does and how you guys hope to kind of really reinvent this industry, tell us a little bit more about about your background. So specifically, we know we have folks from hedge funds and PE firms on here all the time. What was the hedge fund you were running and help our audience understand what trigger power means?
Means that I could make decisions based on whatever I wanted on the investments. And this was a hedge fund that, you know, I ran previously in Chile and for who became the president of the country, Sebastian Piñera. So it was his family office or his own money, but it operated like a hedge fund and a very successful one. When I arrived there, the size of the hedge fund was 300 million.
Chapter 6: What factors influenced the valuation of Sudo.ai?
And when I left, it was 2.5 billion. So we had a really good ride there. And but, you know, I really wanted to move into the creativity aspect of things. I was very strong technically. So I decided to come to the GSB to do at Stanford to do an MBA. And out of that, I started building my career as an entrepreneur here in the Valley.
like an immigrant and, you know, trying to create jobs and disrupt industries.
So what side do you like better, the money side or the entrepreneur side? Oh, definitely.
Well, both are money, but definitely the entrepreneur side, because the money part is like you're making rich people richer.
Chapter 7: What insights does Francisco share about his previous entrepreneurial success?
Here you're like, you know, trying to use technology to like change the way that people communicate and the way people kind of like become more productive.
And come on, Francisco, you're making yourself richer, right? We are, we are, yes.
If everything goes well. Yes, if everything goes well.
All right, so you're nine people, you're based, you guys are based in, what, at Cook, California? Menlo Park. Perfect, Menlo Park, good. Nine people, Menlo Park, how much capital have you raised to date? $2.3 million.
Chapter 8: What advice does Francisco have for his younger self?
Okay, and what, tell us more about Pseudo now. What are you using that money on? What are you hoping to change?
So the problem that we're trying to solve is that we think CRM, customer relationship management systems and enterprise are broken. And we think that the reason that they're broken is that they rely on salespeople to be proactive about manually entering data into the system. And so that leads to lots of problems with the underlying data because the reps are not inherently motivated to do this.
It's not something that they get value out of generally. It's something that the company gets value out of. So you have the incentive problem. And then you've also got the software problems. Most of the CRM systems were in the best case designed in the 90s, worst case designed in the 80s. And they're hard to use.
If you've ever tried to use Salesforce or Salesforce's mobile application, you know it's a time consuming process. And so if it's time consuming and it's annoying and you're not motivated to do it, you're generally not going to do it or you're not going to do it well.
And so the underlying data is just messy. It's missing, it's incorrect, it's duplicative, it's not timely.
And as a sales manager, as a sales operations leader, that makes it very difficult to run an efficient and effective sales team. You don't have the underlying data to know, do I need to have more sales reps or do I need to have fewer sales reps? Do I need to have more leads or should I get my reps more focused on a fewer set of leads?
And if you don't have the underlying data, you can't make those decisions effectively.
Yeah. There is a lot of talk about, you know, Salesforce, Einstein, and how do you use machine learning and big data to get insights out of your data? out. We experienced this firsthand at Groupon where we ran all the systems to prioritize leads and everything.
And it was just very hard to make sense of the data, mainly because the data that was input to the system was essentially done by reps who, you know, if you think about it, like the equivalent of a manager telling you to update Salesforce is similar to tell a teenager, you know, do your best.
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