SaaS Interviews with CEOs, Startups, Founders
How Vroozi leveraged two internal hackathons last year to achieve $1M new ARR?
20 Oct 2022
Chapter 1: What is the context of the hackathons discussed in this episode?
Hey folks, hope your Q3 and Q4 is off to a good start. We just wrapped up Founder 500 in Austin, Texas. Hundreds of bootstrap founders showed up. It was an amazing time. I loved meeting so many of you.
This interview today is a recording from that session, which you're gonna love because now we have visuals, we have the founder teaching, and I made every single speaker include their revenue graphs and real artifacts in their presentations. Without further ado, let's jump in.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all these podcast interviews. Check it out right now at getlatka.com. Give it up for Shahz Khan. My name is Shahz Khan.
I'm the CEO and co-founder of Vruzi.
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Chapter 2: How does Vroozi define its business model and customer base?
And Vruzi is based in San Francisco. I'm from L.A., And we are a autonomous purchasing platform and AP automation platform for large multinationals. So all non-payroll spend that goes through a company will actually run through our platform.
So anything from the Tonight Show with Jimmy Fallon to customers in Texas like HEB grocery stores, we run our entire platform and sit on top of a number of different systems. So, uh, today, uh, I'm going to talk about, uh, a little bit, uh, of what we've done in terms of continuous innovation, just a little bit about our company. We've got 55 customers. Uh, we're in 15 countries right now.
Um, 6 billion annual throughput, 30,000 users, um, and, uh, on track for 10 million ARR by next year. Um, that's, uh, where we're targeting. Hopefully we'll beat that. And, uh, a little bit about what we do. So we synthesize the entire purchasing process for companies.
So everything from digital purchasing on your smartphone, you can get a boom mic, you can get shelving units, you can get helicopter rides, you name it, it runs through our platform.
Chapter 3: What innovative strategies does Vroozi use to foster continuous innovation?
And then we actually pay suppliers digitally. So in corporate America, a lot of people are paying by check still. So we actually digitize payments through ACH, virtual cards, and a number of other mediums. And then we sit on top of any type of financial platform that you can think of. SAP, PeopleSoft, NetSuite, you name it. And again, some of our customers, uh, we're very diverse.
We don't have a, um, industry slant, but, um, we have three major areas, enterprise fortune, 1000 mid-market organizations. We define anywhere from 250 million to 1.5 billion revenue. And, um, GPOs, GPOs are group purchasing organizations that actually build Costco like discounts for their members so that they can get really good pricing without having to be a big, uh, big company.
So, um, as a tech company, I don't know if you guys all have tech companies or run SAS or software. Um, you know, there's a, there's a dilemma that always plagues us. How do we find ways to continuously innovate? You know, what are the, what are the levers that will keep us relevant in this market?
And as a company, my advice, and I talk about this a lot, is that you cannot be complacent when you have a company. You have to be competitive in your core market, have to prove that you can win in new domains.
Chapter 4: What are the essential elements of a successful hackathon?
Classic example is Blockbuster. Blockbuster was complacent. And then Netflix came right and stole their lunch. Nobody knows about Blockbuster unless you have those laminated cards still, which probably you can find on eBay now. But the point is that you have to always be thinking about finding ways to innovate.
And so a couple of sources, founder-led ideas, well, we all have ideas and we start companies based on those ideas, right? Um, I personally get kicked out of a lot of my, uh, product meetings now because I just have a bunch of ideas and they just go, we can't do any of this. And then I come back and I go, well, what about those ideas that I just talked about?
So you always got to be thinking about ideas, client business reviews, great source of inspiration. So talk to your clients, talk to your customers. Talk to them monthly. Talk to them weekly. I'm speaking with HEB right after this in the Eastside Village Hub because we're talking about going into Mexico with all their super stores. And product owners. Talk to your product owners.
Chapter 5: How does Vroozi incentivize participation in hackathons?
Give them incentive. Competition, focus groups, user groups, white papers, you name it. There's all sources of inspiration you can find to innovate within your company. But what we did is a little bit interesting. How many of you guys know what a hackathon is? Okay, great. And have you guys run a hackathon internally or participated in one? So we, that's great.
So we found that hackathons have been incredible, incredible drivers for innovation. So a hackathon is typically an event, fixed period time, about anywhere from 72 hours or less. Most hackathons are 48 hours and they're fast paced. So a lot of the hackathons that we run, people don't sleep. for three days straight. I mean, they'll nap at their desks.
We obviously staff them up with whatever they need, stock them up with whatever they need, pizzas, sodas, maybe some other libations if they feel successful.
Chapter 6: What were the outcomes of Vroozi's first hackathon?
And it's a lot of fun. Slack channel is booming up. a lot of animated conversations, a lot of profanity. It's a great, great way to basically deliver innovation in your company. And so we have a hackathon framework. First of all, the teams, minimum one person, maximum four. Name your team, make it creative. Duration, three business days, and we run them twice a year.
So we run them in December, kind of slow period, and then we run them in July. And cash prizes. We want to incentivize innovation, right? And I think it's a great way. We talked about profit sharing, bonus plans, commission plans. Give money to engineers. I mean, it's incredible what comes out of these two or three day micro sessions.
Chapter 7: How did the second hackathon contribute to Vroozi's growth?
And then team combination, no restrictions. So one thing with our hackathons is that we don't care what you're building. It could be completely irrelevant to our business model, right? We want people to actually open up their mindsets, open up their mindshare and think about new creative ideas where we can find, you know, value.
And so we mix up the teams in terms of, uh, dev QA, uh, DevOps, uh, product owners. A lot of our hackathons are just two people, two people, and, you know, it could be up to 15 teams. And so our rules. On the technology front, no technology limitation. So feel free to explore, implement whatever you want to.
And if you are using open source libraries and tools, no plagiarism, you will be disqualified. So if you are leveraging tool sets for your project, you must credit them in the actual hackathon. And then topics, uh, no restrictions. And, um, you know, we, I'm a judge on the hackathon committee, but, um, we want to see creativity.
So we want to see a lot of people putting together, um, great ideas that we can actually potentially implement in our solution. And so what are you going to submit?
Chapter 8: What are the key lessons learned from Vroozi's hackathon experiences?
You're going to submit the working code plus the readme instructions plus a PowerPoint presentation. right? Or slide wear, right? And you actually get graded on your slide wear. So take your slide wear seriously. That's part of the 72 hour sprint. Okay. And judging committee is made up of four to six team members.
So that could be executive committee, that could be product owners, that could be DevOps, that could be a whole bunch of people. There's no title, right? For us, we just want to actually have a very diverse group of judging members that doesn't have to be executive based. Okay. And scoring criteria. I have a lot of this already built out for you guys in terms of templates and frameworks.
So if you guys want to, I'm a late addition to this. Um, I can, um, you can email me and I can send you, uh, the files and frameworks. It's really, really, really important that you guys look at this. So scoring criteria. One to 10, 10 being highest. We talk about innovation. Is your idea interesting, cool? Pitch, how well did you present it? The pitches are 10 minutes max.
If you go over, you get dinged. So again, we run a pretty tight ship because if you can imagine evaluating in a four to six committee, it's about six hours over a Zoom. And it's really, really tenuous. So you have to have some brevity, but you also have to convey your message really, really quickly. Value, is your idea solving a problem? Did you clearly identify the problem?
And how well did you solve it? And that can come out in terms of the actual PowerPoint, that can come out in terms of a demo that you do. So the pitch doesn't have to be just Slide where it can be a mix of the PowerPoint and a quick MVP demo and then execution, right? So we actually grade one to 10 on all of these. And so here is a kind of sample sheet from
One of our hackathons and so a lot of people death demons callback assassins innovation hub bit hunters creative chaos The people that actually won this hackathon Were a team that combined their first names together yarrow Sam in the middle And so we had five judges in this hackathon and again, we just scored and then basically presented
And so, again, from a framework standpoint, we encourage if you're going to run a hackathon, have multiple types of prizes and awards so that you can incentivize people. So we've had team members that have actually won in three categories, which is your max. You cannot win in more than three categories because then it's just really not not helping. right?
You want to see a lot of ideas come through. And our biggest hackathons have been about 15 teams total. So we have a lot of participation from the company. And by the way, hackathons don't have to be engineering related, right? So you can have a hackathon or a concept for improving the onboarding experience for your clients. You can have a hackathon for
you know, better customer experience or customer service and leveraging tool sets to basically synthesize that customer experience. So it doesn't have to necessarily be, um, tech related or MVP in terms of coding. Okay. And, um, one of the key areas that we like is most likely to be business viable, right? So out of our first hackathon,
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