In part one of my conversation with Dan Reich, the founder and CEO of Troops, he discussed his vision to build an AI assistant that bridges information between employees and software with the ease of sending texts to a friend.
In this second part of our conversation, he talks about the importance of building a team and a product to get the funding, and he shares some thoughts on how telecommuting has dramatically increased the importance of a healthy corporate culture.
More information: https://www.troops.ai/
Dan Reich is the Co-Founder and CEO of Troops, a venture-backed technology company that makes work more human by delivering SaaS software that makes it easier for customer facing employees to get their work done, for executives to make better decisions and for operations employees to be able to react quickly to changing needs.
Troops is working with hundreds of companies and has raised about $22 million in venture capital from First Round Capital, Slack and others. He is also the Co-Founder and President of TULA, a health and beauty business that has created the world’s first probiotic-based line of skincare products and is backed by LCatteron.show more
He has been involved with companies that have raised over $100 million in venture capital and have exited for over $1 billion in mergers and acquisitions. Prior to Troops, Dan started a software company called Spinback which he sold to Buddy Media, and then to Salesforce.com for about $850mm. He has a B.S. in Electrical and Computer Engineering from the University of Wisconsin-Madison, is a contributing writer for Forbes, TechCrunch, Harvard Business Review and hasbeen named Silicon Alley Top 100 by Business Insider.show less
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
Dan Reich 0:00
If you have an idea to live, literally give it a name. Create a company, Delaware C Corp or LLC, whatever it is actually make it real. Give it a name, open a bank account, put your own money in it be your own first investor your business, whether it’s $50, or $100, to make it real.
Alexander Ferguson 0:23
In part one of my conversation with Dan Reich, the founder and CEO of troops, he discussed his vision to build an AI system that bridges information between employees and software, with the ease of sending text to a friend. In this second part of our conversation, he talks about the importance of building a team and a product to get the funding. And he shared some thoughts on how telecommuting has dramatically increased the importance of a healthy corporate culture. Dan, I’m excited to continue our conversation. Now hearing your journey. As a tech leader, I’m sure there’s a few things that you can can share of what you’ve learned over the years. And to begin, can you just share it in brief? Like, how did you get to where you are today, running troops.
Dan Reich 1:06
I’ve always been doing the startup thing in high school, I think I started my first company and in college was started two companies. And so I’ve been a startup junkie and addict since the early days. And I’ve just, I’ve just kept going. And so along the way, I’ve come to appreciate how amazing it is to be able to start a business from scratch and more specifically, technology company, I studied engineering at school because I was fascinated with how technology runs the world. And increasingly so well run the world and more of it. And along my journey just saw how important this category of CRM was, but also deeply felt like it could and needed to be reimagined and thought from scratch. And more specifically, there needed to be a new paradigm by which humans can interact with really important business information and act off of it.
Alexander Ferguson 1:59
The growth phase of a startup I know goes through multiple parts. First is the fundraising. And then you’re getting your first couple clients and then scaling from there. Let’s start with fundraising. This is this is not your first rodeo. But any thoughts you can share, if you to another entrepreneur on on that phase, a tip that you could share the tactic that works when you’re trying to get it off the ground with fundraising? What would you what would you share? Yeah.
Dan Reich 2:25
So when I think about that question, it’s for me, it’s really how do you go from zero to one? How do you take an idea and get it off the ground and make it something tangible that you could build a team around, you could raise money around? So I think there’s at least two immediate thoughts. I have many more. But the first one is this, I think at the beginning, when you’re just getting started, people often have ideas, and they don’t, don’t make a tangible. So step one, I think is if you have an idea to live, literally give it a name, create a company, Delaware, C Corp, or LLC, whatever it is, actually make it real. Give it a name, open a bank account, put your own money in it be your own first investor in your business, whether it’s $50, or $100, to make it real, I think just doing that gives you something tangible and gives you momentum. So when you’re having conversations with prospective investors, or potential teammates, it’s not an abstract thing you’re thinking about doing. It’s something you are already doing. It’s already in progress, and you are already working on it. So I think that helps psychologically in so many really important ways. The second is for fundraising. I think fundraising as a category is one of the most counterintuitive processes. You know, the way I think about it is if you ask for money, you often get advice. But if you ask for advice, you often get money. And people, you know, generally want what they can’t have. And so with fundraising, I think, one you need to show momentum on a business. So people think, oh, I need to go raise money. So I could hire a team. I think also it’s counterintuitive. It’s backwards, I think you need a team before you can raise money. So so in the beginning, even that troops, we built out a team without really any money. And together we said we’re gonna bring on prospects, we’re gonna prove that there’s something here with value, we’re going to try to put prospects into contracts, and then that momentum plus a team, plus the vision and direction of where we can take this that will allow us to go raise money, you need to show evidence across the board, so that an investor can see it and have more conviction that this is something worthy of capital investment.
Alexander Ferguson 4:47
For your first couple clients stand. How do you get them to sign on when you say, well, you’re on my first client and we’re just building a product? We don’t even have it yet. How do you do that?
Dan Reich 4:57
Yeah, I mean, in broad strokes, we don’t We’d have conversations with them about how is their business doing? And what are the biggest impediments to growth? And what are the biggest challenges and we had a hypothesis of what they were. And based off of that hypothesis, we also had a hypothesis around what we thought the best solution would be. And so we’ve had that conversation. And we would validate or invalidate whether or not they agree that this big problem of theirs could be solved by our intended non existent solution. And to the extent we had customers agree that there was an alignment between their problem and our solution, we’d say, great, why don’t you sign up with us sign up with us signed a contract that says, we’re going to go build a solution that we said, we have, or would have, and you’ll be a beta partner of ours, you don’t pay us anything for it, because it’s being built. And upon delivery, you will pay us what we agree to now in that contract. And so what that did is it provided evidence that there was a legitimate problem with a legitimate solution that we still need to prove, we can build that also had a known and quantified dollar amount tied to that problem and solution via you know, a contract, the amount of the contract,
Alexander Ferguson 6:13
then from there, to scale. Now, you’ve got your first couple of clients and customers on board, you’ve maybe got VC funding now and you’re growing, how what tactics have you found that have worked well, to then go from like, the first one to 10 customers to 100.
Dan Reich 6:31
Hustle is, I don’t know, some, there are definitely people out there better than me, and have done this in clever and better ways. But just hustle like in the early days, we just got on the phone with and in front of every single prospect that we thought we could and would be interested in something like this. And in doing so we built champions of our brand and our business of our solution, who then in turn would let their friends know and so on and so forth. One of our one of our investors or board members, he relates this to like a new religion, we’re building we’re building a new religion, we got to get people to believe in what we’re doing. And so that means knocking on doors and showing people hand to hand combat what we’re up to and why it’s important. And so that’s what we did in the first year or two years, even now, we’re still doing that, and probably will always do that. Definitely always do that.
Alexander Ferguson 7:24
Last two quick questions. Looking forward, what challenges do you see you’re going to need to overcome to continue to scale, particularly in today’s kind of environment.
Dan Reich 7:34
I think people their their emotional state, a company culture is just the most important thing right now. I mean, you know, here we are doing this interview over zoom. But we both know, we’re going to do 20 More zoom calls today and probably 200 This week, that’s exhausting. And without being able to have the same amount of face to face interaction, like we were previously, it just changes everything. And I think the biggest challenge that we will face as a company, and frankly, as a society is how to cope with that. And I think we’re just beginning to see that the areas where this hurts people. So that’s one and probably the biggest challenge I’m thinking about. And then of course, another challenge related to this is that the societal structures are very different. Now the economy is very different now to have have not divided is greater than it’s ever been. If you look at the stock market, it’s near, if not all time highs, largely due to these technology companies that perfectly benefit from this ad home only online situation. And at the same time, you’ve got hundreds, if not 1000s of small businesses and entrepreneurs that are out of a job that their business cannot recover. And, and I think we haven’t even begun to see the ripple effects that will ultimately play into the economy. And that will also impact our business. We have companies that are doing well, that we work with in companies that aren’t if they’re impacted, we are impacted. And so I think it’s just also super early with how this whole thing shakes out.
Alexander Ferguson 9:13
Let’s go question for you. What kind of tech innovations do you predict we’ll see in the near term, and in the long term, so next year, so and in 510 years?
Dan Reich 9:21
I think we’re gonna see, you know, Bessemer Venture Partners did a state of SAS for 2021 of the predictions they made which I wholeheartedly agree with this idea of automation at scale. You know, as I mentioned, we believe there’s only going to be more SAS companies, there’s only going to be a greater need for integration and automation. And I think we’re gonna see different permutations of what that looks like. So short term trips is one of those permutations and I think we’re gonna see more of that. I also think as a result of this remote work environment, people don’t know what other people are doing. So I think we’re going to see an increase in things that measure and my monitor usage across the different tech stacks. And you know, long term I do think we’re gonna see a, a shift to investing in the physical world, I think we’re gonna see more investment in physical atoms and cat and chemistry and physics, whether it’s clean energy, whether it’s better transportation, whether it’s medicine and vaccines, I think we’ve over rotated on software, rightfully so. And it’s just getting started. But I think we’re also now going to see the emergence of and resurgence of really important things like like Energy and Climate support.
Alexander Ferguson 10:41
That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview, you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.