← The SaaS Podcast - Growing Profitable AI SaaS & AI Agents
The SaaS Podcast - Growing Profitable AI SaaS & AI Agents
440: Salto: From Early Missteps to 8-Figure ARR SaaS - with Rami Tamir
00:54:50
Loading summary
Transcript75 lines
- [00:00]
Omar Khan
Foreign welcome to another episode of the SaaS podcast. I'm your host Omar Khan and this is a show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business. In this episode I took to Rami Tamir, the co founder and CEO of Salto, a platform that helps teams manage and automate the configuration of SaaS apps like Salesforce, Netsuite and Okta. Rami had already built and sold three startups, but building Salto brought a whole new set of challenges for him and his co founders. The idea came from a problem he kept running into at his last company. Making changes in tools like Salesforce should have been simple, but instead it was slow, frustrating and full of errors. At first he thought the issue was with his team. Later he realized almost every company using modern SaaS tools was dealing with the same thing. Rami and his co founders self funded the early product and started showing mockups to potential customers. The feedback was enthusiastic, but when they came back with a working product, the excitement disappeared. It wasn't what people thought they were going to get, and that was a valuable lesson even for a serial entrepreneur in how early feedback can send you in the wrong direction when you're pitching a vague idea. Early on, once they had a real product to sell, they hit a new problem. Even though the pain was real, most buyers weren't looking for a solution. So every deal was a grind. And just as they started to gain traction, the 2023 downturn hit. Budgets vanished, deals stalled, even happy customers churned. The team made some tough choices. They raised prices, focused on larger companies and rebuilt their sales motion. Eventually that pivot paid off. Today, Salto is an 8 figure ARR SaaS business with hundreds of customers and has raised $69 million in funding. In this episode you'll learn how early feedback sent them in the wrong direction and what they should have done instead. Why selling was hard even when the problem was clear and how they got people to take action. How they turned mid sized events into a consistent growth channel and stop wasting time on the wrong ones. We talk about what forced them to rethink their sales strategy and how that led to bigger, more valuable deals. And why they've kept investing in content marketing even when attribution is messy and results are hard to track. So I hope you enjoy it. Are you building or scaling a SaaS product? Then you've likely faced authentication and user management challenges. It's crucial, but let's face it, it's not the core focus or the most exciting part of your business. And think about it. How much time does your team spend on Auth instead of building your core product and features? And as you grow, it only gets more complicated. Enterprise sso, custom security, user analytics. Soon you're drowning in feature requests that have nothing to do with your actual product. This is where Propel Auth comes in. They handle all the authentication heavy lifting from quick integration for devs to built in user management for your customer facing teams. It's everything you need to scale without the headache. Here's an exclusive offer for our listeners. Sign up for a free Propelauth account at propelauth.com no credit card required. And if you decide to Upgrade, use code SAAS24 for 50% off their growth plan for six months. That's Propelauth.com I talk to a lot of founders who have the same challenge. They've got an amazing product idea but need a technical team to build or scale it. If you're looking to develop a B2B SaaS product but don't want to hire and manage an in house team, listen up. Gearhart is a product development studio that handles the entire technical side of building your software. They've built over 70 successful products including SmartSuite, who's founder trusted Gearhart after his $200 million exit to help build his next big venture. Some of Gearhart's customers have gone through YC and their portfolio companies have won over 10 startup competitions. Until the end of May, they're offering our listeners free strategy sessions with their leadership team. Just visit Gearheart IO to book your session. That's Gearheart IO. Rami, welcome to the show.
- [04:16]
Rami Tamir
Thanks. Thanks for having me. It's a pleasure being here.
- [04:18]
Omar Khan
Do you have a favorite quote? Something that inspires or motivates you that you can share with us?
- [04:23]
Rami Tamir
I'm not a quote person, but I find myself using the Seinfeld quote when I'm trying to describe processes and the quotes go something like you cannot knock a Coke vending machine down in one take. You have to rock it back and forth. And for me it's always a reminder of there are things that has an internal clock and you cannot rush them. So it's always a good grounding for me. So I'm using that a lot. So this is. Yeah, that's a quote. I'm kind of a favorite one.
- [04:54]
Omar Khan
Love it. There's a lot of wisdom in Seinfeld, isn't there?
- [04:58]
Rami Tamir
Yes.
- [04:59]
Omar Khan
So tell us about Salto. What does the product do? Who's it for and what's the main problem you're hoping to solve?
- [05:06]
Rami Tamir
So Salto is a configuration platform for SaaS applications. So when you look at kind of modern enterprise or any enterprise, to be honest, they manage the business of the day to day using cloud application, the likes of Salesforce, Jira, Netsuite, okta, everything is SaaS and the SaaS is a no code platform. And what these companies are doing on a daily basis and making changes to these applications to fit the business. Take an example of Salesforce. What you'll do again, you'll have a group of people that are changing the configuration of Salesforce to fit what the business does. And that's a daily thing, they develop solutions around it and the way these changes are being handled today, it's manual, it's error prone. Basically you go to the UI of Salesforce and you click and click and click and click. At some point you'll get a solution. In most cases you'll do it in production. And all these things create some kind of a continuous process of misconfigurations happening in this application. And it's really hard to manage some such unstructured process. What we do is we know how to connect to this application, extract the configuration and basically offer you a DevOps like process for this application. Think about, let's take another application, let's take Okta. You'll do the configuration and pre production environment. We'll extract that configuration, show you what you did and offer you a way to actually automatically move it to production while analyzing the changes that you made, if they are within a standard, if you're not making a mistake, if you're taking all the changes and getting you to production in a sane way while backing up your configuration, allowing you to restore to a known place, et cetera. So essentially we are kind of the configuration platform of everything cloud application.
- [07:07]
Omar Khan
Great. Okay, so we're going to talk more about that and where the idea came from and some of the early days in getting started. Before we do that, let's talk a little bit about your background. This isn't your first startup. You have already worked and had three successful exits. I think you sold first company, I think Cisco and Red Hat and Oracle. So just tell us about that. What were some of the other startups that you've already built?
- [07:39]
Rami Tamir
Yeah, it's different. So it's different area in each startup. So I started my career in the first startup was around networking. We build a fiber optic switch. That was the infrastructure back then, very physical infrastructure, very Real one. It was acquired by Cisco as you said, very fast. It was a good success story. After we developed the product within a quarter we basically kind of covered all costs of the startup. So very fast. Acquired by Cisco. I spent a few years in Cisco doing high end routing and then I left to do. We started a company called kumranet. If you know open source virtualization, it's called kvm. This is basically the engine that runs Amazon cloud, Google cloud, Oracle cloud, whatever cloud you want to think about. We developed that. Yeah. And it was introduced into the Linux kernel very fast and we were acquired again by Red. Red Hat. I spent two years of Red Hat pushing this in making the product is viable. Left to start another company called Rovello in Ravelo. We went a layer above and we did cloud kind of virtualization. Essentially we allowed enterprises that are trying to move to the cloud to rent capacity on the cloud without changing the application. That went really well. Was acquired by Oracle, spent two years in Oracle and left to start Salto. So that's basically the background and now.
- [09:13]
Omar Khan
Already you have some great traction with Salto. Can you give us a sense of the size of the business and where you are today?
- [09:21]
Rami Tamir
So what is interesting in Salto compared to the other startups? Usually in the startup it's a bit cynical, but it's true. You go to a prospective customer, you have to explain that he has a pain. Once he's convinced that he has a pain, you have to explain to him. Yeah, and I'm the solution for that. In Salto it's a little different. The pain is there. People know that they are mismanaging the configuration in these applications. It's something that whenever I go to talk to a customer. Yeah, of course. And I have to convince them that I'm the right solution. So so far we've been hundreds of customers, enterprise customers, Fortune 100 and large startups from there's no one vertical. We're at the kind of eight figures in ARR and going really nice.
- [10:07]
Omar Khan
And you've raised just shy of. I think you're telling me 70 million so far.
- [10:12]
Rami Tamir
Yeah, a little shy of 70 from Bessemer, Lightspeed, Accel and Salesforce Ventures.
- [10:19]
Omar Khan
So let's talk about where the idea came from. As you were saying, customers have this pain but they're not or at that time certainly haven't been looking for activity, looking for a solution. Right. So it's a new category. So you have you pushing this rock uphill that not only you have to tell them about the pain but you also have to convince them that they actually need a solution and all of this stuff. So where did the idea come from? And then sort of, how did you get started this time with your fourth startup?
- [10:52]
Rami Tamir
So this is an interesting origin story. So previous company Revelo, the one I talked about before, it was a SaaS product that was connected to Salesforce and Marketo went for Salesforce. In SaaS product, when you develop the product, you have a very well defined process in which you take changes from the idea all the way to production while understanding it, you make mistakes and everything. We were very efficient in that. But when we had to do the sort of the similar changes to Salesforce because it was connected to the product, one of the things we realized, it doesn't work, we are not able to do it. We couldn't figure out why. It was clunky, it was hard, it was annoying, created a lot of friction inside the organization. And for me it was, I thought that back then we were not professional, we were kind of, you know, small company, don't know how to work this large platform. We have to learn it. At some point it was something, you know, it was a scar. But I said, yeah, at some point we'll get there. Then we acquired and after spending some time at Oracle, I left and started looking at that problem, trying to understand, you know, curiosity. And then I figured out, no, it's a structured problem because all of these platforms, these new platforms are created as a no code platform because of all the benefits of no code. No code is great. You don't have structure. If you don't have structure, you have no way of creating that process. Because we keep talking about the difference between code and no code. One of the biggest differences is code give you structure. You understand the relationship between the component because it's text, you can understand who's doing what. A conflict is not crisis. If two people are writing on the same line of code, you can merge conflicts in git and you can do all of those things, like as a second nature. When you look at how the similar changes are done in these SaaS applications, these cloud platforms, everything is a crisis because you don't have that structure. Because it's a sort of point and click marathon to get all the changes in and then you have to replicate it in another environment. It's a nightmare. So what I figured out is that it's an industry problem, it's not our problem. So if that's an industry problem, that's an interesting problem to solve. So this is where we started Salto, put our own money in to begin with to make sure that we can develop the technology, started developing the technology and then brought the VCs in.
- [13:30]
Omar Khan
How did you go about validating the idea? Did you just spend time like having lots of conversations? Did you build some prototype and start getting some feedback?
- [13:40]
Rami Tamir
So as always, you start by talking to people, start talking to prospective customers, cio, trying to figure out if you're in the right direction. Adjust, repeat, adjust and repeat. And we knew that we have to develop the sort of what you call the prototype of the technology in parallel. So we did all of that in parallel while feeding it. So it's a process of about three to six months of coming up with a prototype that is fed by feedback that you get from prospective customers. So this is how we created the first one. And you always miss, it's nothing new. You always miss. You always kind of come up with things that are not working well. Yeah, I can share his story. Thought about it a little bit before that. You know, I went to, to pitch to a company, the Salto story, and when I done pitching the story, the lady there basically told me, that's amazing. Can I hug you? Amazing. Cannot hug me, but it's amazing. You can get a lot of buzz from someone like that. Coming back, giving, sharing the feedback, everybody's happy. Six months later. Six months later, when I came with the product, it was like, no, this is not what I'm looking for. And a lesson from that is, it's a very basic lesson. When you pitch something in an early stage, the customer, the prospective customer, takes an artistic freedom, understanding what you're saying, because you're not very specific, that's the nature of things. Because you don't have enough details. So you build something, you kind of pitch something, they hear something else when you come in later on, things can go wrong. So, you know, lesson for me from, from that iteration is you need to have multiple kind of feedbacks and as you go along, as you develop more, give more details, more details, more details, make sure that you are on the right path. And it's not an easy thing. It's really hard to do. You have to be really disciplined. I don't think I'm doing it well even today.
- [15:52]
Omar Khan
So I'm curious, when you had that first conversation and this person wanted to hug you, what did you show them? Was it just some slide decks? Was it working code?
- [16:01]
Rami Tamir
You cannot show code. These are non technical people. So it's a slide deck mockups or whatever you have from the ui, these are the things kind of, this is what we intend to do, and these are the things you can show. And by the way, because of the limitation of how long it takes you to develop something, even when we had something that very specific, that the first feedback we got that was real, real feedback, kind of something you can use was go away because it was not good enough. That was a good feedback. Go away is a great feedback because, okay, why. You can understand why they're pushing back on you. You kind of take the extra step of trying to understand, then you go back, and it's really, really fast to fix. So that is a good feedback. The positive feedback. It goes the direction I talked about before. It can be really confusing.
- [16:58]
Omar Khan
What do you think the disconnect was? Was it like just one specific customer who kind of, you know, used this kind of creative freedom to fill in the gaps on what you hadn't described? Or do you feel like you hadn't really nailed the problem, like, clearly enough or the solution? Like, what was the big lesson you learned from that specifically about Salto?
- [17:25]
Rami Tamir
Yeah, the lesson for me is trying to be specific, but it's inherently problematic because you don't have the specific of the solution yet. So what you're trying to do is sort of pitch something and get a feedback. So you talk about something. It's. It's hard for you to be really specific early on. And if you're not specific, it can take a tangent. They can go in a different direction. Sometimes it's good because maybe they give you a good idea about what they want, but in a lot of cases, it's really, really hard to fully understand what they want if you're not specific. So it's about being specific about showing a product as early as you can, and then you start to give the interesting feedback. But I believe in interacting with prospective customers early as you can, even if it's just talking about the problem that you're solving, because only then you can get great ideas. And. Ha. I didn't think about this one, but the risk is, what I said before, you get too positive feedback on something that it's not even close in terms.
- [18:35]
Omar Khan
Of getting to the first 10 customers. You already touched on this a little bit, that it's a new category. You have to put in even more effort into convincing them that they need something before you can even get to selling it. How much of a struggle was that with the first 10 customers? Because at that point, not only have you got this new category, you're trying to Convince customers. But there's a whole bunch of stuff that you still haven't figured out. And you're figuring out right. In terms of the positioning, how to articulate this, all of that. So how, how much of a struggle was it getting to those first 10 customers?
- [19:14]
Rami Tamir
Not a lot. As I said before, Salto is, it's a special case where the pain is there. So all you have to do is find kind of the classic early adopters, people who are aligned with the vision. It was fairly easy to do here. So you do the one offs and it's the first 10 customers. It's never easy, but it's easier. I don't remember. It's not a struggle. That's the thing. We got early adopters from our contacts, from VC contact. People get excited by the idea of Salto because one of the things we realized when we started building the idea for Salto, you creating tools that make people professional. Because people who deal with that area of the IT feel like they are being given a task, very, very complex task, but they don't have the right tools to solve it. You know, coming in and giving them the tool, they get excited. They may tell you that, hey, I'm not sure if I'm technical enough to handle something like that, then you have to adjust. But the excitement is there. So getting the first 10 was not, not a problem.
- [20:30]
Omar Khan
So would it be fair to say that when you were having these conversations and you kind of articulated the problem, they all agreed because they were experiencing those problems. And then you talk about how to solve it and how Salto solves it and they get excited. And that part was easy. But the bigger problem was that most of these prospective customers weren't out there looking for a solution.
- [20:56]
Rami Tamir
Yeah, one of the things that. So this is the main problem of what people are calling creating category. It's essentially a buying pattern. So if you are trying to fit yourself in an existing budget or existing category that already exists, you go to sell something and you know, the buyer, the buyer Persona looks sideways and they see lots of peers doing the similar thing. They're just trying to figure out which product. Then it's a feature by feature. If you're creating something new, a new category and you're going trying to sell it, the first thing that people will do, look sideways. None of my peer is doing that, why should I be doing that? And the default behavior is, okay, I'll wait, I'll do nothing. For now. I understand the pain, it's painful. But I lived with that for the Past five years. Why should I change right now? So get this kind of stone up the hill. You have to create a base of customer that you can reference. Hey, this one is doing it. That one. That's the hardest thing in creating a new category. So yes, we did experience that often.
- [22:05]
Omar Khan
What a lot of founders look to at this stage is, you know, kind of design partners and working with specific companies to kind of build the product. And it's interesting because you were telling me you're almost religious about not doing that and staying away from that based on some hard lessons you've learned from your previous startups. Can you share one of those stories?
- [22:30]
Rami Tamir
Actually, I have an interesting story we didn't talk about. So let's talk about the danger of having sort of what we call a design partner. Design partner can be really, really opinionated and take you in a route that, that is a dead end. And again, when you're early on in a startup, you're looking for that feedback. You're kind of, this is the things that you're looking for. So for me, I tried to avoid design partnership. We had, I think it was the previous company, no, two companies ago, we had a design partner, a big bank, one of the biggest, who is willing to kind of pay us half a million dollar to actually work with them on the, on the subset of the product that we had. And we analyzed it and we realized that this will get us nowhere. And the hardest thing we didn't have revenues back then was initial technology. The hardest thing you have to do is tell them, no, we're not going to take the half a million dollar because we'll end up nowhere. On the flip side of that previous company, Norvello, our first customer, it's not a design partner. Our first customer was, he was willing to pay us a million dollar a year or actually for what we developed back then. Yeah, it was amazing. For kind of it is the best validation you can have that we're going to conquer the world with that. We try to duplicate that. The use case, the Persona, the icp, that's what you do, that's what you read in books. Take a success, duplicate it for a year. We couldn't do it. We could not duplicate that. It took us a year to realize that was a unicorn. It's not going to repeat itself. You need to give up on this one. And we overfitted our go to market a little bit of the product on this one. So I'm really, really suspicious on the process of design partnership. I'm trying to have as many as I can. I'm trying to make sure that they have skin in the game so meaning they have to pay for something and I'm trying to have a few so I don't overfit. That's the main lesson I learned from those two.
- [24:49]
Omar Khan
Let's talk about growth and I guess going from the first 10 customers, the first million and beyond, what did you do? Was there a specific growth channel that worked well for you or was it a whole bunch of things that you were just doing along the way and some was it messier than we sort of imagine? When we sort of look back and.
- [25:18]
Rami Tamir
Talk about the story, it is a message. You can think. It's always like trying to understand the pattern. It's really, really hard. So you try everything in the beginning like everybody else. You try what kind of emerged after a while of trying to figure out the data is the best channel that we have is events. And even that is really messy because it's specific events. So previous companies events never worked. You go, you spend a lot of money in a booth, get a lot of noise, you get thousands of scans, you're happy, you're coming in, you created work for marketing and SDRs and everybody for a few months and you get I wouldn't say zero, but close to zero here. We kind of built it a little different here in Salto based on that. In the beginning I didn't want to do events. Even I said no, we're not going to do events. Yeah. And you know how it is, marketing people push you to do events. I thought let's do events. So I can tell you that the way we look at it, the big events don't work for us. Big events are noisy, big events are dreamforce reinvent. They don't work for us. You have to be there for brand or anything else. But it doesn't work because people are coming in to have good time to get swag and it's really, really get them to work in a sort of, you know, professional trying to find solutions way. Whereas if you take medium sized events, at least for us in Salto, kind of smaller events, it's not that flashy but people are coming to work and we've created some sort of a very structured way of filtering people in. We have two layers. The first layer is trying to figure out if it's the right Persona within the right icp. Only then they get to the next layer where they get the swag and everything that they're looking for. But then you're already talking about something very specific and trying to get them into the sort of the first meaning of starting to sell to them. These are working amazingly for us. So most of our leads are in QL coming from these.
- [27:38]
Omar Khan
Hey, have you heard of SmartSuite? They were just named 2024 SaaS Startup of the Year by Startup Grind. Well, I recently discovered that Gearhart was the development team behind their success. Gearhart is a product development studio that specializes in scaling B2B SaaS, companies built by serial entrepreneurs. They understand the unique challenges of startups and can plug into your team to accelerate growth. With offices in San Francisco and London, plus a distributed team of 43 experts, they've helped build over 70 successful products. To learn more about how Gearhart can help scale your development, check them out at Gearhart IO. That's Gearheart IO. How do you do that filtering? So how do you, you're dealing with these people coming through. Is it just a matter of like qualifying questions you're asking people when they turn up?
- [28:27]
Rami Tamir
Yeah, it's a trick because you have, you don't have a lot of attention from. So it's, it's a combination of asking the right question and pulling them in with that question. So for each event as part of the preparation is, okay, what are the qualifying questions? How do we present that? Who's going to sit, who's going to be the frontline, who's going to be the backend? So it's a very detailed preparation for each event. We become sort of like a little bit of a machine for that. But for every new event you have to reinvent it, try to understand, read the data after that. Was it a good event or not? And if it wasn't good in event, are you going to do it next year or not? So it's a process that we created internally.
- [29:11]
Omar Khan
Got it. Okay, great. So you have that first filter and then the second, once people kind of pass that, that's where you're having deeper conversations with people. And then what is the general strategy as sort of the event follow up that you feel? Is this something that you're doing now with Salta that you feel works and we should have done it before?
- [29:38]
Rami Tamir
Yeah, actually when we started, we didn't do that. So the structure of how they're going to follow up is really, really important because it's when the leads coming in, if you, you know, you can have hot leads but they can fault. And we had a few examples of that. Hot leads coming in, everybody excited. You know, you share everything on Slack people are kind of celebrating and then basically you forget to do anything about it because you thought that this one is doing that. So what's the process of taking the leads in and if possible, automatically follow up, following up on them to make sure that they are part of the process. And I insisted, after kind of missing a few events and spending the money not getting anything out of it, I insisted of that being automatically to begin with. So even if someone is trying to, if somebody is trying to reach out to them, we should have something automatic because that way things don't fall through the cracks and you miss on those. Because even if you get something automatic, you'll get a response from someone who was a hot lead. He respond. So you make sure that you have a process in place, regardless of attention or crisis within the company that will get you the lead to the right place. Once you have that, you can start ad libbing on that. Making an SDR1 say, Hey, I want to take these two, because I feel like I can make them work. Go ahead. As long as you have the automating the whole process, you can ad lib. If you don't have that, you basically just ad libbing. And that created, as I told you, a few missed events.
- [31:13]
Omar Khan
Let's talk about content marketing. That's also one of the growth channels that's worked well for you. Just tell me a little bit about what are the kinds of things that you do as part of your content marketing strategy. And yeah, maybe what was some of the challenges that you faced in implementing something that's working.
- [31:43]
Rami Tamir
So we're doing a lot of creative things in content marketing, but I'll start with the challenge, the biggest challenge in content marketing, there are two challenges. One is how do you create the cadence? Because it's really easy to create the first, the second one, and then if you don't have anything going on for a few months, it feels like it's dead and it's worse than not having anything. The second one is measuring the effect of that because you can invest a lot in content marketing and you tend to invest a lot in content marketing, but it's really, really hard to fully understand the effect of that. How do you measure that? Because today, in today's marketing, everything is a few touches. So you could have the content market, could the content that you have affect someone to get into your booth? In the event this is how you got it and you kind of measure it on there and you don't understand that the fact that they're there is because of content. So it's really, really hard to measure. And when it's hard to measure, there's a tendency to kind of when I need to do the next investment, should I do the investment, should I not? And you end up, yeah, I need to do the investment, so maybe should do half of it. So you're kind of not going all in. So it's about discipline, it's about knowing or knowing that you have to do it. We did a few interesting things. So one of the things we did, because it's, as we said, new category, we created what we call Sato Leap, Salto Leap. It's a basically university of properly managing configuration for each of the applications so you can go in and consume content. Video lessons that are not Salto specific even. How do you properly do that? And that in NetSuite or in Salesforce or in Okta? So just to get our brand out there, it's time consuming, but it's. It. I can tell you that it creates a brand around what you do that feels like it's working for that. We were able to measure some of it and it worked nice. So that's one thing. One of the things that most companies are doing and we are doing the same thing. Salary surveys always work because people are interested in that and they'll open, they'll download, you'll get the lead. So doing that and on top of that, because we're selling sort of an engineering product, we're doing a lot of technical writing or technical visionary writing kind of thing. This is the way you should do it. This is the right process. Look here, look there, there. So we're spending a lot of time on that as well. So yeah, we're investing a lot in that. We probably need to invest more, as I said before, but that's a significant challenge for us.
- [34:32]
Omar Khan
Yeah, I think this thing about content investment is always a tough thing. This example that you gave where you could have invested whatever you invested in your content marketing over the last year could have led to somebody reading something and then turning up to an event. But then when you come to the event, it's the event that gets the attribution for that lead. And then you're like, well, why do we need to invest in content? Right, let's do more on the. Let's move that money. And then you suddenly find, well, maybe things aren't working as. As well.
- [35:04]
Rami Tamir
You always have that discussion with your VP marketing or your CMO is like, yeah, it's multiple touches, we don't know. And as a CEO, you always get pissed from that. You always get pissed because you want to see, you want to see your dollars working because you have to invest. Yeah, it's a problem.
- [35:26]
Omar Khan
Okay. The other thing that you do is, I mean, I sort of look at Salta and it kind of feels like an enterprise Y product product. Although it's not really right because you have customers at different size of companies. But I was surprised to see that there was a free tier as well on the product. Can you just explain the thinking behind that and why you decided to do that?
- [35:48]
Rami Tamir
Yeah, so that's. It's an interesting use case. So one of the things we are doing is a platform. It's called impact analysis. Basically it's read only for configuration. We analyze the configuration for you and tell you a lot of interesting things about them before you go ahead and make changes. In the beginning we thought we're going to sell that, sell it as a feature. We realize that it's not a feature that it's easy to sell. There is an industry around doing impact analysis or some few vendors, but it's hard to sell that. And we have the unfair advantage that we can also kind of do not just read, but read and write. So you know what, as a way to make an impact to splash in the market, we're going to give it away for free. All the impact analysis away for free. And we'll get people in. It worked. We got a lot of people going in the platform, few thousands of companies going on the platform, using it on a daily basis, a lot of active users and it's a source of leads for us. The problem with that, if you don't carve out your user, your use case in the right way and I'll give him the software examples, people kind of coming to Salto to do read only and not necessarily they want to do the read write, which we kind of charge for. So you end up with sometimes wrong leads or it's not yielding a segment of your users. On the free tier is not working at all. But at the end of the day, as we said before on content, it's hard to do the full attribution because they get to experience the brand and the product and everything. And at some point they'll get to the right conclusion and start using us. So we're not, we're still maintaining the freemium. It's hard, it costs money and you get a lot of sales people whining about it because they feel it cannibalizes the ability to sell more. But I think it's worth it. But I can tell you that it's always a discussion, should we continue, should we not? Because you pay for it, you have to maintain it. You have to give support for people using it. So it's always a discussion.
- [38:01]
Omar Khan
Also, are there any challenges when you've got people coming on the free plan in terms of. Is there like a steep learning curve they have to go through in terms of setup, configuration, onboarding and that sort of thing?
- [38:16]
Rami Tamir
There is some of it, but because it's read only, it's fairly easy. We kind of invested. That's part of the investment I talked about before and trying to make it as easy as possible. I wouldn't say like it's completely trivial, but it's easy. Easy to get on board. We're not investing in onboarding them. We have a knowledge base that they can use to help themselves, but it's not a big deal. But we went through investing in that area to make it easier for them to get on the platform.
- [38:49]
Omar Khan
Let's talk about one of the channels that's been tougher to get working. Outbound. What's been the biggest challenge there?
- [38:59]
Rami Tamir
Outbound. It's a little bit of. For us, at least, for all the company I've been involved, it's a little bit of black art because basically you're trying to think about the process. You have a list of names, people not necessarily in the market for your product. You're going and try to get them excited over a product. The yield is low, the friction within the organization. People who need to get up on the phone or email or whatever means you're doing, get a kind of a stream of no's on a daily basis. It takes a toll. People hate doing that. It's hard to get people proud about the achievements because an outbound can take a while for you to get in. But it's something you have to do. It's like, you know, eat well and exercise kind of thing. It's something that. It's one of the sources that you have to go after. So we invested in SALTA actually in trying to do it better. Trying to create a process in which people understand that they will get no's. It's okay to get no's. It's part of the, you know, the overall outbound thing. This is how a no looks like and this is what you should expect is how to get better at that. And we brought someone external who trained our salespeople and SDRs or that we tried to create some kind of sense of Accomplishment of getting those kind of celebrate any accomplishment outbound, but it's still. It's a tough one. Think about the process of getting a daily go, no, go away. I don't want to talk to you anymore on a daily basis. It's hard, but it's. It's some. It yields. If you do it as a process, at some point it's starting to yield. As long, you know, as the brand become more recognizable, people starting to kind of react to your outbound, but you have to keep the thing going and you have to remind people, yeah, we are. This is why we're doing it. It's how it feels like. It's a grind.
- [41:08]
Omar Khan
Yeah. And do you think it's getting harder now with 20, 25, AI, noise, agents.
- [41:16]
Rami Tamir
All of this stuff in general, everything is harder with agent. Everybody has a budget to spend on AI, so you have to tell a story about something about AI. I think everybody deals with that. We deal with. With that as well. But I think outbound in general is harder in 25 because people are kind of having a better way of blocking you because of, you know, rules. Because it's easier to get an AI to read your emails. It's easier to get the, you know, the outbound motion. So you get creative. LinkedIn is an amazing platform to do outbound on. So. So if you do it in a creative way, if you have the right way of doing that, you can actually use that. So you make the outbound a little more interesting to your target audience, a little more engaging to your target, but it's still essentially end of the day, it's an outbound motion. You're going through a list of names and trying to figure out how to get to them.
- [42:22]
Omar Khan
We talked quite a bit earlier about the new category and some of the challenges around that. And one of the ways that you were telling me earlier how you try to overcome that was targeting the discretionary budget that your prospective customers had. Can you just explain what you meant by that and what exactly you were trying to do?
- [42:45]
Rami Tamir
Yeah, as I told you before, it was really easy or it's still easy to get people excited about it. The problem when you're coming with a new category is that there's no line item in the budget dedicated for you. So where do you get the budget from? If you can get people excited, they'll use the discretionary budget. So early on, it was kind of easy to get people excited and, you know, talk about discretionary budget. So we built our land pricing and motion ICP and everything Our go to market was around that we'll get to someone, get him excited, get, you know, price it correctly so they can use the discretionary budget. And we actually was very specific. We want to have a manager or director be able to approve it. So it's kind of fast and you can take from that and get into the organization because later on the way our product works is you have a lot of way to expand, not just grow more users, but add more applications to it, which is really easy to do. What happened was 23, middle of 23 when the market started to take a dive. The first thing that disappeared were discretionary budgets along with the front organizations. A lot of layoffs and cuts. So what do you do then? So what we realize it's going to be a struggle to get a deal. When I say struggle, it's going to be longer. You have to go through more processes, show your value ROI calculation. So if I know that the process is going to be longer, it's no longer like one or two months of sales cycle. We should charge more because the volume is going to drop. So what we did is we changed our pricing in a way that allow us to charge more, but we basically turn into usage based pricing which allow you to kind of tailor it to, you know, the customer have a feel of they can start small if they want to, but when they start using it, get to a higher price very fast. So we changed that. We basically drove our landing ASP. We managed to get it 2x kind of in a very short period. We kind of adjusted the icp. Meaning, okay, let's go to larger companies. Let's, you know it's going to take longer. So let's spend the time in doing kind of a larger prospect because it's okay now. We changed the products a little bit so we had to make a lot of changes. And it's not something like this. The problem with that is there's no kind of, you know, light bulb coming in and say, hey, the market is going down. No longer discretionary. It takes you a while to fully understand what's going on. Kind of, you know, deals that were hot and you're sure you're going to get them fast. And the expansion was already there. All of a sudden they're no longer there. A customer that was happy, you talked about huge expansion with a, you know, Fortune 100 customer, you know, few months later, they kind of the churning because they don't have budgets anymore. So it takes a while to fully figure it out. It takes a while to fully understand how to. What are the steps that you can take, what. What is in within your arsenal. So that's a, that's, it's, it's a, it's a shift. I don't have a lesson learned from that other than, you know, think hard, don't, don't work in a kind of down economy. That's the only thing I could think about.
- [46:29]
Omar Khan
How did you, how did you eventually figure that out? What gave you the clarity in terms of, okay, this is what we think is going on and therefore we need to make these changes.
- [46:40]
Rami Tamir
It wasn't one take kind of thing. We always do. We are. The culture in the company is engineering. Company engineering culture. We overanalyze everything. So we had a lot of sessions trying to understand what is the framework, why is it not working? Are we not pitching it correctly? Are we not? So at some point when it was obvious that the economy is going south, okay, let's put that in the equation. Let's see what it yields and let's put this in the equation. Then you start seeing people being laid off. Okay. And budget being cut. So, ah, we don't have discretionary budget. That's a problem. And from there on, you start pushing in the right direction by takes. Fully understand that because it's never obvious in hindsight. It was, of course, that what happened while you're in it, it's really, really hard to understand what you're seeing.
- [47:32]
Omar Khan
Yeah. I think it's interesting that despite you having gone through three startups, three successful exits, there's still a lot of, I guess, like basic or fundamental kind of challenges that you've hit and had to kind of figure out and overcome, which shows that you're human just like the rest of us. But at the other hand, it's almost like, you know, it's almost like somebody who's doing it for the first time. It's like, oh, my God. It's like, this is what I have to deal with. Right. It doesn't get any easier.
- [48:06]
Rami Tamir
No, it's not. And it changes because I'm not in the same market. As I told you, each company is a different market. The only thing that I get from experience is the sense of, okay, I've seen worse. I can live with that. I can find a way around that. That's the main thing. So you always kind of, okay.
- [48:25]
Omar Khan
I.
- [48:26]
Rami Tamir
Think I can kind of solve that problem, but I need some time. So that's the only thing you get from experience.
- [48:31]
Omar Khan
All right, let's wrap up. We're Going to go into the lightning round. I've got seven quick fire questions for you. What's one of the best pieces of business advice you've received?
- [48:42]
Rami Tamir
Early on we had someone really seasoned working with us and I'm an engineer by education, so I love engineering problems. He told me a sentence that goes like, I would replace any business problem with 10 engineering problem if I can. That kind of stuck with me because for me an engineering problem was, wow, this is hard, we need to solve that. But for me, no, it's not an issue. Solve the engineering issues. I don't want to have any business problems. That stuck with me for a long time. I still use that.
- [49:13]
Omar Khan
What book would you recommend to our audience and why?
- [49:16]
Rami Tamir
The classic one, explain why the Innovator's Dilemma. It's an old one. It's a good one. As I said, I'm overanalyzing for me reading this book other than it's amazing but it sort of lays the blueprints of why startups make sense. For me it was like, aha, this is, this is why startups can work. This is why I should be there because the whole framework that is lays there. So that was amazing for me.
- [49:47]
Omar Khan
What's one attribute or characteristic in your mind of a successful founder?
- [49:53]
Rami Tamir
Make decision fast. The biggest thing I see, I'm helping entrepreneurs as well. I'm angel investor in that people are afraid to make mistakes and if you're not making just in time decisions, the organization sort of floats on a default and you'll get the wrong results. Take the decision and if you're wrong, admit that you're wrong and fix it. But make sure that you have the right decision in time because I think this is the toughest thing.
- [50:19]
Omar Khan
It's great advice. What's your favorite personal productivity tool or habit?
- [50:24]
Rami Tamir
Yeah, if I'm not saying chatgpt these days it became like a moot question. It's everything. Yeah, I'm doing everything with it. So yeah.
- [50:34]
Omar Khan
What's a new or crazy business idea you'd love to pursue if you had the time?
- [50:38]
Rami Tamir
I don't have one. I thought about this question. So I'm working with entrepreneurs. If I have an idea, I'll push it through someone. I did it a few times. Kind of be part of the ideation of other entrepreneurs and try to push my ideas so I don't have one that is itching right now.
- [50:58]
Omar Khan
Well, we'll see if in a few years time. What's going on? What's an interesting or fun fact about you that most People don't know.
- [51:06]
Rami Tamir
Yeah, I thought about that. That's a tough one. I call it I'm logically superstitious because the be superstitious is again, I'm logical. The be superstitious is trying to find pattern and a way to influence the chaos in your life. In startup, it's chaotic. But what I'm telling myself is kind of trying to justify it by saying, yeah, the fact that I'm deciding to walk with my right foot in when I walk in the door, it gives me more confidence. This is why I can do better things. So I'm kind of trying to balance the two. But yeah, I'm super stoked.
- [51:40]
Omar Khan
Love that. And finally, what's one of your most important passions outside of your work?
- [51:44]
Rami Tamir
I insist on having hobbies. I'm obsessive about my hobbies and I'm kind of spending a lot of time, my off time in those. And I'm changing every six months because it needs to be fresh for me. My last one was motorcycles and track riding. I'm switching back to playing guitars these days because I felt like I didn't play my guitar for too long. So every six months I'll switch and be obsess something else because it gets everything flowing and I need something outside of work.
- [52:12]
Omar Khan
Do you think it also kind of dedicating the time for that also helps you with the business?
- [52:18]
Rami Tamir
Yeah, it gives you perspective because otherwise it's day and night. Just thinking about that. You get in a loop, you get in sort of an echo chamber. The fact that you're obsessive about something else gives you a lot of perspective.
- [52:32]
Omar Khan
Love it. Rami, thank you so much for joining me. It's been a pleasure. And if people want to check out Salto, they can go to. It's Salto IO. And if folks want to get in touch with you, what's the best way for them to do that?
- [52:46]
Rami Tamir
LinkedIn Ramitamir can find me.
- [52:48]
Omar Khan
Thank you, my friend. It's been a pleasure and I wish you and the team the best of success.
- [52:53]
Rami Tamir
Thank you. Thanks for having me.
- [52:54]
Omar Khan
My pleasure. Cheers. If this episode got you thinking about building or scaling your own SaaS product, let me tell you about a resource that can help. Whether you need a complete technical team or want to scale your existing one, Gearhart might be exactly what you're looking for. They're a product development studio that specializes in building B2B SaaS platforms. What's interesting is that they can act as your fractional CTO and technical team, but with a unique twist. They've built strong connections in Silicon Valley and can even help connect you with VCs when you're ready. Plus, as a proud Ukrainian born company, they deliver Silicon Valley expertise with an offshore pricing model. They're offering our listeners free strategy sessions with their leadership team until the end of May. Visit Gearheart I.O. to book your session. That's Gearheart I.O. remember those auth and user management headaches we talked about earlier? If you're tired of your dev team getting bogged down with authentication issues, instead of building your core product, it's time to check out Propel auth. They take care of all the complex AUTH stuff from enterprise SSO to user analytics so you can focus on what really matters your product. Propel Auth integrates quickly for devs and provides built in tools for your customer facing teams. It's the full package and don't forget our special offer. Sign up for a free account@propelauth.com you don't need a credit card and when you're ready to scale, use code SAAS24 for 50% off their growth plan for six months. That's Propelauth.com it's time to stop struggling with AUTH and start growing your business.