Fello AI Revenue & Funding (2024)

[00:04] My name is Stephen London. I am the co founder of fello and I am super, super excited to share how we went from 0 to 10,000,000 in ARR in eighteen months. We can actually change that title in two weeks to 0 to $15,000,000 in twenty four months hopefully. [00:26] First of all, who is fello? We are a marketing engagement platform, AI powered. We are building more and more AI capabilities every day, so that's a huge emphasis for us. We started in residential real estate and our heroes are real estate agents. However, we're going to expand over the next couple of years both products and capabilities in real estate and then also to other verticals. So, how did we do it? [00:58] First of all, a shit ton of hard work and pain and ups and downs and a lot of luck. But here's our revenue growth. This is personally my favorite chart that we have. We went from zero, we launched in October 2022, and then we're about to cross $15,000,000 hopefully within the next two weeks. As I mentioned, we'll be at $20,000,000 by the end of the year. [01:27] Wild, I mean it's crazy to see a chart that encompasses so much pain in one place and it looks so pretty and easy to understand but it definitely is not. What is the story and what are the lessons and hacks that I can share with you guys and hopefully you can take a couple nuggets away from today and maybe apply them to your business. Quick show of hands before we start, who is in the zero to [01:52] one stage of their company? [01:56] Who is in one to 10? Okay and who is in 10 plus? [02:03] Alright, so most in one to 10, perfect. I think generally in terms of these three stages, which is pre revenue, zero to one and then product market fit at some point in the one to 10 and I call it dots, ants and rockets. I always think about it like [02:22] dots are connecting the dots. These are the framework of your idea. It actually applies throughout the lifecycle of your business but these are the things you need to nail up front. First comes team. If you don't get this right, it's like a bad marriage. Your life is terrible, you've got conflicts. I think the key there is upfront, you really have to know yourself and be honest because I think if you're not honest, it's very hard and [02:50] you're a little delusional and all of us in the room are entrepreneurs, We think we are smarter and can solve more problems than everybody else and if you say no, you're lying because you probably do. The more that you know yourself, I think it's easier to understand where you need to supplement and where your co founders can help out. One other thing, the guy on the right, Ryan is one of my childhood best friends and for [03:15] a long time I was always we were talking to VCs, always embarrassed and would hide that and all this stuff. I've realized is that's actually one of the strongest assets we have as a company is that both from a culture standpoint and from a resolving conflict standpoint, you have somebody that you understand how to work with. Once you figure that out, I think we've hit our stride. It took us a couple of years to really hit [03:37] our stride as founders but you start to let go and you can start working with your team more and more understanding who's doing what. I think that's critical. If somebody can do something 80% as good as you can, they should probably be doing it as you scale. Quick idea point here, great ideas always sound crazy, so don't worry about sharing them. Oftentimes as entrepreneurs, we have this idea, we want to launch this product and then we [04:08] don't share it and we don't want somebody to take the idea. The best ideas, when you say to somebody, Here's a little trick, they will go right over their head or they will think it's so crazy or weird that it doesn't resonate. That's how you know you may be on to a good idea. So stay fluid with the idea. We launched actually not in software. We raised a seed round in 2021 off of the iBuying concept. [04:33] So it's asset based. And we pivoted because we had the software in October 2022 and it's just taken off ever since then. We raised about $3,000,000 seed round. While the idea isn't important, I think the story is everything. I'm going to get more into the personal brand and how important brand is these days but a quick question on the story as you're going out to the market and telling it, to me this is one of the [04:59] most important things you can nail. Who's going to be the face? I'm fairly confident to grow very fast in this day and age depending on whether it's a highly technical aspect. You need somebody to be the face. First you have to figure out who's going be the face, what is that origin story and then who is your hero. Our heroes are real estate agents. We build everything so we can decentralize real estate for them. That has [05:25] been something that's been at the threat of everything we've done. Next phase, now you're in the zero to one. You have your idea, you have your team [05:34] and you have your story. You are now ants and everybody laughs when I say ants. What I mean by ants is a long time ago I read a book, I think it was called Emergence, but it was about the organization of ant colonies. I always took away that it's fascinating to me that you have these tens of thousands, hundreds of thousands of creatures that just go out in the world trying to find food. When one finds [05:58] something, you relay the signal and everybody pivots towards that idea. I think as you're trying to find that market fit, the more experiments you run, the more you can test that, the faster the better. How do you do that? One, you need power users all the way down. One of our advantages are Ryan. He's a real estate agent. He has a team. He is a power user. Everything we build, he tests with his team. Our CPO [06:26] and CTO, who are the two other guys in that picture, co founders, are obsessed. I think I work hard. You think you work hard, these guys are psychopaths. They just are obsessed with the product and just keep working all day long. [06:41] The third hack, we had actually investors as users, so after the seed round we pivoted ideas and had to raise a million dollars in safe kind of funding and we made a conscious choice to not work with VCs, not work with other entities and raise from users of the product, so top real estate teams and that's been immensely helpful both from a feedback loop, probably a little less from feedback, more from just the social proof of [07:11] it. [07:14] Here is a quick, something I'm personally really proud of. [07:19] As you start being ants, you are running as many experiments as you can. We created a very flat organization, I think I would recommend that for anybody that is certainly sub 10. As many people that can be empowered to do as many tests as possible wins. 2023 we went from $400,000 in ARR to $7,000,000 in ARR and we spent $80,000 on marketing, which is wild. I will talk a little bit about how we did that but [07:53] I think an important lesson from that is spending money on marketing does not make good marketing. You have to spend money on marketing when you have product market fit and you know what you are doing from a marketing perspective otherwise you are spinning your wheels. Here are some experiments we ran. We gave away the product for free. We did free onboarding. We hired people without an exercise, which is a terrible idea. We ruined our email domain. [08:18] We hired demand gen agencies. Didn't work out. [08:22] Some random fun things that worked. We threw a free party, so we convinced this other large organization, Hey, I want access to real estate agents. We said, Okay, great. Why don't you throw the party? We'll pretend like we're hosting it, and then you guys and your team can attend. So we threw this party for 200 people, worked out great at a conference. We ran a thirty day challenge, so we gave away the software for free for [08:46] a year to whoever won this thirty day challenge. It engaged our entire community, text message posts, people text, Oh man, this software is awesome, everywhere, so the social proof of that, get on as many podcasts and webinars as possible. It is one of the most easiest hacks both from it helps you practice telling that story but also it's just free, you can repurpose that. I think Nathan talked and about then building a community. That is the [09:16] engine that can take you to $1,000,000,000 in ARR, but you have to start building that early on. [09:24] This slide, the Madonna song, we live in a material world, I think if you're going to take away one or two things, this is one of the slides I would encourage you to take away. [09:42] How many people get forwarded something on Instagram or see a YouTube short or listen to something on a podcast and three weeks later you remember it, you don't remember where you heard it from or where you saw it from and these little cultural pieces of information, which is a meme, not the funny frog joke of what a meme is, a meme in terms of sharing cultural information, this gets into our heads and we forget where we [10:08] hear things. As a hack from a marketing standpoint, if you can provide enough social proof in enough places, it's going to start implanting in people's heads and we have an expression, 'hit them from every angle', you hit them from every angle meaning podcasts, social media, all that stuff, and ultimately my favorite line I hear at conferences all the time now from us is, I see you guys all over the place. Have I heard about this? Or [10:36] I heard somebody say it was great, I can't remember who said that, and that is because we are blasting the airwaves with social proof and it's all honest people saying positive things about us, we're not making any tricks, it's just the constant getting into the subconscious minds of your users that is incredibly powerful. [10:57] Now you have product market fit, you are in the let's call it one to ten, three, whatever that range is. For us it was three. I remember saying to our co founders at three and I remember I was at dinner when it happened, if we hit three, we can hit 100. I am very confident but we just have to get to three first and we hit three and then it is now a different game. You have [11:22] to kind of stop at some point, you'll know when that point is, and say, Okay, I've got something here. Now how do I grow this as fast as humanly possible? One exercise I'd love you guys to do when you get home or on the plane or wherever. I think it sounds very simplistic. It will take you five minutes but it will change your business if you do it right. Take a piece of paper and a pen [11:47] and sit down and not with your mind because you're going to say, Well, I can't do that and I don't have salespeople. Dream something big for next year or next month, whatever you want to do. Dream something so big that it makes you uncomfortable, if it's not big enough and it's not making you uncomfortable, you are not dreaming big. If you say I want to grow 50% next year, I want to raise this Series A at [12:11] this valuation, double it. Make it so uncomfortable that in your mind you are constantly saying we can't do that, we can't do that, we can't do that. Once you have that big goal, I think this is the important part, you have to dissociate from reality. You are going to say I can't do this. We have no AEs. We don't have a marketing budget. We don't have this or that. This is where the genius happens. Pretend you're [12:38] just playing a game. It's not me, it's somebody else. How would I do that? We can make affiliate percentage 50%. We can give people zero dollars salary and 70% commission. It doesn't matter what it is, what the variables are, but I think the important thing is you have to separate yourself from the day to day reality of your business and pick something huge. You will be shocked, if you do this right, how powerful this exercise is. [13:09] Last couple of things, culture, another thing we learned from a rocket ship standpoint. Your internal culture reflects your external culture and it's not [13:23] some words on a slide. We had five or 10 employees. We used to write these exact core values down and have people read it every meeting and it's just bullshit. It's only bullshit because your real core values are what you are every day. It's a radiation of the team and to determine them, it's very simple. You just have to think through which employees didn't make it and why and which employees made it and why and those [13:54] are your core values. So as you think about this person didn't make it because they weren't gritty enough or they got pissed when I asked them hard questions or at 04:30 they checked out every day and that just made me so angry, Those are your core values as a company. That reflects and radiates outwards into your external culture, which is so important. This goes back to the community. I would say overspend on your community. If you [14:22] want to get to build a massive company, you need a community. We have Facebook groups, I'll talk about that in a second, but every conference we go to, we get testimonials. We have the top right there, one of our clients we couldn't attend, we had them accept the awards for us, we gave this is again going back to the growth hacks, put on conferences to promote our ICPs as heroes. That's the listing challenge on the bottom [14:51] right. We made a wrestling belt which was really fun. The culture of this vibrancy, especially if you are in dying or slow growth industries that haven't adapted and changed in a long time, you bring some life to that industry, I think it's going to be so well received that can be your culture. Last slide, I heard a couple of people talking about this yesterday. Think again there's only one way to hyper growth and that is leverage. [15:25] Leverage can mean a lot of different things. Leverage content for marketing. Affiliates has been a huge angle for us. People love us. We want to reward them for sharing that. Shared knowledge for CS, [15:41] have bottom so right is our Facebook leadership. We actually have two Facebook groups, one leadership and one for single agents. I think we have 2,000 in the leadership group now. We have a head of community that really talks a lot about what we do, shares knowledge, we have a fello academy which we just launched a couple of months ago where we're doing master classes and tips and webinars. The goal there is just how do we leverage [16:08] everything that a different user figures out or asks a question and just mass broadcast that. Last two, quick plug for Founderpath, early on we actually did a quick deal with them and it was super easy. I remember Nathan called me on a Friday and I was like, Who is this? He just kind of went on and said, I want to make sure you're a real person. [16:33] Debt is good if you have ROI behind it and it's not great if you don't have ROI behind it. Last thing that's been a huge hack for us is leveraging the world for talent. We are a COVID baby as a company. We had never had an office before. My co founders and I rarely see each other in person and we have people working in five different countries. We have people all over The United States. If somebody [17:04] is $120,000 in New York and they are $80,000 in Idaho, Idaho it is. So I think the ability to leverage the world at this point is a really under tapped resource for a lot of people and I think have to work hard and get lucky with some of the hires, but I'll say a lot of people that we've hired from different countries are harder working and more appreciative of the job than the people in The U. [17:34] S. And that has been we have this kind of global company at this point, which is kind of fun. Let me pause there. Hopefully that encapsulated some of the stuff we learned over the last twenty four months. [17:51] I put a QR code with my LinkedIn. I love helping. We received a ton of help over the last few years. If you have any questions, you want to connect, anything, I'm there if you want to reach out. Appreciate your time. Thank you very much, and I'll hang out after if anybody wants to chat.