How Switchboard App Spent $8M Building a Cloud Coworking MVP with 5 Granted Patents Before Launch (Interview with CEO Amir Ashkenazi)

Introduction and Amir's Background

Nathan Latka

00:00Hey, folks. My guest today is Amir Ashkenazi. He's the founder and CEO of Switchboard, his first remote only company, and he's never going back, he says. He's a six time entrepreneur that pioneered comparison shopping, Shopping.com IPO, which has been acquired by eBay. Programmatic advertising, and that was Adap.tv, which is acquired by AOL, and AI assistance for meetings. This is Tokyo, which is acquired by LogMeIn. Amir, are you ready to take us to the top?

Amir Ashkenazi

00:21>> Ready to go. Let's go.

Why Build a Remote Cloud Coworking Space

Nathan Latka

00:22All right. All right. So you've had some success here. Just to be clear, those three companies I just mentioned, you founded all those, correct? Yep. Yep. So look, I'm just gonna say this bluntly. You're like a super rich guy. You can do anything you want. Why get into remote cloud coworking?

Amir Ashkenazi

00:35>> I insist on doing what I love. And what I love is building products that are absolutely innovative that you don't have right now and that you really need.

Nathan Latka

00:44So how would you describe this? It's sort of a blend between what and what.

What Switchboard Does and How It Works

Amir Ashkenazi

00:49>> Yeah. So Switchboard is a cloud coworking space. It's the next generation collaboration platform. It really allows people to do things together as if they were sitting side by side. When you think about the way we collaborate right now, mostly through video conferencing, it's not very collaborative. Like, we can see and hear each other, maybe show a screen, but when we actually want to do things together, it seems to fall short. Mhmm.

The Competitive Landscape for Collaboration Tools

Nathan Latka

01:15Yeah. And there what's interesting is, like, you know, we just had Zeb Evans on. We had Eric Yuan on before Zoom IPO. So we've talked to a bunch of folks and, you know, Zoom just released a whiteboard and ClickUp's trying to do this. And like everyone sort of has their own version of this. And I just look at all of them and I go, who's gonna win this space? Is it really gonna be a technical breakthrough

01:30or it's be who dominates distribution or something else? What's your take?

Amir Ashkenazi

01:35>> So let's focus for a second on the technical breakthrough. So what we did is we developed cloud browsers. Those are essential elements that allow you to bring any tool that you already use, things like Google Docs and Figma and Trello and Jira, and they become immediately collaborative, even the regular website become immediately collaborative in the Switchboard workspace. And what it opens is a canvas that is completely interactive where all participants can engage with the content and

02:04>> not just stare at faces. So we think technology is important, but I absolutely agree with you. It's just a starting point.

Nathan Latka

02:10So tell me, just you have to forgive my naivety here. What makes this a hard technical challenge? Why can you solve it and no one else can or or very few other people can't?

Cloud Browsers as a Technical Breakthrough

Amir Ashkenazi

02:19>> Well, browsers were built as single player applications. They were basically built for one user to interact with the web. They were not built as collaborative applications. And, basically, what we did is turn them to exactly that. So they run in the cloud. You don't need to share your screen. They keep memory of your room. So when you open a room in Switchboard, it starts exactly where you left it last time. You don't have to prepare for it.

02:44>> You don't need to summarize it because it's all in the room. And the the difficult part is mainly around security scalability and the UX of how do you manage multiple application within one browser tab. Switchboard does not require you to download anything or learn any new tools. Everything works in the browsers with the tools you already use.

How Switchboard Was Founded

Nathan Latka

03:07Very interesting. Okay. So put this on a on a roadmap for us here. When did you write the first line of code for this platform?

Amir Ashkenazi

03:13>> So we really started two years ago. It's very funny. I'm a I'm a guitar player. Not very talented, but really enjoy that. So with my guitar lessons moved to, online, it was really terrible. So you need tools like a metronome, you need notes, you need multiple videos, and all I got is the instructor's face. So that was the moment I said, okay, we need something else here. So that one, we started it was May 2020. Quickly

03:46>> in June, we started to write code for this. I think it took us six months to understand that this is actually not for guitar lessons, but this is the core problem that every remote and hybrid team is facing.

Nathan Latka

03:58Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this, we've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:22your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:47get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

05:09not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:34going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're gonna go back to the YouTube video here in a second. But

05:56if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

Single Founder Philosophy and First Partners

Nathan Latka

06:23the interview. And this makes a lot of sense. Now did you were you scrappy at the beginning of this? Did you wanna keynote a lot of second time, third time, fourth time founders to go, you know what? I hated working with a co founder the first time. I'm gonna own it all at the beginning. Just pay everyone a lot of money. What route are you taking here? This is your fourth or fifth venture. Actually, your seventh,

06:38eighth venture.

Amir Ashkenazi

06:39>> Six. It's only six. Six. Okay. Yeah. It's I it's all about partnerships. It's all about getting people that will join your journey and that are excited about it and can contribute to it. So very quickly, we partnered with the right VCs to accelerate our path and with the right first employees to build this thing. I I don't believe that you can do great things alone in a room closed. It's all about creating this human connection and

07:09>> inspire people to go in a direction and believe that this is the future.

Nathan Latka

07:16You but you're burying the punchline here, which is when I when I my research team researched the company in prep for this interview, you're the only one listed as the founder. So you were you were day one guy. There's there's no cofounder.

Amir Ashkenazi

07:25>> I I am a single founder, but but it's really

07:29>> view my leadership team as absolutely essential for this, and they they are partners to every decisions that that we made along the way.

Nathan Latka

07:40Who was your first partner in building this?

Amir Ashkenazi

07:43>> So who was my first partner? So my first partner is actually Daniel Portillo. Daniel Portillo was the head of talent in Greylock, and I knew him for many years. And every time I met him, he gave me the right connections and contacts and introductions. And when I read that he's starting Sweat Equity Ventures, now it's called the General Partnership, I immediately called him, said let's work on this together, and it was transformational. He quickly connected me

08:10>> with the right recruiters and advisers and so on. So we got it off the ground very quickly. It still took two full years of development in stealth mode to reach the point we're in right now.

Nathan Latka

08:21So, Amir, come on. I wanna know how painful this was. If you had to quantify how much money you spend just on development before you ship the beta and did the product launch, can you quantify that? Are we talking like 1,000,000, 2,000,000, 5,000,000 to build it?

Amir Ashkenazi

08:32>> About 8.

Nathan Latka

08:33Oh my gosh. 8,000,000. Interesting. I would have never guessed that much. So what am I what am I missing? What makes it so expensive?

Amir Ashkenazi

08:40>> What you're missing is that from a technical perspective, this is a really difficult, problem to solve. And, I'll give you an example. So in two years, we already have five granted patents for the work that we do on Oh, wow. It never happened to me. It usually takes five, six years. And the reason is that this is really difficult and really no one has done it to the level that we're doing it before. So, it took

09:05>> a lot of work and some money too.

Nathan Latka

09:06Five patents. Have you defended any of those patents?

Amir Ashkenazi

09:09>> Yeah. Yeah. All of those are granted, and there are more in the pipeline.

Nathan Latka

09:13Have but have you had to defend any of them or have you protected any

Amir Ashkenazi

09:15>> I of mean, not not yet. Okay. Not yet. One is doing anything to do right now. So, probably in the future.

Nathan Latka

09:22Very interesting. Okay. And it's interesting you mentioned Daniel. Now, he was at Greylock. Now, did you already generate a big return from Greylock from when you were prior companies?

Amir Ashkenazi

09:31>> No. Greylock never had any investment or interest in any of my past companies. It was just pure friendship.

Nathan Latka

09:40With Daniel. Interesting. So is he full time at the biz?

Amir Ashkenazi

09:41>> Well, he's not full time because he's running the general partnership.

09:44>> Right? He's a partner at the general partnership. Partnership. Yeah.

Building the Team Remotely

Nathan Latka

09:48So who I guess, sorry. What I meant to ask was who was your first time partner in terms of, you know, full time employee?

Amir Ashkenazi

09:54>> Yeah. So it I I obviously called some of the people that I knew and worked closely in the past with or not. Just name one because everybody's contribution is so important here. But what I can tell you is that by adopting 100% remote work structure, it really opened a world of opportunity for us. A lot of flexibility flexibility and freedom to hire the right people regardless of where they are. So that is really one of the

10:28>> key if you look at the structure of the team, it's a very impressive team. And this the key to it is really the flexibility, the freedom to hire from anywhere. Mhmm.

Nathan Latka

10:39How many are on the team full time today?

Amir Ashkenazi

10:41>> So we are 22 people right now.

Nathan Latka

10:4322. Okay. Interesting. Yeah. I guess the reason I'm asking these questions is I'm curious from a guy like you that's done it six times what your order of operations are. Right? Who was the batch of first five and the batch of the second, you know, 10 and then 20?

Amir Ashkenazi

10:55>> It actually starts with before people join with just validating the idea. So what I would do very quickly with my very limited product design skills, I will try to patch something that looks as real as possible, and I will try it on potential customers. So the first thing was to do that and take it to my guitar instructor and say, would you use something like this? Yeah. Yeah. We absolutely need it. Well, along the way, we

11:27>> found that there are many more that are interested in this. So we developed, obviously, it's mainly for companies and not guitar instructors, but this is how it started.

Nathan Latka

11:37Mhmm. I mean, you were recruiting, though, top tier talent. Right? Chris Jones, you know, he had time at Databricks. He had, you know, as an advisor to companies that we know very well, you know, Little Bear Labs, Dynaboard, others. You sort of lull it looks like you sort of lull him in in an advisor role, then before you know it, he's joining full time. Is this like the Amir playbook? Should we all copy this?

Amir Ashkenazi

11:56>> Yeah. So, absolutely, you should copy. Always partner with the best people you can find. And what I found is that the best people are really not looking for just compensation. Of course, you have to be competitive on compensation, but it's really about the journey and about the mission. They get excited about this, and the best thing as a startup CEO that you can give these people is a front seat

12:22>> in this journey. Just completely expose them to everything that is happening. Don't shield them not from the bad days and not from the good days. Just have them as complete partners to the journey.

Beta Program and Learning Velocity

Nathan Latka

12:32That's super interesting take. Okay. Now just to be clear, again, pre pre revenue today. Right? Still building up the beta program.

Amir Ashkenazi

12:39That is great.

12:39>> What are you learning?

Nathan Latka

12:40I mean, imagine a guy like you, you're doing a beta so you can accelerate your learning velocity. So how many are in the beta today, and what are you watching for?

Amir Ashkenazi

12:46>> Yeah. This is exactly the goal is to accelerate your learning velocity. It's the most important thing when you run a startup is learning quickly and adapting the product based on what you see. So the first thing that you learn is like, who is it who are the personas? Who is even your target customers? And whatever you think, you'll always learn something new. So for example,

13:07>> we knew that this is great for startup CEOs. We knew that this is great for design and product managers, but we did not anticipate how many people from higher education are actually going to use that. So this is one thing that we've learned. It's very important to stay very close to the users that are using it. Another thing that you learn is about the retention and the virality and usage patterns of the product. And for a

13:36>> product like ours, obviously, virality is critical. This the main thing that people do or the first thing that people do on the product is inviting other people. You want to encourage it. Our marketing is based on that.

Nathan Latka

13:46Mhmm. Okay. So I wanna go deep here for a second. What tools are you using to measure when key retention, like activation usage things are hit in the app in the first sort of seven days? You use, like, Pendo or something else. Break down that tech stack for me.

Amir Ashkenazi

14:00>> Yeah. So, obviously, we monitor everything, and we use Snowflake and Amplitude and Datadog as like the main tool to monitor everything that is going on in the platform. The key is not so much to collect the data, but actually to spend the time analyzing the data and gain real insights from it.

Nathan Latka

14:23Mhmm. And what are you seeing right now? Mean, have you been able to nail down to a viral coefficient? One user turns into, you know, three within eight days or what is it for you?

Amir Ashkenazi

14:31>> Yeah. We see it already and the numbers look great. Those are early signs, so I don't wanna share, but those are real very encouraging signs of usage, retention, and virality. And as you can tell by my smile that your audience cannot see is that we're super excited about what we build and No.

Nathan Latka

14:49They can see it. It's audio and video. They'll be able to see it.

Amir Ashkenazi

14:51>> I didn't know that. Okay. You should have worked on my background too.

Nathan Latka

14:54No, it's a great background. It's a great

Amir Ashkenazi

14:56>> background.

Nathan Latka

14:57Okay. Last question here before we wrap up. You know, I wouldn't expect a first time entrepreneur to go out and do what you did, which is launch a beta pre revenue and raise $13,800,000. Right? So there's something to be said for sort of Amir's life as a founder. Right? When you look back at just your history over the past ten, twenty, thirty years, what were some of the early things you did in sort of your startup

15:16sort of life that you think worked really well now ten, twenty years later?

Fundraising as Strategic Validation

Amir Ashkenazi

15:21>> So I think it's absolutely critical to raise money from external investors. Even if you can fund it or you think that you can fund it, your ability to raise money is the number one thing that will determine your future success. And I use every round as a way to validate our assumptions and to check the strategy.

15:47>> If you cannot raise money, then you need to go back to the whiteboard and ask yourself why before investing more of your personal money on this. So this is something that guides me along the way. The VCs are not only funding the company, they're important partners to building it.

Nathan Latka

16:05Is there anything, know, of second time, third time founders will tell me, Nathan, I wish I just sold my first company faster to get an exit under my belt to just learn, even though it wasn't, I wasn't, didn't get the best price possible. Are there any lessons like that you wish you did earlier on or no?

Amir Ashkenazi

16:18>> No. Look, in total, I sold three companies, and in general, I

16:25>> regret not holding each one of them a bit longer. We had the Shopping.com that was a pioneer in ecommerce, pioneered comparison shopping.

Nathan Latka

16:33What did eBay pay for that in 2006?

Amir Ashkenazi

16:35>> 630 something million dollars.

Nathan Latka

16:37And you were how much had you guys raised?

Amir Ashkenazi

16:40>> It was, a little bit difficult to calculate because there was DealTime that raised money, and then we acquired a company called Epinions and another company called Better Even Better. So I can do the math, but I

Nathan Latka

16:55I see. I see. And what about Adap? Did you bootstrap that one or no?

Amir Ashkenazi

16:58>> No. Adap.tv also raised money. I think in total, we raised $48,000,000 and that was acquired by AOL for about 400 and something million dollars.

Nathan Latka

17:09Sounds like a great Unless I'm missing Unless it's a three thousand year earn out for 99% of the deal. Sounds like a pretty good exit.

17:17And then fast forward to Tokki, Roku. Did you bootstrap that one or no?

Amir Ashkenazi

17:22>> That one, it actually we had in the first

17:28>> one in one day, we had a term sheet from a VC and a proposal to buy the company. So we actually the plan was to get VC money, but we got the card so quickly that we didn't have an enough.

Nathan Latka

17:39I was gonna say that was a nine months. Your other twos were five, six, seven years. That one was nine months. So interesting story. Alright. When can you share are you open to sharing how many folks are in the beta today, or are you keeping that private?

Amir Ashkenazi

17:49>> We're obviously keeping that private. You know that.

Nathan Latka

17:51I don't know. We get a lot of people share beta numbers. We a lot of people share that. I guess, what what will make you come out of beta? Are you trying to hit a million users, or, like, what's the thing?

Defining Success in Beta: Love Metrics

Amir Ashkenazi

18:02>> No. We are we we we focus on on love, on users' love, on how many of those are frequent users, how many of those would recommend this to, you know, people they know. That's the focus for for this year, and we are making fantastic progress towards that. We already have a community of really passionate users. We're looking to grow this a little bit before we get into monetization and scaling customer acquisition.

Nathan Latka

18:33Alright, Amir. Let's wrap up here with the famous five. Number one, last book that you read.

Famous Five: Books, CEOs, and Tools

Amir Ashkenazi

18:37>> Last book that I read, I'm really ashamed to admit it, but it's very tactical. It's called the mom test. It's how to do user interviews. It's very tactical, but it's very good. It will teach you how to get the truth from anyone you speak with about your product.

Nathan Latka

18:55You said the monk, like priest, right?

Amir Ashkenazi

18:57>> The monk. Monk. The monk test.

Nathan Latka

18:58It's called the monk Oh, mom.

Amir Ashkenazi

19:00>> Mom. Because even your mom will not be able to lie to you.

Nathan Latka

19:03Ah, I love that.

Amir Ashkenazi

19:04>> Okay. The mom test.

Nathan Latka

19:05Number two, is there a CEO you're following or studying?

Amir Ashkenazi

19:08>> Oh, there's so many. There's so many. The best CEO I've seen was actually my co founder for Shopping.com. His name is Nahum Sharfman. He's unfortunately not with us anymore, but he's still with me, and I think about him every day when I make decisions.

Nathan Latka

19:24Number three, what's your favorite online tool besides your own for building Switchboard?

Loom CEO as Investor and Favorite Tool

Amir Ashkenazi

19:28>> Yeah. I really like Loom. One, because the CEO is an investor in Switchboard, but two, because it's a fantastic tool for asynchronous collaboration.

Nathan Latka

19:41Number four, how many hours of sleep do you get every night?

Amir Ashkenazi

19:44>> I'm not a big sleeper. I think it's like, you know, it's important to sleep well. I would say six to seven is probably my number. Yeah.

Nathan Latka

19:52Fair. And what's your situation? I mean, you're married, single, kids?

Amir Ashkenazi

19:55>> Married, three kids.

Nathan Latka

19:56Oh, wow. And how old are you?

Amir Ashkenazi

19:58>> I'm 51.5.

Closing Reflections on the Internet and Entrepreneurship

Nathan Latka

20:0151.5. Very cool. Last question. Something you wish you knew pre Shopping.com days when you were 20.

Amir Ashkenazi

20:08>> Oh, so many things. In general, I think that we were fortunate to see the Internet evolve in such a dramatic way. And we were excited about this in the beginning, but probably did not see one percent of the overall directions that the Internet is gonna take. So I wish I could have seen more, but I'm just grateful to be part of this journey and experience it and experience it experiencing it firsthand.

Nathan Latka

20:37Guys, switchboard.app, when you visit the website, you go, this looks very simple. And then you listen to this interview and go, oh, he has five patents and spent $8,000,000 on the MVP. There's something very special here. They're still in beta tracking usage metrics. He calls them the love metrics as we all do. We'll see what happens though. Hopefully coming out of beta soon so more folks can use it. Successful six time entrepreneur so he knows what

20:58he's doing. Reading the mom test to do better user interviews. Amir, thanks for taking us to the top.

Amir Ashkenazi

21:02>> Thank you so much. It was a lot of fun.

Nathan Latka

21:05One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

21:30Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

21:53fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

22:14for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We

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