Ep. 7 How Cliently Rebuilt After Product Missteps Caused Them to Lose All Their Customers

Welcome everyone to another episode of Down, But Not Out. Today I'm joined by Spencer Farber, Spencer spent a number of years in sales roles before starting his entrepreneurial journey over 10 years ago founding several companies and serving as the director of PandaDoc. Spencer took his knowledge of sales and founded Cliently in 2016. Cliently is the first truly AI-based sales engagement software allowing you to leverage AI to fully understand and action on the buyer journey. Spencer thanks for being on the show. My pleasure thank you, Nick. All right I don't know if my introduction sufficed but I'd love to hear an intro from you for the audience. Yeah I mean it was a pretty good overview I've been sort of in the sales space for my entire career, I had my first SaaS opportunity at PandaDoc, in fact they were super small I was the first US employee they were called Quote Roller at the time you know got to work hand in hand with the CEO and a couple of others that were starting the company so really exciting to learn how to build a SaaS from scratch. Left there about four and a half plus five years ago to start Cliently based on a lot of the knowledge of go to market and building campaigns etc and you know started Cliently you know with an initial Product Hunt release and went from there. And at PandaDoc, it says the director on your profile, and were you in sales and marketing there like what was your overall, because Pandadoc has done really well. Yeah so I'm gonna give you an idea like you know again I was the first player of the US, literally my first few visits there were staying in the bedroom in the house next door with the CEO and then we would go work in the kitchen with you know I think maybe one other person, our marketing person, so I was in charge of customer success, I was in charge of sales support, account management, it was all in one I mean we were literally that small at that point I think we're doing maybe a handful of a few thousand dollars of revenue again it was a different product called Quote Roller at the time of pre-funding and so you know as we scaled and as we grew you know that position, of course, changed to leading sales efforts in different capacities and people took over you know customer success and things of that nature as we grew. And that led to Cliently right because that was the big next step. Tell us about Cliently what it does and kind of where it came from. Yeah so I mean what I've always seen as a struggle whether it was PanaDoc or other businesses was people have not heard of you and of course you want to start building that traffic organically but to find really the right type of customers out there no matter what size you are in a scalable way you know you need to have a a way to facilitate sales engagement usually using outbound and doing that consistently and I saw that constantly a struggle whether it was to you know craft a campaign whether it's to create an omnichannel campaign meaning more than just email whether it's being able to track that and then from a sales person's perspective because it wasn't just marketing being able to see what's going on with those campaigns on an individual basis so you can react to that because that's really what sales people do is they take in information and then figure out how to customize the experience depending on who that specific customer or potential client might be and so quietly as a sales engagement tool you can think sort of along the lines of a sales loft or an outreach but we're kind of veering into our own category to where we are ingesting all sorts of data whether it's from Salesforce or your CRM or even another Pipe Drive, Hubspot, Intercom, Chargebee, Stripe, bringing all that data together to help you understand who the clients are you should be focusing that attention on at any given time and as far as the AI piece that we're very excited about we haven't marketed that really very much yet and haven't really even announced it but about six months ago we acquired a AI technology we're building that into our product today one of the other bigger struggles that we see is lead scoring, either it's a complex setup, or you don't have it at all. We're bringing AI lead scoring too where you always know who the hottest leads are based on all of your data and it's constantly getting smarter by continually looking at more of your data as it grows so that's kind of where we are today. Yeah definitely familiar with cliently and in my realm of sales and marketing looks like you guys are doing some great stuff over there the AI stuff sounds really cool definitely a place for it if you have that large data set like you're mentioning. Would love to I know that this the Down, But Not Out story is related to Cliently so walk us up to that happening. So you found it Cliently and then how long after before you had your Down, But Not Out moment and then go into what that moment was. Yeah so I mean Cliently was was bootstrapped right so we didn't have any funding I was a sole founder with really one developer that was freelance that was you know helping build the build the Project Hunt and so we slowly you know built our first version you know took a few months listed on Product Hunt did you know okay and then started to continue to build and basically had to work really hard to get every single client I think at that point maybe you know probably about three four to four months or something like that after launch maybe had I don't know 20 clients paying us like 15 20 25 whatever we can get at that point. Been there. Yeah right exactly yeah and you know again we were bootstrapped being a sole founder I did not have a technical co-founder I just had you know freelancers I think actually two, one that was working on mainly front and one that was working on back end memory serves me correctly and then basically we had two major blowouts in a span of I think it was a few week periods us being an email sending tool and embarrassed to say this again this is very different than product today, four and a half so years ago, you know we send emails for clients with these automated campaigns and the first big issue was our system start to send emails from the wrong clients so it was sending a client if you had you know we had a client Joe at Apple.com it was sending from Beth at Microsoft.com so about the worst you can do in terms of security and privacy. That's number one and to sort of make matters worse number two a couple weeks after that we lost our entire database and so what that means is we didn't lose our code but we lost our database so all the records that we had for our clients, all the contacts that they had, that our clients had added, people knew we were essentially in a beta at that point so they weren't relying on our system heavily but we lost all of that it was a miscue by our you know our developer who was trying to clean the database. Clicked the button he did not have didn't realize there was no backup those types of things and so basically the 400 or so of MRR that you know we had done everything for to scrape to get there out the window gone. Yeah. We did what we could with the clients that we had to you know describe the issue and honestly it wasn't made or break for them because you know again they knew we were newer and they were just sort of giving us a try but essentially we lost all their accounts that were tied to our billing system so we had to go get those by hand by the ones we could so we lost most of our MRR at that stage. And back to the first issue did that affect all clients that you had on the platform? It affected just a few again we only had I think maybe when I say 20 clients or 15 to 20 clients at the time and I would say it affected you know five or six at least before we realized the issue and then, of course, fixed it but still like it's a major like you know issue with trust and security and everything else Oh yeah, and did you lose any of those 15 to 20 at that point or? Yes yeah and then the second issue was a few months later- weeks later And then you lost all the 15 to 20 at that point or the remaining. I think like 80% of them because with the database being lost again it wipes out all their information that they had in our system, yeah you know any contacts they had added any campaigns they had created those type of things and so yeah that's kind of where it left us yeah. You mentioned that a lot of them were understanding because you were younger as a company right and but were any of them were there any bad reviews that surfaced online was there anything or even bad feedback did you get a lot of bad calls? No and this is where you know and I don't know if this is where you know the segway is gonna be but this is sort of what leads to how we came out of it and I can go speak to that but no there weren't really bad reviews or anything like that, you know we reached out to everybody you know directly as we could and some were just like all right well we tried it wasn't for us and you know moved on. Yeah, and it was just yourself and two freelancers at this point right? Correct. Yeah and bootstrap so it's just yourself that had put in money you're paying the freelancer salary exactly do you know roughly how much you'd put in at this point probably like somewhere between 30 to 40 thousand dollars you know you get the product up to a point where you can you know have something that you can actually that yeah that works you know So you would have been out 30 to 40 grand then if you'd walked away at that point right personally you invested that Also yeah I mean also walked away from a high paying position, all sorts of things. Yeah, I think that helped frames the severity of it right, it was early on but you had already personally invested in this you were the only founder in it too which leads me to another question I don't know if you've had time to reflect on this, and did do you think that it would have been easier if you had someone else that had some skin in the game with you right like a co-founder someone else to go with you? Yeah absolutely and it wasn't necessarily about oh I want to keep all this for myself it was more about finding the right person and I just didn't have the technical co-founder I did not know that person so absolutely it's one of those things where having a partner or multiple partners people handling different facets that maybe aren't the part that you are you know experienced or skilled at definitely important yeah that's definitely where PandaDoc was able to succeed at the very beginning because they had those areas sort of solidified we had somebody that was great at marketing we had a very charismatic CEO we had a thorough CTO and we had myself on the sales side so when you have all those pieces with you know or people that are very strong and then handling it helps quite a bit Yeah I think that's been a common theme throughout the the podcast and other stories that I've heard is going at it alone is tougher and like I have a co-founder at Visitor Queue but he was mostly fractional for the past few years so I can completely understand that going at it alone it does become tougher it goes back to what we were talking about before the show to a misery loving company if you have someone there with you it's a lot easier. Yup absolutely. Yeah so you're at 400 roughly MRR 15 to 20 clients you put in some money yourself walked away from PandaDoc to run this and you're four or five months in it sounds like after launching building the product and this happens you lose pretty much all those clients, what happens next? Yeah so I mean the first thing that I always try to do is I don't look at like getting upset and putting blame right because at that point it's not even because I'm such a great even being anything it's just it doesn't solve the issue right and so first off we looked at all right what can we do so we went and we reached out to all you know most of the clients again only a couple stayed we looked and said what was the last you know sort of instance that we had of our database which I think was a couple months back where we didn't even have you know half those clients before at that point so it gave us a little a little bit of something and that's where we started I reached out to at least tell them all the problems so that we didn't get any of those bad reviews and things of that nature that you mentioned so then the other piece was we took and we also knew from next time we need to make sure we have our our aws backed up you know number one number two it set us on a plan this was about a year and a half later but at least gave us the thought that we need to be using you know really strong backbone for our email provider that's not one that we built with a freelancer and so eventually you know as we got better developers we ended up going through APIs and we used now the same backbone as Pipedrive does for their email sending but that being said here's sort of how I looked at it man we just lost all of our clients but from the flip side all we lost with 400 of MRR so I you know really looked at it that we you know had these extra few months we built up the product we we sort of figured out more ways to go to market and those type of things in that period and ultimately the the sort of silver lining here was that nobody had heard of us yet so we were completely under the radar and we hadn't lost that much and I looked at if we were like a year further down the line it would have been so much worse those reviews that you were talking about would have been you know coming out in mass like hey like I can't believe that we lost our data because we were really using the tool at this point or sending you know so those type of things it sort of helped us get past it because so few clients and and from there we just kept plotting forward and we're able to turn around we were you know again pre-funded at this point we were able to you know again this is just from memory at this point you know bring in about 35 000 of revenue before the end of the year so let's say those issues happened in like you know May or June of I think it was 2016. You know we were able to bring in you know 35 000 probably you know five or six k MRR before the year was out so we were able to turn the corner and again it was just looking at like let's just start from scratch but we have this product now so that was you know I wish I could say there's something a super resilient story or creativity about it but it was really just one of the things that I'm sure you get with a lot of these different calls that you've done it's about perseverance right it's about you know continuing to go even when you get you know sort of knocked down yeah and getting knocked down doesn't always mean that what you're doing isn't working it didn't mean that you know our developer wasn't you know necessarily someone that should be overseeing an entire product sure but it didn't mean that our product wasn't something that people wanted it didn't mean that we weren't building in the right direction and so there were still signs that keep going and we did that Do you think back to that perseverance resilient side really just pushing through where did that come from obviously you have it sounds like a positive attitude towards it when it happened but was that something that you had built up throughout the years like where does that come from? I mean I think a lot of it is going back to my sales background you know and a lot of people say for every you know however many yes is expect you know ten times that in no's right and so I always looked at those as not just getting used to a no but also for me it's figuring out why you're getting a no and how you get to a yes in this case the no was you know we had this issue which means the product wasn't going forward how do we get back around to where it is and so I think it's more just sort of that sales gene and a lot of people have that right you just sort of look how to do I you know figure it out and fix this problem versus dwelling on it. Yeah that's the big thing right it is attracting to go towards that dwelling side a lot of people do but if you keep pushing forward and you keep that to the mentality of it could be worse right that's what I kept telling myself throughout the whole thing it's like okay we've lost 20% of our clients but what it could be a hundred percent so just keep keep going through and then like you said or you alluded to you ended up raising around after 2016 and where's the company now it's definitely progressed. Yeah so I mean we've raised about just under two million I mean it wasn't actually one round we've you know raised a little bit here a little bit there you know some great partners that are have invested in us we have you know brought on as I mentioned that AI technology and the founder of that company has now become you know my partner in the company as well so it is nice now to have that person to lean on that has expertise in other areas and so yeah I mean we've grown pretty well you know we have a couple hundred accounts now much bigger accounts than we were you know and we had at that point different type of clientele and so we're you know getting ready to raise our first serious you know seed round of a few million dollars as we speak. Right on that sounds it's exciting and you can definitely see the progression after that Down, But Not Out moment and you mentioned about bringing on the partner and we talked about this earlier as well was that kind of a lesson that you took from there of I would not being non-technical and there will be a lot of non-technical founders that listen to this is having someone with some skin in the game like a partner or co-founder would you say that was important after the experience you went through? Yeah I mean I probably would tell you before it was important but didn't realize it as much but even then it was always about finding the right person you know because that was it was until four years later so that you know I still found a partner and I wasn't gonna bring that person in less you know very fit but yeah I mean it's nice to have that person where when you're working at 11 o'clock you know on a Friday night or you know 2 p.m on a Sunday afternoon that person is working as well and being able to you know to continue to push the company forward versus you know an employee even really good employees it's just not the same mindset. Yeah I completely agree with that back to the few months back into 2016 you mentioned you guys were bootstrapped how much cash did you have left do you remember, roughly? Were you ever close to walking away at any point? I wasn't close to walking away but I was almost always out of cash like I mean I didn't have a lot yeah and I was like how am I going to pay my rent how am I going to pay the freelancers those type of things and keep and keep moving on so those thoughts were always you know I'll tell you you know one time i actually wasn't an expensive car like a ten thousand dollar whatever car that I had I went to one of those areas where you could get your get cash for giving them the title to your car I've since paid it back of course but yeah I did some I did that for example yeah I gave up my title so my to my you know Toyota Corolla you know to be able to keep going so you do what you have to and again doesn't mean that every one of these stories leads to success however I think it is uplifting for you know people to understand that a lot of us go through this and you know will cliently make it to that pinnacle of you know 100 million a billion dollar company I hope so I mean there's nothing there that says 100 but but i hope so but that being said I know that we wouldn't be where we are now if we had stopped before. I was gonna say you have a zero percent chance of reaching there if you've given up in 2016. exactly and we've gotten through a lot of those hurdles you know since so yeah. Yeah the big thing with entrepreneurship is that if you think of it like a sport or a game there's no bell at the end until you ring that bell and you tap out right that's really it is when you give up that's when you lose that's when you forfeit is when you actually ring that bell it's not like any other game or sport where there's an actual end to it if you keep going then it doesn't end you just keep going. I think it's a great story through and through and obviously, Cliently is doing great now you set a few hundred clients working on raising another round and I think there's definitely some good lessons in there anything that you would tell a founder that's going through that moment now that you haven't mentioned? Just in terms of how you look at the problem work on fixing the problem and that actually keeps your mind going forward instead of dwelling on it right because if you're in that moment and figuring out what do we do how do I move forward it doesn't allow you to dwell because you're just simply dealing with any other issue that you could have just as easily had that wasn't you know necessarily as significant to your company but it allows you to really focus on that and it doesn't give you time to sit there and think about the bad and then by the time you've gotten past it you're past it yeah and along that line as well you've probably had other moments in inclinedly since maybe not as bad but do you think that the first one or the first few kind of helped you build up that resilience and that that mentality maybe I can also say sometimes they create and you probably notice two additional bruises that sometimes make you feel like a punch drunk fighter so I don't want to always say that the more of these knocks that you get the better off you're for it but I do think it's something that at least you know strengthens your resiliency a little bit you know to understand okay I've gotten through this I can get through that. Yeah I think that's an important point to the you can only get hit so many times as well just like just like a boxer right but just keep getting back up I think that's a big thing all right spencer that was great I think that's a really good story to recap again started your career in sales and marketing went and started your own sales and marketing software and cliently 400 into your journey in MRR you there was an issue with the software because of the some of the freelancers that you were utilizing early on that led to some emails being sent from the wrong address the database being deleted which pretty much made you start over from zero 2016 fast forward to 2022 now you have a few hundred clients, how many employees are you guys at? We're about ten. Yeah, you've raised about two million dollars you're raising even more, and definitely a strong recovery after an early setback so thank you spencer for your time and for sharing your Down, But Not Out story. To everyone listening, I hope you enjoyed this episode if you did leave us a review also subscribe to the show to be alerted of new episodes and finally like and share the episode on social media to help us spread the word of Down, But Not Out all right bye everybody bye Spencer. Thanks, Nick.