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The Big Exit Show: Selling Usabilla and Human.co - Paul Veugen on his multiple startup exits cover

The Big Exit Show: Selling Usabilla and Human.co – Paul Veugen on his multiple startup exits

In this episode of The Big Exit Show, we talk to serial entrepreneur Paul Veugen who founded Usabilla, and the iOS app of the year Human.co. Usabilla was later sold to SurveyMonkey, and Human.co was acquired by Mapbox. He is currently building a new venture called Detail.co to help creators make better videos. Detail.co was funded with over 7 million dollars.

In the 🔟th episode of The Big Exit Show you will learn:

  • About Paul his experience when he pitched to the Peak team 🎤
  • Why storytelling is the most important skill for an entrepreneur 🗣
  • Why Paul got kicked out of his investor’s office after he shared he wanted to step down as CEO of Usabilla 💥
  • What his experience was living in San Fransisco for a couple of years 🌉
  • How nobody knew, in the company he was working for at the time, he just made a mega-exit 🤑
  • How Paul managed to secure an exit for Human in a couple of weeks’ time ⏱
Paul Veugen (left) with the team of Human.co

In this podcast series Peak’s very own co-founder and managing partner Johan van Mil, and podcast-host Remy Gieling talk to successful European tech entrepreneurs about the exit of their company.

You can find the episode on your favorite podcast platform, linked below. And, if you are really interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!

Spotify Podcasts

Apple Podcasts

Google Podcast


You can find the transcribed version of the episode below:


Paul: And I still remember when people having an opinion about us selling out or yet another Dutch startup selling out, but if you make a statement like that, it just shows how little you understand what went into it to actually get to that point.

[music]

Remy: Starting a company is easy. Selling your company, well, that’s a whole different story. In The Big Exit Show by Peak, we lift the curtain of secrecy of selling ambitious scaleups by talking to successful founders who have been in this roller coaster. My name is Remy Gieling.

Johan: And I’m Johan van Mil.

Remy: And in this episode, we have the honor to talk to a true serial entrepreneur. And despite his young looks, he founded and exited multiple technology companies. He lived in Silicon Valley for many years, but now, he’s back in Amsterdam to work on his latest venture, detail.co, which raised over $7 million to relieve the world of poor quality in streaming video. We will talk about this, but even more about his exit to SurveyMonkey and Mapbox as he is the co-founder of Usabilla and Human, the leading tool for customer feedback. And well, how can I introduce Human? Because most people know Usabilla, of course, what’s Human?

Paul: It’s so slowly losing the tracks, as in typically, I could refer them still to the homepage of human.co but that’s no longer existing. And we built one of the first fitness trackers on the app store. So it was all-day activity tracking before that was a feature on your iPhone and Apple Watch.

Remy: And it was in even App of the Year at some point, right?

Paul: That’s the highlight of my career.

[laughter]

Paul: It was being best of App Store in 2014. I still remember waking up to that.

Remy: According to yourself, you are a bad designer and a bad coder, so what’s your founder superpower?

Paul: Oh, [expletive], where did you read that?

[laughter]

Paul: I typically look at myself as a little bit like a Swiss Army Knife, as in there’s like a saw and a good knife on the collection of little tools on that thing. Typically, not the best knife, and definitely, not the best saw that you can use to cut a tree, but if you have to, it works. And that’s a little bit how I look at my own skill set as well. So I think my superpower is that I don’t really have like a specialty but it’s more like a diverse skill set that actually helps me to solve problems.

[music]

Remy: Hey, Paul, what’s the heroic story behind Human?

Paul: The heroic story… I think as a company, we started with very bold plans and ideas, and the idea of doing all-day activity tracker in that year, so it was 2012 or 2013. We started building one of the first fitness trackers, and doing that with GPS only. It was the iPhone 4, a very different device than we have in your pocket today. Building that was technically super hard but we managed to get that going in the end, so that we were riding this roller coaster of App Store hype around health and fitness and such, so indeed, getting selected as best of App Store in 2014 and getting featured everywhere. And Apple was really selecting us as already a poster child for a generation of apps, which was super exciting. And that brought us a lot of excitement in the ecosystem—a lot of people that used the app, and a lot of people that hated the app, but also, a lot of people that enjoyed using it every day. So that to me was definitely a highlight of what I’ve built so far.

Remy: Everybody those days was using Human, I recall. Everybody.

Paul: Yeah. And typically, it would also uninstall it after a while [laughter] when our battery would get drained, especially, the first versions, of course. We were super early building what we were building and doing all the activity checker back then. We always joked that the first group of people that were using the app actually used it and were donating battery life for a good cause so that we could actually improve our product by then. But two or three years into that adventure, it became easier and easier to do that because we always said that tracking would become a commodity, and that Apple and Google would be taking care of all the activity tracking, and that we could build a gameplay on top of that. It took a while but we got there. Yeah.

Johan: Yeah.

Remy: Hey, what is the real story of Human?

Paul: This is where you go deep, right? The real story was a super rough ride. Instead of starting with a crazy idea, getting it right, I remember shipping the first version on the App Store and getting hit by a 1.5 star rating. It’s really hard to recover from that after a year of development.

Remy: Because of battery life, I think.

Paul: Battery life and tracking accuracy. And the thing that we tried to build was just really hard and complicated. And at the same time, while we were so focused on building a great product experience, it was challenging to actually build our own quote mechanisms. And because apple featured us everywhere so that we would wake up to 100,000 downloads on a given morning, it’s really hard to compete with that, with your own channels and building a sustainable business around it. So being very productive, we tried to raise capital but we failed miserably at it. I think we raised a total of about a million dollars over the course of four years with a team of five.

I think most of those four years, we were running on fumes. At some point, we were like minus one and a half years of runway, and just trying to keep the company afloat. And pushing through that was really challenging, at the same time, we also had a founder switch. So one of my co-founders left the company, which gave me the opportunity to give it at least one more try, and that was the last year of the company. And at that point, we were at these crossroads at the end of those four years, and what’s next, to either raise additional funding and try to push through this, and really build something different, or do we keep suffering for another year or two years or three years? And that was the point that we actually got acquired by Mapbox, the mapping company in San Francisco.

[music]

Remy: The starting phase.

Remy: So Paul, we just talked about the beginning of Human. You started Usabilla in 2009. It was post-financial crisis. Can you explain a bit the startup landscape back then?

Paul: Which landscape?

[laughter]

Paul: I was sort of half kidding. It’s funny there was not really a startup ecosystem that I was part of that moment. I’m sure there were generations of founders, and then a great landscape but I wasn’t aware of any of that. I was a student in Tilburg, at the university. And there was like a university entrepreneurship center where I could get a desk and I could start. And I remember getting an introduction to some people in Amsterdam and getting on the train to start building my network. And also, I remember one of those conversations when another entrepreneur said, “Oh, you should turn that company, you should turn that into a SaaS company.” And I thought, “What the [expletive] is SaaS? What does that mean?”

[laughter]

Paul: I was literally as green as you could be.

Remy: Yeah. I remember the first time someone told me about onboarding.

Paul: Yeah.

Remy: I was like, “What are they talking about? I have no idea.”

Paul: And it’s just a very different world. And for me, especially, the relation with me, I could imagine there was a living ecosystem, a very amazing ecosystem at that point, especially, around the dot-com bubble in Amsterdam. At least, that’s what I’ve been told. But for me, at that point, I was just a naive student starting a company and starting to figure out how to build something. And I bumped into great investors very early, and they helped me think more through the business and what I was doing, but I didn’t have any clue.

Johan: What was the problem, Paul? Because in those times, we also met, right? I think you were pitching at Peak.

Paul: Yeah. Yeah.

Johan: I still see you pitching there. I still have– that’s huge. You stood there because there was a big screen but you choose to present on your laptop. I still recall that.

Paul: Yeah, yeah.

Johan: Do you remember, it’s also in the room?

Paul: Yeah, I remember being in that room, yeah.

Johan: Being in the room, yeah. And we were sitting there, right? Those days, at Peak Capital with the five founders of Peak. And I recall you pitching. What was in those days the problem that you were trying to solve with Usabilla?

Paul: I think the very early spark for Usabilla was literally a group assignment at universities. I had to come up with a quick way to test a prototype or a concept. And I was just looking at that point. I was looking at all these different methods to do that, and they were all time consuming and involved contact with real human beings, as in walking into the lab and interviewing people, and making notes about that. I just thought as a student, I said, “I’m not going to do this. This is not how I want to spend my time.”

So I came up with a way. One of the methods to do that was a method for text evaluation. So you’d give a piece of paper to a group of people. I would ask them to put pluses and minuses on top of the piece of paper. And then afterwards, you would ask them, “Hey, why did you put a plus and a minus here?” And that was the spark for Usabilla. So I saw that. I thought, “Wait a minute, we can do that on a screen as well. And if I would be doing that with a quick prototype, I can collect XY coordinates on your screen and I can start making heat maps.” And back in those days, heat maps were really cool and was a great visualization.

And I was, at that point, working for local SMEs, helping them optimize their websites and such. And one of the challenges that we had was that everyone was thinking about campaigns. So you would build a website and that was done, but the real– the early days of doing more recurring loops and lean type methodology, and figuring out testing, optimizing, improving. So that was the ecosystem that we tried to target because if you would constantly collect feedback, you could also constantly improve.

And if you would wake up to new feedback every single day as a marketeer or a web builder, that would help us actually sell you something and sell our service to you. So the idea was, can we do all the activity or can we do all-day, everyday feedback on a web page, on a live website without you having to worry about anything or setting up any research? So no effort. So you wake up to a new feedback every single day. And the Trojan horse that we built, which is a little bit of a common theme for what I’m doing, in general, in companies.

Johan: And there were no competitors doing the same thing back then?

Paul: There were survey tools. So there’s SurveyMonkey and others, right? So I remember making a deck for the first pitch deck. And the deck that you probably have seen, Johan, included like a sort of– back then, you could still include an exit slide on your deck because no one told you not to do it but there was an exit slide in the deck. And that was actually one of the– one of the companies on there was SurveyMonkey. I had [Campal 00:10:19.6], like different types of tools to collect feedback on the website but none of them were intuitive or were sparking joy when you would actually leave some feedback on a website.

Johan: And I believe it was more an agency-like business model those days, right? Was it your–?

Paul: No, we started really early days. I remember that I had conversation with our early investors that they wanted to push us to do some consultancy services around it, but it was always subscription based. And one of the ideas that we had back then taken from the base campus is, “You should turn this into a SaaS company.” “What is a SaaS company?” “Swipe your credit card and go.” So the very early days of Usabilla was very focused on, “Can we sell an online subscription and do this with credit card based business?

So doing yearly subscriptions initially because it’s easier to build. And then later, monthly subscriptions. And the very first accounts were like $50 or $199 and at the points of four years in, we had a recurring– the very first product that we built was one-off feedback. So you would set up a test and collect feedback. And then you would do it again, and again, and again. In order to make it better, we needed to build a recurring loop and doing it always. And that’s the point that the company really had product market fit.

Remy: Indeed.

Paul: And it’s actually gotten to the point that I left.

Johan: Yeah, indeed. Yeah.

[music]

Remy: So, Johan, as a side step, as you can vividly remember Paul pitching to you back then–

Johan: And the reason is he’s a great pitcher because that’s what you remember after indeed what is it, 15 years?

Remy: Yeah. And thousands of pitches.

Johan: Thousands of pitches, indeed.

Remy: So do you remember the reason why you didn’t choose to invest back then?

Johan: Yeah, because we felt that– that’s why I asked, because we felt it’s got more–

Remy: Was it because of a tiny screen?

[laughter]

Johan: No, but it made his story even bigger, right? Especially Paul is standing out from the rest. But no, I think it’s mainly because we had the feeling that it was an agency business in those days. And I think– I don’t have the notes from then anymore but we felt it could be that we invest into an agency business model. And we were, of course, more into recurring SaaS models.

Paul: I think at the point that we pitched to you, that was also not that recurring loop yet. So for us, in the first, let’s say, two, three years of the company, we were doing– because we had this this vision on how we could do feedback on live websites but the actual thing that we were doing until then were surveys.

Remy: Mm-hmm.

Paul: So you would set up research and they would collect feedback. And then you would have to do it again. So it fit, definitely, like an agency model in that sense.

Remy: Yeah.

Paul: A lot of agencies would be using our product. And then when we technically could realize our vision, that’s the moment that suddenly, that entire business model changed and the entire business started flying.

Remy: At that point, you decided, too, it was time to take a step back. And we’re going to focus on the growth phase of both Usabilla and Human in a second. Was the early phase different for Human that you had different challenges, or were they more or less the same?

Paul: I think they were more or less the same. It’s funny, you have this picture of, like, if you do it again, some things are easier. But for me, in this particular case, difference was I was a little bit less naive on some fronts. I knew a little bit better about— I, at least, knew the difference between a cash flow statement and a balance sheet, for example. I literally didn’t have any business clue when I started Usabilla. I never hired anyone. I never had to fire anyone. So all these things were new. And that was different when I started Human. What was the same was that we were so resource constrained that even if I would know how to do it better, I wouldn’t have the resources to do anything or much different, and was just constantly– we had relatively really little capital and because it was just hard to raise for the thing that we were building.

In hindsight, smart maybe, but at that point, that part was really challenging. So as an entrepreneur, I think both Human and Usabilla came from very deep– I think technically, on paper, Usabilla should have been bankrupt, at least, two or three times in the four years that I was part of it. I started as a solo founder. We raised some capital but it was also, again, really hard to raise capital for that type of business being a first-time founder and not having enough to prove yet. I definitely recall those pitch meetings and having a lot of those. And then somewhere along the way, having to ask my girlfriend if there would be something that we could do. And I was already not paying any rent for months in a row, right? So–

Remy: At that point with Human, at least, you were also a big shareholder at Usabilla?

Paul: Yeah.

Remy: Did you, at one point, at least consider maybe selling your shares to–?

Paul: I actually did sell a little bit of shares, yeah.

Johan: Yeah?

Paul: So I sold just a tiny sliver of shares somewhere in, I think, my third year when I took over the role of CEO at Human, and we made the founders’ split. That’s when I knew at that point my wife was pregnant, my girlfriend back then. She was pregnant so we had this ticking time bomb financially, at least. And that was also the moment that we realized, “Okay, up until that point, I was totally free to do whatever I wanted. And we could survive on a single starter salary.” And so that’s fine, it was not pleasant but we did– we did that for most of our my working career, at least. But then, we wanted to have, at least, some buffer and being able to at least pay my own salary, even if it would be just a fraction, like the minimum salary that I needed and have that freedom to do what we needed to do. And that’s when I saw just a tiny sliver of Mapbox– or Usabilla shares to actually fund myself and my business.

Remy: Business and your kiddo.

Paul: And my kiddo, yeah, yeah. So her room was pretty Spartan, initially.

Remy: This makes me think about our first episode. This is our 10th.

Paul: Congratulations then.

Johan: Yeah, thank you. Congratulations to you, too, for making it this far with me. But in our first episode we talked to Geert-Jan from Flinders who had to sell his house at one point.

Paul: I actually pitched to him as well.

Johan: Really? Cool.

Remy: He sold his house to fund the inventory at Flinders, as he told us. Is this common for founders, as you speak to a lot of them, of course? Is this common to go through these really grinding times?

Johan: Not always, but it shows grit, right? It shows, I think, a deep grit in founders, if they do, and what Paul says, especially, if your personal situation changes, and you’re going to have kids, and your company is not that far, then you are searching for, how can I make a little bit, take something from the tables on that end, and to see how I can work it out for myself? So I think it’s very common. I think it’s also very normal to do it because I think, Paul, you’ve shown a few times really for a long time grit also being– taking that company further through– to–

Paul: Actually, as an investor, it’s the single one thing that I’m looking for.

Johan: Yeah.

Paul: And that’s so much that people have– so they often read about skin in the game or being able to put in your own money or such. I’m really– I’m allergic to that but I do think that technically, both Human and Usabilla, there were, along the way, so many different points in time that it actually would have been much more reasonable to actually just quit and not do it. We did not as a team and also me, personally. And I think that’s one of the traits, for me personally, that helped me succeed and got, in hindsight, successful.

Remy: There’s also the name that you have in the market, right? Also working with–

Paul: Yeah,and that’s maybe I’m not sure if we’re going to talk about it, like the exit for Human in that sense.

Remy: Mm-hmm.

Paul: That was, for us, not like the ultimate outcome or not the expected outcome, but the way we solved it, I don’t feel bad about asking any of the people that were involved to work together again, whether it’s employees, or whether it’s the investors, or whether it’s the company that bought us.

Remy: Mm-hmm.

Paul: I think that’s the type of stuff that is way more important than anything else. So people often focus on the success of your company and financial outcome, or in market gap, or it doesn’t matter that much. But I think the way you build it is actually the real legacy. So a little bit less about what you actually might or might not achieve because there’s a big component of luck there as well. But along the way, the way you treat people, the way you treat your partners, the way you work with your customers, that’s the real legacy that you build upon. And I think that’s, to me, the most important thing to focus on.

1: One question before we go to the growth phase. Maybe, more of a question to [00:19:00] you, in general, [laughs] somewhat of a life advice to founders listening. How do when enough is enough? Because as you mentioned, it was really tough of the really tough racing funding, some of the early reviews of Human weren’t that good.

Johan: Geert-Jan, which we just talked about, he just launched a new company last year, he mentioned in the podcast. After a year, he already quit because he figured, “Well, this is not going to work.”

Paul: Yeah.

Johan: You kept going with Human, at least, how do you know when enough is enough as a founder?

Paul: I think that really depends on your, I would say, what is your threshold, how much can you stand, how much are you willing to stand, and how much is reasonable to stand for you in this phase of your life. I think for me personally, if I think back about when was enough enough in periods of time, if for a longer time frame, it actually doesn’t make any sense for you anymore, you no longer get any energy out of it, no longer sort of when you wake up, you’re excited about [00:20:00] the work that you’re doing, and then of course, everyone’s personal financial situation is very different, and that to me only started playing a role when I got my first kid.

And that definitely changed how I would look at the baseline of things that I need to get in order in order to do this. And up until that point, I found it totally reasonable not to go on vacation. I found it totally reasonable not to be able to go out for dinner. I found it totally reasonable to spend less time with my friends or family at points in time because I could handle that, because it made up for it, because I was so much enjoying everything that I was doing, right? Mostly. And of course, very definitely dark periods as well, but if those good days outweigh the bad days, then it’s totally fine. I typically had one rule of thumb. It’s that I would never go into debt more than I would be able to repay in roughly a year.

So I always joke that worst case, I need to start working for someone else and I’ll actually make a salary. [00:21:00] Worst case, I will make a salary that actually can pay off any of the debt that I might or might not make along the way within less than a year. That was my rule of thumb. So never more than that. So I had some personal loans along the way, in sort of different phases of the company but I would be able to cover those easily. I would never have any handcuffs after the fact because that would actually limit me in my career again. So the standard running joke that I had with my wife is that worst case, I would be flipping burgers at McDonald’s, it would make more money.

[laughter]

Remy: And the energy level you mentioned, because I think every founder runs into the problem that sometimes you don’t have enough energy and doesn’t see the big picture anymore, it doesn’t feel– so how do you measure that? Because you mentioned also the majority of the day should be good.

Paul: Yeah.

Remy: What–?

Paul: I think, typically, the other people would describe me as being pretty obsessed.

Remy: Mm-hmm.

Paul: And it can be positive but it’s also often– maybe, it’s not positive. I really get obsessed with the types of problems that I tried to solve, and whether that could be team related, [00:22:00] could be product related, it’s often product related in the early phases of the company. And I get so obsessed, like last week, we had a breakthrough with the stuff that we’re working on. And then I just can’t put it away, that I can’t stop thinking about it. And literally, it’s an obsession. And I know that if I have a phase like that, that I have to recover a bit from it afterwards, so I can sprint really hard on a specific topic or a specific challenge, or trying to sort of like– the fundraising with all the uncertainties and such.

To me personally, despite all the no(s) that I got over the course of my career, actually, in hindsight, I do think I enjoyed most of it. What I didn’t enjoy was the waiting game and not being in control, but everything leading up to it, being in control actually gives me a great sense of– that’s what gives me a lot of energy. If I don’t have that or if I feel like I can’t recover from those types of sprints, so if I go really deep or hard and really almost break myself over the course of, let’s say, a week or two weeks of really intense obsession almost, [00:23:00] if I wouldn’t be able to recover from that, then I know that I either went too deep so I need more time to recover, or I need to actually figure a different modus operandi and do something else.

And it could be sometimes team related and maybe there’s challenges that I solve that I actually don’t enjoy solving, right? I had that actually working for different– as being part of different scaleups. So after the acquisition of Human, I worked for Mapbox for two years, another year for Color Genomics, both companies that raised massive amounts of funding, both hyper growth. So 150 people growing to 400 people in two years.

And I just found myself doing the same thing and working my app, because I was getting obsessed again on their behalf and helping them solve their types of problems, but I didn’t have any control over my rhythm, and I couldn’t sort of chill out for a bit after an intense period I was just constantly running. And that’s the point that was– I think out of the past 13 years, that was the point that actually got close to burnout. I did pretty challenging things up until [00:24:00] that point, but I could easily handle that because I knew when I go deep, I need to recover.

Remy: Yeah.

Paul: And for me, that balance is really important.

Remy: And taking that control, right? Also having that control. Yeah.

Paul: Yeah, and that control gives me some periods of time. I have less of that. But in general, just as a personal, my family’s number one. Also when I work for other companies, on my calendar, family time is blocked. After this, I’ll be going– I’ll be spending time there. I never missed a dinner. I know that I need to exercise. And if those two are taken care of, then whatever is left over is going to be my work and I’m going to better enjoy it.

Paul: And that’s also the recovery time, as you mentioned, time with your family, and sporting?

Paul: Yeah. Yeah, but sometimes, even family time might not be recovering, right? I need to be by myself on my road bike and enjoying the outdoors or something like that.

Remy: Yeah. Yeah. Yeah.

Paul: But in general, just taking good care of yourself, you feel like you no longer can recover from the thing that you’re doing even if it’s not the most fun thing at that point, I think that’s the time to move on.

[00:25:00]

[music]

Remy: The growth phase.

Remy: Now, I read a really good quote from you on the worldwide interwebs: “Make no small plans for they have no power to steer the soul.”

Paul: Yeah, it was actually printed on the wall of Usabilla when we started.

Remy: It’s such a beautiful quote.

Paul: I think it’s attributed to Machiavelli but it’s actually not Machiavelli, so I’m not sure whose original quote it is. Actually, my own personal holding company is called [MNSB 00:25:31]. So it tells you a little bit about what I like to do. I think in general, if you think about what you’re building and how you present it, you just joke that I knew how to pitch. I think that’s it, right? So a lot of it, as an entrepreneur, is about storytelling and helping– trying to see if the excitement that you have about something or a vision that you have about what the world could look like, trying to get that across either to team members, [00:26:00] getting that across to investors, getting that across to customers doesn’t matter as long as you know how to tell that story, and then ideally, also know how to actually make that true.

And that balance is, I think, being able to tell a story helps you better craft it and everything that you have in terms of product, often, people think about the technology that you’re building but a lot of what you’re building in terms of product founder is actually the positioning and trying to build towards– I think Mark Suster and one of the investors, an amazing well-known investor, he published this amazing blog post about investors invest in lines and not in dots, which actually means that there is this storyline that you need to craft. That’s a great metaphor for product building, for team building, sort of everyone needs to buy in on the long term plan as well.

Remy: Now, you lived in San Francisco for a couple of years, and people always say it’s the Valhalla of startups and people who think big. [00:27:00] and here’s to the crazy ones from Steve Jobs. Was that the case? Or the reality a bit– it isn’t?

Paul: I have a little bit of like a love-hate relationship with San Francisco. I feel incredibly lucky that I was able to spend time there. There was this point in my life that I could easily pack up my bags and go there, and actually live there for three years. And I feel incredibly lucky that I did, and mostly, in hindsight. So I could imagine that if I would not have, then ten years later, I would have looked back and… “[expletive], I should have done that at that point in time,” right? So we did and we absolutely enjoyed living in San Francisco. It is indeed a very special place in terms of talent and the types of companies, but I also realized that it’s that type of talent and those types of companies you also have in Europe, and they’re amazing. I don’t think that the talent here is different than what you have in San Francisco. They’re only really good at selling it, right? So I think that’s one.

Remy: Mm-hm.

Paul: The density of talent is, of course, really high [00:28:00] but at the same time, the counter of the American dream is sort of success is a choice. If you’re not successful, too bad for you. And at a personal level, I find it really hard. So I just knew that that was not the place where I want my kids to grow up, and I also didn’t actually feel like actively contributing to a society like that. So going back to Europe in that sense felt to me really going back to Europe. And it made me even more aware of what we have here and how we can benefit from a better equal system for everyone, and that we should protect that and actually try to make it better for everyone, and actually create equal opportunities in a way that’s sort of I’m not the only one who’s lucky to be in a position that I can start a company like Usabilla, or Detail, or Human. We should actually encourage other people to do the same. So getting back to Europe feels very much like coming home in that sense. The question was how do we like San Francisco, right? I very much enjoyed it.

Remy: What made you realize the two differences [00:29:00] being successful, which is your choice and being not successful? What made you realize–?

Paul: Yeah, I was on the lucky side, right? We landed very safely in San Francisco with a great job offer from Mapbox as part of a talent acquisition. And I got a generous option package and I made an obscene salary, at least, in my– up until that point, I never made any salary, so it’s something that’s like a salary, and there was actually someone paying that for multiple months in a row, which was spectacular.

[laughter]

Paul: And I was living there with my family in an apartment, which was like a typical two-bedroom apartment on the ground floor, let’s say, 75 square meters. And I would pay roughly $5,000 in rent.

Remy: Yeah. [laughs]

Paul: And if I were only joking, then we would pay another 500 bucks for the health insurance, which was already covered by the actual company that I worked for, the other half or the other two thirds. And then my son, my second kid was born in San Francisco in the hospital. [00:30:00] And after that, you could still get a bill of $4,000 or $5,000, right? And then our car would get towed over Christmas because we didn’t move it– because of street parking with– okay, stupid. And to pick it up, I had to pay 1,500 bucks. And my kids would go to school and I would have to pay 1,900 a month–

Remy: Daycare.

Paul: –to actually get them in daycare three days a week.

Remy: Yeah.

Paul: So if you add all these things up, that type of stuff is just not sustainable. And I was on the lucky side because I was able to afford most of those things. I wasn’t able to save significantly but I could afford this with my family. But then seeing other people around you trying to live in the same city and being slammed with these types of amounts, that’s not a place where you actually have equal opportunity. And that to me is just– that really damned– indeed, joy about being in San Francisco, and the joy of having the amazing city in the outdoors. And that’s like an American problem in general.

Johan: Indeed.

Paul: And I think if we’re not careful, we would be getting sort– like– [00:31:00] things in Europe.

Remy: Yeah.

Paul: And so without making too much about politics–

Remy: No, no, no. [laughs]

Paul: Yeah.

[music]

Remy: Hey, Paul, with Usabilla, there was a moment in time when you stepped back as a CEO and asked your CTO to take over your position.

Paul: Yeah.

Remy: Can you describe that moment? What was the reason for you to do so? And how did you manage that stepping back as a CEO and to leave the company to somebody else?

Paul: I sometimes still wonder how I managed to do that. It’s sort of half joking. So after about four years, I began to realize that I was really– I was getting in the way of the growth of the company, so we were, at this point, where the product was evolving and something that could actually fit an enterprise sales model. And I just knew that that was the thing that we needed to do. So part of me almost– I saw myself getting in the car and selling these two major corporations initially in the Netherlands and such, and had this almost like reality distortion. I felt like I was building an online [00:32:00] business and transaction and doing scalable credit card transactions online, and suddenly, it turns out, “Hey, this is enterprise sales.”

And after that, through different points in my career, in the end, everything is enterprise sales. I often joke that also to the startups pitching to me now as an investor. But at that point, it was enterprise sales. And I just didn’t see myself doing that in the best possible way. And at the same time, there was this amazing person that– a good friend of mine, Marc who joined me and– it took a little bit of convincing early days to get him to join, but when we raised 750k euros, at that point, it was comfortable enough for him to join. He had a good job working at Ernst & Young. He had some special education that was pretty expensive that he needed to pay off. And we could actually afford him finally, which was great. And he was just really someone whom I trusted deeply, also because we go way back, and we were actually friends and still friends. [00:33:00] So I knew that if this was the type of business that we needed to build, I should just get out of the way.

Remy: Mm-hmm.

Paul: Actually, I don’t think I– maybe, I needed to convince him. It needed a little bit of convincing, I think, but he was actually really eager just to give it another try just like I did later with Human, and sort of, “Okay, if this is what we think we should be doing, then–” So I made sure that he and Roel would also join at the same time, was the commercial director of the company, that they were incentivized, and that a part of my stock would end up in their hands because I was a solo founder until that point. So it’s almost four years after starting the company, we had two new co-founders in the company that were willing to take over. And they just did an amazing spectacular job in growing the company and very– almost, Marc, in that sense, might be a little bit– a part of Marc is almost like the opposite of me. He’s much more patient and I was the restless founder that just kept going at it. And he’s [00:34:00] very pragmatic and he had the patience that we needed at that point to actually build the machine to go after.

And they started with scaling– I helped them scale down the team before I left, so they had, at least, the longest runway that we could squeeze out of the funding that we got. And I just gave them just enough to work towards break even and from that moment on, every single target they just hit year after year, and without any additional funding. When I was there, we raised 750k euros. And we never raised again after that. And that got them to an exit of 80 million to SurveyMonkey, which is so spectacular. Most of the times, when you read about these types of stories, they raised significantly more to actually hit our targets along the way. This was just exactly Marc and Roel. You see their character and the way they execute it towards that, bringing up the patience, being very laser focused on doing the right thing, [00:35:00] and they just hit it out of the park.

Remy: And how did you manage because you stepped away as a CEO owning the majority of the shares at that time? The angels at that time stepped in, you had two friends– sorry, one friend worked in a company and indeed the other guy, sorry, the commercial guy also joined, but how did you feel, and how did you deal, especially, with the situation that you stepped away from the company? It was promising because, indeed, there was funding raised, which you’ve been [crosstalk 00:35:24]–

Paul: Yeah, at that point, I think the company was definitely not looking good. I wouldn’t say that I made a mess but it took us a while to build the product that we wanted to build, and so there were a few things that we tried in the meantime and didn’t really resonate, but we just knew that there might be something there that it felt a little bit like, “Okay, let’s try this for six more months and see if we can actually grow that revenue.” That was a tiny bit of revenue out of a different business line that just needed to grow into enterprise revenue. And at that point, [00:36:00] for me, it was clear that that wasn’t the challenge that I needed to solve with someone else, and that the focus that I have on the pure product side and I’m building something. So there was enough product to sell and “Let’s just sell it,” and there was enough road map ready to actually execute and they should be fine if they were, at least, frugal. But the investors, not all of them agreed, of course.

Remy: No.

Paul: So if you can imagine that they invested a year before, and one and a half years before I left. So I stayed on for about one and a half years. And at that point, I needed to convince them that this was the best thing for the company, and it was also, of course, the best thing for me and not really because I didn’t have any financial– as in, I had savings for three months, that was about it. And it also felt a little bit like giving up, but not really. So I made myself available to Marc and Roel, in this case. I stayed on for two days a week. I actually convinced the investors that Mark was the best person to do this.

And my take on that was that the [00:37:00] only way that Marc could do this was if he would actually be in control, and he should take over the company, and “From this moment on, it’s you and you will be making these decisions. I’ll be at your disposal. I’m going to be here for you if you need anything for me but you tell me what I should be doing and how I can best support you, and I will give my opinion,” and he knows me very well. So he definitely knows that I have opinions and I’ll be giving them regardless, but it was all the decisions that were being made from that moment on were Mark’s decisions.

And I think that within a very short time span, while I was still in the background and I was still working two days or three days a week on the company, and I made myself available also to talk to customers and to go into the field, and so that was also the problems that made to the investors but the investors very quickly saw the impact that Mark was making and how he started building a different type of company and the company like the operational entity that we needed at that point. So he just quickly proved himself. And I think it took the– some of the investors, [00:38:00] one in particular, I think, it was like three-fourth of them were happy and excited about the move.

I still remember one of them was just so incredibly mad with me that he was just literally– he was a London-based investor. And I showed up in the office to explain the plan and how he would be doing this. We had a plan as in there was– And I already did the arena before I walked into that office because I knew this would be a tough one. So all the other investors, I already had the backing of them and I made sure that the decision was already clear but I basically went to London to explain to him. And I think within five minutes, I was outside again.

[laughter]

Paul: And literally, he just threw me back on the street and he told me, “You’re pissing away other people’s money. And this is not how you do this.” And in hindsight, when we’re closing the deal of SurveyMonkey, it turned out to be great for everyone, right? And I think that’s the type of deals that–

Remy: What was he mad about? Did he feel like you were jumping ship?

Paul: Yeah. Yeah, he really felt like I was jumping ship and that I didn’t fulfill my promise as a [00:39:00] founder. And that was really tough. I remember walking out of that office and thinking, “[expletive]! What has just happened here?”

Johan: And I can imagine.

Paul: Yeah?

Johan: I would react the same way, right?

Paul: Yeah.

Johan: If you invest in a company and then the CEO was really the owner, and the face, and like–

Paul: I was the only founder at that point, right? And he didn’t know Marc that well.

Johan: Yeah.

Paul: So in hindsight, I could totally relate. The only thing that he– at that point, he didn’t trust me to make the right decision. And in hindsight, obviously, I made the right decision but at that point, it was, of course, not obvious that that was the right decision. And if that would have gone the other way, then I’m pretty sure that I’ve burned some bridges there but I think it was the right decision. And it turned out to be the right decision but it took a while for– some of the investors were super supportive from the get go and they trusted– because probably, they also experienced Mark as they had some conversations with him and he knew what he was capable of.

Remy: In hindsight, could you have done it differently because Johan says that he would be mad as well? Would it [00:40:00] make a difference if you had said, “Well, I want to pick a new CEO but I’ll be staying on full time”?

Paul: Yeah, I think even if had done that, I’m not sure that’s going to help. And I think that’s one of the things that I just learned out of all of this. You can’t keep everyone happy. And I’m really happy that I didn’t, in hindsight, in particular, but I do remember walking out on the London streets and thinking, “[expletive], what did just happen?”

[laughter]

Paul: “Okay, what should I be doing now? Let’s call the other two investors. Let’s make sure that at least the two others that I prepared this conversation–” because I prepared a conversation with them, “–know that that this is going to happen.” And I called one of the other investors. I would still remember that I was pretty shaken, almost, and sort of, “[expletive], okay, [expletive]. Okay, now, I need to– okay, how am I going to solve this?” And I called the investor and told him, “Do you remember the conversation that we had and how we prepared this? He just kicked me on the street. What do you think we should be doing with– because you brought him in, [00:41:00] right?” And then sort of, “Oh, wait a minute. I think he’s calling now.”

[laughter]

Paul: “Okay. Let him cool down for a bit. We’ll talk later.” “So what–? Can you explain again what happened?” So it was a very surreal situation and it just took some time for him to get around. And that quickly went better as well, but I do think that’s sort of– when I was in the board meetings later, it sometimes felt a little bit awkward because– yeah.

Johan: No, but I think you touched also on a very good topic, right? Because on the one hand, you should have grit, right? And be for the company and do whatever you can to be there, but on the other hand, you also need, especially in a CEO role, and if you run the company, you need some kind of energy and belief also in it. And if you feel that the company is going into a direction that you’re not the right guy anymore, and you have the right guy in the team, then I think you should indeed communicate that to your investor. But in this case, of course, you just raised the– one year before, indeed, some funding. And normally, you have a vetting schedule then, right? So if you will leave, they have to let a few– part of your share go.

Paul: Yeah.

Johan: But you already arranged that with your CTO?

Paul: Well, at that point, you also sort of– I think I’ve been on the other side of that equation myself as well. I think a lot of this is also being pragmatic about what you’re doing next, right? And I built that company for four years and the product that they were executing on at that point was the exact product that we pitched to the investors. and it was definitely in their interest also that I would be, at least, be backing them and supporting them.

Johan: And that’s key because in that situation, I fully agree with you. I mean, it happens. We also had it a few times and I think it’s key that indeed the CEO or the guy who’s leaving also has a good feeling about it, and that he keeps on backing the company, right?

[music]

Remy: The exit phase.

Remy: Well, we talked a lot about Usabilla, which exited in 2019 to SurveyMonkey, but also about Human, which exited in 2016 to Mapbox, which one shall we pick first?

Johan: I think Human. I think–

Remy: Okay.

Johan: –that’s really interesting because, indeed, Human is a company, of course, Paul that you built. From the start [00:43:00] all the way to the exit, you were there leading, et cetera. Can you describe, indeed, how that went especially on the exit side, because it has been a few rough years for you, I recall?

Paul: Yeah, yeah, yeah. Well, we were at a point in time we raised some additional capital. We knew that our funding would be running out in, let’s say, three or four months from now. So this time, we were a little bit sooner in realizing what was going on, and at that point, we knew that we either had to raise capital again, or we’d go for plan B, and we had this idea that we could build a massive company but we’re also very realistic after four years that if it didn’t work out, then we needed to make sure that we made a soft landing somewhere. And that soft landing to me, I had like hard requirements because we had conversations with Apple and Google and others in San Francisco because we were– at that point, a lot of folks knew what we were building and we got applauded for the work that we were doing as a mobile team. And mobile teams at that stage were pretty rare, being like world-class talent in that sense. [00:44:00] So that’s what people perceived us as.

Johan: Especially, App of the Year developers.

Paul: Yeah. And so we were like an awarded app, and I think we were pretty good in what we were doing, at least, on the building side.

Remy: I think this is way too modest, and Paul was being named by everybody. If you want to have a great– I wouldn’t say interface but experience, Paul was on the list, right? So I think that’s your– talk a little bit about us how great.

Johan: And was that, from my perspective, only for iOS or it was also for Android?

Paul: We initially started with iOS and that was playing the Apple Game because they like the exclusivity. And later, we introduced Android and our team actually, the iOS engineers, started building Android as well, which is really insane but we just knew that if we couldn’t make it by ourselves, we should search for an exit.

Remy: Yeah.

Paul: And the exit for us, we started making a list of things that we actually wanted to get out of very early. Our entire team knew exactly what was going on in terms of finance and such. So we had con–

Johan: So you were actively [00:45:00] looking for an exit? Some founders are building a company and a phone call comes?

Remy: Yeah, Paul–

Paul: Well, in this case, we already had a lot of phone calls along the way. And that’s the point that we started taking some of those calls, and so, “Okay–” And for two reasons, one is the types of companies that were reaching out to us or a lot of them were like Series B type companies. So they just raised enough money to be able to afford a small talent acquisition, but those founders are also great founders to talk with, and get advice from, and brainstorm with, and get introductions to their investors. And if they vet you and you have great conversations and they liked the team, that conversation actually goes often two ways because if they introduce you to their investors, it’s actually a way to sort of, “Hey, if we would be buying this company, then at least you already know them.” And the other one for us, it was like looking for an investment and trying to get basically like a proper seed round or a Series A done.

Remy: And Mapbox, not everyone will know, it is an American provider of custom online maps for websites and [00:46:00] applications such as Foursquare Loan Plan and the Financial Times, or even Snapchat. They have a revenue of over 100 million, and they have more than 600 employees. So they’re a big company.

Johan: Raised the 50 million?

Paul: Yeah, they raised them.

Remy: They raised 50, and later, 100. And another, 100, I think, something like that, just astronomous amounts from Softbank and others. when we came in, they just raised the Series B. So they raised 60 million.

Johan: And they called you or did you reach out to them?

Paul: They reached out to us because we started publishing our map data. And it was a way to get attention to our product in terms of usage, and mostly, two types of companies that might be interested in what we’re doing. So it was a little bit showing off.

[laughter]

Paul: We accidentally won a Webby Award with a data visualization about real-time data but they reached out because they saw our data and because we were using their SDK. So we were using their technology to build the maps in Human in our app. So if you’d look at your Human data and your activity data, you would look at Mapbox maps. So we came a little bit like the poster child of their [00:47:00] mobile implementation. And they saw the app and they just really loved the interface. And they were really happy with what we’re doing. And everywhere, if they would talk to Snap, for example, it might have been part of those conversations, they would show Human as one of the reference implementations.

So they saw exactly how much data we were processing because when we implemented their SDK, they would collect a little bit of anonymous data as well. So each time that someone would load the map, they would see it. And that would help them to build better traffic data because that traffic data is based on real-time devices. So the more people are using Mapbox maps, the better your traffic becomes. So there’s a little bit of anonymous data floating through the pipeline. That pipeline that they built was actually the very same that we built. And ours was better. So that was sort of a little bit like the challenge.

We started picking a fight with them initially because when we implemented their technology into our app, suddenly, our better usage that we’ve been fighting for so long on, so I think that’s where the conversation started, [00:48:00] suddenly doubled, as in suddenly, we used double as much battery. And so we optimized for three four years, and suddenly, we saw a spike in battery consumption of the app, which was not okay. And it was not what we expected. So we picked a fight with them. And then we actually helped them improve the implementation and got to know their team, and got really excited about meeting them and hanging out, and at the same time, the founder, Eric, started introducing me to the investors that invested in Mapbox. So we just knew there was like this relation brewing.

At the same time, I knew that I had to create options, so I had conversations with other companies as well. And at that point, we got flown over by Google to meet in Mountain View and have the team cater than a typical thing that happens. We can talk endless about that as well but– I think we’re now allowed to talk about it, but I just didn’t see myself getting on a bus instead of living in San Francisco, and then getting on a bus every single day to work on something that would never be shipped. And at the same time, there was this tiny little company with a [00:49:00] very– most brutal, positive, but very energetic founder who says , “We can do this.”

And so I told him, “There are these three things that I need from you, if we want to make this happen. If we want to make it happen, we need to do it very quickly, because otherwise, I have to shop it around to other companies, and then I’m pretty sure that they might offer more than what you are able to offer in this stage of your company. But if you make an offer that actually works for everyone, then I’ll take it to the team and I’ll take it to the investors. I’m going to make it happen because I would enjoy working with you.” And that was the starting point of conversation.

Two weeks later, we had a term sheet. And I think at that point, when we signed the term sheet, we started working for them even far before the deal was done. So we were already working with the Mapbox team on our team, and we suddenly got paid again. So all the engineers on our team and the entire team just got a proper pay. And I was negotiating the deal terms in the meeting room, and I would walk back to my new team that was reporting to me and talking about the road map for the product while I still had to get [00:50:00] the actual deal done and all the terms on paper.

Remy: You sold the bear before you shoot him?

Paul: Yeah.

[laughter]

Paul: Yeah. So in this case, it was a consultancy agreement, right?

Remy: Okay.

Paul: So it was a very weird situation to be in.

Johan: What was the reason for you to go exclusively with them at that time? Because indeed Google flew you over, you had some interest from Apple, probably also some other companies.

Paul: Yeah.

Johan: Big companies with a lot of budget, with a lot of also money to pay for Human, in this case, and still, you choose to work–

Paul: Yeah, we were talking to two smaller companies. And there was a very particular reason, because I didn’t want to leave anyone behind. My number one rule was, I’m able to talk with you about an acquisition but there’s not a single member on our team that will not make it through, as in you can interview us, you can interview every single person on my team but everyone will be hired, or we’re not coming. And that was because we, as a team, went through, again, very deep dark periods. And we enjoyed that together. And I wasn’t willing to leave anyone behind.

Johan: And given the fact that [00:51:00] it was an acquihire kind of situation that was really key for you too?

Paul: So that was the second check mark on the list. So the first check mark was, I want my team to be taken care of. Second one was, if we’re going to do this, I want my investors to be happy. They put in money and I want to make sure that everyone is, either now or in the very near future, really happy about the deal. So this is what I need to be happy or for them to be happy. And as a founder, I actually distributed my own stock across all the investors. So we made sure that all the investors were taken care of.

Remy: Wow.

Paul: And then at the end of that, that actually gave everyone a decent return, which was made a great deal for everyone. And only at that point, I started negotiating my own terms. And that was for me, as a founder, I basically told them, “Hey, there’s– if you want me to work for you in the next period of time, you have to make me an offer that actually keeps me here. I’m not interested in the past as long as the rest is taken care of, [00:52:00] but just make me a fair offer, and an offer that you think is fair in comparison to the other people on your team, and that you think that works for my skill set.” And they made me an offer, I accepted it without any negotiation. Team offers were on the table. Everyone’s super happy. And we spent– most of the engineers spent four years working with them. I spent about two years, and I was completely done. And most of the other team members, also two or three years of time.

Johan: And at this point, the app is no longer in existence?

Paul: Yeah, I think they killed it about a year ago. Yeah, so–

Johan: Yeah, because I was looking at the website, and it says, “Site unavailable.”

Paul: Yeah. Yeah, it was a very weird moment that someone else pulled the plug on the app after, I think, three years. They kept it running for three years, which was amazing but they should not– it was probably more difficult to pull the plug than to actually keep it running.

Remy: Just keep it running for the peeps that were going to use it.

Paul: Yeah, and at some point, it becomes a little bit like abandonware, right? Initially, in the first two years when I was [00:53:00] there, we would use the app to test the new versions of the maps. So we actually have still quite an audience. I got some people using it. And a lot of people actually loved using the app even while it was not actively being developed, but it was pretty expensive to run because there was quite some backend infrastructure to support. And after a while, no one actually even knew how to get into the infrastructure anymore. So it’s like weirdos still actually– was possible to use the app.

[music]

Johan: Hey, when in time did you realize that the exit was acquihire and not let’s say the exit that you probably would have hoped for from the beginning?

Paul: I think from the very first conversation, I just knew that I had to set up guardrails. And I also didn’t even take an attempt to turn that into something bigger. I just knew that if we’re not going to build our own company, then we should optimize for a great outcome for everyone, and most of all, for how we’re going to spend our next three years. And for me, personally, at that point in my career, I built [00:54:00] two tiny companies, right? I built two small teams. And I never experienced the growth phase of a company, and the same for the other team members, right? So we just knew that– “Let’s make sure that the investors are taken care of, but then for the rest, we’ll be optimizing for our careers, and we’re going to look for experience that actually helps us do this again.”

And that’s what we did. So we spent two years at Mapbox. We spent another year at Color. And the same goes for the other team. And now, the CTO of Human and the first engineer are the founding team of Detail again. So I think that’s optimizing for– in their case also, being an engineer working for an American, like a San Francisco-based company, getting good stock options. So it was a very good job, right? Especially, if you live in Canada or if you live in Sweden and you make an American salary.

Remy: What did you learn about this process? Because I think the exit of Usabilla was layered. There was your first official exit, I guess.

Paul: Yeah. So even it was the first time that I actually experienced all the paperwork and–

Johan: Yeah.

[00:55:00]

Paul: —the data room, and– yeah.

Johan: What surprised you about the process, because we often hear that first-time founders who exit the company are surprised about the huge amounts of paperwork or huge due diligence that’s going on, or that there were surprises that they didn’t expect to happen?

Paul: Yeah, I think a lot of it boils down to, typically, the other person in that room has a lot of other people to cater to as well, right? And especially, if you think about a talent acquisition or an acquihire or stuff like that, a lot of it boils down to speed and board votes because someone else is actually needs to sign off on the deal. You need to understand their incentives, and you need to understand why this company is actually even interested in working with you. I think in most cases, you don’t want to push your luck too much. So it’s this very interesting dance where you’re negotiating with your future colleagues. It’s a bit the same with investors, actually, but you should also just push, right?

Johan: Is it different when it–? Are your future [00:56:00] colleagues then, when you know you’re selling the company and you’ll leave anyway, you guess this differently?

Paul: Yeah, I’ve never experienced, in that sense, at arm’s length, selling the technology, but in this case, to me personally, was understanding how you can make them win as well. And you just know that they’re reported– often, it sounds like typically, a founder also reports to others, right? So with me as a founder, I now have a group of investors, and of course, I do what I think is the right thing to do. But if I would come in and tell them that I’m going to buy my first company because the team is spectacular, then I make sure that, actually, that becomes an easier sell.

Remy: Yeah.

Paul: And I think that was one. I think the other thing that’s really challenging in a process like this is that you have so many constraints to work with, and then mostly, people to take care of. And for me personally, this was really about the people, and especially because it’s the size of it, right? So a transaction like Usabilla is a very financial transaction, right? And still there– I knew because I experienced as a founder what it [00:57:00] takes to sell your company. I think what people do not understand is how much effort it takes. And the use of– the Human exit was easy, right? It was a piece of paper, maybe 150 pages but not complicated.

A lot of work for a small team but still, if you compare that to major acquisition and shopping a deal around, and then getting that done while you’re building your business and while you do not want to miss any single target, because you’re in the process of selling. I also want to have the optionality to actually pull out of it with all kinds of clauses that might prevent you from doing so. It’s just a different ball game. So every single time that I now see an announcement of an acquisition, then I think, “Wow! Deep respect for the people that pulled that off because it’s really hard.”

And even the smallest one is already hard but you can imagine that exponentially increases when the size of that deal increases. So I think that I have deep– insane respect, for example, Marc and Roel being able to pull it off for Usabilla [00:58:00] because I know I sort of won this time, I’ve witnessed it, right? I tried to support them as good as I could and being on their side as supporting them as a friend and a board member, but even a talent acquisition is really hard. And I still remember when people having an opinion about that after we sold Human, right? They had an opinion about us selling out or yet another Dutch startup selling out to–

Remy: Yeah, I recall also the president–

Paul: –so at that time–

Remy: [expletive], sorry. No, just kidding. [laughs]

Paul: Well, I think that’s nearly if you make those types of statements, first of all, most people that make a statement like that, definitely not built something themselves, and they never were in that position. And if they were, then it’s even worse, probably. But if you make a statement like that, it just shows how little you understand what went into it to actually get to that point. And not only the actual acquisition, but also everything leading up to that.

So if a team, after four years of trying, actually sells their company, I celebrate it. I’m happy for them that they made [00:59:00] whatever the outcome was, whether it was a fire sale that didn’t get anyone any return, I wouldn’t care. Also as an investor, by the way, I would hope that they land somewhere safely, that they enjoyed their time, that they get a lot of new insights. And most of all, I hope that on a personal level, they don’t have too much of a scar. And it’s up to other people to get those.

Remy: Yeah. In a bit, we’ll hear the guesstimation from Peak on how much–

Paul: Let’s see how far they’re off?

Remy: –yeah, how much Human was sold to Mapbox, our guesstimation. But I am wondering, how did you know what to ask for? How do you decide a reasonable price where everyone was happy?

Paul: I think in our case, it was like a fire sale. So there’s no reasonable price. There’s something that we need. Just like I explained, there was something that I needed. It was the investment by the investors.

Johan: Indeed.

Paul: And I wanted to make sure that everyone had a return. That’s it.

Remy: Yeah.

Johan: We hear this a lot actually.

Remy: Mm-hmm.

Johan: Funnily enough.

Paul: Yeah.

Johan: We hear that also with Gero Decker.

Remy: Mm-hmm.

Paul: Yeah.

Johan: He sold his company for, I think 1.2 million.

Paul: Million.

Johan: Signavio to SAP. We asked him the same question. He said, “Well, as founders, we would have been happy with 5 million but we wanted to make a return for our investors.

Paul: Yeah, and I think if you– in our case, there was no revenue in the business. There was a nice growth line but nothing really severe. The technology was interesting but not unique to them. Literally, for us, at that point, that was a soft landing. And making a soft landing with a company that you would actually appreciate working with, and that also that we were bullish on in long terms, and that we were excited about not just as an employee to participate in but also for our investors that they would be excited about, “Hey, I traded this stock in this tiny company that was bankrupt, technically, for something that might become something,” right? And we try to make our investors, at least, get as excited about Mapbox as we were. I think a big part of them being excited was us joining [01:01:00] them, and being happy about joining them. So I think that in the end was the most important outcome.

Johan: And did they convert in stock, or did they also–? If I may ask.

Paul: I think I’m allowed to talk about it now but yeah, so we initially had a deal on paper, which was like 50/50. So some stock, some cash.

Remy: Because you’re not a big fan of stock swaps, are you, Johan?

Johan: No, depending, depending.

Remy: Okay.

Paul: Sort of like a testing one. So we actually had a term. We actually had, initially, a first term sheet on table, and I was like, “Okay, 50/50,” or something like that. And I was looking at it. I thought, “[expletive], this is actually less than I was hoping because of the investors,” but “can you make it all stock?” was my response. And my response was, “Can you make it all stock, same amount?” Because it might, on paper, be not a return yet but I’m really long on the future of the company. So within a year or two from now, we’ll be looking back at this as a success.

And so I actually pushed for stock over cash because I couldn’t care about cash. And my take on that was I can give my investors a partial return now, then still feel like a failure because it would be, let’s say, 20 or– I’m not sure about the exact amounts, but let’s say, you would get 30% of your investment back. So if someone invested a 50k check and they suddenly get like 15k back, it’s not going to make anyone really excited or happy. So even if you think you need that, my push as a founder was, “Can you please give me an all-stock deal instead of what you offered me here, because this way, at least, we can make the win,” and because I’ve long been on the team.

So in hindsight, I’m glad that we did because, what is it? Six years later or seven years later, that stock is great, right? And it also made everyone excited in what we were doing next. So every now and then, I would get an update. And one of the investors said, “Hey, how are things at Mapbox? What are you working on? Okay, tell me a bit more.” And suddenly, it still felt a little bit like I was an entrepreneur as well because I had these investors that suddenly became investors in Mapbox. And I took my investors [01:03:00] into the company while I was investing in Mapbox as well. So I actually am not sure if everyone was happy with it but for me personally, that was the best outcome.

Remy: Do you think it helped that you also had stock in Usabilla, that you’re also a shareholder there?

Paul: No, because at that point, Usabilla was still pretty much on paper, was all promised, right?

Remy: Okay.

Paul: So for me financially, it was definitely not the thing that– financially, the biggest driver was the fact that I actually got a salary, right? It was the first time that I had salary. And I think technically, on paper, part of that, either stock or the cash that they offered, would have been mine, right? But it didn’t feel like that because I took investors’ money, and I was just really adamant on giving them a return. And because I made them a promise, I worked my ass off to make it happen, in the case of Human, we almost gave them like four tickets for the price of one, right? Because we spent four years. About one year of runway, we spread out over four years and we kept going at it and kept [01:04:00] trying.

So I think the end was, I need to be taken care of and I need to be able to afford living in San Francisco with my family. And I’m going to do this again regardless of the outcome, regardless if the stock of Mapbox will be valuable or not, we’ll see in a few years from now. I got a salary, so that I can pay my living in San Francisco. And that’s the best outcome for now. And in the end, I just knew that, maybe, I was signing up for a year, maybe, I was signing up for six months. I told my wife that we’d be moving to San Francisco for six months, maybe, 12 months, maybe, two years. We’ll stay as long as it’s fun.

Remy: How did she react when you discussed that you were getting a salary, and you were going to be able to pay rent finally?

Paul: Our lowest point in time for us as a family was the big sacrifice because Evie, at that point, my girlfriend, and now wife, she had been following me through my crazy adventures, or at least, following my crazy– definitely, not following me, [01:05:00] far from it. She had been following these crazy adventures for a while. And she had a great job as well that actually paid the bills, instead of– in contrast to me, but she suddenly had to drop everything and move to San Francisco with me. And in that case, long-lived the American visa system. The visa that I got actually didn’t allow her to work for the first, let’s say, two years almost. So that’s a big decision to make if you’re building your own career and if you’re doing things. But at the same time, she understood that this was a unique opportunity for me in this case, and also, a little bit for us. At least, in the end, it turned out to be for us but initially, it was for me.

So we were lucky enough to be able to combine that with getting our second kid and we were hoping to make that timing work, and it worked out. And then after two years, she was able to work in San Francisco as well but it took two years to wait for that. And that’s tough, right? So any monetary outcome should not– I think that’s– [01:06:00] it was not worth it, and was the experience for us to be able to work in San Francisco, both of us. And she worked at Uber, in the recruiting team, and did all kinds of cool stuff. And she went to a course at Stanford. So she also came back to the Netherlands with experience that was worthwhile. And I think that’s the most important thing.

[music]

Remy: Hey, Paul, with Usabilla, of course, it’s a different story, right? Because you were in those days, not daily active anymore within the company?

Paul: Yeah.

Remy: You had Marc as the CEO there. You really left all the control to him and had no mechanisms in place, et cetera. How did that happen? How did that exit occur? Can you–?

Paul: That’s a very different process we had. I was part of the board, so I, at least, could see them execute like crazy for a long while. And every year, there was a yearly shareholders’ meeting where all these shareholders would be present, and they would be presenting their plans and their budgets and discuss some of [01:07:00] the targets. And every year, they would just hit it out of the park. And at some point in time, I remember that we had conversations, “Hey, I already actually make this also work on mobile. So web was dominant and mobile came up. Is this going to be a risk making that transition to mobile, and this is going to be a risk that actually would slow us down?”

And then next year, we’d have a conversation, “Okay, we’re now at XXXX ARR, this is going to be very difficult to push through. It is because you need a very different organization to get there, and we’re not going to raise additional capital. So will we be able to do this on cash flow?” Right? And they hit it out of the park again. We had a few of those years where we had sort of, “Okay, is this going to be a good moment to have these types of conversations.” And then somewhere along the way, we decided, “Okay, this is a good moment to actually start exploring this.” And we worked with an investment banker in this case. So they started making their long list short list. And so it was a very much like a driven process by an external party that helped build a market around these [01:08:00] shares.

Remy: Mm-hmm.

Paul: But that entire cycle took about a year, right?

Remy: A year from decision making?

Paul: From very first conversations selecting the bankers, and then going with the bankers, they would start making their deck. And now with the deck, they would start shopping for a long list. And then the first offers came in, and we started comparing the offers, and then that was actually term sheet being signed, still due diligence and was a public company. So there was all kinds of stuff that needed to happen before. So I think that the entire cycle was about a year. And in that year, I was living in San Francisco and I was having my job at Color Genomics. I would check in behind my desk while at the same time, getting all these messages and helping review the decks and such. It was a very surreal period for me, being at arm’s length because they did all the work.

Remy: Mm-hmm. Were they still based here in the Netherlands?

Paul: Yeah. Yeah.

Johan: Yeah, still.

Paul: So I’d had about, at that point, 120 or 150 people in the office.

Remy: Wow.

Paul: And it’s just amazing.

Remy: You were like their San Francisco liaison, almost.

Paul: Well, not really. I was not involved in the day to day.

Remy: Yeah.

Paul: But the only thing that I knew is how much effort it would take, and I just tried to do my very best to support Marc and the other team when I was a board member.

Remy: But you never did any meetings because you were there anyway?

Paul: No, and I was not–

Remy: But you’re a board member, you probably had board meetings once every month, quarter?

Paul: Yeah, every month at that point–

Remy: Yeah.

Paul: –and making sure that we were laser sharp in the numbers. So that was a really fun process to witness at the same time, of course, saw the impact on how tough it is to do this. So I was sitting there as a founder, mostly, as another founder is in– sort of the founder of Usabilla per se. I was sitting there as a fellow founder to Marc and Roel and trying to support them in the best possible way, so they wouldn’t lose their sanity, and they just did spectacular. And they probably didn’t need my support in any way but it was very interesting to be part of it, but at the same time, not being part of it, as in I didn’t have any control, I didn’t have any say. Of course, technically on paper, yes, but it was up to them to make this happen.

Remy: What’s it like for you because you started this company in university. You made these trips to Amsterdam to meet with the investors like Johan here as a very, very young guy.

Paul: Yeah.

Remy: And [01:10:00] years later, here you are on these board calls to sell the company for this huge amount of money. What was it like personally for you, because–?

Paul: I have a very weird– there are these years, let’s say, eight years that there’s no real value to anything that you do, right? There is, of course, you see valuations but we didn’t raise any capital. So there was also not a formal point in time there was a valuation being put on the company.

Remy: It’s only the growth in your ARR, right?

Paul: Yeah, you see your ARR. And now, you put that in a spreadsheet somewhere online. You’d think, “Whoa, really? Is that really the amount that it would be worth now? Wow, that would be–” But still, it’s paper. You own some stock and it’s not publicly traded, so there’s no one– you can’t sell it– so it was a very surreal period until that very moment that the first term sheets came in. I was like, “Whoa! Whoa, if this is going to–” and not if it’s still– “Well, there’s definitely not a deal yet. Let’s just chill down.” But that was like a life-changing [01:11:00] sum of money for me personally, that I was suddenly looking at these amounts on paper and thinking, “[expletive], if this is–” And I was still doing my– I was working my ass off at Color Genomics and helping them instead of– I had some, let’s say, three months or four months of San Francisco savings, and depending on–

Remy: Yeah.

Paul: In the Netherlands, it would have been a year maybe, but that was what I personally had at that point. And now, you see these amounts and everything can still go wrong. And it’s still this very lengthy process to get to the finish line. And then I remember the very day that the deal was actually signed. I need to get a paper signature. And then so you get this weird dance in the Netherlands with notaries. And you need to print it, sign it, scan it.

Remy: Mm-hmm.

Paul: Okay, sure. I can do that. Where the [expletive] do I get a printer at 6 AM in the morning, because it was closing in Dutch time. And I was in San Francisco at that point. So I was rushing. So that was a really [expletive] day where I had to rush to a DHL– sort of, coffee shop and try [01:12:00] to find a printer, I couldn’t find it, and finally, two hours later, I had a printed piece of paper. I signed the deal, a very weird anti-climax standing in the FedEx store with this piece of paper that literally changed my financial situation insanely. And then I went to the office and I checked in, and I was sitting behind my desk. I was working on the product team at Color. And I was sitting there and thought, “Okay, I’m sitting here now but actually, I don’t necessary have to work, do I? That’s okay.”

Remy: “I needed to quit now”?

Paul: “I think I can do it, whatever. So what would I be doing? Would I be traveling for a little bit, or–?” And I kept working at Color and kept having an amazing time helping them and scaling them. And that made me happy and–

Remy: Did they know about the exit?

Paul: No, no one knew. That’s the–

Johan: Oh, really?

Remy: Oh, so you didn’t tell anybody? Also, immediate.

Paul: I actually had a few people around me that I sort of– like the– I know the CEO pretty well. And so there’s the CEOs working a lot, so then at that point, I thought, “Okay, let me just tell her,” the CEO, in this case, Caroline. [01:13:00] And I had this conversation, “So this company that I started, remember that I also started another company before I joined?” “The second one or the first one?” So, “Yeah, well, it got acquired for $80 million.” “Oh, did you own some stock?” “Yes, I still own some stock.” It’s a very weird, surreal situation to be. And that literally, at that point, didn’t instantly change my life. Of course, my financial situation instantly changed, and then a day later, the money is being wired into your bank account. And that’s the very moment that I started investing.

Remy: Do you remember refreshing your bank account that day?

Paul: No. I said I was smart enough to set up a push notification because these types– I never had experienced any wire like that, so I was like, “Should I call my bank before it’s going to happen or it’s sort of– as in–?”

Johan: Yeah, indeed.

Paul: Yeah, yeah, yeah, as in–

Remy: “Should I announce that there’s more amount flowing into my bank account?”

Paul: As in [crosstalk 01:13:50]. It’s very surreal, weird–

Remy: Okay. So you get the push notification. And then maybe, it’s sort of a dip, I can imagine, like, “Wow! [01:14:00] This happened.” And then nothing changed, basically.

Paul: Yeah, it’s like almost– about, I think an hour–

Remy: You still have to go to the groceries and–

Paul: I think other fellow startup founders experience– at least, I always have this anti-climax–

Remy: Yeah.

Paul: —also when we closed the deal for– when we raised capital for Detail, you start pitching. And so there’s a moment building up and the excitement, then the waiting game, and then excitement. Then you sign it, and you think, “Hmm. Okay, let’s go on.”

Remy: [laughs] Yeah.

Paul: And it was a bit the same here. And so nothing changed much as I kept working for Color Genomics for a while. And I told them, “I think it’s better if I worked two days less.” So I took some more time with my family and traveled a little bit. And then before I knew, I started a new company again. So in the end, it doesn’t– a lot has changed in that sense. I feel incredibly lucky that I can make different decisions now, and also starting as an entrepreneur again, I knew when that happened that I could suddenly build a new company again. And regardless of where I would be and regardless of my family’s situation, I just knew that, at least, that– the [expletive] money [01:15:00] to actually do something again without my family feeling any impact of my decisions. And I very much enjoyed that feeling. I mostly tried to pay that forward in the best possible way.

Remy: You didn’t try to get your wife to pay for the mortgage again.

Paul: No. She now forces me to pay. [laughter]

Remy: Well, that’s right.

Paul: I think I still have seven or eight years to make up for ourselves.

Remy: Yeah. [laughs] The thing I was wondering, because you started a new company, detail.co, which is truly amazing. I can’t wait to try it out. It looks so cool on the website, detail.co, I highly encourage everyone to check it out. But from the moment of starting, I believe, or very early on, you raised $2 million and an additional $5 million somewhat later. You, obviously, made two good exits yourself. What was the reason for you to raise external capital anyway?

Paul: A super good question. Initially, when I started out with Detail, I thought, “Let’s do it by myself and build the first traction,” [01:16:00] but I actually realized that the investors along the way for both Usabilla and Human have been so key to the success of the company in various ways, not because of the typical thing that the investors say, “We’re a value-add.” I don’t think they’re actually a value-add but the fact that they were there and that we were explaining ourselves to them, and that we were sort of building this and–

Remy: “Show up in your story, problem-solving.”

Paul: Yeah, and then sort shooting holes in some of the parts of our story, whether they’re at the development makes–

Remy: It’s sort of an accountability partner as well.

Paul: I think accountability combination, which, along the way, there were moments in time that each one of them became really helpful. And the person that I explained that kicked me out on the street in London, he has a very traditional private equity background. Oh, he was for sure incredibly valuable when we closed that deal, right? He was the shark on our side of the table this time. And we didn’t have any experience, or at least, they didn’t have any experience in doing those types of things. So suddenly, his experience was incredibly valuable. Was he very valuable when I [01:17:00] had to present my marketing plans in the second or the third year? Not really, right? So along the way, each of them turned out to be really helpful in various tiny little parts of the journey. And that’s what I was looking for when I started Details. I wanted to partner up with the right people.

And I had the opportunity to sort of– for me personally, it’s less about the financial outcome of what I’m doing. It’s much more about the ride and being able to do this together with an amazing group of people that is willing to support me again, that makes it for me much better. There’s an amazing group of people that is willing to put money in what we’re doing. Second one is that it also separates the financial risk from my time. So my financial risk is, basically, there’s my time, and my effort, and my energy, and my obsession of building something magical. That’s what I invest. And I do that with an intensity that I think warrants a good investment in the company.

So if you want to be part of that, and you trust [01:18:00] me at a personal level to execute, it’s great to have you aboard. And you can get aboard by taking on the financial risk of the endeavor. And that to me is like a– that worked very well for Usabilla. And we tried to do that for Human and Usabilla early days, didn’t really, at a different scale, help. But now, suddenly, because I did that, I actually have like a war chest that enables me to execute a company in a way that I, otherwise, would not even nearly be able to do so. I would not be able to bankroll the organization that I’m building now.

Remy: Because you want talented people, of course.

Paul: And I’m getting just even more impatient this time. It’s really about building an engine as quickly as we can. And I know what to do. I have the experience to sort of– I’ve witnessed what happened at Mapbox, in Color, and building those teams, and I did the same, early days, building the early foundation of Usabilla and the early foundation of Human. Now, I know how to do that, right? So a big part of what I’m [01:19:00] doing, I know how to do. So I can skip some steps. And some steps, you can’t skip but raising that capital actually enables me to go brute force. We we’re already like a team of 16, and we started– we have like– a big foundation of the product is being laid. My goal as a founder right now is to outperform most of the others, right? And not by a little bit, but I need to be 10 times better. And that’s capital that I raised. So the type of company that we’re building is very different this time.

Remy: But what are the steps that you are skipping now? You mentioned it.

Paul: Yeah, simple things like setting up your paperwork and such, just a very simple example, knowing how to structure your captive or getting the right folks in, what lawyers to work with, how do you build up a great hiring pipeline, and actually getting the right people in. I no longer do my taxes on Saturday evening. The evening before, I need to do them. There’s something like a functional organization from day one, which enables us [01:20:00] as a team to focus on the things that actually make the biggest impact. And that’s in our case, right now, building product and positioning ourselves.

Remy: Mm-hmm.

Paul: Then at the same time, product market fit and building the right thing, and actually, validating, that’s still really complicated, of course. So some of the hard things are still equally hard, as in building a great product that a lot of people actually enjoy using and are willing to pay for. But some of the hard things that are much more baseline, getting the guard rails up and running, is much easier now. And the same goes for hiring talents and stuff. I underestimated how much easier that is this time around, and also, it’s easier if you raise capital, right? So then I’m able to pay world-class talents. And I’m able to actually pitch them on the idea and get them excited because of the track record that you have, and so you suddenly have an unfair advantage in some ways.

Remy: Yeah. Very practical question, do you take a salary now?

Paul: Yeah.

Remy: Yeah. [laughs]

Paul: I do, yeah, yeah. And that’s also– I’m taking like a– relatively to the others [01:21:00] on the team, definitely not one of the other– but we do take like a– and especially for the other founders on the team, in particular. And I really find it important that they do. So of the founders, I’m not taking the highest salary, but I do take a salary. Yeah. Yeah.

Remy: Yeah, which is good. Yeah.

Paul: Yeah.

Johan: Two more questions before we go to the valuation.

Paul: Mm-hmm.

Johan: How did you celebrate the closing and what did you buy for yourself as a present?

[laughter]

Paul: How did I celebrate the closing of–?

Remy: The closings, we have to say.

Paul: Yeah, so the closing of Human, I celebrated with a trip to Hawaii with my family that actually turned sour because my daughter had chickenpox.

Remy: Oh.

Johan: Hmm.

Paul: So we had to cancel the trip. So that was too bad. And the closing of Usabilla, I actually celebrated– so if you have this picture, you’re sort of, “Oh, now, I’m going to buy [XRY 01:21:49].” What I actually bought was a road bike. I’m an avid cyclist, so– and I didn’t even buy the most crazy expensive road bike, but I went to the store and I just picked up the road bike that I [01:22:00] liked, and that I wanted, and that would make me feel I would go fast.

Remy: +Right, right.

Paul: I bought a nice road bike but not like a crazy road bike. And that was my celebration, yeah.

Remy: It wasn’t the Urban Arrow you’re using these days?

Paul: No, I celebrated with that one later.

[laughter]

Johan: What is the–? Because, Paul, I think tremendous track record, right? And really inspiring to hear your story, what is the biggest advice would have now for founders who are now running a company, and it’s not they run into the phase it’s not easy, right? You have difficulties finding users attracting users, attracting funding, hard to attract people, et cetera, what’s the biggest general advice that you have for founders in these rough times?

Paul: I would try not to tie my identity to my company. And I think there is this common threat, especially, for early founders that your identity grows with your company, and you become your company, right? To the outside world, you’re Mrs. (fill in the name) [01:23:00] or Mr. (fill in the name of the company). And I think whatever happens to that company, as long as you pour in your energy and you try to do your very best, that’s the best potential outcome. In the end, I also tell it to the to the team members now at Detail, “This is just a job,” right?

Remy: Mm-hmm.

Paul: And instead of everyone who makes it feel like it’s more than, it’s just a [expletive] job, there are so many other things in your life that are so much more important, but it is the most amazing job that you can have, right? And to me personally, that excites me, and that’s the reason why I’m doing this. People ask me why on earth we should be doing this again if it’s so painful. Well, because actually, I think I enjoy that. And I enjoy doing this but I do think that I’m much more than the company that I’m building.

Remy: Mm-hmm.

Paul: And so it’s much easier now that you say, “Hey, you have an impressive track record.” Well, when I started Usabilla, I didn’t have that, right? I was just this university student that just had a crazy idea. [01:24:00] So it’s much easier in your second or your third company to disconnect. I have much more to lean on in terms of my background but I do think for every single founder, also, first time founders who are starting their company, just feel comfortable that if you do your best and you don’t– it’s not the outcome of the company that’s the most important. It’s how you actually build it and how you treat people along the way. That’s the thing that you’re building up over time and could go amazing. It could also go the exact opposite. And either way, we’ll be fine, right?

Remy: Mm-hmm.

Paul: I think that’s the most important thing. Then you have people to lean on again and you have other amazing colleagues that you treated well, are willing to work with you again. And there are suppliers that want you to win. So I think that’s the type of– just in the end, everything will be fine.

[music]

Remy: The valuation.

Colleague from Peak: All right. Now, it’s time for the valuation or what I like to call “the good stuff.” This is a hard [01:25:00] one to assess. So I approached it from Mapbox, the acquirer’s eyes. What value did Human hold for them? Recall that Mapbox provides mapping SDKs, so companies can integrate map views in their apps and on their websites servicing clients like Foursquare, Evernote, Instacart, Pinterest, GitHub, and more. At the time, Mapbox had raised over $60 million in total, mostly, from a $52 million Series B in 2015, the year before. A year after acquiring Human in 2017, they would raise a major $165 million.

For scope, in 2016, Human was used by over 1 million people and had tracked over 1.5 billion activities to date. In the press release, Mapbox emphasized the strong network effects of their SDK, their product. So more developers use it, meaning the maps get better, which attract even more developers to it. And so the flywheel spins. Keep this in mind, because it means that to Mapbox, Human held huge strategic value. [01:26:00] Acquiring Human enabled Mapbox to supercharge their offering and to expand their map SDK into mobile, as well as offer real-time updating map data. The acquisition was also an acquihire as the team that built the success joined Mapbox, thus it follows that Mapbox would pay huge multiples for Human because of the future value it would bring.

Mobile and real-time mapping are game changers and would fan the fire of the SDK network effects. Thus I looked to multiples and valuation ranges for SaaS companies in 2016. Research by the infamous Tomasz Tunguz reports that the average Series A valuation was $15 million. And the average Series B valuation was 50 million back in 2016. I believe that Mapbox would pay around Series B-ish. So 40 to 50 million euros for Human due to its clear strategic value and contribution to Mapbox’s compounding network effects.

Remy: So Paul, [01:27:00] is this guesstimation higher, lower, or exactly right?

Paul: It’s much higher than it was. Yeah, yeah, it was a very typical soft landing. So in this case, it was very, very far off. I think she was right about the strategic value. There was a lot of strategic value in, I think, mostly the way we solve problems and not in the actual product that we’re– so the product was, in many ways, almost like a handicap because it wasn’t a nice-to-have, initially, to test their SDKs but they couldn’t really use the product in any way. It was a distraction from their core business. And they actually didn’t want to touch any consumer type companies. They also were serving customers that were sort– as Human, right? So we had a little bit of crisis, communication to do to some of those customers as well. In the end, what we got out of the deal was very much like the investment that the investors put in. And like I said before, it was like an all-star deal. So in hindsight, I think they have to get a very, very high [01:28:00] multiple–

Remy: To reassess or–

Paul: –on their current valuations to actually reach those types of amounts. So who knows, right? You never know if they’d become a trillion-dollar company, they might hit it. But I think most of all, our best outcome was that the investors were at that point, satisfied and happy. And in hindsight, I think it might or might not be the returns of an index fund, if they would have invested their money in an index fund. But that’s still to be seen because they’re still private and they’re not publicly traded. So the actual value of the shares is still in the open.

Remy: Thank you. Thank you for your time today. Ladies and gentlemen, thank you so much for listening to this episode of The Big Exit Show. And we hope you enjoyed today’s program. And if you did, please subscribe to our show at Spotify or your favorite podcast platform. And if you have any feedback, please send us a message at [email protected] My name is Remy Gieling.

Johan: I’m Johan van Mil.

Remy: Thanks again for listening. And we hope you join us at the next episode.