We all know that the Internet is loaded with information, but so much of it isn’t structured in a way that can be queried. Well, that’s not the case anymore because of Thinknum, which crawls the Internet for “alternative” data that tech company operators and investors can use to get ahead.
Thinknum co-founder and CEO Gregory Ugwi joined the latest episode of the Midstage Startup Momentum Podcast with Roland Siebelink to talk about how he came up with this unique idea, his long-term plans to be a leader in this space, and everything in between.
Roland Siebelink: Hello and welcome to the Midsize Startup Momentum Podcast. My name is Roland Siebelink and I'm an ally and coach and advisor to many of the fastest-growing startups around the world here with our fellow coaches at the Midstage Institute. Today, I am so proud to have in our studio, the co-founder and CEO of Thinknum, Gregory Ugwi. Hello, Gregory. How are you?
Gregory Ugwi: Very well, Roland. Thank you for having me. I'm very excited to be.
Roland Siebelink: No, the excitement is all on our side. It's been hard to get you scheduled. We're recording this on a Friday afternoon and you've already told me what you're going to do afterward. But first let's focus on business. Let's talk about what does Thinknum do, who do you serve and what difference are you making for them in the world?
Gregory Ugwi: What Thinknum does is we crawl the web for data. We then structure that information into a database that can be queried. The core insights that led us to build Thinknum is economic activity is going online. We shop online, we get loans online, we list jobs online, we review our employers online. All of this economic information, humans have never had access to it. What we do is we crawl it, we fit it into a database, and we provide that to investors and operators at tech companies. And they use this data for query needs. They can tell where people are hiring, which companies are growing fast so they can invest in them. That is the value we provide to our users.
Roland Siebelink: Excellent. You're basically taking the data we all leave behind as our little breadcrumbs everywhere while using the web and the Internet and translating that into detailed economic records per sector, per vertical, anything that investors might be interested in exploring more. Very cool. I have to ask you, Gregory, how did you get to this idea? What was the background there and how did it all get started?
Gregory Ugwi: I was working as a strat at the bank, at Goldman Sachs. And when you're a strat, you're a geek or a nerd and you sit down with sales and traders - and they are the alpha women and alpha men - you build tools to help them decide which bonds they want to invest in or which stocks they want to invest in.
Roland Siebelink: Gregory, for those that haven't been at Goldman Sachs, what's a strat?
Gregory Ugwi: Exactly. That is what I was describing. A strat is this nerd and you are sitting down with sales or traders and you're supporting them, writing code or building models.
Roland Siebelink: Is it short for a strategy analyst?
Gregory Ugwi: It's short for strategist. Ironically, we are not allowed to call ourselves strategists anymore because there was a different group that started calling themselves strategists.
Roland Siebelink: That's what I wanted to understand. Why are you using such a short term? But I see it's all politically motivated.
Gregory Ugwi: When we want to feel good about ourselves, we used to say we are like Q in James Bond. Anyway, that's what I was doing. And essentially, what I needed to do my job well was data from the web. I needed to understand how a home price is changing in Florida, in Arizona, in the sunny states, because this was during 2009, the housing crisis had just happened. And I actually got yelled at by my friend who was my boss because we're not supposed to be crawling the web for compliance reasons. But I didn't know at that time. Then my co-founder, Justin, was running into the same problem in a hedge fund. He didn't want to write the code. We started thinking about it and we said, "We have this problem. We feel it every day. More and more people are going to have this problem and are going to need this data to be structured and analyzable. If you can do that once and sell it to many people, you can add value to the world." That is what we set out to do.
Roland Siebelink: Excellent. Very cool. In the end, life as a founder was more attractive than life as a strat Goldman Sachs, was it?
Gregory Ugwi: That is correct. I will say life as a strat at Goldman was maybe the most comfortable I've been. But I felt this itch to be a founder. More importantly, I had a specific problem I wanted to solve. It was less that I wanted to be a founder and more that I wanted to be the one that solved this problem. Sometimes I wonder if Goldman had allowed me to work on this problem in Goldman, would I have just stayed and done that. I don't know. But the main thing is I wanted to solve this specific problem.
Roland Siebelink: Yeah. That's such a great pattern when startups are based on the niche that the entrepreneur themselves is feeling and that they just want to solve in the world. Is the target group for Thinknum other strats like you used to be?
Gregory Ugwi: That's how we started. We started by targeting other strats. Now we've grown. For example, if you are doing people analytics in any large tech company - nowadays, you don't just publish your jobs, you need to understand where your competitor is hiring. What kinds of roles are they hiring? In the market, how long does it take to fill a certain job? You need all this data. And the only way to get it is to systematically crawl job listings from all companies. And we are one of the only people that do this. For example, we target people analytics in various companies. We target hedge funds. They want to know which companies are growing fast, which products are having great reviews. Some of the biggest VCs are our clients because they need to know where to invest in, which startups have social signals that mean that they might break out. We think of a matrix and we think of all the data sets in the world on one side. On the other side, we think of all the people that could need the data. And we make that matrix as dense as possible. We crawl it once, we do a great job, and we sell it to everybody that needs it.
Roland Siebelink: Okay. That means your business model is really dependent on a strong go-to market as well, right?
Gregory Ugwi: That is correct. That is, I would say, our biggest challenge. We started focusing so much on the product - and that's in our DNA. And your insight is exactly correct. We've decided now in order to execute and grow as fast as we need to, we need to build an excellent go to market. We are constantly trying to hire the best BDRs and AEs that care about users and are willing to solve complex problems.
Roland Siebelink: Okay. Yeah. And it's a common pattern that in the beginning you have to build your product and that gets into your DNA. And then over time, it's not just a product company anymore but now you have to become a sales machine. And that's not something every founder signs up for. But I would say pretty common where you are, having raised a Series A and probably on the way to raise a Series B at some point in time.
Gregory Ugwi: Yeah, that is correct. Right now, we are north of $9 million in recurring revenue. We are cash flow breakeven. And then we're just building out that sales force. At some point, if we need to, we'll raise capital, but we don't need to.
Roland Siebelink: Having reached $9 million, you must have had some success with your go-to market already. Can you share some of the tips to other founders of what you found really works in your business?
Gregory Ugwi: Sure. The first one, the most important thing, and I think it's obvious - but because people told it to me and I did not believe - recruit, recruit, recruit great people. We've been lucky that we've had some exceptional BDRs that are very passionate about this space. Our product is nerdy and complicated. You need to recruit the right people. That has been the most important thing. The second thing is for us, one thing we did, we tried to provide value even while you're trying to generate leads. We write content. We have a whole media business called business of business, where we use our data to tell stories. It may not necessarily have any direct tie into our specific sale, but we just provide that to the world. And that leads to leads.
Roland Siebelink: Is the flow mostly inbound? People see your stories and then they talk to a BDR to understand if this might be something they could afford, that would help them in their work. Something like that?
Gregory Ugwi: Exactly. The flow comes inbound either through a media article or we sell to eight of the top 10 investment research reports. They might read the research reports, cite our data. They will come inbound, they'll get qualified, they will talk to an account executive, and then they'll get a trial for a month. And then we either convert or not.
Roland Siebelink: You mentioned right in the beginning when I mentioned the go-to market, "Oh, that's our biggest challenge." And nevertheless, the way you talk about it, it sounds like you have a lot of things figured out already. If I may ask, what is the next level go-to market that you're striving for? What's the big gap you still want to cross?
Gregory Ugwi: For example, our hiring. We have to hire 12 BDRs and AEs as soon as possible. In other words, with everything we do, how can we do it faster? We have specific things we do and we want to do more of it. It's less that we are trying to find - it's more repetitive. Initially, we're trying to figure out what niche to target, then we're trying to figure out how can we repeat what we are doing, and now we're just trying to do it in volume fast.
Roland Siebelink: Excellent. That means you suddenly have to find so many exceptional BDRs and AEs, which is not easy in this environment these days. When you mentioned what niche to target, Gregory, what was your approach in figuring out where you would be most successful? Did you try and shoot a little bit across the board and see what sticks or did you have a top-down approach of being very focused?
Gregory Ugwi: Initially, we were very focused. We would only talk to long-short equity hedge funds. We have this thing, as I described. It's quite weird when you first get introduced. And then we're trying to figure out who is going to be the early adopter? Who is going to be open to these ideas? A lot of the people that come inbound now from large tech companies, they would never have talked to us. They'll be like, "I know what I'm doing. I'm fine. Just leave me alone, please. I don't want to try anything new. Thank you. I'm really good at what I do." But long-short equity hedge funds, they just happen to be the kind of people that are constantly looking for an edge. No matter how weird or stupid your idea is, they'll talk to you. They are very selective and it's hard to sell to them; 99% of the time, they'll say, "No, thank you. Go away." But they'll talk to you. We were looking for a group of people, not just one person, a group of people - essentially markets, they reference each other in buying decisions, and as a group, they're eager to constantly find an edge, try new things. And there happened to be a niche that worked really well for us to get going.
Roland Siebelink: Wow. It sounds like you really applied the whole Crossing the Chasm framework.
Gregory Ugwi: Exactly. We were struggling. The truth is for almost a year after we raised our seed round - we raised $1 million - we are struggling. And then our investors made us read that book and it just made sense. And they drummed it into our heads. From my view, you have this product, it clearly adds value, why wouldn't people buy? I can't understand. And it would constantly challenge me and help me understand buyer psychology.
Roland Siebelink: Your investors, it sounds like they are not just providing money; they are also providing important advice and hand-holding potentially. Has that been the case?
Gregory Ugwi: I'll say our turning point is how we think of our investors. And that's how we try to use them, as turning points. Early on, we had to pivot the product. Then early on, we had to figure out the go-to market. Now we have to figure out skills. That is where we get involved with our investors. I tell most young founders, the truth is my view is that if you think of any great company - who built Google, who built Facebook? The people that work there every single day. The engineers writing code, the marketers. But in terms of getting a unique insight of not just working in the company but also working on the company, that is where we look at advisors and investors. That's how we think of it. But day-to-day, we're expecting them to bring in leads or to write code. But where we have to make large strategy decisions that affect us for years, we consult with them heavily and they have been very useful.
Roland Siebelink: How do you feel about whether advice is applicable to you as a founder? When I talk to founders, I sometimes hear them say, "I get conflicting advice from three or four sides, how do I deal with that?" What's been your experience in navigating that, Gregory?
Gregory Ugwi: The way I think of it is I'm looking for insights. It's less advice, I'm less looking for someone to tell me, "This is how I think you should solve this problem, Greg." I'm more: "Here's the problem I have. Can you give me any insights on how I could think of solving this problem?" And then I have to decide for myself. For example, I'm trying to figure out what is my problem? Why when people buy? And then if someone gives me that insight, like check out Crossing the Chasm, this is the nature of the world. One thing to keep in mind - and I believe this - eventually, all companies are 98% the same thing. There's some sales process. There's some go-to market. There are sales people. There are BDRs. There's HR. You write code on GitHub. It's all the same thing.Two percent is different. In other words, in learning, I'm trying to learn things that have worked for other companies that could apply here so I don't have to invent it from scratch. To keep it simple, when we first take a test - imagine we are taking a test; building a company is like taking a test every day, and it's like an open format. Now I'm trying to turn it into multiple choice options. I'm trying to say, "This is how someone else did it. They used content marketing. And this person uses Google ads." Now I know what the different options are. And I simplified it because I just have to pick one. And if it doesn't work, then I can pick the next. I'm trying to get insights, ideas, things that work for other people. And then I will pick.
Roland Siebelink: Okay. Very good. Excellent answer that I think a lot of founders will be able to navigate with very well. Greg, let's talk a little bit about the team that you have been building. How big is Thinknum now and how have you split it up between product-engineering versus more sales and marketing people?
Gregory Ugwi: Right now there are 40 of us, about 22 of us are in sales and marketing and 18 are product and design. Going forward, we are more focused on growing out the sales and marketing function. Within sales and marketing, we have people that do marketing. As I said, we have people that work on business of business, so they write stories. We have EAs, we have BDRs that go out and get business. There was a segment that we learned of, sales enablement reps, and that has added a lot of value for us.
Roland Siebelink: Okay, excellent. When you look back at how small the team used to be and how big it is now, Greg, what's been your experience and the growing pains? Can you still manage it the same way? Did you have to learn new ways of keeping everyone aligned? Talk to us about that a little bit.
Gregory Ugwi: Sure. My approach when I first started, I'm less comfortable talking about the company, even internally with all of us, constantly broadcasting. I was very uncomfortable with that. And that caused problems in our company. My strength is the one-on-one. I can build a relationship with my direct reports. I know the vision they have for their life. What do they want to get out of the job? Why are they not happy? And we try to come with a shared vision. But there are certain things that you can't handle that way as you scale because it becomes a cultural thing. We all have to agree on what is our mission? How do we think of this competitor? Are we not growing fast enough? Or should we raise? You don't have time to talk to each person every day anymore. And so I had to get more comfortable about sharing our roadmap publicly. Making sure everybody has access to Slack, everybody sees every sale, every churn. We all have access to Salesforce, GitHub. More broadcasting, I'll say, is something I had to learn.
Roland Siebelink: And did you find that people were able to then follow the same priorities and were all working toward those big common goals or has that seen some growing pains too?
Gregory Ugwi: It has certainly seen growing pains. But I think it made a big difference. Even today, it's something we are still trying to figure out. For example, recruiting. For the most part, the way I know how to recruit is one-on-one. I go out to events, I find people, I take them out to lunch, I pitch them. At this point now, we have different departments and they each need to recruit. I need to try and communicate more of that to the managers to explain to the manager that they have to do that. "You're really good at marketing. You're good at Google ads. But if you just keep doing this for the next 12 months, we won't grow fast enough. You have to go out and poach people." And sometimes they came from a bigger company. In a bigger company, you post a job. My sister works at Shopify. She posted a job for product marketing and literally 500 people apply, 400 are qualified. It doesn't happen at Thinknum. Not yet, at least. No rational person would wake up and be like, "Let me think of applying to Thinknum." It just wouldn't occur to their mind. You have to go and pitch them and show them why it'd be a great fit. Then some of them are like, "You know what, that resonates with me. I'd rather work with you than with Google." But initially, everybody that wants to be an engineer, they're first going to make a list. And it certainly would probably not include any small, less than 100-employees startup.
Roland Siebelink: How do you convince an engineer - maybe out of college or a few years out of college - that working for Thinknum is going to be better for their career than working for Google?
Gregory Ugwi: Exactly. The main thing we'd tell them - I only have one thing to have. I cannot pay you as much, I can not give you as many amenities, and I cannot give you as much mentorship or brand. We only have one thing, and that's growth. What makes a startup a startup? Paul Graham wrote an essay about this. If you think of a chicken and rice stand. Maybe I found a chicken and rice stand tomorrow; it's not a startup or IBM, it's a tech company, but it's not a startup. A startup is when your primary business initiative is growth. And that affects each employee as well. There's a lot of room to grow. You get to learn a lot. No one is ahead of you where you can't get promoted because there's a hierarchy. That's the only thing we have to offer. If that's your main thing you want, you want to go faster, you want to learn more, you want 10 years of experience in two years, you have to work in a startup. Now you just have to find the right one for you. And then we try to explain why we are the right loan for this specific engineer.
Roland Siebelink: I love that. It's really targeting those also with the growth mindset. Otherwise, they might not actually fit very well with Thinknum or any other startup for that matter.
Gregory Ugwi: That's exactly correct. It's like self-selecting
Roland Siebelink: Very good. You mentioned you're often still the one going out there and recruiting people. That brings me to a broader question, Greg. As a CEO, how do you make sure not to keep doing all the work and actually get all these people you hire to take over a significant part of your job for you?
Gregory Ugwi: It is almost exactly what you said. You have to find people that want to do that. They want to take over your job. I can't remember where I saw this analogy, but if you have horses and then you have to be pushing them and whipping them, you don't want that. You want wild horses running in all different directions and you're barely keeping on. We look for that. That's the main thing I look for when I'm looking for someone that will report directly to me. Does this person have agency? Do they want to take risks? Take initiative? Can they deal with ambiguity? Whenever I find someone like that, they just take stuff off your plate. If you find someone that's an A student that wants to appease authority, wants to do well on a test, and just get promoted, it's just not a good fit for reporting directly to me because he doesn't take stuff off my plate.
Roland Siebelink: Back to Thinknum, as a business proposition, how big could this become, Greg? Where would you see Thinknum 10 years from now?
Gregory Ugwi: Our view is that we believe this is a huge market and we are leaders in this market. We want to win this market. I think there's an opportunity if you do that to be a standalone tech company. We want to go public and be a stand alone. We don't necessarily have to go public. But the main thing is to have permanent capital where you have the option at any time to go public and to be a standalone tech company, to maintain our DNA. That's the goal.
Roland Siebelink: Excellent. Very good. How big is the market that you are trying to target to? Ten years down the road, how big would you be in terms of your revenue or employees, number of data points? I'm just trying to put a finger on it.
Gregory Ugwi: In my mind, over the next three to five years, how do you get north of a hundred million a year? And then after that, it's hard to tell. I just think the Internet is man's greatest - one of the top three greatest - inventions man has ever had. You can think of language, think of religion. I think the Internet is up there. There needs to be a way where this data can be structured, so it can be queried. And if we can build that, that will be a huge value to the world.
Roland Siebelink: Greg, this has been very informative. What are more of the short-term challenges that you face? And if listeners of the podcasts are interested in working with you, where could they help you most?
Gregory Ugwi: I think the short-term challenge is still finding great people. If you're interested in data and you're interested in finance, you're interested in tech, we would love to talk to you. Thinknum.com. Check us out, check what we're working on. If we can get connected, that would be great. That's the main challenge we have, recruiting great people. And we have challenges internally, which is how do you get each person to do the best work of their life? It's basically those two things. How do you recruit great people? Internally, how do you get them to do the best work of their life?
Roland Siebelink: Okay, very good. And when people are indeed interested in data and tech and finance, you already mentioned the website. What kind of positions are you primarily hoping to fill short-term?
Gregory Ugwi: BDRs and marketing. Fleshing out the go-to market. We're always going to look for great engineers because, as we said, that is our DNA. But BDRs and marketing. That's the number one thing we're looking for right now.
Roland Siebelink: We'll look primarily at people that want to work for you or with you. Go to Thinknum.com and there's a job site there.
Gregory Ugwi: Exactly. And we're also interested in partnering. If anyone has some interest in ways to partner, we're always open to that.
Roland Siebelink: That's awesome. I really love this interview. Thank you so much, Greg Ugwi, co-founder and CEO of Thinknum. It's been great having you here on the Midstage Startup Momentum Podcast.
Gregory Ugwi: Awesome. Thank you very much, Roland. This was a lot of fun.
Roland Siebelink: Thank you. It was, absolutely. Thank you for being here.Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.