[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey everyone, and welcome back to Category Visionaries. Today, we're speaking with Spencer Doesabout, CEO and founder of ADM, a CRM platform for Murgage professionals that's raised 19 million in funding. Spencer, how are you? >> I'm doing great. Yeah, thanks for having me, I'm Brett. >> Not a problem. Super excited. Let's jump right in. What are you building today? >> We are building an end-to-end solution for really property tech, but focused particularly on mortgage. The minute that there's a lead to the transaction phase, to have client retention, working with borrowers again and again. That's the solution that we brought to market and our continue to add additional data layers on that to make it more useful for our customer base. >> Now, take us back to the founding of the company in 2019. How did you uncover this problem? Were you in the mortgage space or were you just looking for opportunities and problems to solve and uncover this problem? >> I had done a startup before I had done a number of things, and we'll skip over all of the failures where I ran into brick walls, and did one that that actually worked, which was doing predictive data in the real estate space. We were creating a few of them more likely to sell their homes and then selling those leads to realtors. Got a good glimpse of what goes into a real estate transaction, the tech that's involved or lack thereof in its particular case, and just really was able to see that the mortgage lenders are 99.9% of cases, with a quarterback of a transaction, and no one's really on the same page. And so you sort of just saw that and the lack of technology that was being used and understood that there was an opportunity to kind of bring something into that market to help kind of streamline that process. And of course, we've iterated many times, but initially that was just sort of my blokes. There's not a lot of great technology here and people are not on the same page, as to what's going on. So let's try to find a way to help address that. Why do you think this market is so underserved? It's a few reasons. So I think the first reason is there's a lot of legacy software players that are extremely sticky, if you will, and in any industry with a lot of legacy software, it's hard to kind of figure out the right way to be disruptive in that, and sort of strike a chord where people are willing to adopt something. And so I think there's that. I think there are significant barriers to entry sort of on the compliance side. These are things that I kind of found out as we started building, but you're dealing with banks, a lot of sensitive information. And so it takes some serious resources to get integrated into these core systems that these banks have and to get through their compliance. And so I think there's some pretty significant barriers, but I also just think that people really haven't cracked the code on how they can kind of guess best get into the space and add value. When we look at the competitive landscape, who are those competitors? Is it more general purpose tools like sales force or are there industry specific tools? Are those like the legacy players are talking about that are serving the industry and they're just old? Yeah, so there's different categories in this particular vertical. You know, I think the interesting dynamic about mortgage, but also this is true for sort of real estate title insurance, which we dabble in as well, is you have a distributed sales team that has a lot of leverage. So if you think about a loan officer or a realtor, they're generating their own book of business in essence. And that might be from referral sources. That might be they have their own lead gen funnels, but really likely you think about a mortgage for your loan officer at a bank. The bank isn't providing them with leads typically. They're going out and sourcing that. And so they have a lot of leverage in the sense where if they say, hey, look, I really like this tech platform. I want to bring it in and use it. Banks says, no, they'll just say, all right, fine. Well, I'll just go down the street to another bank because it turns out there's a lot of banks that can do mortgages and underwrite it. And so I think it's very fragmented in that sense, where you have sort of the needs of the enterprise, which might be a marketing director, might be a head of production, which is the mortgage equivalent head of sales, you under compliance or technology. And then you have the loan officer. And within kind of that category, you have some loan officers that have been the business a lot of years that use Excel on sticky notes. And then you have some that are more open to technology and you have others that are kind of somewhere in between. And so there's a lot of different personas there. And there's different technology solutions that sort of serve all the above. Like there's vertical specific solutions that address marketing, or others that maybe address the needs of the originator that is used to using Excel, or there are also, you know, the systems and the sort of where we started, I think we kind of tackled the hardest problem first. We went to market is serving the needs of the top producer and really putting something in their hands that's integrated to all their horse systems. It's very flexible, customizable, and also easy to use, easy to adopt. And so, you know, kind of looking at the competitive landscape, there are different players that kind of scratch the itch at different personas, but there's not really one that brings it all together. And then that's us. And as far as like the sales force kind of solution, I think we're sort of obviously we're startups. I hate to say like we're a case study about it. But like, I think we definitely are an example of where our vertical is an example of something where sales force has been largely very, very ineffective in serving. And the reason for that is it's just extraordinarily expensive to integrate everything into a sales force, integrate things on top of it to get kind of the marketing juice. And then it's just something, again, that your loan officers primarily don't use. And so we've worked with a number of companies that let's say they spent 20 million on a sales force build, nobody uses it. And we end up just coming in and replacing it, in essence, obviously at a pennies in a dollar in terms of getting up and running and things like that. And so that's, yeah, I know I threw a lot at you. So happy to just we'll click on any of that. A lot of founders that I bring on when I talk with them, they talk about going out and creating a new category. It seems like strategically though, you've decided to really just own mortgage CRM and double down on that space. Is that correct or is there a long term vision to create something additional on top of CRM? Yeah, we're very focused on what we're doing right now in the audience that we're serving. But really that core problem we're solving is that a bit distributed sales team and really serving that enterprise customer. So if you have, obviously we can use the example of a bank. But again, as I kind of explain that the relationship that they have with like their loan officers, this is the same with an insurance agency and those kind of writing the policies and the real estate brokerages and the realtors. But again, really like the professionals at those particular companies can go elsewhere. They have a lot of flexibility because they're really generating their own business. And so as an enterprise, the question is how can they have a technology stack that is sticky and providing value? Bitbolts for recruiting, additional talent, which all these industries do at nauseam, and then also to retain them. And so one of the things that we've focused on is sort of the customization aspect. So people are in our platform at the enterprise level and customizing will become more challenging for them to maybe want to leave and go somewhere else. And so for us, that's really the core problem we're trying to solve. And right now we're obviously more vertically specific because we're definitely in an early stage startup. But over time, we could definitely see us expanding and solving that problem and adjacent verticals as well. This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now, back to today's episode. At a high level, what does the go-to-market strategy look like? Yeah, so this is evolved over time as these things tend to do. So initially, we went to market, really going after those top producers. And so think about a top producer. There's somebody, they do $50 million and low and low in the volume of a year. I mean, they make millions of dollars or they're sophisticated and they have a team and they're competitive. They want to build their business, leverage technology to grow their business and get more time back in their day. And so it's kind of an easy target to go after initially. In many cases, this particular persona was using five or six different software systems and trying to connect them all via the app to basically do what our system does. And so we found a lot of momentum going after those particular people. And I think in this industry, you can definitely get your name out there pretty quickly. People talk, it's large industry, but people do talk, especially at that level. So we had some success with trade shows, do things like podcast webinars in our particular vertical. You'll referrals was a huge source for our business. People would get on it and they would tell everybody within their coaching group things like that. And so initially, we didn't have a super concerted, I would say go to market or outbound strategy. We were just with referrals in the product that we had built. It was really pretty self-serving. There and I think kind of phase two was really as we landed these top producers expanding with the logos that we were at. So let's say you had a bank that had 300 potential users for us. And we had 10 on there, but that 10 was, those were some of the big hitters that particular bank. And so really leveraging that to grow from 10 to 20 to 100 to maybe try and go all the way to the top and get the entire enterprise contract. So he used the term landed expand, but that was a very concerted intentional effort on our end. Like, okay, we've got some penetration of these logos. Let's let's grow that. That was phase two. We still do that, but we have shifted more and more of market as sort of phase three. And that's really just identifying our sweet spot, which we have some criteria for and I'm happy to get into if you'd like or if that's helpful. But it's more of a quality account-based marketing target approach. So going after some of the personas that I mentioned, that's adding very relevant content and copy. We have a newer SDR motion, which sort of makes results so far since it's new, it's really early to tell. But we have a motion on a top-based marketing side that's heavy and has generated quite a bit of pipeline. So that's the high level. But again, if there's anything specific there, I'm going to dive into or I'm happy to. Yeah, let's go deeper into the personas or really the process of identifying, determining what personas those would be and then deciding those were the personas to double down on. Can you take us back and talk through that journey? Yeah. So at the enterprise, there's kind of two ends to this. There is that we still do target those top producers. And this is relatively straightforward data to get. We have the data of every loan officer and how many loans they do and all that. So we're able to see who the top producers are, in particular logos. I think for us, we've found our sweet spot is roughly called banks and then we're just bank brokerages that do $500 million to $2 billion in volume a year because the sales cycle is quick. Typically, we have not invested in a Salesforce build or anything like that. And generally, they're looking for something like we provide. And so there's about 600 logos there that also do align with our tech stacks. So we'll go about it. Like I said, we'll find the top producers and kind of go after them. So that's growing a great database and sending a curated content to them about how they can leverage technology, things like that to their regular business and case studies, all that fun stuff. And so that's on one end. And that would be more of that land and expand. But then on the enterprise side, the personas that we go after would be like a marketing director. So obviously curating content, sort of more on the marketing side of things. And then there would be like a how to production, which is really just like a how to sales. And for them, like the data piece is really important. So we would kind of emphasize like our reporting suite, know your numbers. So you can help your people do more loans, things like that. And then we also do have compliance is big in our world too. There's sort of ever changing regulations. And so for us, like curating content on the sort of compliance technical side as well, to like a chief information officer, you know, chief technical officer at those logos too, can be quite effective. And so those are the personas we're going after, you know, it takes some work to kind of curate, will be really good content. The way that we think about it is we need to create content that it becomes like their job to read. Like if you're a CIO at a bank, we should be providing you with great content that it's like this is my job. I got to read this just like maybe a stockbroker would need to read the Yahoo Finance, the Wall Street Journal, whatever it is. And so that's how we approach that. And then as people engage, we tend to kind of score the logos and be able to be a little bit more aggressive without found after a number of touch points. And once those personas reach a certain level of engagement. Did you know those were the personas you were going to target on day one? Or what was the process to identify those personas? And were there any personas that you thought this was going to be a hit? And then it turned out it wasn't going to be a core focus. Yeah. So it's been a moving target. And it also comes down to how to get the sale, right? And I think that and how do you get in the door? And so when you look at it, like the top producer can definitely throw their weight around that they can't force the enterprise to sign something. The head of marketing usually has a lot on their plate and they're very reluctant to any form of change management, changing software, anything like that, at least in our vertical. But they're the easiest way into corporate because they're always identifying and looking at new tools. It's a big part of their job. And so for us initially, we've done a lot on the product to sort of make marketing our friend. But initially, like we would try to go around the head of marketing in a sense where we would try to get more strengths or maybe be conversion and get integrity and all that stuff. And so we would try to get the kind of compliance technology production very much on our side and then also get like maybe that top producer saying how great it is. And then we would almost try to use that as kind of like a tsunami where the marketing director couldn't torpedo a deal or slow it down or if they're a wrenching it sort of initially. And then I think there was some success to that. But also, you know, it just made us realize that from a good market side, like we have to be able to find a way and to make the marketing director our friend. And if we can do that, they're also kind of the easiest way in. So it's been iterative for sure. And the dynamics are always very interesting and enterprise sales in general. But it's always fascinating to see who can squash deals and who sort of the main voices are. It can definitely change from logo to logo. But typically, it's fairly consistent. And so we've learned who could be our advocates. And we've learned that we need to getting the buy-in from marketing, getting the buy-in from compliance early is cheap. Because if you, there is that chance that even if you've been a lot of momentum and you go to them last, they can in some cases kind of kill the deals. And so those are things you just have to learn the hard way and iterate from them. Today, what do you think spend the most important go-to-market decision you've made? So we're here vertically focused, which means that if you provide a good experience and a good product, people talk. And there's a lot of organic growth opportunities. And so look, I think that obviously enterprise SaaS is the credit of the Crem or whatever you want to call it. But it's a soft market to figure out. And it's enterprise-grade software is a very different type of software than maybe a team-based software. And so I do think for us, starting with serving those top producers kind of at that team level, moving up market was the right choice. Even though, yeah, I think in our case, that was the right choice and really focusing on just providing fantastic experience, really solving the problems, listening to them. And then 11 never changes. A massive amount of referrals has led to a super efficient go-to-market engine. And so, in a sense, it really helped us because a lot of people look at those top producers and making millions of dollars a year. And so I want to be that person and they're saying you should use ADM. And so that led to a lot of organic growth early on. So I think that works for us. I think it maybe, yeah, even though we probably could have gotten to the enterprise level of software a little bit quicker. We focused on that initially. I think it would have taken a lot of money. And I think we certainly wouldn't be as far along as we are today from a revenue growth and traction standpoint if we had gone that way and they get going. This show is brought to you by the Global Talent Co., a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet, and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit globaltalent.co. What about the impact of the acquisition that you've made? I understand it. I believe it was in early 2020 that you acquired whiteboard technology. Talk to us about that acquisition. Yeah. It was in '22. I think the real estate market was obviously especially in mortgage too with all the refinances. It was super super hot in 2020, '21. And there were a lot of platforms. But '22, '23, still, it's definitely been extremely historically health market. I talk to people all the time that say, "I lived through 2008 and this has been harder in many ways," which I think is interesting, but just to give you some insight into that. So there's a lot of companies that didn't have particularly sticky products that people were buying when they were flush and were getting rid of, and so that there was definitely some opportunities for acquisition. I think what we really liked about whiteboard and acquisition is their customer base, they didn't have a number of really, I'd say, they had some top producers on their platform that had that influence and particular logos that were going after, but also they had some really great capabilities around automations and workflows that we were able to leverage and incorporate that sort of extended that offering that we had and got it for a reasonable price point as well. So, yeah, it made sense from those different perspectives. What were the learnings from that acquisition? Anything come to mind? Yes, acquisitions are extremely challenging and all-consuming, and you have to really be able to justify it in order to do it. I talk to a number of friends or whatever others in my network that are early stage founders. Just using an example, let's say someone's at a million in ARR, the opportunity to acquire another company, it's a million in ARR, it's like I can double in size, and it's like, yeah, you can double in size, but I mean, you're basically putting a lot of your current initiatives on hold for a long time, because then you got to integrate the product, you got to migrate people. If the company you're buying has good retention, that's great, except that they're going to hate migrating, because they like their product, the product that they're on. As a company, other than I have great retention, then what's going to happen to that? In ARR, you're just acquired, and so the pros cons are, I think, early stage, getting your product right, finding that good market fit, finding a motion that can work where you can scale is way more important, unless there's really something strategic on the technical side, but my sense of having kind of been up and close to that is when you have a great platform and you acquire the businesses and kind of cross-sell, upsell, your existing customer base, a lot of times those acquisitions can make quite a bit of sense, and even though it's really tempting, you've got to make sure it's really, really worth it for the sake of revenue. I would say really on it's probably not worth it. There's got to be another reason to want to do it. What about fundraising lessons? So as I mentioned there in the intro, you recently raised a blue $19 million series. What have you learned about fundraising throughout this journey? Yeah, fundraising is, I think a couple of things. One, you're going to have to talk to a lot, a lot, a lot of people, and I think a lot of newer founders and those of us that have been in this game since I graduated college in 2015, there's a lot of years where fundraising was fairly straightforward and it could be pretty automatic at times and so I think you see that and you assume it would be that way for you and I don't think that is the case anymore unless you're doing something AI-related at that the moment and so be prepared to talk to 100, 200 different companies and give them your pitch and learn from what's resonating, what's working and kind of double down on that and so I think there's that component of just you got to really grind it out until you start to see who's resonating who's not. I think as a part of that like every VC out there wants to be found their friend link so they're all going to say they love your pitch, they're all going to say that they're interested and we'll get back to you but I think you're really asking those hard questions of like well have you funded a company that's doing something similar to mine or where are we on stage or how many investments are you looking to make this year or are you looking to make four and you already made four? Okay well like those types of things, you have to get to those nose really quickly and VCs aren't kind of volunteering that information, they're just going to all of a sudden like everything was great and then you just kind of you don't really hear from them again and so get to the nose and then I think third is we've been fortunate like I really love the partner that we work with, alignment is key so again it can be tempting to just grab whatever money people throw at you but really think through who you're raising money from and what that means so I held out for a while until we got into kind of growth equity territory meaning that they underwrote us to basically have three X return so you know like we don't have to become a unicorn to sell an exit right and of course everyone wants to become a unicorn, I'd love to be one but I made a very conscious choice there which is like I don't want to get into fun where I have the unicorn bus basically like I want us to be aligned that with itself return like dollars like everyone's happy and so again like really just narrowing down who those potential partners are being really honest about that with them and yourself and again just combining those three threads it takes time so raising money is a relationship game and VCs love to see progress, they love to see you say hey we're going to hit this number this year or over the next three months and they might be reluctant or not super interested around the fence today but you may see you hit that well they will write checks because you can sort of demonstrate that progress and so building those relationships with people you identify could be a good fit and giving yourself the time to do all that is super critical so I would say at least six months but really if you can carve out a year to do this and start to build those relationships and show progress you're in a great spot but it doesn't it might make me for some but for me it wasn't just like we've got these metrics and you throw it around you get term sheets like we had really good metrics and really good traction and it still took us a long time to kind of get some traction with investors and get our deal done. Outside of fundraising if you were speaking with some founders right now they're trying to build mortgage technology what's the number one piece of advice that you'd have to give them? Understand what your superpower is everyone has different superpowers. For me I am passionate about the product and building a product that having great product velocity and building something that is truly solving our customers problems so for me to delegate that away would just be suicidal and I've learned except from experience other founders are fantastic at sales like don't hire other sales you'd be that a sales no one's going to do it better than you and so understand that's your power really lean into it do not delegate that maybe ever but certainly I mean you should be 10 plus and there aren't with the repeatable go-to-market motion before you do that. I mean that's sort of what I've seen and what I've heard from a lot of mentors and other founders that have gotten there and so I think the sort of one I think number two is culturally matters like you know the founders listen to your podcast know like you are rolling upstream it is really really hard it is extremely challenging and you need to build a culture of like my people that bind to the way that you do things and the reality is there's a lot of different cultures and a lot of different ways that you can build a company just because some people use okars I mean that might work for you but it might not work for you and I think it's really easy and I certainly fell into this trap really on when you start to get traction growing quickly and things are chaotic and crazy you start to say well we got to really create a lot of structure around this start to do things differently and there's an element of that but it has to kind of stay true to like who you are and what you want your company ethos to look like and you can save a lot of time and energy like if you you know by avoiding hiring people that might be fantastic at their jobs or just culturally don't align with what you're trying to build or have a different view on how companies should be built or organized and so yeah culture really does matter and it's not your job to confine or to a different culture especially at this early stage it's the people that you bring on need to be aligned to the culture that you want or kind of gravitate to how you're doing things and so those are two lessons I would say I learned the hard way really on and final question for you here before we wrap up let's zoom out into the future so three to five years from today what's the company look like yeah I think there's different paths so I think for us like again we tried to align ourselves with an investor that really I wrote us to that 3x and so we have that as an option which is great like let's say we continue to have capital efficient growth that mortgage we can't really break into insurance or title or these other verticals like we have a great path to a successful exit or just to build a company that's profitable and doing really well and so you know I think that's on one end and on the other end is the product really resonates in the good market motion we're crushing it and then you start maybe thinking like a series be and really trying to kind of get to that next milestone and the way I look at it is like I'm kind of looking at the data to see how we're doing and obviously bigger is better and began as people listed by us you know like to build a product that people were willing to pay for and it's hard to do and so when you kind of crack that code a little bit it's fun and you want to push it as hard as you can so you don't get those opportunities very often but for me I'm very data-driven so this year we launched our data warehouse data visualization product and that's beyond the insetraction things like that but we're going to continue iterating the product side and we're going to continue to make sure our customers are happy and the go-to market is that they're going to scale accordingly and we'll continue to get more traction verticals or you know maybe it won't be quite as explosive growth as we were we were hoping for and we have to kind of land the plane for a small exit so I like the optionality I think it's something that I definitely I don't feel like I'm up late at night thinking that we got to get to a billion dollars or bus which is really nice but for me it's also taking it one day at a time and understanding that if our customers are happy and the products sticky and they're staying and they're buying more of what we're bringing to market then good things are bound to happen so that's for most of my focus lives. I love the approach and love the optionality there we are up on time so we'll have to wrap here before we do if there's any founders that are listening in that want to fall along with your journey where should they go? Yeah just find me on LinkedIn and connect with me and send me a message and you'll mention that you're listening to the pod and happy to chat I do post on LinkedIn from time to time as well so we kind of see how big and continues to progress and the lessons that I continue to learn along the way. Amazing Spencer thanks so much really appreciate it yeah thanks show me Brad it was great. This episode of Category Visionaries is brought to you by Frontlines Media. Silicon Valley's leading podcast production studio. If you're a B2B founder looking for help launching and growing your own podcast visit frontlines.io/podcast and for the latest episode search for category visionaries on your podcast platform of choice. Thanks for listening and we'll catch you on the next episode. you
