"We’re very lucky in the sense that Barcelona has some excellent tech talent"

"We’re very lucky in the sense that Barcelona has some excel...

Esade Entrepreneurship Institute

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eWorks is the Esade venture creation program; it provides a series of activities and services designed to foster and support new venture creation by Esade students and recent graduates.

The Esade Doers podcast series, led by eWorks manager Davide Rovera, focus on entrepreneurs from the eWorks Community who present their startups and share experiences, learnings, sources of inspiration and tips with fellow entrepreneurs.

Today, we can learn from Christopher Payne, Esade alumni who founded Reach, an app that centralises all your digital information.

esade-doers

Davide Rovera: Hello and welcome to Esade Doers, a podcast about entrepreneurs and innovators. Our guest today is Christopher Payne, founder of Reach. Hi, Christopher, thanks for joining us.

Christopher Payne: Hi, Davide. Thank you very much for having us.

Davide Rovera: By the way, a quick question: Should I call you Christopher or Chris during this recording? Which do you prefer?

Christopher Payne: Whatever you prefer, but I’m known as both, so whichever is easiest for you.

Davide Rovera: There’s no specific one. Ok, I’ll do that. Then, Chris, tell me in 30 seconds in a kind of pitch style, what is Reach? What does your company do?

Christopher Payne: Okay, so Reach was essentially built as an equivalent to as a personal Google, in that sense. It’s an all-in-one tool that centralises all your digital information, your notes, your contacts, your e-mails, your pictures, the articles that you’ve read that you find interesting, so on and so forth, all in one tool, all in one place. And the key differentiation is that, rather than storing all of this as we’ve done for years in folders, where you have to remember the name of the folder and the name of the file in order to find it again, our structure, the way that it’s different, is that it works just like a brain in the sense that all your knowledge, all your data is interconnected with each other based on context, meaning, where you were, who you were with, what it was about, etc. So this way, rather than remembering what it’s called, you just have to remember what it was about, what was the context around it, and you can find it again. And, for the moment, the tool is primarily focused as a mobile application with the idea of expanding it into desktop. We also actually have a Chrome extension.

Davide Rovera: Ok, that’s great. So, this is extremely interesting as a topic in general. We’re seeing quite a lot of conversation in the tech scene about this kind of second brain or personal knowledge management systems. There’ve been quite a few companies that have been trying to go in that direction. What are you doing differently? Or what is your competitive advantage here?

Christopher Payne: Most of the companies you’re mentioning have focused actually on one vertical uniquely, which is note-taking. So, you have Roam, Mem and a whole bunch of them out there. What they’ve done is take the principle of ZettleKasten, which is a new filing approach, and, essentially, they have digitalised it. So, to keep things simple, it’s essentially a note where you can then reference other notes and other concepts and they’re in a graph database, sort of, network structure. The key differentiation in terms of ours is that, in ours, you can have notes but, on top of notes, you can have any other media type. So, you can have documents, pictures, you can have a contact, you can have a location. And all of these work under the same principle, that they’re essentially stored based on the connections that they have and that’s how you can then find them. And, maybe the other key differentiating component that we have is how you then visualise this network. So, most of these tools talk about the network structure and the graph structure, but you don’t actually see how this structure grows and evolves and how everything is interconnected. And, the ones that do it, it is purely 2D. In our tool, on the other hand, you can see in a three-dimensional space how your entire network is interconnected and how your second brain actually looks; and then you can navigate it. I’d say our differentiation is twofold: One is the amount, the variety of things you can now store; and the second is how you can visualise and how you can search through it.

Davide Rovera: That’s amazing, and it sounds, as well, rather complicated to build as a tool, no? Maybe going a little bit back, what’s the story behind this project? When did you start working on it? How did you get the original idea and what has been its development up until now?

Christopher Payne: So, it’s been actually quite some time. I’ll try to be as brief as possible but I started out initially working at a VC fund here in Barcelona focused uniquely on SaaS B2B software companies in the early stage. And, at that time, I realised the core beauty of SaaS businesses, specifically in the B2B sector, and the benefits that you can have in them as a company. So, during my time there, I decided I wanted to go and start a SaaS company, specifically on the B2B side, and there I realised that the key issues that all the companies were seeing in data and that the fund was also having was the way that they could store and then search for the data and all the research that they were doing. So, then when I left the fund, what I then tried to focus on was the one specific issue of changing the way we file information and changing from the archaic system that we had of full lists to a system that replicated the way the brain works. And, there, together with my investor and partner in this venture, we then came up with the initial idea of what Reach is, which has actually evolved quite considerably since we started. We initially focused Reach as a B2B tool, purely on actual files and specifically for legal departments or law firms, in that sense, for e-discovery, so for companies that had a huge amount of documents, contracts and, sort of, a very big archive of information. And, the pain point we were trying to solve was, according to Gartner & McKinsey, two separate studies that they did… They said that the average employee spent between 17 and 23% of their time just searching for information. This wasn’t information that was online. This was information that the company had in their servers. And, this problem was even bigger in law firms and in some specific departments in companies. So, that was the problem we then started targeting and that was the first version of Reach. So it was essentially a new version of your Google Drive that worked a bit like a brain.

Davide Rovera: Ok, but it evolved, no? To something different.

Christopher Payne: Yes, exactly. So, we created the first version of the product then, and we saw two things: First of all, sales cycles on the B2B side are significantly longer, and, then, although people loved the concept and the pilots we did were very good, people had quite a bit of resistance. Well, not people, actually companies had quite a bit of resistance shifting from a system they had used their entire lives with full lists to a completely new system. So, with that in mind, we decided to take a different approach. Rather than a top-down approach, it was a bottom-up approach, similar to Blogsdrop and these sorts of players, and then targeting the individual, finding a product that worked for the individual as an individual, for his personal use, and, from there, grow it into the company afterwards. So, we then pivoted from a B2B to a B2C focus. And, in that pivot, we then reinvestigated what were all the pain points that individuals like you and I have. And, we then tailored our solution to those pain points.

Davide Rovera: That’s very interesting. Because we often hear about companies that are doing the opposite, no? Starting with B2C and then having to move to B2B because of investor pressure. I think that’s one interesting thing, as well, to explore. You had an investor earlier on and then you had to pivot your project to something different. How was that received by the investor? Was there any change in terms of the support or milestones that you had in your relationship with them?

Christopher Payne: I think the key benefit or the key thing that differentiates it from most others is that this individual isn’t really just an investor; he’s also actually as much an investor as a partner in the business. The key benefit that we had was that it wasn’t a decision that I took unanimously. It was, more than anything else, based on the inputs we had gotten from the market and discussions with him. We took the decision together. So, it wasn’t that I had to sell him on an idea as an investor that only cared about the return on his investment. His investment was also becoming more of, in that sense, a partner in it. And, there, the key focus was, “What is the best way we can develop the product forward and what is the best way we can get Reach to then grow and launch successfully?” And, so, we knew when we started out together that… We knew that there wasn’t one way that we could potentially solve it. There weren’t actually… So, at the time, this was three or three and a half years ago. At the time, there wasn’t anyone really playing with graph databases and knowledge networks. So, we were there, in a completely green space, without anyone to actually copy or follow, which is the typical thing everyone does. They look at a successful company like Notion and then they create a similar version but slightly better. There we were in a completely green space, with just one idea in mind which was changing filing. We knew we wouldn’t hit it the first time and we knew that we would have to pivot and sort of tighten our focus a bit and keep on changing until we found something that worked. So, it wasn’t a surprise to us and it wasn’t a hard decision to take in that sense. We still know that, in the future, the product is still a B2B solution. The thing is what the entry is going to be.

Davide Rovera: And this, as well, is a strategy I’ve seen in other projects, kind of, going to the individual first, making them aware and getting them used to the way something new works as a bottom-up approach to then get into companies. Interestingly, as you mentioned, you’ve been working on the project more than three years and now you’re launching the first usable version. In terms of motivation as an entrepreneur, how does that feel? How do you keep up, pushing and pushing through pivots all this time?

Christopher Payne: This is actually the first time we’re launching it open to the public, but we’ve had throughout, actually since the very beginning. We created small versions and tested them out. So, initially, we sat down with good small companies, with small teams. So, the good part of it is that this is not the first time we’re getting the product in the hands of our users. We’ve had the product already with our users, and some of them for actually three years, and they’ve been with us throughout. But now is the most exciting time. The key issue is software, at the end of the day. So, it’s a lot simpler if you want to start selling, I don’t know, sandwiches on the street. You can build that in the same day. But, when you’re dealing with software and, specifically, highly technical products like ours, it’s not something that gets built overnight. So there is quite an investment in time and in energy that needs to be put in order to get something that is actually workable and working in the hands of the users.

Davide Rovera: Absolutely, and you touched on one of the core points as well. You just mentioned software, quality, building it takes time and, of course, it can scale, but, first, you need to build it. To build software we need people. There is a big conversation on getting the right talent, getting the right developers. And there is a big fight around this. You told me in the pre-show that you worked mainly in person, not remotely. Does that make it more difficult or easier to get good talent and developers on board?

Christopher Payne: To be honest, we’re very lucky in the sense that Barcelona has some excellent tech talent. So UPC, the Universitat Politècnica de Catalunya, here in Barcelona, has brought us some excellent talent which we’ve been lucky enough to be able to tap into. So, to date, we haven’t had a big necessity to hire outside of Spain. The talent that we’ve been able to source here purely in Barcelona has already been top-notch and excellent, in that sense. And, we’ve also had some bad experiences in the past with fully remote. So, we had an initial team at the very beginning and we had to then, sort of, start again from scratch. We changed the team and all that. So, since then, we’ve gone fully presential and with the entire tech team based here in Barcelona.

Davide Rovera: Ok. And, Chris, you’re not originally from Barcelona but, of course, you studied here at Esade. So, why start a company in Barcelona?

Christopher Payne: So, the company is actually based in Switzerland, but we have an office here in Barcelona. And the office in Barcelona is where, essentially, we have the entire tech team, or the vast majority of our tech team is here in Barcelona. The key reasons we chose Barcelona were, one, it’s a great location to attract top talent. So, not the entirety of our team comes from UPC; some of them are from Europe, but they loved the idea of moving to Barcelona. So, that was really a key driver. The second is also the value you get from the talent. For example, for the same talent you get in the UK, where I studied before, would be considerably more expensive and considerably more competitive. There are a lot more startups there, and it’s a lot harder to source top talent there than it is here. And, in the US it’s even harder. Actually, now the biggest issue we’re more or less having is that, with more and more remote work that’s actually proving to be a bit of a problem with talent because right now you can have companies that are purely and entirely based in the UK hiring talent that is fully remote here in Barcelona for a fraction of the cost. So, that is proving to be the new challenge we are seeing with, actually, with COVID. As more and more teams are going fully remote, it’s making the boundaries no longer exist, in that sense. And, so, everything is up for grabs.

Davide Rovera: Right. So, on the one hand there is a big advantage, for example, you mentioned Barcelona as a location that is attractive for developers. And, then, on the other, you mentioned companies that are now able to hire fully remotely which makes it difficult to use that as a moat to defend yourself. How many people are there now in your company? 

Christopher Payne: I think we’re 12 or 13.

Davide Rovera: Okay. So, it’s already a good size and with the right people initially on board should make it easier to attract more. Normally, the very first ones are the most difficult to get.

Christopher Payne: So, there are some key individual profiles that are very tricky regardless of the stage because there are very few people with that skillset and know-how. And, that is the biggest challenge we have. On the tech side, there are a few key roles, and there are very few people out there today who have the skillset to do them. 

Davide Rovera: Right. And you’re, as well, very specialized, as you mentioned. You started out in a green field, so you couldn’t copy-cat things and couldn’t get somebody necessarily with prior experience in a similar company.

Christopher Payne: Exactly. Actually, we saw that the people with the most experience that we interviewed were the worst performers.

Davide Rovera: Wow, that’s actually interesting. Okay.

Christopher Payne: Actually, one guy a few weeks ago, he had twenty-something years of work experience as a full-site developer and he’d been working for a company that raised a lot of capital. And the fact that he had so much experience was his biggest handicap because, if you’re doing a very new, innovative product and that person has become a bit more senior, they’re no longer in the mud. They’re no longer writing code, in that sense. So, they no longer have the knowledge of the latest stuff and how it actually works.

Davide Rovera: Right, so they’re not necessarily up-to-date. They no longer have the expertise; they’ve moved a little bit more into management than keeping up-to-date with new technology. Which I think is kind of good news for recent graduate listeners. There is a way to fight, to put yourself up against much more experienced competition by being more up-to-date. So, that’s positive news. Going back to the beginning of the company, you mentioned that you’re not an engineer by background. You studied more management and business. You mentioned you were working in a venture capital firm, and, at a certain point, you became passionate about B2B SaaS and you wanted to build something and then you left. You started building Reach. Was it all together? You left because you wanted to build this very company or did you leave deciding that you wanted to build something and then, kind of, found the idea later on? 

Christopher Payne: So, it all happened more or less at the same time, in that sense. So, as soon as I started at the VC fund, the main reason I wanted to go into VC was to learn how other people had actually started their own companies, how they had come up with the idea, grown the team, launched, how they had raised capital. The interesting thing about this VC fund was its focus on the early stage. They were doing seed and early-stage. So that was actually the most interesting stage that I wanted to learn about. So the startups had validated the product and they had passed the, sort of, deadly initial phase of raising capital from family and friends. The idea had come up already once I was working there. And, once I was working there, was when I, once again, started discussing it with my partner and investor. And, so, as I had finished with the fund, I immediately then started back-to-back in that sense. So, it wasn’t that the idea came afterwards, in that sense. It sort of had been cooking and growing whilst I was working there. 

Davide Rovera: Right. And, in terms of getting it started. This is a very high-tech company, so did you immediately hire developers? Did you start working immediately on the project or did you start working on more classic problem-finding and solution-validation? 

Christopher Payne: We actually did everything we were taught not to do at university.

Davide Rovera: Perfect!

Christopher Payne: So, the exact opposite. I don’t know if it was the right decision or the wrong decision, but we are here today. One of the things is having the idea of wanting to change the way filing works, and the other is if that is even possible. So, on what we then spent a lot of time initially was on a feasibility study, in that sense. “Is it actually possible to change filing from the archaic tree structure to a graph structure, essentially, an interconnected structure?” And, so, we then initially had our first tech team that focused entirely on that feasibility side. And, we had one or two issues with that tech team and we then had to start from scratch again.

Davide Rovera: Was this the remote team you were mentioning?

Christopher Payne: Yes. It was a remote team based in South America. And we then started completely from scratch again, because we knew it was possible, but what we didn’t know was how to do it because the only other person from that remote team was me, and I’m not a technical person or technically savvy, in that sense. So, with the knowledge that it was possible, we hired a new team here in Barcelona and we then started building up the idea.

Davide Rovera: On the feasibility and tech side. What about the more commercial/business side? I guess that’s more your background. But, I mean, did you start, in parallel, scouting for potential customers?

Christopher Payne: Correct. The sales side, in that sense, what was the fit, the market fit of the technology and the product. We then started focusing on the different verticals and use cases you can have. That’s where we initially focused purely on the documents for companies to manage all their in-company knowledge base. And, so, that was already an existing vertical, that there’s a big pain point, but there were very few solutions there. That was the first one we then started focusing on and then, as we hit barriers, we just continued evolving what was the business model and what was the vertical we were focusing on. So, in that sense, the beach-head customers, as we were taught, have been constantly evolving based on the feedback that we’re getting.

Davide Rovera: Right. You said that, initially, you started with law firms and legal research and then you figured out that that wasn’t really viable but then you moved on to other B2B customers, right? Was there any specific category or was it broader in terms of corporations interested in having a faster discovery of documents?

Christopher Payne: To be honest, the law firms were within the same category. So, we didn’t initially test for law firms. So, it was essentially the business side, so, business knowledge management of companies. The size didn’t initially matter. And then we started testing, of course, with small companies, with small teams. And, we fairly quickly saw the resistance. So, we didn’t have to spend too much time on it to then start seeing there was resistance to change and, secondly, there was resistance to learning how to use the new tool. Plus, the fact that the sales cycles are quite long, and, to be honest, a product like ours cannot be done on a small test with hundreds of documents or ten-thousand documents. For it to work, it needs to have the full database, really. And, so, from there, we fairly quickly shifted towards the individual. By quickly, I mean that it took quite a bit of time to develop the first version and then test it. And, once we had tested it and gotten initial feedback, then it was pretty quick to take the decision to shift to B2C. And, then in B2C, we had to readapt the entire product, and that’s a significant development time to do.

Davide Rovera: That’s, I would say, a testament to your motivation and dedication, as well, as an entrepreneur, no? From the initial idea, keep testing, building, until you change one key element at a certain time, and then re-start. That’s not super easy personally, emotionally, to handle as well. But, I think, overall, having come all the way to this and really trying to tackle a challenge as big as this one is really a strong testament to your skills. Along those lines, I’d like to move the conversation a bit more to the personal side to understand you a bit better. So, we’ve come to the second and last part of the podcast where I’m going to ask you a few questions to understand you better. So, the first thing I always like to ask guests is what book are you currently reading?

Christopher Payne: A few of them I am actually finishing, but the one that I actually do read quite often and go back to very often is called “The hard thing about hard things” by Ben Horowitz. And that book, I have to say, in terms of the business books I’ve read, is probably the best one because it tells you not what, in that sense, you learn about what entrepreneurship is; you learn, sort of, the dark side of it also. So, I don’t know if you’ve read it, but it’s the story of Ben Horowitz who’s the partner of Marc Andreessen and it’s the story of how prior to starting Andreessen Horowitz (a16z), in the business venture he was involved, all of the issues he had and how he tackled them, from how do you hire someone that you don’t have the skillsets to then even interview them? How do you fire a first-hire or a friend? How do you deal with all of the dirty side, not the dirty side, but the difficult side? It is not the rainbows of starting a business.

Davide Rovera: It’s a big classic, kind of, becoming a classic now for entrepreneurs but maybe one of the very top. So, definitely a solid recommendation, I would say, and good to have for any entrepreneur to have and as well as for those who are not entrepreneurs. That’s a great book in general. Moving forward to, a little bit more, the ecosystem, now, as you mentioned, you’re focusing on something, on building something very specific, but what do you think is a very interesting startup nowadays, of course, beyond yours?

Christopher Payne: So, one quite interesting startup that I’ve seen quite recently is, I actually invested in the first round, is called MiResi. MiResi is essentially a platform that centralises all elderly homes into one booking system that then enables either the children or individuals to then be able to find what is the optimal elderly home or place you go to based on a certain set of questions. It’s essentially like booking.com but for elderly homes. And, the reason I find it quite interesting is because the third-age sector or the elderly sector, in that sense, is finally becoming a sector, like an age group that has used smartphones, that is tech savvy. I consider that one of the sectors that is currently quite interesting and fairly untapped that can have quite a lot of growth in the future. And, why that sector now, miResi, now? It was, mainly because of COVID. They’ve seen a lot of families, specifically, for example, here in Spain, that used to live with their grandparents and everyone, people caring now a lot more about the housing and the time they spend in their homes and it’s a big, sort of, taking back.

Davide Rovera: Working from home, staying at home, taking back space, etc.

Christopher Payne: Yes.

Davide Rovera: Definitely. And, as you mentioned, I think, as well, that it’s an extremely interesting space that was largely untapped until now, but it has a few core advantages. One, especially in, let’s say, the Western world, it’s a naturally growing market. The projections are that the market is growing quite fast and, as well, as you mentioned, the technology penetration is growing. So, that makes it easier, as well, so super interesting. We’ll check it out.

Christopher Payne: It has nothing to do with what we do. It’s very different, but it’s always interesting to keep an eye on other sides.

Davide Rovera: Absolutely. And, linked to this one, a bit broader question. I know you worked at an early-stage VC because you wanted to learn about early-stage companies. So, as a potential founder, what do you think is an interesting trend for people currently looking to start a company that they should look into?

Christopher Payne: There’s the centralisation of data, so, web 3.0 is something that is a very hot topic right now, which I’m still not too certain as to how much of the technology behind it is to go into. But there are some very interesting potential ideas untapped today in the medical space on the ownership of your own data Then there’s the concept of centralising information in one place, similar to what we’re doing. But there are multiple different verticals in which you can do it, as I mentioned before, the conservation of medical data, but, also, all the different tools, having them together. People are doing it with a streaming network, centralizing all the streaming networks. So, there’s that part of centralizing information all in one place. And, then, there’s what I mentioned earlier, the elderly, in that sense, the third age. I think is a very untapped market that also has a lot of disposable income or savings. It is one that is, proportionally, fairly wealthy, in that sense, and that there are very few tools and solutions currently targeted at them. They can be for social interaction and events to then where they can be living or how they’re going to be spending their time. So, I would say those are maybe three of the ones that are quite interesting today.

Davide Rovera: Exactly. Lots of inspiration today, as well, for our listeners. One thing about you as a founder or as a manager. Is there any advice that you oftentimes give but do not follow yourself?

Christopher Payne: Maybe testing. We should be doing a lot more A/B testing. Sometimes, it’s very easy to fall into a rabbit hole and think that what you have in mind is the best way to do it and you end up going in so deep that if you had A/B tested prior, a lot sooner, in that sense, you would have saved a lot of time and energy. A/B testing, even if we’re pushing ourselves to do more and more, it’s something that we definitely don’t do enough.

Davide Rovera: Right. You have this pull as an entrepreneur, you know, to go to the next thing and, kind of, believe in your instincts a bit. Always being rational and testing. Okay. Going now to the very last question. As an entrepreneur, as a founder, what has been your biggest mistake?

Christopher Payne: Biggest mistake? What I studied at university, maybe. I should have done a degree that was a lot more focused on the technical side than in my initial degree. I originally did purely Business Management and Economics, and it would have been a lot more useful, I think, having more of a technical angle to it. But, this is maybe on a personal level. But, if not, in terms of as an entrepreneur, the biggest mistake we’ve made was waiting too long to launch. So, always trying to polish the product more and more, make it better and add another functionality that you know users will love, and they’re waiting. So, we built up maybe 1,800 people on the wait list and we’re giving them access very slowly because we’re scared that the product isn’t good enough. But, it’ll never be perfect. So, now we’ve just bit the bullet and said, “Ok, we’re launching this week in the app store, and it’s good enough.”

Davide Rovera: Yeah, the famous “perfect is the enemy of done”, in a way.

Christopher Payne: Yes, exactly.

Davide Rovera: You need to always ship. I think that, overall, this is extremely difficult for entrepreneurs because you want to deliver the absolute best that you can, and there’s always a lit bit of fear of rejection. But, on the other hand, the product has to hit the market or else you don’t learn, so It’s a difficult trade-off.

Christopher Payne: Absolutely.

Davide Rovera: Chris, thank you very much for sharing your inspiring story and for being so persistent in trying to build what you’re building and which you are now finally able to launch. And, all the best moving forward.

Christopher Payne: Thank you very much and thank you very much for having us.

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