Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious, upstart and home of over a thousand entrepreneurs who come here to tell the story of how they built their business. So, you can learn from them and apply what you learn and then hopefully you’ll build a successful company and you’ll come back here and share your story when the time is right for you.
Today, I’ve got the story of an entrepreneur who built a company and sold it to Intel. We’ll hear how she did it. Pilar Manchon is the CEO and founder of Indisys who creates software that allows computers to understand humans who communicate with those computers normally and naturally, just like humans do. It’s an amazing piece of technology. We’ll find out how she did it and it’s all thanks to my, well I was going to say my sponsor, but instead of that, I’ll say, I’d like to give you if you’re watching me, a free ad.
All you have to do is, go to mixergy.com/leadpages and create a template, a page that helps people get leads and helps people to convert hits into email addresses. If you create it and sell it on that page, I will give you a free ad. I will help sell your, your lead page. Basically, you create a template that allows people to collect email addresses. You sell it on the lead page, lead page marketplace, and I will. I’ll actually sell it for you. All right. I’ve got to work on that pitch Pilar, but right now. Now I have to welcome you. Thank you for doing this interview.
Andrew: Hey, I want to make sure I am pronouncing your name right because I know that people will listen to this interview on their way over to a job interview with you or listen to it and study it because their professor gave it to them and I want them to know how to pronounce your name. How do I, how do you pronounce it perfectly?
Pilar: Pilar Manchon.
Andrew: Manchon. I’m getting closer with each try but I do like the way that you say it better, obviously. Hey, do you remember the day that you announced to your team that you sold the business?
Pilar: I don’t think I will ever forget that. It was. It was very exciting. It was a little scary. It was. It was also hard. It was a very emotional moment. And it took me by surprise. Completely.
Andrew: How did you react?
Pilar: Me or them?
Andrew: You. You were surprised. Are you saying that you teared up or that you just? What do you mean?
Pilar: Well, the way things happened. It was building up because obviously there were a lot of negotiations and discussions in the background and not everybody was aware of that. My executive team was in the loop but not the rest of the team until everything was pretty much happening. So, you know we have been building up so much tension to that moment that by the time that we had to announce it we were just, you know, about to burst.
And in our second sessions at the time, we had just closed around a funding a few months before that. And that was a very exciting, very important moment because we were going international. We were expanding. We were growing. We had the supports. It was great and then just a few months after, we announced that we were being acquired. And that was huge, huge surprised for everyone. And it was a very emotional, very important moment. Yes.
Andrew: Wow. And well, before we started doing this interview, we were talking about whether you considered yourself a businessperson before. But you weren’t the kind of person, or were you the kind of person growing up who said, one day I’m going to build a business. All right. Let’s find out how you got there then. It actually started for you. You grew up in Spain and when you were 12 years old, before this. Did we just lose you? There you go. When you were 12 years old, something shocking happened. What happened?
Pilar: When I was 12?
Andrew: Was it when you were 12 years old? You were on your way to school.
Pilar: Oh, well, that has nothing to do with my company.
Andrew: No, nothing at all, but it seems like it is something that that taught you a lesson. That helped you build this business. Unless I am reading too much into it.
Pilar: Well, when I was 12 years old, I was attacked on my way to school. I was a very shocking moment when you are a child and you know, at the time, I, you know, was unaware, really unaware of the dangers of the street and I was just walking to school like any other school girl at the time and some guy came running behind and grabbed me. What I learned there was that even though it was a very extremely scary moment, it took me by surprise because, you know, I was in shock. I managed to fight him off and kick him between the legs and smack him with my folder and run away. And I was scared to death and by the time I got to school, I was still in shock but you know, I think became, I became very aware of the fact that I am a fighter and no matter what life throws my way, I will find my way out of it.
Andrew: That’s what I thought and clearly this business that you built wasn’t an easy climb up. It. You had to fight back, right? And do you feel that because you fought back then, that it made you aware that you can fight through business. That business is. That you can handle all these business challenges that we’re going to talk about.
Pilar: Well, I think that every experience in your life teaches you a lesson about the world, about the people around you and about yourself. And, I think that knowing yourself and what you’re capable of is a very important thing if you’re trying to succeed but it is fair to say that I was very lucky to be surrounded by fantastic team of people. I did not really inspire myself. I am far from that. I had, I was surrounded by wonderful people who believed in the business, believed in the product, believed in themselves and also believed in my ability to lead them to where we are today and that was key. That was key. It’s very hard to do anything by yourself. You have to surround yourself by the right team.
Andrew: You got, well before you did this. You were in Florida for startup. What was that startup?
Pilar: The name of that startup was Knit by Tell. I was recredit while I was at Stanford. I was at Stanford here in California with a [??] scholarship and they were hiring and it was my very first industry experience here. It was very interesting. I learned a lot. I also learned about Florida and what Florida is like.
Andrew: So you went to Florida just because of this job, what was it about the job? What was it about that start up that you made you say I am willing to go to Florida? I’m willing to take a shot on this company?
Pilar: Well, at the time, I had only worked in research and academia. So, I was a very research and academia focused person. Then, I thought for me to grow, personally and professionally, work in the industry was important. So, I wanted to get my hands into real things, right? I wanted to get things done, beyond research. And I was eager [??].
Andrew: What do they do?
Pilar: Well, Knit by Tell was creating voice applications for customers. It was. They had. They were using software, commercial software to create these applications on the phone. So, it was an IVR company, pretty much. It’s. Well, we all know. If you want some information, say information.
Andrew: Ah, yeah. Yes. I see.
Pilar: Press three. That kind of a company.
Andrew: Okay. How did you get the idea for Indisys?
Pilar: Well, once you are in the Silicon Valley, you kind of get bitten by the entrepreneurial bug and you know you get this need to do something, to create something. Right? And I was very fortunate to get a scholarship to study and work and learn and research in different places. And one of them was obviously Silicon Valley California at Stanford University which is, you know, a fantastic place to do that.
And by that time, I went back to Spain and I was working in research again with my co-founder who was the director of the research [??} for the University of Seville. I already knew that I wanted to do something by myself. And you know, I had been working in the industry and I knew what the state of the art was. The results which we got in our research were just fantastic and the, well what we had been developing was very focused on real world needs. So, I saw the opportunity. And I said, well, this is our chance to do something. To change something. To have an impact in this space. And I had no clue of how to put together a company. Like zero.
Andrew: What was your vision for the product?
Pilar: What was that?
Andrew: What was your vision for what the product would be?
Pilar: Well, at the beginning, I was more familiar with the IVR space.
Andrew: What’s IVR?
Pilar: IVR is interactive voice response systems which is like the telephone kind of systems I mentioned before. And I was more familiar with that space because that’s where I had been working in for a couple of years and that’s the, that was the focus of the research that we were doing, too. But, when we created the company and we saw the market and we saw what the opportunities were, we volt a little bit more into the conversational agents where in general. We were not just focused on the form but also in the word based pro max and mobile devices.
Andrew: And so this would be, I would think one of the examples that I saw was, a cartoon of a human being that we can go to and see online but we can interact with if that cartoon was a human being, a real representative of the company that set it up. Is that right? That was the vision?
Pilar: Yes. The only difference is that the embodied virtual agent was initially a cartoon and then there was a 3D photographic character that looked very close to what a real human being looks like.
Andrew: I see. Is it possible that I’m not talking to the next version of that software and not the real founder?
Andrew: Maybe? You said that that evolved after you looked at the marketplace. What kind of research would you need to do that would tell you our original idea doesn’t work? We have to really adjust it.
Pilar: Well, the first thing you do is to see where the opportunity is, whether there is demand for that program or an opportunity to break into the market. What program are you going to be [??]. What are the challenges that you are going to be helping with and how much money is there in that market? You know, that is the investment that you have to make to get there.
And at the time, it was very compelling in that space. The problem was the players in that space were huge. And the kind of money that you need to get into that space is very, very high. So, even though we were trying, we had a very compelling demo on the technology. People seemed to be genuinely interested. It was really hard to break through that huge barrier, especially when you’re a small startup, showing some high tech that’s unbelievably advanced for what they had seen so far. We were small. We did not have much financial muscle.
So it was hard for these large customers to trust us with that. And the difference with the [??] is that the investment was smaller and it gave the opportunity to smaller companies and smaller organizations for them to do something a little more disruptive without so much risk. And that opened the door for us to do all this international [??].
Andrew: I see. So a company might not be willing to replace its current phone system with a new start-up’s phone process, but online they might be willing to throw a link up or give some space on their site to a new tool that would allow their potential customers to interact with them. Is that the difference?
Pilar: The initial investment was much smaller in the work that was any phone based system.
Andrew: Okay. The initial one was smaller than a phone based system. Then what was it?
Pilar: The kind of investment?
Andrew: No. Sorry to be so lost here, but I guess I thought what the original idea was interactive voice response, something that would work on the phone for clients who were saying I need support or I need to get my balance. That was the original idea?
Pilar: Yes. [??] on the phone the kind of infrastructure is very expensive. And if you already have some infrastructure in place, replacing that or modifying that with current [??] is also a huge investment. However, when you introduce a new channel, a mitigation channel, on your website, it does imply investment but it’s not nearly as large as it was as when you tried to do that on the phone.
Pilar: So, it’s a different space in terms of what the industry is organized like today and, therefore, it opened an opportunity for us to do something new and challenging that proved to them that we could have those intelligent conversations in space that wasn’t where they had to make that huge investment.
Andrew: Okay. All right. So I was following. That makes total sense and now I understand the evolution of the product. You started out with three co-founders. As you progressed, you became two. What happened to the third co-founder?
Pilar: Well, that’s one of the lessons that life teaches you. My two co-founders were professors at the university. The co-founder we ended up with together, the company with was the director of the research group. The other fellow was one of the researchers, one of the assistant professors there. And since they were both full time professors that were working full time, I was in charge of basically looking for the funding to put together the company. And I was CEO in the company when there was no company or CEO, right? So, I was just pitching in where I am. By the time that we managed to align the investment, this gentleman thought that he would be better off doing it by himself. So, he ran off with the investors.
Andrew: Wow. So he got both the investors that you brought in and the idea that you co-developed with him?
Pilar: He took, even though we had purchased all of the exploitation rights from the university because the software was developed within research [??] at the university, he took the software. He took the business plan. He told the investors he didn’t need us and he ran away and put together the same company with our investors and our seller.
Pilar: And that. It was not pretty. No.
Andrew: Why didn’t you give up at that point? He had everything that you needed. There’s. There are tons of other ideas. Why not let him do it and not compete with someone who had already gotten ahead?
Pilar: Well, that would have been the easy way out. Right?
Andrew: But it’s the fighter in you said, no I can do this.
Pilar: I guess that I knew for a fact that it wasn’t his idea. He was not the one who was going to drive it. And if he thought that we were not important than he was obviously not going to get very far. And I was right. He failed miserably a few years afterwards. And we succeeded.
Andrew: They closed 2010.
Andrew: Wow. Actually, here I am looking at your notes from the pre-interview and you said I even won a TV contest.
Pilar: Yes. That was a lot of fun, actually. So, when we were pitching for our money, we were selected as one of the most interesting projects in, for some TV contest that was called Generation 21st.
Pilar: And, you know, the whole point of the contest was to pitch your business and to prove that you had the business acumen and abilities, you know, to take it to success. And I won. So, they gave me a car.
Andrew: Oh, wow.
Andrew: What did you do with the car? Did you drive it or did you sell it?
Pilar: I drove it for the longest time. It was, unfortunately, the car was not the kind of car that you need for software. It was more like a van kind of car.
Andrew: I see.
Pilar: It was small and it was definitely, very. It helped out.
Andrew: All right. So, now you have your idea. You have your car. It’s time to start finding customers. Right? How did you find your first customer?
Pilar: Well, before we found the first customer, we had to find the first money because we had a car and that was not good enough.
Andrew: I see. It wasn’t enough to finance.
Pilar: So, we were looking at the same time for customers who would be interested in doing something with us because that would be an attraction to bring the money, to have peopled invest in you. But it was hard at the time because technology was only a group of concept. It was not fully developed. And so, we needed seat capital to finish developing the software first.
Pilar: And we put money in ourselves. We brought some money from the, you know the three Fs. Family. Foods, [??]. Right?
Pilar: And we also got business angels who invested some money and with that money we started business. We hired the first few people. Interns. And we got started. We started developing what we needed to and then about a year a half later we managed ghost the first round of funding with a venture capital. That was 500,000 Euros.
Pilar: And that gave us enough to basically finish the development and go out and start selling like crazy.
Andrew: Which of these pitch sessions were you pregnant during?
Pilar: Well that was fun to. So, if I had to give advice, does not finish your PhD, put together a company and have a baby at the same time.
Pilar: It’s not a good idea. So, yeah. As I was pitching for capital, I was invited to this event and I was 8 1/2 months pregnant.
Pilar: It was fun. People are more concerned about my breaking waters right there than what I had to say. Yeah.
Andrew: This was the first time? When you were pitching the early angels or when you were pitching venture capitalists?
Pilar: No. We had already funded the company. And actually when I closed the rung I was three months pregnant.
Andrew: I see. So, did you get any pushback from investors who saw you pregnant and said you know what; she’s going to give up on this idea once she has the baby? She’s going to have other things going on in her life and she can’t be trusted to follow through?
Pilar: Everybody was very politically correct.
Andrew: I see.
Pilar: At the time.
Andrew: But what about subtlety did you notice anything underneath that political correct veneer?
Pilar: Well, there were questions. There were questions about well what are you going to do when you have the baby? How, how are you going to handle this? Are you sure you can do this? This is a very early stage. And, you know, to tell you the truth, they were fair questions. Something that you have pay a lot of attention to in a start of is how much time and effort an entrepreneur can put and it doesn’t mean that if you’re a mother you can’t, but you know, you do have to make sure that you, you convey the confidence to do so and your committed too. So, there are responsibilities there. So, I don’t know. I feel, not at the time.
Andrew: But in retrospect.
Pilar: Yes, in retrospect there were people that were extremely insensitive to the fact that I was giving birth. Like there was this project were you know, we were invited to participate and you know they were asking for data and documents and I said “Well you know like, can you wait a couple of days” and he said “Well I need them tomorrow,” and I said “Well, I’m giving birth tomorrow.” [laughing]
Pilar: He said “Okay, let’s make it Monday then.” [laughing]
Andrew: [laughing] Wow and boy that is not an easy thing to do after giving birth.
Pilar: No it wasn’t easy but you know, women, you got to do what you got to do and if you believe in your project and you have your family and your team behind it, then you know, things get done one way or another.
Andrew: Your working unbelievable hours and I could see how you follow through, but one of the things you told me before you started is, you know, a product is very much like a baby and everyone looks at it and says my baby is beautiful, my project is beautiful, but when you take that product out to the rest of the world they don’t like it so much. Did that happen to you when you first built the first version?
Pilar: Well it’s not that they don’t like it so much, it’s that they don’t see the value…
Pilar: …It’s, when your so immersed into the goodness of the technology for the sake of the technology and you’re so proud of yourself for having, you know these breakthroughs are you know what we’re 50% faster or you know our performance is like, it’s three points higher than anybody else.
Pilar: That doesn’t really mean anything for the customer, unless you can tell them what impact that’s going to have in their problem, right? So at the beginning when you’re a technologist your only focus on describing how much better your baby is then everybody else’s baby, when the message needs to be okay, this baby is beautiful but wait until you see what it’s going to do for you and it’s going to increase your sales, it’s going to help you with this, it’s going to have a real impact in your business. That’s how you really sell product. But you know at the beginning, for a technologist, it’s kind of hard to see it that way. [laughing]
Andrew: Especially with something like this. Look you talk to it, it’s almost like talking to a real human being here and it’s so much better than the competition, it was that kind of thing and then your first customers came to you from the Chamber of Commerce in Seville and when you had to tell them what it could do for them, what is one example of what you told one company that your software could do for them?
Pilar: Well in that case what they were looking for is a solution that would free the time for the people that were answering the phone, because a lot of people were calling to ask simple questions about what they were doing, at what time they were doing it and you know it was something that our system could do for them very well…
Pilar: …and they were also looking to be innovative and you know the fact that we were a company born in Seville near the Chamber of Commerce of Seville that was also very interesting and there was also personal affinity. I think that when people see you inspired and compassionate about something and they see that it’s beautiful and they see there is a challenge and they see you’re trying really hard. They kind of, you know if you like, if they can be something they will and they want to be part of it and one of the most beautiful parts of putting this company together is that a lot, if not all of our customers feel like they were part of it. And to tell you it’s worth, once we get one customer, that customer will be our best advocate ever…
Pilar: …Like he will call and he will try to find out, did we get the next contract? [laughing]
Andrew: Ah, did we get the next contract, oh that’s interesting.
Pilar: Yes it was a beautiful, I mean there were parts of it that were extremely hard, but it was definitely a beautiful adventure.
Andrew: So they get on, they buy it, they…but did they buy it or did you just give them a sample?
Pilar: Oh no, they paid. [laughing]
Andrew: They paid.
Pilar: They paid…
Andrew: How did you know what to charge for it?
Pilar: …they didn’t pay that much but they did pay. [laughing]
Andrew: Oh, okay. How did you know what to charge then?
Pilar: Well, you know you have to see what the market is, you have to see how much other people are charging, how much your cost is and you know, basically whether you know you can charge more or less depending on how much you need that first customer, right?
Andrew: I see, so you give them a really big discount because you want them first and they’re a nice marque customer. Then it’s time for you to get the next customer, one of first big ones was the health department?
Pilar: The Andalusian government, that’s right, and they were…
Andrew: What did they need…I’m sorry.
Pilar: …They were huge advocates of ours and they were really good to us.
Andrew: What did they need it for?
Pilar: Well what we did for them was actually very interesting and a book chapter was written on the project because it was so successful and so descriptive [SP]. We created a virtual character called Maria, who could basically give you appointments…
Pilar: …for your doctor or pediatrician online and she could also give you information about sensitive subjects like sexually transmitted diseases, or sexuality for teenagers, or about the flu, things that people needed to know either urgently or they were kind of sensitive and it was hard for them to ask for a real person.
One of the collateral effects of this technology, being at the same time very empathetic and human like but also very anonymous and non-judgmental because it wasn’t a real person, it opened the door for, say, a bunch of teenagers to ask sensitive questions that they were not sure about. They had a huge success. It was a very successful application.
Andrew: You know what? NPR did a piece on that, about how the military has a chat bot that people will go and they’ll ask questions if they’re thinking of enlisting, questions that they wouldn’t feel comfortable asking another soldier because they’re afraid of coming across as weak or insecure. They do need a place to go and ask it. All right. I see the power of that.
Andrew: What was the next big goal? Actually, you know what? At this point, it looks like things are rolling for you. Were there any challenges at this point, or was it once you get the health department on board, once you get the chamber of commerce, everyone understands that they need to do this?
Pilar: Then, the financial crisis came along.
Andrew: Oh, okay.
Pilar: Even though we were growing and we managed to be profitable in 2009, our sales cycle was extremely long. The companies that we had to go up against for the contracts were much larger than us and had a lot more resources than we did.
Pilar: It was a big battle. What happened with the financial crisis is that even though we had signed a bunch of contracts, they fell through. You know, the people…
Andrew: Oh, because when there’s a crisis people can’t follow through, and they just use it as a way to get out.
Pilar: Yeah. It’s not like you’re going to go to one of these large banks and you’re going to sue them because they signed a contract with you. It’s like okay. Our whole pipeline fell through in 2010. We were not in very good shape, I would say.
Andrew: And, on a personal level, you and your husband had something happen.
Pilar: Well, that was a little later.
Andrew: Okay. Can we talk about that? I want to get to both. I keep pushing my interviewees for both the personal and the business. What happened?
Pilar: Like I said before, it’s not only what you can do but who you surround yourself with. I was at the time happily married and I had a baby, but things started to not go so well in terms of the company. Some people were leaving. We had a lot of trouble. The customers were falling. There was no money in Spain. It was scary.
When you think things cannot get any worse, well, my husband decided to abandon us. He left. With no previous warning, he just decided to leave his son behind and me almost in bankruptcy.
Pilar: I know. When your business is not going well and, all of a sudden, by surprise, your personal life goes down the drain, yeah, it’s not a good…
Andrew: That’s a really big, shocking move for a husband to do, for a father to do.
Pilar: I know. Don’t ask me how. Don’t ask me why.
Andrew: Have you talked to him since then about this?
Pilar: Well, I don’t think I will be talking about my relationship with the father of my son.
Andrew: Okay. All right. I don’t want to push more than you’re comfortable with, but that’s a really shocking thing to have happen to you.
Pilar: It’s a terrible thing to happen, especially because there is a child who is not to blame for anything. Obviously, I still don’t understand how a parent can do that. But, you know, what happened…
Andrew: What about you?
Andrew: This is all happening. People abandon you. I remember reading a book about Steve Jobs back in the NeXT days where the people who he brought on board from Apple, people who thought that he was a genius, suddenly started to disappear. The line that I remember him saying is you can all leave, but now I’m stuck, I can’t go because I’m too connected to this business.
You feel abandoned. Did you feel that? Did you feel any of that depression that entrepreneurs feel when things go bad like this?
Pilar: Yes, and for a while it was a huge decision. I mean at the time everything is falling around you; you’re on the verge of bankruptcy. You don’t know if you’re going to make it to the next paycheck. You have responsibility of a whole team that is looking up to you to make things happen. But there are a lot of things that you have no control over.
At home, you all of a sudden find out that your husband is cheating and going away when your son needs you, and he was very young at the time. He was only six years old. You know, a lot of other people are pulling in different directions from you, and there is only one of you to go around. So you have decisions to make.
Andrew: How did you get through it?
Pilar: Well, I decided that failure was not an option.
Pilar: When you make a decision then there is no other way to move forward. So what I did was make sure my son was taken care of. I dedicated all the time that my son needed. Unfortunately, we needed to take him to therapy and things like that. But I am lucky enough to have my family, as well, in Spain. They were a big part of that support I needed. I worked like crazy and slept very little. I think one of the things that got me through, were physical activities. I like sports. When you cannot sleep because stress is devouring you inside, instead of feeling sorry for yourself, you get up and run.
Andrew: With running, you don’t need to wait for a team of people to join you. You don’t need to wait for a stadium, the ballpark or the gym to open up. You can just go do it in the streets.
Pilar: Not only that, I actually got an elliptical bicycle.
Andrew: Oh, I see.
Pilar: Since I couldn’t leave my home, the only way I could do that was by having the gym at home. You know, sometimes at 3:00am in the morning, when you can’t sleep, you jump on the bicycle and work on your business plan.
Andrew: Your family took care of your son during the day while you were working?
Pilar: Well, he was in school.
Andrew: Okay. Well, that helps.
Pilar: I had made a point of taking my son to school and picking him up every day.
Pilar: So actually I found that very, comforting. By the time I managed to close our first round of funding, because even though negotiations were endless, I was working 18 hour days, I established that at 5:00pm I had to go and pick up my son. So everyone was working around that, because there was a gap when I had to leave. Then I can come back and work later.
But at that time, I am missing. So unless there is some emergency and the world is falling through, I am picking my son up from school. Once you organize yourself, and make it clear that for you it is a priority to take care of your family, within reasonable boundaries of course, people do respect that. At least I found I was lucky enough to be given that kind of understanding. I won’t be giving them an option either.
Andrew: You know I was really appreciative this week when we had a challenge with the nanny. She had a personal issue and couldn’t come in. Then we needed another nanny. You and I were scheduled on the day that she couldn’t come in because of her personal issue. So then we rescheduled and the personal issue moved out of her control to yesterday, the day you and I had rescheduled for. I called you up and again you understood. I was really appreciative. In my head, it was bigger, as if I were letting my personal life interfere with your schedule. I felt really guilty about it. But I appreciated that you understood and I am finding now, as a new dad, that people do understand much more than I expect.
Pilar: You know there are things in your personal life, which will never come back. Your children’s growing is one of them. So other things can wait. It’s something you have to do on a regular basis. I knew that when I became a mother and it became more so when I became a single parent. I am the only one responsible for my son, and he is looking up to me. He’s growing, he has his needs, I am his mommy and that’s part of who I am. I think I can make everything compatible. Yes, you can have it all. You can be a good mom, and you can be a good interpreter, and you can be a good human being, all at the same time.
Andrew: Go figure, you don’t have to sacrifice one for the other. So, I see now how you rebuilt yourself, despite all of this. How did you rebuild your customer base? What did you do to bring people in and get the revenue back into business?
Pilar: Well, from my perspective, I think, that at the time failure was not an option. When I was in that position I did anything and everything I needed to. Because you’re so passionate about what you do, you are also be honest about what you can and what you cannot do. I think that people see through that. I have some good things and some bad things. And one of… I don’t know what they are things is that I, I am very transparent and you know, if I see it, I see it, and I will, you know, actually give it my full support and I will explain to you, give you every single argument. If I don’t see it. I will also tell you.
Pilar: And one of the things my customers saw was that I was always going to be honest. I was always going to give them not only a 100% but a 120%. I never. I never overpromised. I always under promised and over delivered. So, if I told them I was going to do something, we did that and more, but I never told them I was going to do something I couldn’t do. And my team you got as well. And they, they stood by that. And I think that when you build that kind of trust and that kind of confidence and you know your stuff. They know that you are one of the best people in your field, because you’ve proven it. Because you’re executing it. Because you’re fulfilling on things. It’s not just all theoretical. Then you build that trust. You build that credibility, and that helps you move faster and more competent.
Andrew: I see. You’re saying that. You said failure isn’t an option. So, the part of our minds, especially as entrepreneurs, starts to wander to what are people going to think when this business doesn’t work out. How am I going to tell my employees that I failed them? How am I going to tell my investors that they’re not going to get their money back? All those brain cycles that would ordinarily go to that, you now cut it off and say well, I’m not giving that any space. It’s not going to be an option. And that then got you to focus on your business and it increased your confidence and you’re saying that when you talked to your customers with that confidence, being able to say I know this will help you. I’m not going to overpromise, but I know what this can do for you. They were persuaded by that confidence and that focus on them.
Pilar: Well it’s not that you cannot adapt. You cannot avoid thinking about that. But you confront it.
Pilar: You know, you say what’s the worst that can happen? The worst that can happen is that I fail miserably and have to close the company and you know. I live in Spain when you’re an entrepreneur, you basically have no back up, especially if you have no money in the bank and especially if your husband has left you. But you know what, if I have to go and clean houses, so be it. I knew that I could do this. I knew that everybody around me, including investors, customers, partners, employees, peers, everybody knew that I was giving it my very best. And that’s all that you can do. You know? You can just try and try and try and not give up until you basically succeed or completely fail. And since failure wasn’t an option, you know, I had to succeed.
Andrew: Who was the first big customer after the financial crisis?
Pilar: If I remember correctly, it was. Courting us during. Courting us one of the biggest groups in Spain, but they were with us during the financial crisis. They were one of the ongoing customers and then the first one we closed internationally was BTR, in Chile. It was. It’s one of the largest telecos in Chile.
Andrew: How did you convince them? What was it that you said, with your new focus, with your I will not fail attitude?
Pilar: Well, they were looking for a solution at the time. So it wasn’t one of those customers that you try to open the door to. They were actually actively seeking for a solution. And what we did was prove it to them that we were the best solution that they could get.
Andrew: What was the problem they needed a solution to?
Pilar: Well, we created a virtual agent for their webpage that would basically help them provide tech support for their customers. So, you know, when you’re teleco, people don’t know what’s wrong with their router and they’re calling all the time saying my router doesn’t work. Okay. Reboot. Nothing like that. Or you have to collect data to basically send an engineer there to pick something or you want to change your bank data or you want to know how much to pay this month. You know, kind of, the kind of things you call them for.
Andrew: I see. So, their problem was that people were making calls in or sending emails in and they wanted to see if they could reduce their costs and still give the customers the service they needed?
Pilar: Yes. There were a lot of people trying to reach them and you know, you want to provide the best service you can. But, if you have to have a call center that’s big enough to help everyone, whenever they want to, it’s gets very, very expensive and.
Andrew: And that’s why they were open to you. You were able to show them that your product can do what they needed and they signed up. Did that start to change morale within the company?
Pilar: Oh absolutely. That was one of the key products, especially because it was our first international project. And we had, we had beaten our competitors back later. That was.
Andrew: And everybody knew that you did.
Pilar: Yeah, we just started getting some visibility, and …you know there were very few companies that were able to do anything similar to what we did, so we were in the papers, there were a lot of press releases, that is good, yeah.
Andrew: Is this also when you gave the big bonus to the team.
Pilar: Oh no, there was no bonus, we were not…
Andrew: Not at that point, you were still fighting back.
Pilar: Yeah, we gave a little bonus to the team when we closed the first batch [??] which was the [??]. We worked like crazy for that and yeah, we gave the team a little bonus.
Andrew: And that’s the one that you beat the competitor, the guy who took your ideas.
Pilar: Oh yeah.
Andrew: Oh yeah, that felt great…So now you’re back on track, one company starts to build morale, it’s time to keep on growing, what’s the next step that you took in the business?
Pilar: Well at the time, Spain did not seem to be recovering from the financial crisis very speedily and the kind of business that we had was not a local business, this was a global business, so we had to go international. We were planning on doing that when we had more resources, like we were planning on growing our customer base in Spain and then growing and acquiring more resources and pitch for more money but there was no time, no place to do that, we were going to fail while we waited.
So basically we did what we had to do, we started pitching internationally, looking for money, looking for customers, looking for anything that would actually help us expand the business and prove who we are. We did all kinds of activities that would help people see what we could do. And we started pitching in the U.S., started pitching in the UK, we got customers, or potential customers, in New Zealand. We were going everywhere.
Andrew: You were a pitching machine internationally. Anyone who could potentially benefit from your software that you could reach you wanted to reach out to them and sell to them.
Pilar: Yes, but we had specific focus of activities. Because there are markets that are hotter than others. And even though you can extrapolate from one customer to the next, customers always look for something that is very, very close to what they are doing. So if you want to find customers in the U.S, your best chance is to already have a customer in the U.S. Even if you have one in Australia, even though they speak English, even though they can see it is working, it is not nearly as good. They want another peer to have been in the US doing the same thing right. So we had very targeted activities so we are opening our eyes to basically grab anything that could help us grow.
Andrew: I see, anything that can help you grow but you were staying targeted, you weren’t going to talk to anyone in the world, you wanted to stay focused within certain countries.
Pilar: We sized up opportunities, I mean at that time when you need the money and you need to survive and you need success stories to back you up and find the initial funding that you want to have to grow, any success story is a good story but it needs to be sizable, and it needs to be doable, and it needs to be profitable. So our activities aren’t targeted at particular markets, we were listening everywhere.
Andrew: I see. You mentioned people several times that because of the team you were able to build this up. One of the people who was especially helpful was the CTO of your company,
Pilar: Absolutely. Yeah Guillermo Perez, he was my right-hand. Don’t get me wrong, the co-founder was there. But he was the main…[??]. But Guillermo was definitely someone key in the development of our company.
Andrew: How did you find him?
Pilar: Well he had been working for the research group. Where the whole idea originated. And he was working for [??] at the time, so when we put together the company, we reached out to him and offered him the opportunity to join us early on, with stock. And he came. He came on board. And he was a key part of it.
Andrew: What made him someone that you could work so closely with? What made him your right-hand person?
Pilar: Well, we’re very different. Very different. He is an excellent engineer. Also a PhD in natural language, and I’m a linguist. He is very…engineer like, I don’t know how else to describe it. And he says things in a very technical, very feasibility kind of way. He is the kind of person that can analyze things, and build them, and do them, and see exactly what they need to be like. And I am more of the flexible type, okay, this cannot be done this way. How about these are the 20 ways.
Andrew: I see, so if he would come back to you and say, this just can’t be done this way, you could come up with creative other options and then he would find a way to make those work.
Pilar: Yeah, kind of. [??] our conversation between us.
Andrew: Tell me more about the subtlety, because this is an important relationship that we should learn from. What was like?
Pilar: The relationship?
Andrew: Yeah, how it seems like I’m over simplifying it.
Pilar: We fought a lot. I knew a lot, we both knew that the reason why we were fighting was because we had strong views about what we wanted to do or how we wanted to do it. I think that was the battles that we had.
It wasn’t my way, it wasn’t his way, and it was our way. It was the commitment that we managed to get together.
And because I also had the capability to understand that his opinion was better than mine in certain fields where he was more knowledgeable, more experience than me. And he also had the same ability to see well, you know, I disagree with this but then again you know, for this particular matter you might have more of an understanding.
So we found that balance and the agreements and discussions were always profession. And even though we felt very passionate about it we always able to go and have a beer afterwards.
Andrew: Beyond any individual person, the culture is what helped make the company. You said the culture was built during the hard times, how?
Pilar: Well during hard, and during the good time too. When we hired our team and I knew that the culture was going to be key. And I know that I didn’t need people who wanted a job. I needed people who wanted to be part something bigger than just a job.
And I also felt like for me trusting the people I work with is key. Loyalty is key, ethical behavior is key, honor, that sounds out of date, is key. So I made that part of our culture and whenever I hired somebody we had the contract, the legal contract, that were the company and me as a representative of the company was signing with them.
And then I also told them the following things, like well, this contract with the company and then you have an agreement with me where I rely on charm, personally commit to all those things. And I want your personal commitment to do all those things in this manner.
Andrew: What are some of the things that you would commit to and they commit to?
Pilar: Well I committed to always tell them the truth, to be honest with them. And to look out for them. Because that’s a manager, they are putting a lot of trust in you, especially in the hard times. And when you’re the one who’s responsible for their income they’re bringing to their homes, and they know that’s a lot of trust.
There are other jobs out there that they could get especially when the times get hard, right. So my commitment to them was too be honorable and to do my very best to make it successful. And you know, to make sure that I put the team first.
And I did that to the best of my abilities, I tried to do that. And I think that they saw that in the harsh times too. And what I was asking from them was also their trust, their best work, and their loyalty. So that there was an open communication.
Andrew: What does that mean? It feels like every company expects loyalty. How is it different for you? What was different about the expectation?
Pilar: Well, to tell you truth even though every company says that and it’s written. The fact that it’s written and it’s officially there doesn’t really mean it gets implemented on. And I find that a lot of things happen and very commonly in the professional space makes it almost acceptable.
Andrew: Like what?
Pilar: And what’s even worse, to be expected.
Andrew: Like what, what kind of loyalty is expected? I mean disloyalty is accepted and expected today.
Pilar: Well okay, like when you sign a contract with your employees, for us the intellectual property was key. We were doing things that were receiving edge. And they all had a contract saying that they could not go to our competitors, with that information.
Because obviously we were teaching, the kind of training that they needed, almost none of them had. So we had to train them from scratch because that kind of expertise it was not something common in the south of Spain. So we were investing a lot of time and effort in training them for them to become knowledgeable and we were transferring our knowhow.
And even though you have a contract that says, that they can’t [??] to our competitors, if you don’t mean it, there are ways to get out of the contracts. Specially in a country like Spain where you know the labor law go in favor of the worker. So, by the time they did that, even if you can sue them afterwards –
Andrew: What’s the point?
Pilar: – how’s that going to stop you from having your know-how being part of your competitor’s database right now? So, I made it very clear that we had to be a team, we had to be together. And for them, it was possible to hurt us badly if they wanted to, and I had to make sure that I had the personal commitment. You never know but you can only try, right?
Andrew: It’s not guaranteed, but I see how that would help. Alright, I want to ask you about how and why you sold the company to complete the circle, but first let me complete what I said at the beginning about my sponsor. Now, tell me if I’m getting this right because it’s brand new and I want to get it right and not do the bad sponsorship message that I did in the beginning.
I’ve interviewed several entrepreneurs on Mixergy who built multi-million dollar business doing nothing but creating templates, templates for webpages, right? And the reason that they do that is a lot of people need websites but they’re not willing to commit to hiring developers who are going to build out their websites. They just want a template that they can plug and chug and have work. Well, it’s not just about webpages that people need templates.
One of the most important pages on the website, is the page that collects email addresses. A whole business could be built on that page because it brings in leads. It saves those leads and allows you to form relationships with those leads and sell them. So, there’s a huge market out there for people who want lead pages, pages that do nothing that collect leads. I’m going to encourage some people in my audience to create those templates and sell them on a platform called leadpages.net. If you create it and put it up for sale there, they will send you 100% of the money that you make selling it, and since LeadPages has been such a supporter of mine, I will help sell those pages for you right here on Mixergy.
I’ll take maybe five people, the first five people who create templates. I will be your salesperson and I’ll do a better job than I did at the top of the interview.
So, here’s the deal: If you have any idea about how to create a landing page that looks good, go to Mixergy.com/leadpages. That page will show you easily how to turn your idea into a template for lead pages and how to put it up for sale and how to get the money for it into your account. If you do that and tell me about it – in fact, you don’t even have to tell me about it, I’ll find out about it instantly – I will become your salesperson right here on Mixergy, I’ll give you a free sponsorship spot. I’ll do it for the first 5 people who try it out. So, go to Mixergy.com/leadpages. It’s a great opportunity, it won’t last long, so go jump on it now.
I think that was better. But not just right yet. We have an open honest relationship, you and me. Give me some feedback. What did you think about the way that I promoted that?
Pilar: I think it was very good. It was clear and it was passionate. It was a little on the wordy side.
Andrew: You know what, that is true. I like that honesty. So, what I realized when I did the first run is I didn’t prepare to talk about it. I just said, “I talk for 1,000 interviews. I can just go out there and do it, I don’t need to prepare for this sponsorship spot, I’ll just talk.” And that’s why it didn’t go well. You should always be prepared.
I should’ve sat down and written out the message, and then shortened it and then understood it and then come out here and said it. Alright, so, now I’ll go back and practice that. I’ll think it through a little bit better and I’ll do a better sponsorship message later. I think about why am I being this open about my challenges with the sponsorship message or with questions, or a couple of things that I asked you “Did I express that clearly?” And the reason I want to always do that is I’m asking my interviewees to open up about their insecurities. I’m asking you to tell me about your challenge in your life. What kind of a fraud would I be if I didn’t open up about my challenges, about where I was having some issues. I think we can learn from that, and I think we need to both be open. What do you think?
Pilar: Yeah, I think that there’s no – I think that’s great. One of the things that I mentioned before is that you have to know yourself. It’s easy to say who you are when you’re not put to the test. So, it’s all a theoretical exercise. So, we’ll imagine, “Okay, if I were into this situation, I would always be honest, I would always be true. I would always be…” It’s not until you find yourself on the spot where you can actually get very hurt that you’re put to the test. You know we’re not perfect, we’re all human. but as long as you know who you are, I think that you’re set up for success. That’s one of the things that I’m most proud of. I found out that I am the person I thought I was.
Andrew: Yeah, and the only way to really find out is to be in those situations and keep on going and, boy, were you.
Pilar: I guess so.
Andrew: You went through the challenging period. You got out of it. You started building up your company. Then, you sold to Intel which was one of your investors. Why did you decide to sell?
Pilar: The only reason why I decided to sell was I really thought that that would lead to something greater with Intel than without Intel. The reason I put together the company was not only to make money, which is nice, and to do my own thing, which is something that suits my personality, but because I really wanted to make a dent in the space. I thought we had the opportunity.
Having something that you have helped create or been a big part of become part of a big stream or the mainstream is humongous. It’s like a big success. Having an impact on the way people communicate and in a very marvelous way changing the world for the better, it’s a great feeling. Is there anything better than that? I really thought that by selling the company and becoming part of a larger team with a lot more resources and a lot more reach we were going to achieve that goal, either earlier, or the probability of that happening was higher.
Andrew: Did you get to grow it since then?
Pilar: Well, we’re still in the midst. What you find out when you move from the start up space into the large corporation space is speed changes a lot. I went from the fast track lane to the corporate lane.
Andrew: I see.
Pilar: I’m learning to drive in the corporate lane.
Andrew: This has been about a year.
Pilar: A year and three months.
Andrew: When I go to indisys.es, nothing comes up. If I go to that /en, which is the English version, nothing comes up. What happened to the site?
Pilar: The site is no longer public, because the company is not an independent company anymore. It’s a team with Intel. We’re not selling products the way we used to. The technology is being used in different ways.
Andrew: I see, and it’s part of Intel. It doesn’t have its own presence.
Andrew: You own no share, obviously, of the business, because you sold it. How much did you own before you sold it, what share of the business?
Pilar: I had a little over 25%.
Andrew: Twenty-five percent. Was TechCrunch right when they said that you sold for north of 26 million?
Pilar: I cannot confirm that.
Andrew: You can’t confirm or deny that. Okay. Wow. How did your life change after the sale?
Pilar: A lot.
Andrew: What’s one example?
Pilar: Well, I moved to the United States for one thing. We closed the [??] on June 28, 2013. I was moving to the U.S. on June 30.
Andrew: Oh, wow.
Pilar: So, I had to move continents in, like, a day and a half. That’s a bit of a challenge. Then, when you move to the Bay area as a single parent, finding housing here, oh my goodness, that was hard. You have to…
Andrew: Even for you? I would’ve thought that at least since you had an exit that you’d be able to afford the expensive housing here in the Bay area.
Pilar: Well, it’s not being able to afford it. It’s being able to find it.
Andrew: Oh, yes.
Pilar: The demand here is so high. The houses come and go in one week. You see the house. You go and see it. You drop everything that you’re doing it. You go and see. You talk to your bank. You get all the paperwork, and still you don’t get it.
Andrew: Yes. You know, I talked to an entrepreneur last night over drinks who is starting a company that allows future homeowners to find out who’s about to sell their house. If you could do that… He’s looking for indicators in what people do so you can predict that they’re planning to sell houses. We were talking about what those are. Obviously, having a child is an indicator that you might need to move out and find a bigger place, or a job.
Pilar: Or a better school district.
Andrew: Or a better school district, yes. That’s right. Maybe you look also for when a kid becomes a certain age, and then you start to think. It’s that tough over here.
Do you now think about your husband and think if he only had stuck around instead, if he only had stuck around, he’s missing out and I’m so happy about it.
Pilar: No, to tell you the truth, it’s not part of our lives.
Andrew: Not even in the inner gloating. I would gloat internally so much.
Pilar: You know, what I’m happy about, is the fact that personally that is not part of our lives anymore. which for me, even there is a tiny little part of my son’s life because we just chose to just do that. You know, he has to see him. But in terms of what represents in our life when you realize that someone is not the person you thought they were, you’re better off alone.
The wrong kind of person. I mean, I’m not going to go into the details of what happened. But it was cruel it was undeserving, and it was terrible for my child, so you know I don’t wish him any wrong. I just want, you know, we’re happy, we have a new life, we have friends, family, and a career. My son is amazing. I can show you a picture; I can show it to you.
Andrew: Yeah, do it. Can you show the audience also?
Pilar: Oh, of course. Alex, can you come here?
Andrew: Oh, he’s there, you home, right. So the reason we were able to do it today is because you had tons of flexibility because you were at home.
Pilar: Come here for a second, honey. There is someone who wants to meet you.
Andrew: There are a whole lot of someone’s.
Pilar: He’s a wonderful kid, he’s a happy kid. We got over that and, you know, we’re better people I think.
Andrew: That’s got to feel great.
Pilar: Come here, sweetie pie.
Andrew: Oh, can you tilt the camera away from the window, yeah that way we don’t get the darkness. Hey, Alex.
Andrew: Hi, I’m Andrew. I was interviewing your mom for an audience of entrepreneurs who are all going to study how she did it and become better business people because of it. So we heard a little bit about your story.
Pilar: How old are you?
Pilar: How old are you?
Pilar: Eight, he’s about to turn nine. What are we doing for your ninth birthday?
Pilar: We’re throwing a Halloween birthday party.
Andrew: Oh, it’s going to be fun. When’s your birthday, what’s the date?
Alex: Tenth of November.
Andrew: Ten, what is it?
Alex: November 10th.
Andrew: Oh, November 10th, oh wow, okay.
Pilar: Thank you, sweetie.
Andrew: Yeah, thanks for coming on.
Andrew: Congratulations I can see the happiness in you, and I can see that you’re a much better person than I am. I would be gloating on the inside. And I’m really lucky to get to know you. Thank you so much for doing this interview.
Pilar: Thank you for giving me the opportunity to reach so many people.
Andrew: Absolutely, thank you all for being a part of it. If you got anything of value and I’m sure you did please her know, let me know. And go out there and use what you’ve learned. Thank you, everyone. Bye.