Jul 10, 2024
They Charged $30 Before Writing a Single Line of Code
An interview with Brandon Foo, Ishmael Samuel, Founder of Paragon Co-founders
Founder Focused
Most founders think product-market fit is about building something people want. But for Brandon Foo and Ishmael Samuel, the co-founders of Paragon, it was about learning what people were already willing to pay for—before they even built it.
After their first startup Polymail hit 30,000 daily active users but struggled to monetize, the duo took a radically different approach with their developer platform for integrations. Instead of building first and hoping customers would come, they secured paying customers before writing a single line of code.
In this candid interview, Brandon shares the hard-earned lessons from going from struggling startup to 4x revenue growth, including why charging $30 from day one taught them more about product-market fit than months of user feedback ever could.
Watch the full interview now on EO's YouTube channel! Below is the complete transcription of the interview. Minor edits have been made for clarity and readability.
Key Highlights:
"Early on we hit, I think it was around 20,000 to 30,000 daily active users, you know, we really saw a big opportunity to go upmarket and sell to enterprises. That was the point that we struggled to get traction in the market."
"Ultimately, if you know you're trying to build a B2B business, there's only two reasons that businesses pay you money and it's because you're saving them money or you're making them more money."
"We've grown in terms of revenue by over 4x in the last couple of years, and we've grown usage to over 15,000 connected users, which we've grown by about 17 times in the last year."
"I would recommend every founder who's in the early stages of building their product to try and get your first 5 customers before you actually build the product."
"Ultimately, if you know you're trying to build a B2B business, there's only two reasons that businesses pay you money and it's because you're saving them money or you're making them more money."
"We've grown in terms of revenue by over 4x in the last couple of years, and we've grown usage to over 15,000 connected users, which we've grown by about 17 times in the last year."
"I would recommend every founder who's in the early stages of building their product to try and get your first 5 customers before you actually build the product."
From Math Major to Serial Founder
Tell us about yourself and Paragon.
Brandon: I'm Brandon, founder and CEO of Paragon, and Paragon is the developer platform for integrations. What we do is help software companies integrate their products with different SAS applications like CRMs, sales, marketing, and messaging software. We started Paragon about 5 years ago in 2019. We've grown in terms of revenue by over 4x in the last couple of years, and we've grown usage to over 15,000 connected users, which we've grown by about 17 times in the last year.
I was in college in undergrad and I was studying math, math and economics, did a couple internships in private equity and banking, realized it wasn't really for me. It was becoming possible for anybody to build software and so I just started to do tutorials and learn how to code myself online. The information was available for free. I started to get involved in the hackathon community at UCLA. We host a hackathon called LA Hacks. It's the biggest collegiate hackathon in the world.
I was in college in undergrad and I was studying math, math and economics, did a couple internships in private equity and banking, realized it wasn't really for me. It was becoming possible for anybody to build software and so I just started to do tutorials and learn how to code myself online. The information was available for free. I started to get involved in the hackathon community at UCLA. We host a hackathon called LA Hacks. It's the biggest collegiate hackathon in the world.
How did you meet your co-founder and start your first company?
Brandon: So I met my co-founder Ishmael at the hackathon LA Hacks. We started a software development company together called Control LA. We built custom software solutions for startups and corporations that wanted to build mobile or web applications. We did everything end to end. Including branding, UI UX, logos, landing pages, mobile apps, etc. and we had the fortune of working with a lot of startups and a couple of really big companies and so we got paid to learn and to have a lot of fun.
Honestly, a large part of it was learning from other founders, and I think, and we got to kind of experience that alongside a lot of those founders that we were building with. I worked on Control LA with Ishmael for about a year.
Honestly, a large part of it was learning from other founders, and I think, and we got to kind of experience that alongside a lot of those founders that we were building with. I worked on Control LA with Ishmael for about a year.
The Polymail Experiment: When 30K Users Isn't Enough
What happened after Control LA?
Brandon: After that, I went to start an email company called Polymail. So we started Polymail around 2015. Email naturally is a very large market. Billions of people, almost everybody in the world uses email. Everybody uses email, but no one's very happy with it. There's a lot of opportunity for us to build a much better solution there.
We applied to YC. We ended up getting into the summer 16 batch pretty early on. We hit, I think it was around 20,000 to 30,000 daily active users while we saw a good strong adoption from individual end users, consumers, and we really saw a big opportunity to go upmarket and sell to enterprises to build a B2B email solution. Every company uses email for work.
We applied to YC. We ended up getting into the summer 16 batch pretty early on. We hit, I think it was around 20,000 to 30,000 daily active users while we saw a good strong adoption from individual end users, consumers, and we really saw a big opportunity to go upmarket and sell to enterprises to build a B2B email solution. Every company uses email for work.
What went wrong when you tried to go upmarket?
Brandon: That was the point that we struggled. To get traction in the market by building a very general email solution, our product just wasn't really well designed for a lot of B2B use cases. We tried over time to take a solution and retrofit it to different problems that we tried to find in the market as opposed to starting from those problems in the first place and then building the products from that.
So I think going back, if you know we had the opportunity today, I would say starting from day one in parallel with the product I would also consider building a go to market strategy.
So I think going back, if you know we had the opportunity today, I would say starting from day one in parallel with the product I would also consider building a go to market strategy.
Finding the Integration Pain Point
How did that experience lead you to Paragon?
Brandon: When Ishmael and I first started Paragon, we looked back on our experience as developers. Eventually, you know, what took us back and took me back to the problem that I had faced at Polymail and when we were trying to sell to enterprise customers, hearing the same request, can you integrate with Salesforce? Can you integrate with HubSpot? Can you integrate with all these different solutions and having to write code manually to build all of those integrations and basically reinventing the wheel every time.
In our discovery process, exploring, you know, different ways that we could try and tackle these problems it took us back to, you know, the integrations problem and seeing that, until Paragon, until then, the only real solution in the market was for developers to write code for every single integration for every single API, to build these integrations with what are thousands of different applications in the market today.
In our discovery process, exploring, you know, different ways that we could try and tackle these problems it took us back to, you know, the integrations problem and seeing that, until Paragon, until then, the only real solution in the market was for developers to write code for every single integration for every single API, to build these integrations with what are thousands of different applications in the market today.
When did you know you had found the right problem to solve?
Brandon: Through that process, I think we eventually found, you know, really strong conviction on if we could build the Stripe for integrations if we could build the single connecting layer. That developers could just install once and instantly connect their product to the hundreds of thousands of different SAS applications in the market, that's something that could be useful to almost every software company in the world.
And we realized then that, hey, this is really an unsolved problem, but the size of the problem is, is huge. It's like a multi-billion dollar problem. No one's doing it right. We rebuilt our entire product from the ground up focusing on that use case of customer facing integrations and, within two months of launching, we saw a very strong product market fit, just hockey stick growth in terms of usage, retention, ARR, etc.
And we realized then that, hey, this is really an unsolved problem, but the size of the problem is, is huge. It's like a multi-billion dollar problem. No one's doing it right. We rebuilt our entire product from the ground up focusing on that use case of customer facing integrations and, within two months of launching, we saw a very strong product market fit, just hockey stick growth in terms of usage, retention, ARR, etc.
The Customer Validation Framework
What made the difference in finding product-market fit with Paragon?
Brandon: I think we were able to very concretely define, you know, here's the market that we're trying to build for. Here's the problem, here's the value that customers derive if we're able to solve this problem for them, and I think that is ultimately what's allowed us to pursue and capture a much bigger market opportunity with Paragon.
I think it's a great thing when customers do one of two things. They're already spending time, money, and resources trying to solve this problem. That's when you have like your ideal user, they've essentially validated that, hey, this is a significant enough problem for me to pay people or spend time doing the thing. So when you, when you see people jumping over hoops trying to solve your specific problem, I think that's a great sign.
I think it's a great thing when customers do one of two things. They're already spending time, money, and resources trying to solve this problem. That's when you have like your ideal user, they've essentially validated that, hey, this is a significant enough problem for me to pay people or spend time doing the thing. So when you, when you see people jumping over hoops trying to solve your specific problem, I think that's a great sign.
What other signs indicate strong product-market fit?
Brandon: You know, 2, if you have customers using your product and they're reporting bugs, and they're, you know, telling you all the ways that it could be better. That's actually a very good thing. I think a lot of people get very self-conscious. We do a lot of betas just from our founder network, and I, I like to report bugs, and people get very self-conscious about that. No, that means I'm using it, and, you know, I'd like to see it improve.
And if you have customers who are constantly reporting bugs, you know, think, you know, are, are they legitimately angry, you know, or are they so excited about your product and they're finding all these different things that, you know, they, they, they want to improve.
And if you have customers who are constantly reporting bugs, you know, think, you know, are, are they legitimately angry, you know, or are they so excited about your product and they're finding all these different things that, you know, they, they, they want to improve.
Get Customers Before You Build
How did you approach customer acquisition differently with Paragon?
Brandon: Having gone through my first startup in Polymail, we were very intentional about doing when we first started Paragon was trying to get our first customers before we even built the product. As soon as we started to think of and test and validate different ideas and as soon as we started to write the code for some of these ideas, we were doing this in parallel and trying to get customers, pitching customers, trying to basically validate our sales process at the same time and trying to get customers to pay $30 would they pay $50? Would they pay us $100 if we could deliver on this product that we're pitching them and there's no better test than if a customer is willing to give you $50.
Why is charging customers so important for validation?
Brandon: Ultimately it comes down to. Are people willing to pay for it or are they willing to keep paying for it? I think a lot of founders make the mistake of not charging for that product, and ultimately, if you know you're trying to build a B2B business, there's only two reasons that businesses pay you money, and it's because you're saving them money or you're making them more money. And if you're not providing a strong enough value prop in one of those two things, then you know, they're not gonna do it.
So charge early and charge as much as possible, even before you build a product to like try to get people to, you know, pre-order it and that shows intent, that shows value.
So charge early and charge as much as possible, even before you build a product to like try to get people to, you know, pre-order it and that shows intent, that shows value.
The $30 Pricing Strategy
What's your approach to B2B SaaS pricing?
Brandon: For B2B SAS, pricing is generally pretty straightforward. There's a monthly subscription and for any meaningful problem that you're solving for a business, I think you should be able to charge at a minimum $50 a month. If a company is not willing to pay $50 a month, that probably means you're not solving a big enough problem for them.
I would say if you're selling a B2B product or you're trying to validate a B2B product in the market, start at $30 a month, which is where we started and then if you get enough customers, you're willing to buy your product at $30 a month, start asking for $50 a month, start testing higher and higher price points, and I think doing that both is good for your growth but also helps test the strength of your product market fit and how big of a problem is it that solving for these customers and it's a very iterative approach.
I would say if you're selling a B2B product or you're trying to validate a B2B product in the market, start at $30 a month, which is where we started and then if you get enough customers, you're willing to buy your product at $30 a month, start asking for $50 a month, start testing higher and higher price points, and I think doing that both is good for your growth but also helps test the strength of your product market fit and how big of a problem is it that solving for these customers and it's a very iterative approach.
How does pricing help you understand your customers better?
Brandon: I think pricing is always a work in process and we're still changing our pricing to this day but I think in that process, you'll learn more about your customers and what they are willing to pay more for what they're maybe not willing to pay more for, maybe who your customers aren't, you know, and who your customers are that you should be focusing on.
The 5-Customer Rule
What's your advice for founders trying to validate their ideas?
Brandon: First of all, I would recommend every founder who's in the early stages of building their product to try and get your first 5 customers before you actually build the product, there's so many ways that you can do this now. There's so many tools available where you can easily spin up a landing page that sells the value prop of your product, and you could buy a few ads or you could send cold emails to your prospects to this landing page and see do people convert, do they actually buy it or maybe you have a waitlist or this is something anybody can do without running a single line of code.
If you can go out and get 5 paying customers or 10 paying customers, probably means that there's some meaningful problem out there that people are willing to purchase, pay money if you can solve, and that's a good sign you should build the thing that you're marketing.
If you can go out and get 5 paying customers or 10 paying customers, probably means that there's some meaningful problem out there that people are willing to purchase, pay money if you can solve, and that's a good sign you should build the thing that you're marketing.
What if you can't get those first 5 customers?
Brandon: If you can't get 5 paying customers, hopefully in that process you also have the opportunity to treat it like a sales process and talk to those customers, get their feedback, pitch them on the solution that you're building, even if it's not the thing that they're willing to pay for now, you can get some deeper insight into what are the problems that they have, maybe they're tangential, maybe it's something completely different than what you had thought was the problem that you're solving.
I think that process is even more valuable in terms of if customers are willing to give you feedback on what are the problems that they are willing to pay for or the problems that they have that can help you iterate and shift your product approach, shift your strategy, and eventually you will find something that people are willing to pay for.
I think that process is even more valuable in terms of if customers are willing to give you feedback on what are the problems that they are willing to pay for or the problems that they have that can help you iterate and shift your product approach, shift your strategy, and eventually you will find something that people are willing to pay for.
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