Spanish startups with Emily Lomban

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Guest

Emily GC Lomban

Founder & CEO
Froged

Froged is a Spanish startup focused on helping companies improve customer onboarding and retention while reducing churn rate.

Sean has founded multiple companies and done multiple 8 figures worth of business.

He’s currently advising, consulting, and investing in business just like yours.

He knows where you’ve been, and he knows where you’re going.

Book a call with him today to see how he can help you get there smarter, faster, and in a way that aligns with your life goals.

Timestamps

00:00 – Guest Introduction
02:10 – Get to know Emily
05:13 – Get to know Emily’s company
09:47 – Investor funding in Spain
11:41 – Getting investors to invest
22:57 – Challenges of being a woman in the Tech world
27:59 – Changes that can be made in the investment world
30:59 – Follow up with Emily

Transcript

Read the transcript
Sean Weisbrot:
Welcome back to another episode of the We Live to Build podcast. I’m so happy that I recently began interviewing European entrepreneurs because innovation is global and each region of the world does it differently, so there’s a lot that we could learn from each other. If you haven’t listened to it yet, episode 35, the one that came out just before this one was with Mike Dragan, who’s from Bucharest, Romania, and based in Austin, Texas. But currently in Romania, raising a bridge round for his own company in Coming Soon will be an episode about the French ecosystem with Gabrielsson. Today’s guest is Emily, the CEO and co-founder of Froged, a Spanish startup focusing on helping companies improve customer onboarding and retention while reducing churn rate. In this podcast episode, we discuss why she became an entrepreneur, how a hackathon changed her life. What does the Spanish startup ecosystem look like, as well as the Spanish investor ecosystem? How she recently closed a half $1 million seed round. What she learned from each pitch that she gave, how she quickly found great investors? And if being a woman makes being an entrepreneur more challenging? So, let’s hear her story now.

Welcome to We Live to Build. My name is Sean Weisbrot and I’m an entrepreneur, investor, and advisor based in Asia for over 12 years. Join us every week to fast-track your personal growth so you can meet the ever-increasing demands of the company or companies you are passionately building. Time waits for no one. So, let’s get started now.

Thank you for taking the time to talk with me today, Emily. I’m really excited. I can’t say for sure, but I believe you’re the first person from Europe who’s in Europe that we’ve interviewed, so this is exciting. I’d love to know more about what’s going on in Europe and your company. So, tell everyone a little bit real fast what it is you currently do.

Emily Lomban:
First of all, thank you very much for the opportunity and super happy to be here. And of course, because being the first female European entrepreneur, being with you that at the podcast is uh, is an honor. Well, we started from it uh, almost a year ago, but I can spend with my two co-founders. And so, we just closed a seed or pre-seed, uh, investment ground and, uh, yeah. So, we’re happy to share all the stories and all the experiences we had up to here.

Sean Weisbrot:
Yeah. So, before we get into anything else, why don’t you tell everyone what your company does?

Emily Lomban:
Would define it as a customer success and support platform that helps all the SaaS and subscription businesses to handle and to optimize their users’ lifecycle. So, what is different in our platform is that we provide both visibility of what these users do, and also the customer communication tools that enable you to be handling the lifecycle of these users. And we focus very much in the mid-market. So those would be the –

Sean Weisbrot:
Great. And what gave you the idea to start this business especially? I know you, you’ve been around the world. So, you’re in Europe now. What gave you this idea?

Emily Lomban:
So, everything is started when Juanjo and myself met at Demian, which is one of the main incubators from Spain. But they are also in some other countries and cities in Europe. And so, whenever we decided, well, it was a hackathon that was held during a weekend and then you’re in 15 more days. We were working together and trying to check how the participants were and who was of if there were people or any person that we could be co-founders together. So, this is where we met. And then when we decided to go together, one of the things that was on the table was that we were going to use to the maximum, all the qualities and the background that the three of us had.

So, I would say that Froged is what is today mainly because of Angel. So, he’s our CTO and he had already an idea when he came to talk to us. So, I always say that he came with a map because it was not a paper. It was like a map. You know, he has been a beta tester for most of the platforms out there, and he had identified very much the pinpoints that most of these stars had. So, he told us that we should build a SAS for all the SAS. So that was the beginning of Froged. That’s how the story started.

Sean Weisbrot:
That’s great that you guys met at a hackathon. And it’s cool that you went to a hackathon. I’ve never been a part of one, but I know that they’re popping up all over, especially in Southeast Asia. So, it’s cool to see that there are these hackathons happening in Europe. Why don’t you tell me a little bit more about what’s happening in Europe and specifically in Spain, if that’s your focus for startups in general?

Emily Lomban:
When I started Froged, I had just came back from Brazil, where I lived, uh, for my previous six, almost seven years. And so, getting to Demian was also a way to have a fast track into the entrepreneurship world in Spain and mainly in the startup world. And so, for me, it was like a way to get to that speed that I needed. Talking of, uh, the Spanish ecosystem, I would say that it is moving faster and faster in these late months because, you know, you can never talk of years in the startup world because everything happens fast. I think is moving faster and faster.

It is true that we look very much to other ecosystems, and there is still a gap from our area or from our market, I would say to other markets out there, but it is true that more and more the projects that are coming are becoming international from the very first moment. And this is our case, for example, and it is great to see companies like Typeform or like, um, hold it or like, which are very much in our sector, and they are doing great things out there. And of course, not considering global, for example, or Shopify, which are unicorns who have been born in Spain. So, you know, the fact of having Spanish entrepreneurs that are really growing fast and doing big things is also inspiring us. So, I would say that is a booming ecosystem.

Sean Weisbrot:
And where do you think most of these startups come from? Within Spain. Are they in Barcelona or, sorry, Barcelona or Madrid, or what part of the country are they coming from?

Emily Lomban:
For sure, Barcelona, but I would say is like the most startup or, uh, city of Spain. But it’s true that of course, Madrid has a lot of I mean, is a big is a big area for, for startups. But more and more, there are other cities like Valencia, which is also been on the in the spotlight. Malaga is also becoming also very strong. And then Bilbao I would also find that. So yeah, there are certain cities and I would say that more and more this is being diversified. And because of the Covid everything is changing. So now is remote work. Most of the people are in remote. So that means that, you know, they are covered in other cities that maybe before were not in the map, but especially in our case, we’re coming from Malaga. So, we are super happy to say that, you know, Malaga is becoming one of the cities that is growing at the biggest speed, I would say.

Sean Weisbrot:
So, the investors that are available to startups based in Spain, are they mostly from Silicon Valley? Are they from Singapore? Are they homegrown European funds? You know, what’s the breakdown? Are they private equity firms? Are they family offices? Like do you know anything about that?

Emily Lomban:
Basically, I would say that most of the investors ecosystem here is from Spain itself. Some of them, for example, some of the business news is true that they have an entrepreneurship background. So, they have been entrepreneurs themselves. Some of them have invested and have or have started something in Silicon Valley, for example. But it is true. That is quite wide, I would say. So, some of them are coming from different industries. Some of them. Yes. They have gone through, um, entrepreneurship and startups and they have done some exits. And so, they reinvest in the ecosystem, which is, I think, the natural cycle for, for all of us.

I see myself in a, in a near future in the same way. And then yes, they have more contact, I would say, with European countries rather than maybe North America or other geographies, but some of them, yes, they are connected. And then you have a big variety. Okay. So, talking from my estate, uh, where I’m more related. So, to business angels or to VCs that invest in early stages, uh, that is mostly the case. And then afterwards is more pan-European funds or funds, which are very related to other European countries. And, uh, yeah. And of course, they have a liaison also with, uh, North America, which at the at the very end is like, you know, the, the Meccano.

Sean Weisbrot:
Yeah, it seems like it doesn’t matter where you start if you followed the trail, the money always leads back to Silicon Valley.

Emily Lomban:
Yeah, that is true.

Sean Weisbrot:
What do the rounds look like? So in in Silicon Valley, for example, I’ve heard of people raising $5 million seed rounds. But when you look at Southeast Asia, it’s normally like $250,000 seed rounds. So, what is what is a seed round, I guess, or an A round like what is the structure look like in in Spain and in Europe?

Emily Lomban:
In Spain we’re still far away from, from Silicon Valley amount. And I do remember because we were part of a program this year, which is called the Safiya de la VIB, and Hong Kong, which is uh, mainly is organized by the ESX, which is dependent on the uh commerce and industry uh ministry from Spain, but is um, is a company called the floor from Israel has a month of immersion so that you get to know the Israeli ecosystem to see how they rise and how they move. And, and, you know, also, the most important thing they were saying from the beginning is that, guys, you know, you have the quality, you have values, and you need to change your mindset.

And this was one of the points. So, they were saying that, uh, it is true that if we are based in Spain, we normally rise to 150 to 500, maybe a seed round. And the story is completely different if you’re based in Israel. And of course, if you are based in, in the US. So, I think it’s a bit of mindset. But also point related to costs is that we don’t have the same costs being based in us than being based in Southeast Asia or in Spain. I think that’s a challenge, but it’s also an opportunity that we have to be able to highlight, uh, in front of investors. So, coming back to your question, I would say then normally this round it will go from 250 to 500 and €600,000 or something like that.

Sean Weisbrot:
I read something recently and I, I’ve been doing my own seed round fundraising for sidekick. So, I’m, I’m aware of the situation. But again, I’m outside of Spain, outside of Europe. So, I’m curious to see how this translates. Essentially what I read said, if you want to raise your round, you have to basically talk to like 100 investors to get like 1 or 2 yeses.

Emily Lomban:
That is very true.

Sean Weisbrot:
So, what was your strategy for doing your raise? How many people did you talk to? How did you approach them? Uh, what did you learn from, you know, each pitch, talk about that.

Emily Lomban:
Okay. So, for us, um, I think this round has, has been really interesting because, um, I took it like a way to. Really get to know investors, not only from my stage that the stage my startup is in, but also the next stages. So, I was very much willing to get to know the investors ecosystem in general. So, Spain, Europe and I also touched some from, from the US just to be sure that I was in the radar. So just trying to answer again your question and asking me about the top of the funnel, which is the number of investors that we should be touching in order to get these three, four yeses at the very end and closing the round.

Yeah, at least those 80 to 100 or a little bit more than that I think is the right number is true also that with the pandemic everything has been slowed down a bit. And so, what you need to do is to get to the top of the funnel bigger so that you make sure that everything happens. So, it’s like you have to make I mean, yeah, this is a bigger funnel so that you can get to that point. But you can also or at least this is my case, I consider this to be part of the next round as well. So, there is a big job that is already done. At least there is a pre a pre-work that has to you need to get in touch with them. You know you have to build. The confidence of, uh, with these investors. And it’s not just in the first contact that they are gonna, uh, say yes to your project or it’s not normally it’s not that decays.

And normally they have to see a bit of your story of how it’s evolving over time. So, we may also share that we were present in, in different events that were in, in our area. So, for example, we were part of coalition from home that we wouldn’t have gone if we were not in the Covid, but we also were at SAS, so we would our assessor. So, we make sure that we were present in some places where they could also see us, but yes, 100, around 100. So, we contacted, uh, a bit more than that, but no one that some of them are mostly for the next round. But yes, I would say, yeah, around 80 to 100 is a good number to get in touch with.

Sean Weisbrot:
I found that myself. I ended up starting with VCs because I thought that they would be the ones who could write the bigger checks that we would want. A lot of them said, well, we want to see users because I haven’t launched yet, right? I went into my raise with the idea that I’m not going to be getting money from them today. Maybe it’ll be 5 or 6 months down the road, but like you, I want to just get to know them, and I know I have nothing to show them, but at least I can give them a really good pitch and see what they think. I called, and emailed like a hundred of them. I would say about 75 of them. They didn’t answer the first email. They didn’t answer the second email. They didn’t answer the third email. I stopped emailing them. The remaining maybe 30 is about 30 of them. So, like ten of them or so said, absolutely not. You’re in a crowded space. Forget it. Another ten or so said, we like what you’re doing, but we want to see users and we want to see a product, right? Launch first, get some users. Show us your data, right, how sticky is your product? And then another ten people said, we like what you’re doing, but we want to see revenue basically come back for your way around.
Emily Lomban:
In fact, regarding the cold approaches and they call the emails, that’s a way to get to them. I remember very much reading and following, uh, Nathan Bechard. He has a platform which is called Founders Street and is quite good because it gives us like a CRM for investors and for, I mean, for startups raising funds. And I remember one of his webinars and he was explaining that it’s good to be creative at the time of approaching these investors. And so, if you can get an introduction through someone. So, he was like explaining how to reach them through LinkedIn. But maybe instead of selling, sending them a cold email, trying to get someone to introduce you. And there are like different levels of introductions. So, the best introduction that you can get is from another investor who has invested with them and has been successful in that investment.

Then the next is an investor, which they are close with. But you can also be introduced, for example, by another startup which has been invested by. So, there are like different kind of introductions that you can get. And I believe getting in touch with investors in this way is like a fast track. So, in my case, I have always tried to get introduced by someone else and not directly approaching them except in specific cases, which, for example, were investors that I met in an event or that I was part of a webinar or something together with them. And so, in these cases, yes, I did an approach because I had something in common with them. And so, it was easy or it was easier. So, you get related to them. So, I think this is something that probably will make the difference, because somehow it’s already qualified lead. So, it’s not just them getting in the top of the funnel and just trying to reach them, but reaching them in a more consciously way, or making sure that they will at least read you.

So, I’m sure that I got many no’s, but at least they were listening to me and that was great. At least they knew I was there. And it’s true, as you said, that some of them were like, you know, Emily, I need six months of traction and I need you to go on to do mobile on and do it. And so there were like many same as you, as you said, and, and more or less a proportion where as you said, some of them were saying, yes, we like it very much a project, but we need a bit more attraction. Some of them, they really wanted to see something else that was giving them the trust. I really suggest your approach to investors is in a strategic way. I think that will lead to better results.

Sean Weisbrot:
Yeah, it’s all great advice. I appreciate it. When I spoke to investors, I think one of the problems that they had was that I’m trying to raise a seed round, but I have no other investors. They’re like, well, why don’t you have investors? It’s like, because I have enough money to fund it myself. Why would I get other investors? It’s a waste of equity. But for them, they would rather me have given away equity at an earlier stage than self-funded. They didn’t like that I was funding the company. They didn’t care that I had seen success in a previous business and was using profit from my exit in order to fund the company. They would rather have somebody else invest the money, and they also didn’t seem to care that I’ve also done investing in other startups. So, I had no credibility whatsoever that I was funding my own company and other companies because they want to see the product and they want to see the users.

Emily Lomban:
What you’re saying is, is completely true. And that happens. And, um, it is true that this is a question that I would say most of investors do. Who is co-invest in or who is led in the the investment round that is, is and somehow is because, you know, at some point they have to handle the risk. And whenever this risk has also been assumed by other investors is like somehow the responsibility for that decision is diluted, you know, so this is like it’s a pattern that most of investors I’ve been talking with have. So, I think it’s part of the game. I do agree with what do you say bootstrapping a company or is uh, is a great challenge and is a great risk that you are taking also with your own money. So that is saying a lot about you. That is of course, my point of view, but. It is true. I’m not saying this is right or this is wrong, but it is true. That’s like the pattern that we see in the market. And the question of who is co-investing or who is leading the round is really important for them. From my point of view as an entrepreneur and having gone through the process, I really say for those who are bootstrapping and who really move forward, uh, as you are doing so, but uh, but yes, yes, I, I also found the same thing. So, so investors, they, they normally ask for the rest of investors for committed to the round.

Sean Weisbrot:
Or something like I experienced uh, when I was, you know, trying to find jobs. When I was younger, a lot of the companies were only looking to hire someone who had two years of experience. But if nobody’s willing to give you the opportunity to gain the experience, how can you get a job? It’s the same thing with investment. It’s like, oh, I need to see an investor. But if everyone needs to see an investor is in before they’ll invest, how do you get investment? If everyone wants another investor first? But anyways, it is what it is. Now I’m at a point where I’ve stopped talking to investors. I’ve built those relationships, I’ve had those calls, they’re interested, and now I’m just going to release the product to get users, get data and get to revenue. Then I’ll look for investors.

Emily Lomban:
Another thing that it work, for me at least, is like, you should be moving like groups of investors, not just one investor and another one individually because they normally look for who else is investing or who is leading the investment round. I think as a funder raising funds, you have to be very resilient. You have to be ready and prepared to hear many things that, if you’re not ready, may affect you, but you have to be focused in your goal and continue. So, whatever happens, you don’t need many yeses. You just need a few of them. I mean, 1 to 3. Maybe it’s enough.

Sean Weisbrot:
You know, I’ve spoken to over 100 company owners about our product and they all seem really excited about using it. So, I was thinking about even offering for them to buy into the company.

Emily Lomban:
That could be a great way of creating synergies, you know, because you get them involved in several ways. And so, yes, and even they can be super close, because an investor can be also a person who is advising you too many things. And yeah, that’s a great move, I think.

Sean Weisbrot:
And I know they’re not going to kick me out of my company. They’re just people with their own companies and they’re like, yeah, you’re doing a great job. Just keep doing it.

Emily Lomban:
Uh, you have more freedom because that’s also another big difference from, you know, when you have business angels or private investors versus VCs that normally are more, you know, you have more limitations or you are you have more rules to follow. And as an entrepreneur, you will always have more freedom just having this kind of private investors or business angels, that is for sure as well. So, that’s also something to be considered.

Sean Weisbrot:
You mentioned the word challenge. I want to go back to that word. My assumption and what I’ve heard is that being a female in tech is one of the hardest things that you could do. So, do you feel like being a woman founder, female founder made it harder for you to raise funds?

Emily Lomban:
Being a woman has always been a challenge. But, um, as a challenge and a Japanese, uh, say and have very much in their culture. These challenges are also opportunities. So, it is true that we are getting into an environment which is more dominated by men. Dominated. If we can use that word, of course, in my case, I’ve always taken this as an opportunity because it’s easier being a female. At least they remember you, you know, and this is something I value very much. You know, at least you are. You could be top of the mind because they know you. They will be at some point more excisions because they expect to see more things. And sometimes what I feel is like whenever you are leading a team, a project or whatever they expect, not only about your execution, but also about the way you lead things and so how these things are going to happen. So, this is something what I’ve felt and I used the word feeling or the word to feel because it’s something that that is very soft. You know, they would never tell you these in an open way. But I’ve noticed that I’ve been observed during the months. And to see how the how I lead the team, how the people around me feel working with me.

So, I would say that being a female has these challenges. The exam is more deep in that sense. But on the other, on the other hand, being a female in the tech environment is a great opportunity at this moment. So, I do encourage many of the women that are thinking and, you know, and giving this step and starting something to do it because I think is a great thing. It is also a big commitment. And normally we do have like the clock is it’s like more exigent with us. So, we have like very much tight timings for everything in our lives and that comes into entrepreneurship as well. So, if you are able to handle that challenge and to manage to put a place for everything, but being focused on where you are being a female, entrepreneurs is a challenge. But it’s a great opportunity.

Sean Weisbrot:
I’m surprised that they were so strict in how they were observing how your team worked with you. Like. It is evident to me that female founders are much better at running companies than men
.
Emily Lomban:
I would not say is strict because it was not open. Okay. But I felt like, you know, this is something that they were observing. They were observing how I was dealing with things and how I was managing to get things done. Um, but I, I mean, this is something that I found in not only in this project in Froged, but also in the past. You know, I’ve always been observed, but I think I’ve always delivered good results. And it is true that, for example, my way of doing things is so different I cannot generalize men, you know, I cannot say I’m very different to men and I’m different to many men.

I would say is true that somehow at least, my style is like very human. If something pops up or it’s something is, um, defines me very much is like that human part. So, I know that behind any job, behind any team, behind anything, there is always a human. So, I always try to touch that human and to make sure that, you know, he she is realizing and he’s making the best of himself or herself. I always like to surround myself with other leaders, you know, so or try to make people grow around me. And I think that’s my style. People have the doubt. If a woman is able to fight for something or to make things happen. And so, they observe. But I think this is maybe a bias that exists.

Sean Weisbrot:
I agree it’s a bias. If every one of these investors is assuming that a woman is less likely to achieve something, they will then treat her as if it’s harder or impossible for her to do that. And if a society gets together and agrees on this idea, then everyone will work together to make sure that it’s impossible for this woman to succeed.

Emily Lomban:
I think we are in a process of change. Everything is becoming more balanced somehow. So, it’s true what I told you that people observe and people want to see the results, but at the same time they also have like the obligation, moral obligation of giving women a place. So, they have like these two ideas behind.

Emily Lomban:
What would you like to see change in the in the startup and investment world?

Emily Lomban:
Um, I think it’s very much related to what, uh, you said, what your commentaries were. Um, so what I would love to see is that, you know, that that first step is given, like, uh, maybe faster and maybe, um, then somehow you have you as an entrepreneur, have to make a lot of movements to get to investors. I know that investors are being more active these days and they try to reach you also. So, it’s both ways. But I would love, uh, to find a much more interconnected, uh, offer and demand where the matches are faster made. Because that would facilitate a lot of things for the projects, because, for example, in my case, I always say that all the time that I invest in the closing the round and closing the investment is time that I’m not, uh, the, you know, I’m not investing in the in the moving or making the project move, uh, like itself. So, imagine all that energy of mine, all that time just invested in the project is a lot. So, if things were a bit quicker and, you know, those connections were easily made from before, maybe, uh, that would, uh, save a lot of energy that would be invested just in the project.

Sean Weisbrot:
I agree, I think it takes too much time and energy to raise funds. I’ve heard the average founder takes up to six months, and it’s easily a part-time to a full-time job.

Emily Lomban:
One of the things that we were also looking at is like, you know, Israel as, um, as a country. And that is why it’s called Start-Up nation. They hugely invest in, in startups because they know that these, I mean, startups are changing not only their economy, but, uh, even the culture and the life or, or the citizens. So, this is an example. Uh, at least it was an example for us. Of you know, how things could go. So yeah, entrepreneurship and policies from governments, they should be very much aligned if you really want to make the best of it. And I mean, you could do great things if, I mean, it’s not that difficult. It’s just if you follow an A strategy and a logic, that would be great for all parties, I do. I do agree with you soon. This is a this is like the non-ending topic. You know, many countries should be looking at uh, you know, how things are being done in, in other places that are working very well.

Sean Weisbrot:
How can people follow up with you?

Emily Lomban:
Of course, in social media and LinkedIn and I also leave I can leave my, my personal email. So, if anyone wants to reach I’m super happy to respond. So, it’s Emily at froged.com. So, it’s really easy. You can they can uh they can find me their Twitter as well. So yeah, super happy to help and to share with whoever. Uh thanks that I can add something uh to the project or to their experience. So happy. And thank you very much for the opportunity of sharing with you, Sian. It was really nice and, uh, and, uh. Yeah, enlightening. So very, very good.

Sean Weisbrot:
Yeah. Thanks a lot for coming on. I really appreciated it. So, if you liked this episode and you’re curious about Europe, definitely send Emily an email. Learn more about the ecosystem there from her. Whether you’re in Europe or whether you want to work out of Europe, I’m sure that she’ll be a fun conversationalist and be able to help you get an understanding of what’s going on there. Again, if you like this episode, if you could leave a review for us on iTunes, tell your friends about us. It helps us to grow and be able to find people that are fascinating that you want to hear from. Let us know who you want to hear from as well.

And as always, entrepreneurship is a marathon, not a sprint. So, take care of yourself every day. Thank you, Emily.