He built in stealth with 1 customer for a year—then grew to 1M paid users across 60,000 locations. | Sanish Mondkar, Founder of Legion

Last quarter, Sanish raised a $50M Series D. His company has raised over $130M. They have enterprise customers across 14 countries including Dollar General, Aldo, and CircleK. 

It all started because Sanish was working out of coffee shops. He wasn't looking for a startup idea. But after a few casual conversations with employees, he noticed several problems retail workers and managers faced. He decided to build Legion to solve them.

He partnered with one local coffee chain, worked as a barista for a week, and developed the product with them for a year. He didn't sell to other customers, he stayed heads down until the local chain adopted the product across their entire organization. By the time they went to sell to other enterprises, they knew the product worked.

Why you should listen

• Why listening with an open mind is a common way to identify customer problems.
• Why providing clear and immediate ROI is a must-have for enterprise customers
• How to perfect your product with design partners that are heavily invested 
• How to raise a Series A without meaningful revenue.

Keywords

Legion, workforce management, enterprise software, problem validation, value proposition, scaling, pricing model, ROI

Timestamps:
(00:00:00) Intro
(00:01:35) The Origin Story of Legion
(00:04:53) The Mindset of Most Frontline Workers
(00:11:05) Gathering Data
(00:20:00) Building an MVP
(00:24:30) Insights from Customers Using V1 Products
(00:30:15) Series A
(00:32:13) Legions Core ROI
(00:36:15) Scaling Legion
(00:39:47) Finding Product Market Fit
(00:41:19) One Piece of Advice

Chapters

• 1:35 The Origin Story of Legion
• 4:53 The Mindset of Most Frontline Workers
• 11:05 Gathering Data
• 20:00 Building an MVP
• 24:30 Insights from Customers Using V1 Products
• 30:15 Series A
• 32:13 Legions Core ROI
• 36:15 Scaling Legion
• 39:47 Finding Product Market Fit
• 41:19 One Piece of Advice

Transcript

Sanish Mondka (00:00) 

If you're really open to starting something new, you have to be in that type of a mindset where you're open to new things, new ideas, new motivations to come to your mind. the revenue is not the important thing. The proof point is the important thing. Proof point, are many ways to prove traction and product market fit. Revenue is just an obvious way and sometimes actually a misleading way, right? But the goal is really, hey, whatever you have built, Is it working to whatever extent at that stage it should be working? And then can you project the longer term? If you extrapolate that, what does the market look like? But when you're building a product, the objective is not to just understand the problem statement. The objective is in your mind, there's a product that's taking shape and every conversation is either adding a feature, taking away a feature or changing a feature

Pablo Srugo (00:53) 

Welcome to the Product Market Fit Show brought to you by Mistral. a seed stage firm based in Canada. I'm Pablo. I'm a founder turned VC. My goal is to help early stage founders like you find product market fit. Well, Sanish, welcome to the show.

Sanish Mondka (1:11) 

 Thank you. Thanks for having me.

Pablo Srugo (1:12) 

So Legion is now, you know, late stage startup. just raised $50 million a couple of months ago. You've raised over a hundred million dollars in total, but it's been, you know, a pretty, pretty long run as most startups, you know, often take. I think it's been about eight years now. It started in 2016. So it'd be great if you could take us back to that time when you were starting and just kind of walk us through really the origin story of Legion and how everything happened in the first place.

Sanish Mondka (1:35) 

Legion is building a workforce management platform as it's called. And Workforce Management is a pretty established enterprise category where the whole purpose of the platform is to help labor -intensive industries efficiently manage labor. So my background, I come from enterprise software building. Prior to Legion, was Chief Product Officer at SAP, a very large company building enterprise software. I'm sure you heard of them. Prior to that, I spent a long time in this company called Rebo,

We were building procurement and order management and business network software. Rebo was acquired by SAP. That's how I got there. And so it was about 50 plus years of enterprise software building for complex enterprise categories, generally serving the enterprise market. That's sort of my background. After I left SAP, after a good run, and you know, I just wanted to sort of do something else.

Pablo Srugo (2:30) 

 I'm curious, like even just on your mindset then, did you leave SAP thinking… I want to recharge and we'll see what happens or thinking, you know, I've done this for 15 years now. Maybe I want to start my own thing. Like what was your mindset at that time? 

Sanish Mondka (2:43) 

Mindset really wasn't about starting a company or anything of that sort. It wasn't really about, in fact, I didn't really know what I was going to do. And also by the way, as an aside, I really believe that entrepreneurs at that stage when they're thinking about, you know, you should focus more on the problem statement than on the notion of being an entrepreneur. I just feel that those are sort of maybe slightly misplaced motivations, right? It should be, but you really are you in love with the problem statement. You really want to see that problem solved. The ultimate test of that is if somebody else has made progress in solving that problem that you fell in love with, would you join forces? Would you join that company? Right? Would you put aside your maybe I want to start? So I felt that way about it. I went through the journey of a few months of initially just curiosity. Wow, like, know, I'm in a lot of time those days. I was traveling a lot. was going to all these national parks and spending a lot of time out there outside of California. I was just sort of drawn to all these small businesses with for hire signs outside and spending a lot of time talking to them. Even talking to the employees there, like, you know, I see all this for hire signs everywhere outside restaurants, and we still do, you know, and it must be very easy getting a job, would ask the employees. And then, well, you know, it's actually, it's hard, and it's hard to stay at one place because of all these reasons. So it really felt like a broken picture to me, you know, how can employees been looking for employees and employees been looking for good jobs all at the same time? they're like, Why hasn't that supply demand sort of normalized?

Pablo Srugo (4:33) 

And what do you think made you curious about that in the first place? Cause most people would walk around even in it, let's say sabbatical, mean, but you see for hire signs all the time and you're just like, cool. It's just another, another thing in, in, you know, in, in every day. But for you, for some reason, it kind of pulled you in and made you curious and started asking questions that then led to obviously something much bigger. 

Sanish Mondka (4:53) 

A lot of it just at the mindset at that point of time, like I was, I just, I just started, you know, long run. at ribo SAP. And also I thought, looking back, I think there is a of a lesson there too, that if you really want to start, if you're really open to starting something new, you have to be in that type of a mindset where you're sort of, you're not working, you just, or whatever commitments you've got in your mind, you've sort of completely passed that. Now you're open to new things, new ideas, new motivations to come to your mind. I felt like that was my mindset at that time where I'm really open to anything. this was something that the observation led to more was because I really felt drawn to as an innovator, as a product guy, I felt like, wow, this is, we have really been sleeping at the wheel and not solving the problems of most of America's employees. Innovation has really, if you think about… Just as a thought exercise, if you think about $100 in the history of software have been spent on improving work just as a number. Like you and I are having this conversation right now on this beautiful video. We have all these conveniences and eight out of 10 retail workers even today don't get a company email address, video, anything else. How much of the $100 have gone towards improvement of the frontline work or this hourly workers? I don't know. less than a dollar, less than maybe, maybe far less than that. So as an innovator, felt almost like embarrassed that, well, we've been working on all of this stuff and you're, there are 80 million workers, 60 % of the workforce. For them, technology hasn't really changed anything materially in the past decade.

Pablo Srugo (6:47) 

 And so you start talking to employees and what do you hear? mean, some of your first questions are around this kind in liquid marketplace, right? All these for hire signs, which you would imply, okay, that must be easy then on the employee side. And yet they're saying it's not easy. What was happening? 

Sanish Mondka (7:02) 

The reasons why employees were leaving seem to me like, is that it? Like that's, it has to be more like that. Like I would hear things like, Hey, when I joined this, this, this restaurant or whatever it might be at, at that time, I could. I could work weekends, but now I can't work weekends. I can only work one day of the week. So I'm like, well, why don't you talk to your manager about it? No, that doesn't work. Like they need somebody on Saturday. So, you know, and I can do Saturday. So I go and find another place where I don't have to work Saturdays. I'm like, that's it? Like, yeah, that's it. Or it could be like, you know, I feel like I've been asking my manager about, you know, can I take Fridays off early?

And the manager keeps saying, no, and I don't think my manager likes me. And I'm going to go across the street and get another. It was the day -to -day friction, a lot of it manifesting because of schedules. And then I would talk to managers too, and they have a very tough job. mean, these managers in retail and restaurant service industry, they have, just think about all the things they're managing. They have customers. primary sort of, you know, stakeholder, they're dealing with budgets. Here's your labor budget for the week and here's your sales target and whether you're in some in any retailers. 

Pablo Srugo (8:31) 

I often find actually when I think about these retail managers that they're probably like the worst, the most underpaid just because they're probably not paid that much more than the frontline worker, but they have so much more in terms of responsibility for that extra amount that they make.

Sanish Mondka (8:48) 

And training is very low. There isn't a lot of investment. They don't have technology themselves to manage all these things. And then back to the employee thing. So if you've got a roster of 25 people and on an average, everybody's asking you two things related to the schedule every week, which is by the way, the norm. Can I go early? I come late? Two requests per employee. You have 50 requests flying towards you every week. You are in the, your default mode is just no. I don't have time for that. And so you see all just scheduling alone becoming such a big pain point for this industry that just matching supply demand optimally so that both sides feel like, yeah, at least it's fairly done. I felt it was like, wow, this is like, I'm hearing the same thing over and over again. And then there were other things. was like, you know, experience related things like I have to take picture of my schedule. I wish there was a mobile app. like not a lot to ask for. I wish I was mobile app. I wish I could send a request via the app or I could get communications and messages versus my manager using my personal phone to text me outside of work hours. Like there's a lot of these, just all of them related to collaboration and friction, scheduling. And I came to the conclusion those are software problems to solve. software can play a role, should play a role. This is a very large space and lot of people are impacted by this. And so that was sort of the kind of the evolution in a few months from observation to curiosity to, you know, problem solving to very deep empathy. Like, wow, if we do solve this problem, there will be a lot of people who would be staying in their jobs for longer. There are a lot of businesses who won't have to constantly clear the treadmill of looking for people. They'll have happier employees, happy employees will treat their customers very well. So that was sort of the journey.

Pablo Srugo (10:49) 

And by the way, how are you finding this stuff out? I'm curious on almost like the methodology where you just literally, you go to a coffee shop, you sit down, employees come to the table and you just ask them, or did you have structured interviews where you'd go in and just like, hey, can I talk to you for 10 minutes? And you would have these kinds of conversations. How did you get all that information? 

Sanish Mondka (11:05)

So initially, the very early days it was just I'm there because of buying coffee or whatever. And I would talk to people. Then I started getting more curious about it. I took a more structured approach and I created a questionnaire, okay, that I felt kind of, you know, were the things I wanted to really dig in more. And myself plus another person that I, you know, it's very scrappy day, so I just basically hired a person in New York and she would go because of the density of location should go literally door to door and say, can I ask you a few questions? I'm doing a survey. And actually, that works so well. We had like over 500 businesses that we talked to and very well -organized data over a three, four week period. Very structured data in a spreadsheet that I could start now talking to people with and showing them the data and having some sort of insight that matched a lot of people's gut feel, but also some surprises in there. So, yeah, it very quickly evolved from me just talking to people, but that was good for hypothesis building. But then hypothesis validation was, and not full validation, but starting to get validation was this. And then in those conversations, I also talked to lot of people in my network on SAP. you know, doing a lot of business with retail. I was really able to get 360 employee, employer, manager, business owner, execs in large companies, and triangulate into the kind of this problem statement of labor really being broken.

P12:53) 

You know, it's funny you mentioned 500 because I think intuitively everybody knows you have to talk to customers. And I think intuitively you would think. if you talk to a few dozen, you start to get pretty clear data. But I have heard consistently on, frankly, on the show from founders that have had, you know, very successful businesses, that the number of conversations they had early on were hundreds, a hundred, 200, 500, I've heard many times. Why do think that is? Like, why did you, in your case, actually go and get so much data? Were you still finding out new things on the 300th interview, on the 400th interview? I'm curious. 

Sanish Mondka (13:26) 

There were always some things that were new things that, you know, it could be a nuance that's new. But when you're building a product, say, the objective is not to just understand the problem statement. The objective is you're constantly in your mind there is a product. In your mind, there's a product that's taking shape. And every conversation is either adding a feature, taking away a feature, or changing a feature. Like, so you're going through this thing where, you know, there is validation. The only reason why, my opinion, Every product builder should do this, whether you're founding a company or just building a product. But at some point, it's just not efficient to do so much at some point. So this serves as like for foundational sort of product point of views, it makes sense to invest so much time. And after that, there is incremental. But I'll tell you, that volume of conversation, that experience still carries me today. I I still feel like I've developed some sort of very deep point of view and expertise in not just software building, but talking from a customer standpoint and having all the anecdotes and examples in my mind because I had that experience and so much volume. So I strongly recommend, if you have time, spend a lot of that time. Don't feel like you have learned enough after 20, conversations because all these people give you something new, but just approach that with the mindset of How do I shape that product in my mind and what should I take away? What should I add?

Pablo Srugo (14:59) 

I think that makes total sense because getting the nuance, the specific of the problems right at the beginning make it so much easier down the road. Like, yes, you can pivot in the future as you learn more things, but the bigger the pivot, the harder it is and the more time that it takes to do that. So I think that makes total sense. So curious, like once you have these interviews, you understand the problem statement, the insights pretty clearly. Where do go from there? mean, from Crunchbase, it looks like you raised a $3 million round in 2016. Curious if that's accurate and if so, how that happened. 

Sanish Mondka (15:30) 

Yeah, so before we raised the round, though, there was also another pivotal moment. In my conversations, I happened to meet, you know, I started also talking with investors and, you know, to get their perspective of, anybody else solving the problem? Like, to the point of I was making on there, I would have been happy to join somebody. That's totally okay. So I met Maynard Webb. who still runs VIN Labs and VIN Investment Network. And he introduced me to Jacob, who was the founder and CEO of Phil's Coffee. And he said, hey, I want to go talk to Jacob and see if you can learn something more. And I went and I spoke to Jacob and it was a great conversation. told him at that time, thanks to all this conversation that all that he said, I had a sort of a pretty definitive point of view on what I want to build. And Jacob said, well, if you build it, we'll use it. I'm like, wow, I come from very structured enterprise software world, so I'm like, is this like a software contract? do I have to sign something now? Do I need legal people? I don't need a software. But it was a handshake. And it was just like, you know, and Jacob was absolutely amazing. He said, like, okay, well, if you build this, you know, I'll give you, you know, desk space upstairs in their office and I'll open up several Phil's locations for you to actually do research and try your software and work with all the baristas and the staff. But here one condition is like, you got to be trained up. Like you can't build this unless you know what the job is like. Like you can't, and this to your point, the nuances, like getting, know, like if you've never done this, you don't know what my baristas are going through. How are you going to apply? you need to really immerse yourself. So I got trained as a barista. It was very hard, the way. Hardest thing that I've done. 

Pablo Srugo (17:29) 

I know, because we have a coffee machine in our office and I'm used to Nespresso and it's been months and I still can't make a coffee with it. So yeah, it's not easy. 

Sanish Mondka (17:36) 

And Phil's, mean, it's real, you know, I mean, to me, it's complex, it's hard. It was difficult, but it's five days of barista training, lots of theory and all that stuff. And then working very closely with, we had about seven locations that I was working very closely with. was visiting them every week. At that time, I kind of hired the initial developer team and we were building software. And so the actual raise of Seed round came after we did all of these things. We were building a product with fills at that time. Fundraise at that time was very natural. know, it was, I was already getting some inbound because they were, you know, I'd already spoken to investors just to get their feedback on the idea. So some of them were interested in sort of knowing when I'm looking for the first check. 

Pablo Srugo (18:30) 

And had you figured out like with Phil's Coffee, for example, as you're working, you're building this product for them to use, like did you have a sense of what pricing would look like? 

Sanish Mondka (18:38) 

No. And I don't know if that's good advice or not good advice, but no, we were so focused on product building. I also felt like there was trusted relationship at that time. felt, you know, they were very interested and very serious about helping us build because they also had the pain point that we believe this platform would have solved. It was a compelling pain point for them. So I felt there was enough and also the payment and this is sort of important, the quote unquote payment for software doesn't in the early days, doesn't always have to be in form of money. Sales was, they They gave me desk space, they gave me access to their location, they gave me access to their managers. I could go there, they trained me as a barista . Like they're clearly making investments. So I felt pretty confident that, you know, if we get to the mutually agreed upon goals, they would be the first user. And we did, and we took about a year because the platform was being built from scratch at that point. And then when the platform was ready, you're ready enough. to expand from seven locations to 34 locations. At that time, we signed a contract. At that time, fee structure and everything was aligned on. it became formal and they signed a contract and we basically expanded to all the locations. yeah. 

Pablo Srugo (20:00) 

Just a question on that, like on that first product, because, when you build the point solution, that's just like single feature, it's pretty easy to MVP. How does the concept of MVP fit into like an intent platform where somebody's going

you know, all of scheduling and everything that's to do their employees is now going to depend on Legion. It's pretty important core part of their business. So how did the MVP concept fit into, into what you built? 

Sanish Mondka (20:21) 

 It's, it's, it's one of the hardest things to do in my opinion, particularly for products that have some degree of complexity, because as a product builder, you want to keep your users happy and you want to listen to them and you want to build more and you, and if five users tell

that, this is important. You want to be a good product builder and add that to your backlog and build it. But at the same time, you need that voice in your head which says, no, well, we haven't really proven adoption of other things that you have built yet. And for early customers, adoption just needs to be flawless. mean, because you're just so focused on them. If you can get early customers to love your product, and I mean love, not like, or like, yeah, it's great, or NPS code, no, this is so awesome.

Like that's the feedback you're looking for. So that's the balance between have you refined that enough and where exactly is the line of that minimum valuable product. And it's constant iteration, constant judgment. So in this context, through some trial and error and feedback and also many, many embarrassing situations of, this doesn't work. I don't want to use it, those types of things, we arrived at scheduling and forecasting being sort of the core.

forecast demand using machine learning and AI, and then optimize the schedule using AI and get the employee mobile app. So it was still a considerable footprint. But we felt like that was to demonstrate and to remove the friction out of schedules as we talked about earlier. You have to build that much because then you control the supply and demand pieces of it. And you can now start optimally matchmaking.

But then there's all these things. Well, how about can you add chat to it? Can you add this? Can you add that? And we were like, well, yeah, you know, sometimes you just show roadmaps and yeah, look, it's on the roadmap and we'll build it one day. know, your commitment that we'll get to it. But right now let's make sure this stuff that you have in your hand works really well.

Pablo Srugo (22:25) 

How long did it take you to build that, that first product that you put in customers' hands? 

Sanish Mondka (22:30) 

About three months. It's now, of course, that's a very different product than what we can use today. It was three months was enough to put something in users' hands. And if it would have been two months, like my philosophy about this is as soon as possible in users' hands and just have a thick skin about getting bad feedback, saying this is not good, this is not good, that's okay. But users, it's so much better for users to tell you what they like or don't like versus you imagining this is what's gonna happen,

So we did that in about three, three and half months. And then I would go visit six locations in the Bay Area every week, spend an hour approximately with each manager and just watch them build schedule using Legion. And I would not try to interrupt. would just say, look, I just want to watch them just sitting in the back. But anything in your mind, just speak out loudly. And so it was very embarrassing earlier. I'm like, this is stupid. Why would anybody do something like this? But I'm taking all these thoughts, I take it back to my development team. And there was one location in LA that I would go to once every two weeks or longer. So one of our first hires actually was customer success, just to make sure we're getting all the feedback. And I scale in the act of listening to users. which is not the conventional sort of use case for a customer success manager. But for us, it was like, we want to learn more through these actual conversations. So that was sort of how we did it early days.

Pablo Srugo (24:09) 

do you remember some stories or insights or learnings from those early days? Because I find especially that first version of your product and the sort of things that you start hearing are so instructive into how the product ultimately develops. Especially if you were spending that much time with customers. things you saw in whatever, like things that happened back then that made a big difference. 

Sanish Mondka (24:30) 

Yeah, I think one of the big insights, which I think is still, and it's very relevant today in sort of the days of AI powered applications. One first version of Legion was go to a page and here's a schedule. It's already done for you. Everything is figured out and you can see a schedule of all the employee shifts and everything. can imagine that. All the users really rejected that. They're like, I'm going to change this. And then they would end up changing 100 % of the schedule.

The reason why they were changing the schedule was they didn't know how the decisions were made. Creating the schedule is, know, managers feel like it's an art, not a science. Like every manager has a different way and they want to make sure their way is, or at least they have visibility into why certain decisions were made. is Pablo's at 9 a versus Anisha at 10 a No, I'm going to flip that. and they could because that's what made sense to them and they would. So the big aha for us was, let's, even though it requires building more, let's walk them through why, like what is the demand? demand at 9 a as this and 10 a as that and at 10 a we need the second person and Sanisha's preference is to work at 10 a and Pablo's preference work at 9 a and let's show that and let's show why the matchmaking happened and let's give them all this transparency on even though is AI powered and all those things. But the trust comes through transparency. The more transparent we can make into why decisions were made and explainability of surfacing all the things. And easy to understand things. are not technologies. They're managers of retail stores and stuff like that. The more we can do that, the higher the adoption. And that was a very early lesson. And we ended up building a lot of things to show managers, your how things are, your why things are the way they are. And we would say like,

And we had to figure out the usability properly to several iterations. But that visibly dropped the number of scheduled edits they were doing. They're like, that's okay. Well, I'm expecting 11 a more people tomorrow. looks like your demand forecast is already spiked up for that. Okay, great. So you've taken that into account. Like that's sort of when things started truly kind of converging. The other lesson was I feel a lot of companies building enterprise apps, sort of feel like it's important for users to dwell in their app. that's a great consumer software mentality. Enterprise apps, no one wants to hang out in your app. Something needs to be done, and you're in and out. That's actually a great experience from a user standpoint.

Sanish Mondka (27:08) 

 And how did you balance the time in those early days, those first months of deployment between landing new customers and trying to grow and just getting this in as many people's hands as possible versus: You have whatever customers you have now and just going deep with them and kind of perfecting and perfecting that problem, that product. 

Sanish Mondka (27:26) 

We focused on the latter. That it worked for us and why it worked for us. But that was our focus. We're like, we found a perfect customer in Phil’s that really shares our values of what workforce management needs to be. It needs to be, it was never about the workforce. It was never about employee value. And it was all about just efficiency and optimization, which are important goals, but it wasn't balanced with what do employees think about this optimized schedule. So when I spoke to Jacob at Phil's, I felt like that's what he wanted to do. He wanted to completely agree to that broken picture that I talked about where supply and demand is not optimally matched and all of those things.

So I felt that we found that perfect customer. That's why we could really go deep with sales and build something that represents what our vision for workforce management was. That may not always be the case. And if that's not the case, my recommendation to our entrepreneur would be to work with many customers. But it's a very small, small set, though. But once you find that right mix, then go deep and work with those customers until

those customers slash users really love your product. So for us, that was Phil's. We added another customer to later on, but that was really validating.

Pablo Srugo (28:55) 

How much time, for example, did you work with just Phil's? Like how many months?

Sanish Mondka (28:59) 

 A year.

Pablo Srugo (29:00) 

 Wow. Okay. Yeah.

Sanish Mondka (29:01)

 But not saying my investors were happiest with that. That was a…

Pablo Srugo (29:06) 

 I'm sure they're happy now.

Sanish Mondka (29:08) 

 Yeah. I mean, it was important to kind of really get, you know, the product It was waiting for it. 

Pablo Srugo (29:18) 

What were you waiting for? What are the signals or for you, were the signals you were looking for to say, okay, yeah, the product is ready for prime time. It's time to just like, you know, smile and dial and get and really kind of grow this thing.

Sanish Mondka (29:29) 

 I wanted Phil to launch it and use it like across the enterprise. you know, rip off the bandaid, no guardrails.

Pablo Srugo (29:40) 

Because for that one year they were using it in specific places, they were complementing with other things.

Sanish Mondka (29:45) 

 They're complementing with spreadsheets and other things and all that stuff. in fact, we didn't even launch the company until that happened. We launched the company after Phil’s was live and we raged sort of at that point, series A, after Phil’s went live with Norvest Ventures. And then we launched the company. So yeah, so Legion has been the market since kind of early, late 2017, early 2018 would be sort of the right.

Pablo Srugo (30:16) 

And I have to ask, because I'm sure people will be wondering, like, how did you manage to raise like a $10 million Series A with probably, I don't know what your revenue was, but I'm sure it was in two, $3 million in ARR. 

Sanish Mondka (30:27) 

At that stage, my belief is investors are not, the revenue is not the important thing. The proof point is the important thing. Proof point, there are many ways to prove traction. and product market fit. Revenue is just an obvious way and sometimes actually a misleading way, right? But the goal is early pay. Whatever you have built, is it working to whatever extent at that stage it should be working? And then can you project the longer term? If you extrapolate that, what does the market look like? Those are the important points. So yes, that's why it was important. Early customer going live and using it, points, you can walk into you know, at that time, you're walking to any phil’s and ask the barista, what do think about Legion? Like all the investors did that, you know, because so easy, it's a barrier brand and stuff like that. But also it's not hard to build your own model or hypothesis or however investors want to do research like, wow, this is like, we're talking about hospitality and service industry or we're talking about a very foundational problem that hasn't been solved. We're talking about a large market for frontline work and hourly work. you could sort of make the leap from this point onwards. How, if there is product market fit and users actually like it, how would this scale? 

Pablo Srugo (31:47) 

How many Phil's coffee locations were there at the time? 

Sanish Mondka (31:50) 

34.

Pablo Srugo (31:51) 

 So it was a meaningful amount. Okay. So you raised the series A. You Phil's as kind of a proof point. Actually, maybe before I jump to that question, what was like the core ROI or even today? What is the core ROI? Is it time saved? Is it better customer service for these retailers? What is the number one value prop that you'd say Legion offers? 

Sanish Mondka (32:13) 

Yeah, so the core ROI, there are four parts to it for our ROI. First is time saved because of the extent of automation. All core workflows in Legion are automated, so creating a demand forecast, creating a labor plan, creating a schedule, all of those things. Second is the… compliance violations. These labor industries are regulated. There are a lot of compliance rules that need to be followed. And because we automatically generate schedules and automatically capture time and correlate that, we are able to proactively handle a lot of compliance rules which can change city to city, state to state, and things like that. So that's a pretty core part of the platform. Third is what we call labor

Efficiency. So labor efficiency, the definition of that is pretty straightforward. Like if you think about your output as a retailer, which is sales, let's say, and the labor that you need to kind of derive that sales, how can it be most efficient with maximizing sales and minimizing labor costs? And fourth, which is very unique to Legion as a workforce management platform, is employer retention improvements.

And I was never even considered the agenda of workforce management before. And a pretty significant part of our ROI comes from employees just staying longer because they like the experience and the friction that we talked about in the early part of this conversation is handled. We did this Forrester Total Economic Impact, Legion's ROI, and it was 1 ,300%. I mean, it is just massive in terms of, and these are hard dollar.

savings and efficiencies because it's the hourly workforce. You're paying everybody by the hour. Anything you save goes straight to your bottom line.

Pablo Srugo (34:09) 

It's really interesting that last point because it ties into something you said really early when you're talking to these employees about why they leave and how some employee might leave just because they're not getting the right schedule. And everybody listening, I'm sure, was an hourly employee, at least at some point. You can think back to that time when really what mattered. mean, the things that mattered to you were number one, that your manager treated

okay, right? Like not even that they were amazing, just that they were respectful. And then number two, that you got the amount of hours and the right hours that you needed because you have all of these other constraints around your life. And if you're not getting that, it's not going to work. And you'd rather go and sell clothes instead of coffee or park cars instead, like whatever, as long as you get the right schedule. So it really is that important. You can see how, because you realize that and then make it really easy, I would assume for people to kind of see what their preferences are and for the system to take that into account.And then if the output is you're getting a better schedule consistently as a result, that's definitely going to drive attention. So that's really interesting. But I will ask one more question because okay, for ROIs, would you say at least back then, like, was there one ROI that resonated the most? Like, was there one main reason why people were buying back in that time 2017, 2018? 

Sanish Mondka (35:19) 

I think the buying decision was tied to labor optimization. but satisfaction was tied to employee retention. 

Pablo Srugo (35:31) 

Yes, that makes sense. That makes sense. they come for one, they stay for the other. I mean, the thing about labor optimization, and I bring this up because those are real dollars. I mean, that's at the end of the day. Like time saved is kind of real dollars, but it's always a little bit softer. when can, you know, when a manager understands or owner understands that we're not being a hundred percent efficient and we in some shifts have too many people and other shifts too few people, and you can fix that, you are tied like right into their bottom line. So that can be very compelling.

Okay, so that's helpful. So maybe just give us a sense, know, to the extent that you can, like once you raise that series A and Phil's coffee, you know, it's 35 locations. What does growth look like from there? Like how quickly do you scale to, you know, a million or 2 million or 3 million in ARR or, know, hundreds of locations or whatever. Like, was that ramp pretty, pretty fast or was it still, you know, harder than, you might've thought at that point? 

Sanish Mondka (36:12) 

It was fast. I mean, it was certainly harder than, it's always harder than, you know. it felt like the first few customers were all in direct or indirect references from Phil's or some of the managers, which was just great. mean, it was SoulCycle, was Barry's Bootcamp. Very quickly, we sort of started getting inbound or connections into similar type of businesses, which are

Pablo Srugo (36:48) 

 And always enterprise? Like always like 30, 100 plus locations? 

Sanish Mondka (26:52) 

Yeah, yeah, yeah. In fact, now, where Legion is, We're very much in the enterprise space, including some very large nation, nationwide retailers and things like that. The reason why enterprise is so interesting is because, A, you can, if you solve that problem, it is basically you are touching more people, you know, through that one platform versus sort of going through that. And also, if you look at retail, for example, there are 32 million out -of -workers working for retail and hospitality in the U .S. About half of them work for a thousand companies. so enterprise is where there's concentration of the workforce. So if you really want to back to my original objective, I'm doing this, I want to improve that, experiences for as many employees as possible. You have to win enterprise to really get as many of those employees on the platform as possible. Focus has been on enterprise and that's why we really do well.

Pablo Srugo (37:44) 

And what was the price point like back then? 

Sanish Mondka (37:47) 

Significantly evolved, but I'll tell you the pricing model is per employee per month on the platform. but packaged as enterprise software contract. it's generally multi -year. The relationship of customers with their Workforce Management Platform is a long one. This is like, sometimes we joke it's like changing the plumbing of the house, you know, or the roof, because it's so foundational for your labor operations that you're very thoughtful about when you want a new Workforce Management Platform, but when you do, you probably want to stay on with it for, you know, years and years. So it's generally a multi -year contract.

Pablo Srugo (38:22) 

How many locations depend on Legion? How many employees depend on Legion every day?

Sanish Mondka (38:28) 

Approximately, so we are approaching a million employees. We have over 60 ,000 plus locations, maybe more. And we are in 14 countries now. We are growing internationally very rapidly. And we've added a lot of products, end to end now. Employee, remember the part we talked about where employees thought their managers didn't like them because they were always saying, no, we have solution for that performance and rewards where we actually have data -driven performance assessment and stuff like that. So we really expanded the solution to be very holistic, but it's a long journey. I I feel like we're still relative to the size of the market. I think most of our scale. It's still ahead of us. 

Pablo Srugo (39:20) 

Well, makes sense. mean, 1 million is a lot of employees, but if there's 32, then it's all just scratch 

Sanish Mondka (39:26) 

and that's only retail. we'll be now doing work in healthcare and distribution centers and, you know, and they just talk about US and this global and all that stuff. yeah. 

Pablo Srugo (39:37) 

Well, we'll stop it there and I'll just end with the two questions that we always end on. The first one is, and I think I know the answer, but I'll ask in anyways, when, when do you feel like you found true product market fit?

Sanish Mondka (39:47) 

There were many, many moments. Of that, along the way, there is not one single thing, but the most gratifying moment was when we went in the first customer fields, when we went from seven locations and we went nationwide. They had this, they called all the man- to roll out Legion to all the locations. They called all the managers to their headquarters in San Francisco to roll out and educate them about Legion.

Legion team, I was there with a few of my team members, but we were not allowed to talk at all. We were asked to sit in the back. And the seven managers who were the early users of Legion for all those months leading up to the rollout, they were talking with Legion to all the other managers, their peers. It was just amazing for me sit back and just listen to how they describe Legion. the problems it solves for them every day and how happy their employees are and how it's improved the relationship between managers and employees. That was the, I couldn't have described it better at all. And it was just, it was a real sense of product market fit .

Pablo Srugo (40:53) 

I love that. seeing, and I see this, I say this all the time because I see it all the time, just like as a founder, seeing your idea, which was just a thought in your mind out in reality and delivering the sort of value you thought it would deliver. Is it feeling like no other? So that makes total sense to me. The last question then that I'll ask is, if you had one piece of advice for yourself that you could give yourself kind of eight years ago when you were just starting, what might that be? 

Sanish Mondka (41:19) 

That's a good question. I think I would have probably knowing what I know now, I would have probably told myself several years ago to just stay focused and keep doing, stay on that journey. because there were oftentimes, like, you know, you're second guessing yourself sometimes that is, you know, not everything is as perfect as maybe it came across in this or any other conversation. There are lots of ups and downs. And I think getting yourself back up from some of those downs and staying focused, think, here we are all these years later, and we're clearly, you know, growing and onto something else. So that would be the advice, just, you know, kind of stay focused and continue.

Pablo Srugo (42:00)

Well, Sanish, thank you so much for taking the time to jump on the show. 

Sanish Mondka (42:03) 

Thank you. Thanks for having me. It was fun.

Pablo Srugo (42:05) 

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