A Product Market Fit Show | Startup Podcast for Founders
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A Product Market Fit Show | Startup Podcast for Founders
He lost 90% of his users overnight—then grew his consumer app to $10M ARR. | Koen Droste, Founder of Polarsteps
He turned a personal travel tracker into an app with 10 million users and $10 million in revenue, with almost no funding. He reveals how ignoring conventional startup advice—like launching early, chasing revenue, or partnering for growth—was key to their viral success.
He realized everything growth was about word-of-mouth. So the key to success was obsessing over a single metric: NPS.
If you’re an early-stage founder deciding where to focus, this is your must-listen episode.
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Why You Should Listen
• From losing 90% of users overnight to over $10M in revenue.
• Why obsessing over Net Promoter Score (NPS) instead of revenue can drive explosive organic growth.
• How to stay hyper-focused on one metric—and avoid distractions.
• The truth about partnerships and why most startups shouldn’t chase them.
• The counterintuitive decision to build for quality first, even if it delays your launch.
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Keywords
product market fit, startup growth, net promoter score, organic growth, consumer apps, app monetization, viral growth, user retention, travel app, early-stage startup
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(00:00:00) Losing 90% of Users Overnight
(00:01:10) Turning a Personal Project Into a Travel App
(00:09:36) Raising $50K and Building Before Launch
(00:24:09) Launch Day and First 2000 Users
(00:30:35) Why Chasing Partnerships Can Hurt Growth
(00:36:40) How Polarsteps Reached $10M Revenue
(00:41:00) Surviving COVID as a Travel Startup
(00:42:20) Finding True Product Market Fit
(00:43:26) The Moment Polarsteps Almost Failed
(00:45:03) One Metric Every Founder Should Track
Koen Droste (00:00:00):
Yeah, it's funny because so when COVID hit in March 2020, we lost like 90% of our active users within a couple of days. Is that if you want to, you know, if you really want to go for viral growth, people should just fall in love with your product. One thing I very often say is agree with your investors and your co-founding team and all the people in your company on one metric. Make sure that everybody's on board with that and that you track it well. And don't lose focus because focus is so critical to keeping it. And especially in early states, if you don't have money, if you're approaching the end of your runway, it's so easy to get distracted. It’s so easy. We've got a competitor who wants to merge with us.
Previous guests (00:00:38):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is product market fit.
Pablo Srugo (00:00:51):
Think back to the last few months, the last few years as you've been running the startup. How many different founders have helped you out? The reality is founders help each other out. That’s just who founders are. They pay it forward. So, help a founder out. Take literally five seconds, take your phone out of your pocket and hit five stars. Welcome to the show, man.
Koen Droste (00:01:09):
Happy to be here.
Pablo Srugo (00:01:10):
You have an app now called Polarsteps, 10 million users, $10 million in revenue. You raised some money, but you started off with, what, like $50K or so? So, we'll jump into that. I’m curious, just tell me a little bit about what the app is and how it’s kind of all started in the first place.
Koen Droste (00:01:27):
Cool. Yeah. Well, Polarsteps is a travel app that lets you plan, track, and relive your trip all in one platform. So basically, what we do is before you go on a trip, our app offers inspiration to users of where they could potentially go on their trips. Then we have an itinerary planner that helps you plan your trip. During your trip, we basically track your trips on a map. So, we basically plot your routes and your friends and family at home can real-time follow where you're traveling. And after your trip, you can use our app to relive your trips, which basically. For example, we do it in printed photo books where people can, at the end of the trip, order a printed book of their adventures, but also in other ways we let people remember their trips.
Pablo Srugo (00:02:07):
Did it start with, because obviously the app grows over time, like what was kind of the core use case that you, like, first, time, you know, when did you kind of launch this app and what was the original use case?
Koen Droste (00:02:18):
Yeah, good question. So, the very first, how Polarsteps started was my co-founder, who's a very fanatic traveller, just like most people who work here at Polarsteps. He went sailing across the Atlantic. He’s a very adventurous type, and when he did that, he figured out it would be cool if people back home could follow in real time where he was sailing across the Atlantic. This is over 15 years ago. So it was before the times that everybody would have a cell phone out of their pockets and all that stuff didn't exist. So, what he figured out was that on his sailboat, he took a GPS tracker, which was a little device a few people know nowadays, but it would just be a device that shows your current geocoordinates. Together with a satellite phone on his boat, and then every day he would read off his geocoordinates on that GPS tracker and then typed them into the satellite phone and, send a text message to a server that was in his home country, the Netherlands, and plot life on a map on the internet where he was sailing across the Atlantic. So he combined a few technologies that at that time existed to create this quite cool thing. And the thing is that his little website, he created it initially just for his friends and family, but it kind of went viral. Back in these days, people were talking about travel and travel forums. Facebook forums was also a place where a lot of conversations were going on and people were just sharing his sites and said, "Hey, this is cool." What’s cool to be able to follow a traveller in real time on a trip to really see where they are on a map and to get short little updates of what somebody is doing right now.
Pablo Srugo (00:03:50):
But it was just him. Like at that point, it's just he's distracting himself.
Koen Droste (00:03:53):
Yeah, it was just him, one website. He just every day at 12 o'clock, he would type a little text message. Into a satellite phone and text, it to a server. Then more people started following him. At some point, it was not just his friends and family anymore, but it was just random stranger who thought it was cool to be able to follow a traveller in real time. Then of course, people started asking him also to like, hey, well, this is a cool project, but can you make something like that for me? Can I start using it? And I was one of these travellers. I was also quite into traveling, and I came across his website on a travel forum or something. I had quite some experience in building apps and in building viral apps. I saw a lot of potential in this, both from my own experience as a traveller. I really wanted a product like that because I really would love to be able to track my own trips on a map. But also, I saw the potential in this from a viral point of view.
Pablo Srugo (00:04:48):
You were building apps on what platform? Like we're talking 2008, like the iPhone had just come out or was it a little later than that?
Koen Droste (00:04:55):
So, this was around 2012 or so. iPhones and Android phones had existed for a few years. Indeed, what we realized quickly is that, at that time, everybody had a GPS tracker in their pocket, which was now then suddenly their Android phone or their iPhone. We also realized that, with an app, it could be a great way to build a consumer app out of this that could potentially reach millions of people. So yeah, it was very much a good timing also from a technology point of view that suddenly everybody was having this technology readily available in their pockets.
Pablo Srugo (00:05:35):
So, you reached out to him to build out an app with this functionality?
Koen Droste (00:05:39):
Yeah, exactly. So, we got together at that point, and we decided to turn this into a company. We looked for two more co-founders. We had a little bit of going left and right. So, of course, there's a lot of people who, if you pitch an idea to them, are interested in starting their own company. But then it's a lot harder to find people who want to start a company and who realize what it means in terms of all your evenings and weekends gone into building the very first version and all the tough challenges that you run into in the early days. So, yeah, we tried. We had quite some tries before we went live with various configurations of a founding team. But then at some point, we hit it with four founders who then turned out. Yeah, to be the founding team of the company and who stayed with the company for most of the 10 years that we are alive now. One founder has left just over a year ago. But for most of these years, we've stuck together with the same founding team.
Pablo Srugo (00:06:37):
Were you doing this like nights and weekends or were you doing this full time? Like, did everybody have a full-time job as well?
Koen Droste (00:06:45):
Yeah, we basically, so what we did was we would have a full-time job, but then we started working four days per week in our full-time job in the beginning, which, you know, we just took a cut in salary. We said, okay, let's work four days. Luckily, we had employers who were willing to work with us. And that's quite a step already because then you have one full office day per week to work. You can do the evenings, you can do the weekends, and you're creating time. What was important in our team, and I think that's something I would recommend to anyone starting a company, is that we could, with these four guys, we could independently develop our products and create updates towards it for the market fit.
Pablo Srugo (00:07:22):
You were all, all four were kind of technical like builder types?
Koen Droste (00:07:25):
No, we had one CTO who was doing all the coding, but then we also had a designer on that team, which, you know, some people wonder like, okay, why would you have a designer show early on? But it makes a lot of sense, I think, if you're developing an app that you can really invest not only in the design of your app itself, but also in the brand and how you put your brand identity, which is important, of course, even in the early days. Even up to the pitch, yeah, because I would always go out to pitch to investors with amazingly designed decks, which I think really help to tell your story in the early days. The third co-founder was creative director, so he was good at product, but also marketing angle. I had a product background and was doing all the CEO stuff, finance, raising investments and things like that. With that, we had all the competencies needed to push this thing forward, to push updates live, to raise additional investments, do the marketing and all of that. That was valuable in these early days.
Pablo Srugo (00:08:19):
Did you try and go raise money with just like the idea in a deck or did you build an app and launch it? What were the first steps?
Koen Droste (00:08:27):
We started building something and already before we went live about one year before we went live, we found a guy. It's really the friends, family and fool’s category that you often hear about in investing. We found a guy through our circles who just really liked the idea, who was also a traveller, and we had some nice sketches to show him. Here, sees again the value of a designer in your already founding team. So, we just showed him some beautiful sketches of what that product would look like, and he really bought it, and he decided to invest 50,000 euros. That was an important moment because that suddenly meant that with these 50,000 euros, we could pay ourselves a little bit of extra money so that we could quit for yet another day at our regular office jobs. So, we went from four days per week in our office jobs to three days per week in our office jobs, which means we had two days per week that we could work on a product. One funded by these 50,000 euros and the other one funded by ourselves by just taking a salary cut. That's how we created then more time and then we could continue developing. We built for, I think it's about one year of full-on building everything.
Pablo Srugo (00:09:36):
Before launching anything, like one year has done building.
Koen Droste (00:09:39):
Yeah, before launching anything.
Pablo Srugo (00:09:40):
How come? Like what? I mean, the normal kind of the normal, I say, like the popularized mode of operation is, you know, lean startup, get something out there, especially I would think like I'm no I'm no consumer expert, but like I would think more than anything in consumer, like just figure it out, put it out, make it clunky, see what happens. You guys took a different approach. Why was that?
Koen Droste (00:09:59):
Yeah, well, for us, first, we already had quite some validation, of course, because we knew that the product that had been live, there were just so many travellers asking for it. If something goes viral like that, we had quite some confidence like, hey, there is a need for travellers in this product. And of course, not being live with a product doesn't mean that you can't validate because what we would do is we would have designs, prototypes and all kinds of stuff that we would show to travellers to validate like, "Hey, is this a product that you would use? And how excited are you about this?" And in our case, when we would show these designs, it wasn't just the people who were excited. They were amazed by it. They said, yeah, I would love this. Where can I sign up for this? So, we got a lot of proof along the way. I think also in reality, we would have liked to ship earlier than that year. So, I think if we would have been able to do it in six or seven months, there would have been the preferred way of doing it. Then reality hits and I think one thing where we've been a bit different from other scale-up stories is that we've always been really quality driven. That's something that a lot of people say they are but in the end there's also this truth of hey, okay be scrappy and quick ship faster. It's okay to be scrappy and, we've actually not been like that. We’ve always tried to polish it a little bit more, make it look beautiful, because we found it important to make users happy with the experience that we provide and to not disappoint users.
Pablo Srugo (00:11:21):
You think that's especially important in consumer to have that extra polish?
Koen Droste (00:11:25):
I think so, maybe more than other spaces. I think one thing that we have found is that in consumer, it's quite, you know, the hard thing is you need to reach people. And if you build a B2B company, you need to reach way less people than a consumer. Because if you have a B2B company, you know, 10,000 clients, you're massive. In consumer, 10,000 clients. But for most products, it's nothing. So that means that your distribution model needs to be something that's really, scalable and cheap. Then already quite quickly, you got to the best model for many companies being viral distribution. So, you need people to get talking about your app. This is something that we realized from the early beginnings, also based upon some previous companies and apps that we built where we learned a lot about viral growth, is that if you really want to go for viral growth, people should just fall in love with your product. And we've always used Net Promoter Score as one of the keyways, as they keyway to measure our success. Which is not just about the features and the functionalities that's in there, but it's also about the experience overall. And are there little delightful moments that you can provide the user? Because you really want users to give an 8 or a 9 or 10 to that Net Promoter Score question. And for that, just having a nice product that does it, it might not be enough. People need to be flabbergasted to give that high score and to start promoting this product to their friends. So yeah, long story short, I think it's worth, especially in consumer, to invest in the user experience and providing something that's just a bit more in terms of product quality.
Pablo Srugo (00:13:00):
There does feel like there's a difference in consumer and B2B that affects this as well, which is like this idea that you know, for businesses, oftentimes, there's this concept of good enough. And so you have a product like take Teams versus Slack, as an example, everybody will be familiar with, like, they both do the job, they both let you communicate, I think, most people, maybe not today, but certainly a year ago would have said, you know, Slack is the better product, or you can, you know, or we can do Teams versus Zoom, like Zoom is the better product. I think that's you know commonly accepted but the other ones are good enough and they're integrated and so then they end up being cheaper and so on and so for a business good enough is good enough and that's the thing they buy whereas for consumers you can like they're diminishing returns if you think about the iPhone as a consumer device like the cameras get better and better they're not you know they don't get as better now as they used to but people still value that better you know like the It’s not, the concept of good enough is not as clean in consumer. And so, you always get, you kind of get more returns to polish and product quality in consumer than business. I guess that's the way I maybe think about it.
Koen Droste (00:14:01):
Yeah, that's a good point. And I think it relates closely to also the question like, you know, is your business solving a problem or is your business providing a nice experience? Because our business, we're not really solving a problem. We’re not that type of business. We are just providing a nice extra experience for people that a lot of people get a lot of joy from in their lives. We’re now moving a bit with our latest developments of where the company is going in the itinerary space. Yes, there we're solving problems, but especially the core of what we shipped 10 years ago, it was more just like Instagram. What problem is Instagram solving? It’s not like a B2B company making sure that you don't have a headache in a certain field of your business. It’s just providing something nice that people fall in love with. And yeah, that results in different implications for what you want the product to deliver and the quality standards for it.
Pablo Srugo (00:14:51):
So how do you scope out? Because that's the other thing when you think about a one-year build that gets contentious, let's say, is like what makes it in? What doesn't make it in? What does the product do? So, what was that V1 and how did you think about scoping out what features should be part of that and which ones shouldn't?
Koen Droste (00:15:06):
Yes. For us, at Polarsteps, we used the same strategy for that that we also used in some previous apps that we scaled that were quite successful with viral growth. And that is to use NPS and a promoter score as the way to track our, as the number one metric to organize the whole company around. And I know there's a lot of criticism out there about NPS and its value, but I think that NPS is very undervalued for what it means if you want your company to grow through virality or organic growth, however you want to call it. And the reason for that is that if you think about it in the essence, NPS, the question that people could ask is how likely are you to recommend this product to a threat? So, if that's the single metric that you focus on, and you're able to make progress with that, what you're effectively doing is to let more people recommend your product to their friends, which is the definition of how viral works. And despite the criticism, and I can see the criticism in certain areas, but I think if yeah, if you want to build a viral business, for us it has been valuable to make this the number one metric. And it's not just about saying, hey, this is the number one metric that we use, but it's also what we would really do is we would track it on a monthly basis. It’s not so much about the exact score that you get out, but it's about making progress on that score. And we would really look closely at the qualitative feedback that we would be getting from users of what should we do to let you give a higher score to our app. And yeah, basically in the first couple of years, the primary thing that we will be doing is just read the feedback that comes in and make the improvements that people say are needed for them to give a higher score. And with that, you know, it sounds very simple, which is it, which it is in essence, because if you keep doing that, eventually we saw our score going up and up and slowly over the first couple of years. I think we started with an NPS of about +40. And yeah, in a few years, we brought it well above 60, which meant a massive difference in how many other users each of our users would acquire for us. And we employed quite some tactics. NPS is not just about on the product side doing this. It’s about making sure that everybody is on board in your company with this being your ultimate metric. And everybody's also aware of what needs to be done. So, what we would do is we would make sure that all the qualitative feedback of users would stream in on our Slack channel so that the whole company could just read whenever there was a comment, what is the pain point of users. The investors, that's often overlooked how important it is to also get your investors on board if you choose a metric like that. So, we were lucky to find the investors who we could convince to be on board with making NPS the metric, which means that if we all agree on that NPS is what's going to get us to success and to product market fit, then let's not talk about revenue anymore. Let’s not talk about a lot of the other metrics
Pablo Srugo (00:17:57):
Well, that's what I was going to ask. So, what happens to revenue, to retention, to conversion? Do they kind of take a second priority?
Koen Droste (00:18:05):
Very much. And I've spoken to other entrepreneurs who also really believed in this model of NPS, but they could not get it going because at some point they're investors. You know started asking where's the revenue but if that actually happens it's already too late because it means you've got investors on board who are not really on board with the concept of a shared understanding of believing that NPS is the metric to to get your viral growth going and of course there's a few steps before this you need to believe that viral growth is the growth model that is applicable to your company and that is the way for you to get to product market fit. But if these are the case, then everybody should be on board with it, including investors, and everybody should be aligned on that. The only thing to look at in the Monday update is how are we doing on NPS and have we made progress?
Pablo Srugo (00:18:51):
You know, again, I think this makes a lot of sense, especially for anything that has like consumer or at least SMB, like you need to have, I think, scale of users for a few reasons. Like one is then word of mouth obviously becomes exceptionally important, which is why you want but then the other thing I think about NPS, like sometimes the issue with NPS in the early stages for B2B companies that are like mid-market and above is you can game it too easily. Like you can provide exceptional customer service and just make sure that your customers really love you, love the people. And then they get high NPS. But it doesn't really translate into the word of mouth you want because the word of mouth you want, you know, more than anything is this is an amazing product. Like you need to use it versus like this company is nice. They treat me well. Like that's just not going to convert, you know, in the same way. But when you have a consumer app, like the only way you can drive NPS is through great product, great experience. You can't do it through like customer service most of the time because you are just, you're not going to touch everyone. And so, you're really driving, I think, at the core by focusing on a metric like that.
Koen Droste (00:19:55):
Yeah, yeah, very true. And it's, you know, the thing with this, and I've seen it working again time and time and time again, that it's really, people really say such valuable stuff in that feedback. And if it comes in a Slack channel and every day you see that people are talking about whatever, their synchronization isn't working, well, obviously you're going to feel it because it's painful. It’s customers directly telling you, giving you a score of a three or four because their synchronization has failed again. Well, if you get that often enough, you're going to fix it and you're going to make people happier and they're going to start recommending you to their friends. So yeah, in our experience, it has worked out really, well.
Pablo Srugo (00:20:32):
So, before you get to this NPS, obviously you need to launch something. How do you decide just that first product where you have no data? What is it? What makes it into that V1 and why?
Koen Droste (00:20:43):
Yeah, that's a good question. I think one thing that we found important for the first version, you know, we only looked at it through this validation angle. Like, hey, you know, can we get good NPS scores on a product? So, one decision that we took early on is we're not going to build an Android app because for. In the early days, you know, what we built, there was no, it was not like a chat where you should be able to talk with each other or whatever. So, we didn't need that. For our goal of seeing if we ever can build a product that has value to users, we just need, we don't even need big user members. We just need a couple of thousands of monthly active users to provide us NPS feedback so that we can improve their NPS up until a point where we see, okay, wow, this is starting to look good. Now let's start investing in other platforms. So, the first product that we built was basically, it was an iPhone upland, we did have a bit of a desktop version supporting it because especially it was 2015. So then, you know, quite some desktop traffic would still be coming in. And it was basically just a very simple version of an app that, you know, took the GPS coordinates of people that were traveling and tracked it on a map. It didn't even have any social things in it. So other friends and family could not follow yet. People were using it in what we would call single player modes. So, people would only use it for themselves. And that was quite a powerful thing. I think also it's important for people to consume a product to think about the single player or multiplayer mode, what kind of product.
Pablo Srugo (00:22:08):
So, they couldn't share it with their family and friends, their coordinates?
Koen Droste (00:22:12):
No.
Pablo Srugo (00:22:12):
So, what was the point? So, it was just to track their own trip for themselves?
Koen Droste (00:22:15):
Yeah. For history. Exactly. They just loved for themselves to have a detailed route on a map of how they had been traveling on the trip. And that already was enough for us to really get enough growth to really kickstart the first, I would say, year or so of growth. And only after we were live for a year, we added the multiplayer mode where friends and family could start following them. Based, of course, on a lot of feedback of people asking.
Pablo Srugo (00:22:38):
Yeah, that's crazy because I would have felt like just because of what you shared, that initial story, the origin story, like that would have been the core feature is like to let your friends and family track where you're going.
Koen Droste (00:22:48):
Well, it was like the moment when we shipped that is one of these points where in the graphs you see, okay, we're yet going to another level again. So, it was a huge accelerator. But also in the first year, without having that live, a lot of people were finding enough value in single-player modes to really love the app, appreciate it, keep using it, and keep coming back for the next trip because they just loved that experience.
Pablo Srugo (00:23:14):
So, all it did was just let you track your GPS coordinates and kind of paint a map of where you've been and what journey you took to get there.
Koen Droste (00:23:20):
Yeah, and then we would suggest photos on the spots where you took them. So, you basically have a route. The core concept is still the same of our app today. You get a route on a map and if you take photos, you can select photos that you would like to add to the map, and we add them to the right point on the route where you took them. And yeah, people just really love reminiscing their own trips and looking back at their adventures.
Pablo Srugo (00:23:45):
I'm really worried because listen like you've been listening for like what 10, 20, 30 minutes now clearly you like it and the thing is the next episode is way better and you're going to miss it you're going to miss it because you're not following the show so take your phone out and hit that follow button. And tell me about the launch itself how do you how do you like you put it out on the apps on the plate on the on the app store and then what do you do to get traffic
Koen Droste (00:24:09):
Yeah, so we put it live and in the first day we had a few, one of the largest, we're from the Netherlands. So, our first users were basically just our friends and family installing the app and then a large Dutch news site wrote an article about us.
Pablo Srugo (00:24:24):
You got that PR? You went out to get it or it just kind of happened?
Koen Droste (00:24:27):
Yeah, we sent an email. We somehow hacked together a list of 200 Dutch journalists, and we all sent them a press release that were live. And then in the end, we managed to publish an article, which gave about 2,000 installs on the first day, which was great, of course. But the next day, then we had 100, and the third day, 50, and then 20, and then you're back to zero. It’s nice at PR, but the thing is we did not really care about signups or installs in these first months and even in the first year, because that wasn't our metric. Our metric was NPS. And the only thing we needed to prove NPS, yes, we did need sign-ups, but only enough to be sure to be able to validate and to have just enough users in the app to validate all the assumptions that we have to measure NPS to see if they're happy and to get the feedback that we needed. And to decide on the next features we built. So, we were never really, also we're not doing a whole lot of marketing initiatives or things like that. We were just making sure we would get just enough people signing up to validate and to be able to build.
Pablo Srugo (00:25:29):
Did you care about retention or even that was kind of secondary?
Koen Droste (00:25:32):
No, we didn’t. Even that was secondary, partly because of the dynamics of our app, because if you're a travel ad, people might churn for a year and then they come back. So, if you're just live for a few months, you don't know if people churned or if they are going to come back on the next trip. So, it was partly due to the dynamics of being a travel app. But it was also partly related to, you know, again, we always got back to if we can fix a Net Promoter Score and if people are really going to start recommending our app to their friends, then we will be successful as a company. So, we always got back to that. Secondary things we did is not, yeah, of course, even sign-ups. We did look at it, of course, also daily active users for us were stuff on the side that we were looking at. Content creation, so how many of these steps, the step is our variant of what Facebook would call a status update or what Twitter would call, X would call a tweet. Well, how do they call it nowadays? I don't even know. But yeah, with us, that is called a step. So, we would track this content creation because of course you want people to be active on the app. But always in the end, NPS was the prime driver for us.
Pablo Srugo (00:26:34):
And so, it started at 40 and you started getting kind of qualitative feedback very early on and just acting on it. And it was just this kind of small iterations on the NPS feedback.
Koen Droste (00:26:42):
Yes, exactly. The NPS feedback would stream in on our Slack channel, and we would just read the qualitative comments that people were asking and use that as direct inputs to prioritize a product roadmap. Of course, you're not going to do directly everything that the user says because sometimes there's stuff that from your vision, for example, doesn't make sense. So, you do a little bit of weighing in there. But usually we would just look at, hey, based on all this feedback, what are the biggest pain points? And then we would go tackle these pain points. And because we had a founding team that was independently able to just push updates because we had all the competencies on board to do so. We could just iterate all the time and bring improvements, ship them live. And then quite often we would see, oh, for time, it would not be a direct effect, not like, hey, we ship now this new feature. And suddenly the next day the MPI is up at five points. But it's more a process where over time, if you keep fixing enough of these things that users are complaining about, that over time, yes, we saw the NPS going from 40, slowly to 45, to 50. And eventually, I think after two years or so, we hit 60.
Pablo Srugo (00:27:47):
And then when you raise 50K, you're probably running out of money quick. There’s no revenue coming in. How do you fix that piece? What do you do on the fundraising front?
Koen Droste (00:27:56):
Yeah, the good thing there is that we had investors. It was quite hard to find investors because so many investors are still, you know, focused on monetization and revenue. But we were lucky to find investors who also were better on saying like, hey, you know, the first thing we need to get to is actual user growth. Make sure that this product is providing a lot of value to user and user growth to get there. NPS is the best way to do that. And the nice thing about NPS is that you're tackling, you’re killing two birds with one stone because you're not just generating the user growth, but at the same time, you're also creating an immensely valuable product because you're solving a lot of customer pain points based on that NPS feedback that's coming in. So, on two tracks, you're doing well as a company. You’re building a great viral growth model, but you're also, yeah, slowly along the way, building a valuable product. And we were lucky to find investors who believed in that and who gave us the time to not focus yet on monetization or all kinds of complex other things. We just together, let's look at, you know, are we improving the NPS and the quality?
Pablo Srugo (00:29:03):
After that 50K, what did you raise and when?
Koen Droste (00:29:06):
So, we raised, so the first round before we went live was $50K.Then we did some seed rounds of, I would say about, I think it was $200K in total. That would allow us, yeah, to basically go back to, well, to keep working at three days per week in our regular jobs and two days per week on this.
Pablo Srugo (00:29:23):
And this was from angels as well, or that one was from VCs?
Koen Droste (00:29:26):
It was seed investors. Seed investors, not VCs, but more like intermediates and VCs. Various companies and an entrepreneur who believes in it, et cetera. Then at some point we were able to raise $500K investments. It was about, I would say one year, a little over one year after we launched, maybe one and a half years after we launched.
Pablo Srugo (00:29:46):
You still had no revenue or where were you at?
Koen Droste (00:29:48):
No, we still had no revenue. No, we shipped, we launched in 2015, the first version of the app, March 2015. And we only started making our, we only made our first Euro in revenue in 2017.
Pablo Srugo (00:29:57):
Okay, two years after.
Koen Droste (00:30:00):
Yeah, so that was two years after. But the $500K, I think we raised it in 2016. That was quite a pivotal moment for us because that's when we could quit our jobs and start working on this full time. It also allowed us to hire an Android developer and finally build an Android app because we did not have an Android app for the first one and a half years or so of our existence. And that also was a turning point because being able to go in full time and spend full time on fixing all these feature requests and bringing the NPS even higher. You can just see it back a couple of months later, our growth graph started accelerating even more.
Pablo Srugo (00:30:35):
What did that look like? Like you had, you know, 2000 signups on day one. By the end of the first year, how many active users did you have? And the second year, like when did things really take off sort of thing?
Koen Droste (00:30:45):
Yeah, at the end of the first, I have to go back in time because this is 10 years ago. But what I know, I know the numbers in signups, for example. So, you know, with 2,000 signups on the first day, then it dropped back to 10 after a few days and then 20, 30, 50. And the first summer, we were up to about 200, 300 signups per day. So that's where we were after six months. And then one year later, we would be up to about 1,000 signups per day. And, you know, that would translate into the numbers of, you know, having 1,000 multi-active users in the very early beginning or a few thousand, up to 10,000. And at some point, we had 20,000 after a few years, one and a half years or so.
Pablo Srugo (00:31:32):
Was it just steady? Because that, like, you know, you're still starting off a small base. Was it just like kind of steady growth or were there any like big inflection points along the way that took you to entirely new levels?
Koen Droste (00:31:42):
No, there were a few points. We did some redesigns of the app. At some point, we found out like, hey, you know, the way that we organize information in the app and the way that everything looks, we can do this in a smarter way. And these redesigns would have quite impact. Also, shipping individual features would have some impact. But it was not like massive inflection point. It was more really like over time that cumulatively it would start showing up. Which, of course, relates to the growth model because people started finding their friends and, the thing in travel that we're in, one specific dynamic is that people discover an app, but on average, it's six months until they take their next trip. Or if you're an American with only 20 holidays per year, unlike most Europeans, it might take even longer before you go on an actual trip. So that really slows down the organic growth value of travel apps. But we could just see that over time, these compound effects started getting larger and larger and larger and then, yeah, it really accelerates at some point.
Pablo Srugo (00:32:39):
Did you ever leverage partnerships with other travel, I don't know, take Airbnb, but anything like that? Was that ever part of the growth mechanism? And if so, did it kind of work at all?
Koen Droste (00:32:52):
Yeah, no, for the first, I think, eight years of our company, we did not spend a single euro on marketing.
Pablo Srugo (00:33:01):
Wow.
Koen Droste (00:33:02):
And we have done rarely any partnerships. And the ones we did were, we did one that was kind of sizable in the very early days, but it proved that we were already thinking, which was that partnerships were. Costing way too much distraction and attention from a thing that really matters, which was, in our opinion, building a valuable product to users. So, what would happen, for example, we had a partnership at some point with a really large travel company that would reach, it's one of the bigger brands that even most Europeans and Americans will know, reaching millions of users. And they give us quite a prominent partnership position. They even give a discount to people on the travel books, like the printed photo albums that we are selling at the end of a trip. And then out of this partnership, you know, we would, I think in total, we got about 5,000 signups. And from a certain perspective in these early days, okay, 5,000 signups, it’s. When you're quite early in your journey, it's quite a lot. But if you look at the amount of time and distraction it takes to close a partnership, there's always product implicated because in the beginning it looks easy, but then, oh no, but it would be nice to track it or to do.to alter the product a little bit because of this and that and such. And it's a one-off thing. So, yeah, you have these 5,000 users, but.
Pablo Srugo (00:34:20):
What do you think explains that? Because on the surface, you'd say, you know, if somebody wants to travel, they probably first go to Expedia or hotels or Trivago or Airbnb or whatever, right? And if once they book an experience, they get redirected a way to track that travel, that would be right at the point where their mind is in the perfect place to get recommended this sort of product. Why do you think that logic doesn't really, let's say, play out fully?
Koen Droste (00:34:49):
Yeah, I think the logic might be in theory true, but I think in the reality of the traveller, they're just not waiting often for that product. If it's not. If it's not what they're waiting for and if it's got recommended because of yet another app that tries to do the affiliate thing or tries to push other products down, there throughout. Yeah, it rarely converts. You know, in the business cases for this kind of partnership, it's always. quite a different story from the reality when you implement it, and you see the actual conversion when it's live. And I think that has to do with that in theory, it always makes sense. But in practice, that customer has just booked their flight, and they just want to go on now to book their hotel or the dinner is cooking on the stove, and they need to go there. So, there's just less need for them to do so, but I think the maybe even more important argument is also on the business side that your time and your resources are so scarce in these 30 days as a startup, but you have to think about the opportunity cost of the time that you spent on that. And I would rather bring, if we can do a small improvement to the product that causes a 0.001% increase in daily signups, then over time, the compound effects of that are worth way more than the 5,000 signups that I would get out of one of these partnerships. and with the same time you might be able to achieve both and that's where what it often brought down to us if you really choose for focus that it's and you really keep in mind also the opportunity cost of your time that yeah in our experience it has always been worth a lot more to invest that time in product improvements and improving your whatever your onboarding conversion or things like that even if it's small things that you can improve over time the compound effects of that are way larger than, but in our experience, we've been able to achieve with the experiments we did around partnerships.
Pablo Srugo (00:36:40):
And then tell me a bit about monetization, like what monetization path did you pick? And then how did that, you mentioned it took two years to launch it, but then how did that kind of take off afterwards?
Koen Droste (00:36:52):
Yeah, so we were lucky, as I told before, in the early days to have investors who were okay we’re not going for monetization. We did always have ideas about monetization. And the funny thing about us is that you hear a lot of startup stories that do a lot of pivots along the way before they find a way to go. But I think we're quite unique in that we exist for 10 years now. And our vision is still the same as in the first pitch that I created for the company, even two years before we launched the first version. And in that first vision, our idea was already that we saw that, hey, there's a lot of apps and websites that a singular traveller is using online. And it's a very broken experience in travel. And if you can build a platform where you unite the whole travel experience into one single platform, that can have a lot of value for these travellers. You know, you need to start somewhere. So, we started building this tracking product. But we always had in mind that there's other areas of the travel funnel, such as inspiration, planning, but also reliving your trips, where you can potentially make money and where monetization models are very logical. So, in this first pitch deck, we already said like, hey, our first goal is to get user growth and to get really to build a lot of value in the track pillar of our product. But if we are successful with this, then over time in the future, it makes a lot of sense for us to expand into reliving your trips afterwards and planning your trips before they start. And there, well, for example, in Relive, if people have already uploaded all their photos and you have their routes and all their travel stats, you can create a beautiful, printed photo album out of that for which you can ask money. And if you can help people to plan their trips, well, part of planning, of course, is booking hotels and finding accommodations where there's an affiliate game where you can also make money. And so, the key thing I think in these early days was that we had investors who believed that, yes, if we're successful with this down the road, there's lots of way to monetize around this product. And, yes, but on a short term for the first one, two, three years, let's focus on user growth and not yet making money.
Pablo Srugo (00:38:57):
But so, it wasn't like a premium subscription type product. It was more like a la carte kind of things along the way.
Koen Droste (00:39:03):
Yeah, we've never had a subscription or anything. So basically, the app was free without any monetization model for the first two years. And then in 2017, the fun thing is already in these early pitch decks, we had the idea that, hey, maybe printed photo books could be one way if we have all that content of users in our app. Well, letting people print it out in a cool photo book might be a really good way to monetize. Then as we were live and as more and more people started tracking their trips with our app, people in the NPS feedback started asking like, hey guys, I'm ordering photo books, but I'm uploading all the same photos and the same stories that I've already created on Polarsteps. And I'm even copy pasting your map into my printed photo book that I ordered somewhere else. Well, if you're looking for validation, there you have it. And so, for us quite quickly already, we concluded, okay, this hypothesis that we had about that this could be a potential monetization model. Turned out to be true. And well, we're now 10 years down the road and we're making over 10 million euros a year with selling these books. So that's, yeah, definitely a successful monetization strategy so far for us.
Pablo Srugo (00:40:05):
How did that, like, how long did it take from 2017 to hit like a million in revenue?
Koen Droste (00:40:10):
A good question. Well, there's a little COVID hiccup there that happened along the way. So, it was a bit of a bumpy ride, of course, for us. But the growth was quite quick in the beginning. I’m not sure about the exact year where we hit a million, but it must have been like something like two or three years or so before we got there. The thing is that it felt very natural for our users to order these books because if you've already invested all the time to select photos and to write stories. To even have some cool maps of the trip that you've done, then at the end of the trip, we would send people a push message and their book would actually be ready. Then you can deliver it to their doormat within five days after people order it. So yeah, for a lot of users, it was just a very logical step that if their trip was finished, they would order that book that we presented to them.
Pablo Srugo (00:41:00):
What did COVID do? Did it speed things? I mean, it crashed everything in travel. So how did it affect you guys?
Koen Droste (00:41:06):
Yeah, it's funny because when COVID hit in March 2020, we lost like 90% of our active users within a couple of days.
Pablo Srugo (00:41:14):
Wow.
Koen Droste (00:41:14):
So that felt, and was of course, a very tough thing to swallow. Luckily, we had just raised $3 million Series A two months before that. So, our idea for that year was initially to. Scale up fast, but we were in a lucky position because we could basically just keep the same team size, and we had a very good war chest to sustain through the COVID years. The thing that we found out quite quickly is that it turned out that lockdowns are a great time to order photo books, because if you're sitting on the couch anyway, you might as well order some books for trips that you took 10 years ago. So I think we are one of the very few companies in travel that actually in 2020 made pretty much the same revenue as in 2019, which was very unique, of course, being a travel company, which was also really a lifesaver for us because we had a combination of a Series A in the bank combined with revenue actually not even going, well, we almost had the same revenue in 2020 as in the year before because so many people started ordering books from the couch.
Pablo Srugo (00:42:12):
Perfect. Well, let's stop it there. I'll just ask the last kind of few questions we always end on. You know, the first one is, when did you feel like you had true product market fit?
Koen Droste (00:42:20):
Good question. I think it was early 2016. We did some major redesigns of the app, combined with launching that follow feature that we spoke about before where people could start following and inviting their friends. That was really a moment where you could just see in the daily actors in the signups, like a little bump like that. You could also see it in the NPS that people were suddenly, you know, getting significantly better. If you know the math behind how this, because we did not do anything, you know, if it's, if you're doing a lot of marketing, then you, it's still a question like, hey, are we growing because we have a better marketing campaign or are we growing because of something else? But if it's organic user growth and you see these lines going up without you, you know, with your job, just to make product changes, then you kind of know, okay, we're onto something because people are really, really at quite some scale talking to each other about this stuff.
Pablo Srugo (00:43:12):
Then on the kind of opposite side, because, you know, the world of startups is just full of ups and downs. Like, was there any moments where you thought this maybe wouldn't work and maybe the whole company was going to just fail?
Koen Droste (00:43:26):
COVID, definitely. Despite having that money in the bank and despite the revenue going up. A big question that we had, we were lucky, my co-founder, who was our CTO, he, as most engineers, I think a lot of engineers quite early on, got the concept of how serious and how long COVID was going to last, because they understand math and they understand the numbers of. How for reality works a lot better than well than me at least so we are thanks to him quite early on aware that it was going to be really serious but what we were not sure of is what is what is travel going to look like after covid so yes we realized quite early that it's going to last for two years and for two years travel is going to be a mess but will the world of how people travel be the same after covid or will all of patterns have changed in terms of what people do and That caused a lot of uncertainty with us on the business side and like what will be the relevance of our product in the post-COVID world. Luckily, well, we made the decision then to, because it was a big strategic charge that we had, like are we going to build all kinds of COVID optimized features or are we just going to stick to our initial roadmap and assume that after COVID everything will be, the rough dynamics of the travel will be the same again. Luckily, we chose the second. After COVID, it did indeed turn out that most patterns of how people travel and the needs the travellers have, have turned out to be quite the same as before COVID, which meant that, yeah, we could continue after that.
Pablo Srugo (00:44:55):
Last question. You know, you mentioned you often speak with like earlier stage founders. What’s like one piece of advice you find yourself giving out most often?
Koen Droste (00:45:03):
One thing I very often say is agree with your investors, your co-founding team and all the people in your company on one metric. Make sure that everybody's actually on board with that and that you track it well and don't lose focus because the focus is so critical to keeping it. Especially in early states, if you don't have money, if you're approaching the end of your runway, it’s so easy to get distracted. It’s so easy. We got a competitor who wants to merge with us. It looks interesting, but hey, distraction. We had people offering us quite some money to white label our product for them. Very attractive if you're approaching the end of your runway but also lose the focus. I think that's most entrepreneurs that I've seen eventually succeed in getting to product market fit and beyond. I had this very sharp vision of what success for them meant. We’re able to measure it and then not lose focus on that execution.
Pablo Srugo (00:45:53):
Perfect. Well, Koen, thanks so much for sharing this story with us, man. It’s been awesome.
Koen Droste (00:45:56):
Cool. Thanks so much for having me.
Pablo Srugo (00:46:00):
You remember like the first person who told you about Bitcoin? The first person who told you about Uber? You want to be that person because being first. Is cool. So be a cool person and tell your founder friends, send it to them on WhatsApp, put it in a WhatsApp group, put it on a Slack channel, let people know about the show, let people know about this episode. Don't let somebody else beat you to the punch and share it with your founder friends first. Remember what Ricky Bobby said, if you aren’t first, you're last.
