Conversational Intelligence software founder Greg Reffner of Phoenix sat down with the GetLatka team to discuss his wild ride since founding Abstrakt.ai as the pandemic shut down the world in March 2020. His real-time conversational software uses machine learning, natural-language processing, and custom algorithms to help every sales rep and leader avoid the pain of missing their number.
Reffner, a self-proclaimed “sales and marketing guy,” unpacks the key insights from his journey, from what he learned as an early power user of Gong to why he doesn’t have a technical co-founder (he tried). He also shares how his team outmaneuvered industry giants to crack the code of organic traffic and exploded in the scene with a $2m run rate in just 5 months.
- Team: 2 FT employees, 2 SEO contractors in India, Contracted dev team of 9 in Indonesia
- $170,000 MRR in 5 months from 113 customers
- 7-day sales cycle
- $500,000 Seed Round in December 2021
How Gong Influenced Reffner 7 Years Ago
Reffner was working as an account executive at Act-On Software 7 years ago when the field of marketing automation was first taking off. He became an early power user of Gong and fell in love with how technology enabled his success.
Fix the Problem with Gong
“Gong is an amazing tool,” notes Founder Reffner, but it has limitations. He shared a story from a client who described Gong as “finding the black box after a plane has already gone down. It tells you what went wrong, but it does nothing to stop you from losing an opportunity.” So Reffner set out to fix that. He wanted Abstrakt.ai to tell sales reps what to say before they lose the opportunity. To recommend what to say, what questions to ask, how to overcome objections—all in real-time.
Helping the sales team avoid universal pain
As a former AE, Reffner understands the pain and pressure salespeople face in making their numbers every quarter. He envisions Abstrakt.ai as the tool best suited to help them do so, thanks to its real-time interface that integrates machine learning, NLP, and unique algorithms.
$60,000 nest egg launches company
Reffner launched Abstrakt.ai in March 2020, investing $60,000 of his own money to create a proof of concept. He explained that at the time, his wife was pregnant with their first child and that if he wasn’t successful, it would mean that she would have to work and couldn’t be a full-time mom. Reffner admits that those days were particularly stressful, knowing what was on the line.
Perseverance and confidence make Abstrakt.ai a reality
Since he’s not a technical person, Reffner searched for a technical Co-Founder to launch Abstrakt.ai with him. He leaned into his network and LinkedIn contacts to find a partner. He was consistently told either “no,” or it could not be done for the money. Eventually, he found his way to a website called CoFoundersLab, where entrepreneurs can connect with CoFounders, advisors, mentors, investors, and innovators. There he connected with John Bunting, from Omaha, Nebraska, Founder of Beeso Studio. Bunting helps early-stage startups with expertise, including technical development. Bunting showed a willingness to try to bring Reffner’s vision to life.
$12-25,000/mo to Beeso Studio’s Indonesia dev team of 9
In exchange for providing the technical support at launch, Reffner gave Bunting “single-digit equity.” The two worked together to set up the development team of 9 in Indonesia, all of which are technically contracted through Bunting’s Beeson Studio.
Creatively tapping into Google’s natural language AI
Reffner shared that his team found a creative way to tap in and access the Google library and data in real-time. This creative stumble became a critical piece of Abstrakt.ai’s success.
Reffner’s 18-month secret to success that only costs $1,000 per month
Abstrakt.ai’s FT team—Reffner and Director of Marketing Claire Dobson, recognized at the beginning that for the company to succeed, they needed to create an inbound marketing machine to generate leads. So Reffner set out to find an SEO guru who could help the startup rank above giants like “conversational intelligence software” in organic searches. Reffner knew he was looking for someone who “lives and breathes Google search algorithm changes,” noting that Google makes dozens of updates annually. He worked LinkedIn until he finally found a pair of such gurus in India. Together, for approximately $1,000 per month, they worked with the team to create content that ultimately outranked Hubspot and Gong for critical keywords.
Created 60 blogs, 40 podcasts to follow the Allbound playbook
Allbound inspired Reffner to follow their playbook for Abstrakt.ai. Allbound created optics of looking bigger than they are by investing in inbound content. So, as Abstrakt.ai began product development, Reffner began creating content based on 2-4 critical keywords, including:
- Real-time call coaching software
- Call coaching software
- Conversational intelligence software
- Sales coaching software
His Indian contractors did the rest.
Founders: Learn to put your ego aside
“I found people better than me and got out of their way. As a founder, you have to put your ego aside and understand where your gaps are,” explains Reffner. He noted that he’s not an SEO expert, but instead, he spent 18 months creating content and let someone else do the rest by optimizing headlines and metatag descriptions to align with Google’s ongoing changes.
$130,000 Friends and Family Pre Seed Angel Round at $4m valuation
Once Reffner had a proof of concept, he needed additional financial support to take Abstrakt.ai to the next level, so he reached out to his network to cobble together another $130,000. He used the funds wisely to begin to build his vision.
$500,000 Seed Round closed in December 2021 also at a $4m valuation
Abstrakt.ai raised another $500,000 in Seed Round funding at the end of 2021, at a $4m valuation. Reffner explained that he wanted to keep the value cap the same, so he did some maneuvering, including decreasing the interest rate, to close the deal.
Added $120,000 from Startup Showdown in Atlanta in March 2022
Reffner’s competitive nature (he played soccer and baseball and snowboarded in college) willed him to victory in the Startup Showdown in 2022. He received $120,000 in funding in exchange for a small amount of equity. Given the sizzling start to the year, Latka inquired as to why Reffner even entered, given how valuable a founder’s time is during this critical early stage. The Founder admitted that the organization turned him down in May of 2021. Panoramic Ventures told Reffner they didn’t believe he could build a stable product and then get customers. “I wanted to prove them wrong… and I did,” quipped Reffner.
Launched in April 2021, landed the first customer 3 weeks later
Abstrakt.ai finally had a production-ready product in April 2021. Reffner planned to give the product to beta users for feedback and wasn’t expecting any customers for a few months. Instead, he got his first customer just 3 weeks after launch.
Closed 2021 with $60,000 ARR, as users pay $100 per seat per month
2021 closed with what Reffner called a “nice organic pace,” with a total ARR of $60,000. Users pay $100 per seat per month, with the average customer buying 15-16 seats. As the year ended, Abstrakt.ai’s MRR sat at $5,000 per month.
Revenue explodes in 2022 to $170,000 MRR
In just the first three months of 2022, Abstrakt.ai closed 113 new customers. Each customer averages 15 seats and represents $1,500 in subscription fees. Reffner attributes the success to the lightning-fast 7-day sales cycle and that no one else in the marketplace is solving the problem. He noted that most people don’t know the technology exists, so they’re sold almost immediately once they see it.
Two years for data set intelligence to grow
The current Abstrakt.ai model relies on sales leaders to configure the product for their sales team, outlining the essential details to help their teams be more proactive and close more opportunities. Reffner envisions that in about two years, the dataset will grow large enough that Abstrakt.ai will be able to support teams by making recommendations on how to optimize opportunities.
One million dollars in revenue per employee
Latka shared his delight in how Founder Reffner has built Abstrakt.ai, noting that he believes we will soon see a company go public with less than 10 full-time employees. Latka noted that Reffner is in similar territory to John at SmartSuite.
$25m from Gong?
Expecting a different response, Latka asked Reffner if he would take a $25m offer from Gong today to buy the company. Without hesitation, Reffner said, “ Yes!” He added, “I’d like to stay on for 2-3 years to help it grow.”
Fast 5 with Founder Greg Reffner
Founder Greg Reffner cited Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek as his favorite business book today. The CEO he most admires is Steve Jobs. Thanks to the free CRM and marketing tools, Hubspot is his favorite online tool for building his business. Greg credits his wife for taking good care of him, allowing him to get 7-8 hours of sleep per night. He is married with one son and another child on the way. Greg turns 35 in June. What he wished he had known at 20 was to listen to his dad. “I wish I had listened to him every time he told me something. I fought him every step of the way,” he explained.