An Interview With Fotis Georgiadis

Build for your users, not yourself. Early on, I remember building all these calculators and tools that I thought were so awesome. After reading up and learning about user testing, I figured I’d apply that to my business so I set up 10 user tests. Some of the tools had such a poor rating for a variety of reasons: difficult to understand, overly complex, etc. That was really the first gut check I had on the product and it changed how I approached product development.

As a part of our series called “Making Something From Nothing”, I had the pleasure of interviewing Alex Leduc, CEO and founder of Perch.

Alex Leduc is the CEO and founder of Perch. Prior to starting Perch, he worked in the real estate sector for 8 years in various corporate finance, strategy and analytics roles. In addition to hands-on experience in the industry, he is a graduate from the Ivey Business School (Western University) and a CFA Charterholder.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

From a very young age, I always had these side hustles I’d be doing and loved being an entrepreneur. Graduating university, I wasn’t 100% sure what I wanted to do so I went into a rotational program with one of the Canadian banks. It was an awesome experience because I got to try a bit of everything and then I ultimately ended up landing in corporate finance. My core skill set was in forecasting business growth, strategy and analytics. Taking something that exists today and then looking for ways to optimize it for efficiency, enter new revenue channels or any other channel is so interesting because you’re looking for ways to create value.

Perch was my first entrepreneurial move as it related to my career and I’ve been going strong for almost 4 years now. Every day I get to work with people that are super motivated to take us to the next level and I feel a profound sense of purpose in what I do. The most exhilarating thing is the pace at which we move and the limitless opportunities in how we look at everything. Most of what we do is from a blank slate, so we don’t inherit archaic procedures and can tackle a solution from a different angle than what others have historically done.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“You do the things you need to do in order to do the things you want to do”. My dad would tell me this from a young age because even at a young age, I was pretty impatient and wanted to dive right into the fun parts of everything.

The reality of starting a company isn’t sitting in an awesome leather chair with a beautiful skyline from the downtown core where you’re delegating and closing deals all day. You have to literally do everything when you start and if you think doing the mundane parts of a job you like are bad, wait until you do the mundane parts of a job you don’t like. I’ve learned to appreciate the little details and the process that needs to be followed to produce results. Shortcuts rarely produce the same results and you end up just having to redo everything so as painful as something might be, if you decide it needs to get done, it needs to get done.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

Reading “The Hard Thing About Hard Things” by Ben Harowitz was one of the books I got a ton of information out of, but also reframed how I was looking at what potential issues may be coming my way. When I started Perch, I had never worked at a tech company, let alone a startup. I also had never run a business before and this was my first venture. I knew I had massive knowledge gaps and books can be a good way to fill those gaps. In a way, this book helped me emotionally prepare for a lot of the things that inevitably did come my way and make some decisions early on that shaped how Perch operates and functions successfully.

Ok super. Let’s now shift to the main part of our discussion. There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. Can you share a few ideas from your experience about how to overcome this challenge?

Good ideas are a dime a dozen. The hardest part is seeing it through. The main thing you need to do to understand if it translates into an actual business, is to roadmap what that success looks like. This could be a day long discussion on it’s own, but at a high level:

• What’s the financial viability? How do you monetize this? Once you have an idea around the revenue model, you can then identify what capital requirements you’ll have to fund that growth.
• What portion of this can you take on? Will you need to quit your job and can you take that hit? What other roles will you need to make this business viable and do you have a co-founder or enough capital to hire them?
• Am I solving a real problem? Pitch your concept to complete strangers and see if there’s any high level interest. You can also validate price points and competitors via this method to validate your hypothesis from prior points.

The list goes on. In essence, your idea is the destination. But you need to assess if you have what it takes to reach that destination and how bumpy that road is going to be.

Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created?

Online research is a solid starting point to see if it already exists, but this can be a pretty deep rabbit hole considering that your idea may exist in different markets, countries or even languages. I’d start by looking at if the idea exists in the market you’re going after and then worry about external entrants at a later stage of your due diligence. If your idea exists in other markets that don’t overlap with you, you can learn from their mistakes and potentially even connect with their team to share insights.

More importantly than if your exact idea already exists, you need to identify what you’re going to do better than your competitors. Almost every product or idea will have an existing solution that people currently use to solve that problem. Those options are your competitors and you need to be able to clearly articulate what you’re going to do better than them to win over users. It’s always important to remember that they have a huge head start on you (capital, existing users and a product that actually exists), so you need to have a strong enough differentiator that can’t easily be replicated by others to build a sustainable competitive advantage.

If it’s extremely novel and nobody is solving that problem (extremely rare), you then need to ask yourself why that is the case and your problem may not be worth solving. Perhaps people have tried in the past and they failed, which you could learn from before repeating their mistakes.

For the benefit of our readers, can you outline the steps one has to go through, from when they think of the idea, until it finally lands in a customer’s hands? In particular, we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.

This seems to be most relevant for a manufacturer, since I haven’t had to do any of those steps. I can speak to it from a software company standpoint. At a high level:

1. Have the idea

2. Validate the idea

3. Validate your business model

4. Hire resources (if necessary) and develop MVP

What are your “5 Things I Wish Someone Told Me When I First Started Leading My Company” and why?

1. Build for your users, not yourself.

Early on, I remember building all these calculators and tools that I thought were so awesome. After reading up and learning about user testing, I figured I’d apply that to my business so I set up 10 user tests. Some of the tools had such a poor rating for a variety of reasons: difficult to understand, overly complex, etc. That was really the first gut check I had on the product and it changed how I approached product development.

2. Prototype before building.

I had never heard of Figma or other various tools when I first started. I thought user testing was only possible if you built a very basic working version of your product. Once I learned about prototyping, it cut down the time I needed to get feedback on a product dramatically. You could have a working version of your product built entirely by your design team, without needing to involve a single engineer to see if something resonates with your audience.

3. Quickly identify what partnerships are viable.

Even early on, you’ll be approached by potential partners who want to work with you. However, you’ll quickly realize that most of these partnership opportunities lead to nothing because they either don’t add value or you can’t come to terms. You can waste an incredible amount of time evaluating these, where you could’ve saved yourself the headache by determining upfront that it isn’t going to work. Have a list of things that are deal breakers, things you would expect both of you to get out of that partnership and get their requirements upfront to see if you can even meet it. This should be doable in less than 1 hour between you and the other party.

In our 2nd year of business, we were approached by a potentially massive partner and I was beyond excited for it. I spent hours, if not days running financial forecasts, looking into how we’d integrate with them, putting together a deck to raise capital to fund that initiative, etc. This was the equivalent of me picking out paint colours for the rooms for a house I hadn’t even put a bid on yet. Two weeks later, they sent over a technical requirements list that outlined things I needed on my end which included dedicated staff on 24/7, SOC2 certification, etc. For context, we were a 3 person company with 1 engineer at the time and they needed us to meet these requirements within 30 days, which was impossible to meet.

4. How to hire for things you know little.

You’ll have to eventually make key hires and the first thing you’ll want to hire is typically the things you know the least about. This makes it hard for you to evaluate that person and you could easily miss massive red flags. Wherever possible, try to involve outside parties (advisors, friends, recruiters, etc) that are experts in that field to help with the interview process and focus on what you can evaluate. Regardless of what their role is, you should be able to assess fit and if they’re a person who’s values align with yours and the company.

I had to hire my first engineer and I knew nothing about software development. I created a challenge where they had to create a basic tool that I could interact with. I had an advisor help me evaluate the code they built it with, but in the interview I had them explain how it works, why they built it a certain way, etc. I could get a feel for how they work with others, why they wanted to join, what their motivators were and then the advisor could help me determine if their coding was up to par.

5. Have a good filter.

The adage “Don’t take criticism from those you wouldn’t go to for advice” holds true. Everyone will have an opinion on what you’re doing and you won’t have time to explore all of it. You definitely want to be seeking feedback, but you need to be able to assess how material it is, if you see a pattern (are multiple people bringing this up?) and the person providing that feedback.

When we first launched our portal, we had people add co-applicants within their profile. This meant that a spouse or partner was an add-on for the applicant and was run through that profile. We had users suggest that they wanted direct access to their mortgage information and didn’t want to only have access through their partner. As a team we decided that splitting it up made sense for privacy reasons but also for empowerment, all parties to the transaction should understand what’s going on and be in control. After we made that change, we had users suggesting that their partner or spouse didn’t want to be involved in the transaction and it was an unnecessary barrier for them to fill out an application.

Moral of the story: You’ll never have 100% agreement on anything, but make decisions around what your company stands for as a guiding principle where there’s ambiguity.

Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?

Online research is a solid starting point to see if it already exists and I’d start by looking at if the idea exists in the market you’re going after. More importantly than if your exact idea already exists, you need to identify what you’re going to do better than your competitors.

Almost every product or idea will have an existing solution that people currently use to solve that problem. You need to be able to clearly articulate what you’re going to do better than your competitors to win over users. If it’s extremely novel and nobody is solving that problem (extremely rare), you then need to ask yourself why that is the case and your problem may not be worth solving. Perhaps people have tried in the past and they failed, which you could learn from before repeating their mistakes.

Recommended steps:

1. Have the idea

2. Validate the idea

3. Validate your business model

4. Hire resources (if necessary) and develop MVP

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

I’ve honestly never heard of invention development consultants, so I can’t comment on what it is they do. I also don’t think that striking everything out on your own is a good idea. However, be wary of all these experts that want a slice of your equity upfront while offering very little in return because there are so many free offerings out there that you can leverage. Here are some of the ways I was able to plug knowledge gaps with outside parties early on when I started:

• Free bootcamps and courses offered by MaRS & Communitech that went through defining a value proposition, go-to-market strategy and other.
• I hired 6 advisors when I first started that specialized where I was weakest (digital marketing, SEO, etc). I paid them all in sweat equity since I had limited capital.
• Meeting other founders (at the same stage or later stages) at industry events and sharing experiences to learn from each other’s mistakes.

But there needs to be a limit regarding how much you depend on external parties. The risk

I could see is that a new founder may then lean on the invention development consultant way too heavily, which will not only cost them equity or capital, but it might become a crutch that prevents them from leading their company and learning. I find that some people try to build a false sense of confidence by making a lot of decisions on expert opinions (lawyers, consultants, etc.) which can be warranted sometimes, but most of the decisions you make aren’t black and

white and there is no perfect answer. You’re ultimately burning a ton of your capital on things that don’t generate any revenue. A founder should know the most about their own business and it’s how they build their confidence over time to make decisions in ambiguity.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

This is very relevant to us, since we bootstrapped our way for the first few years and then recently raised institutional capital. I wouldn’t look at it as one or the other, but rather what weight can be allocated to bootstrapping without jeopardizing the business.

Let’s start with bootstrapping. Every business model will impact how much bootstrapping you reasonably can do, but it usually comes down to your ability to capture as much of your customer’s lifetime value upfront as possible. Many businesses have found ways to do so while scaling, such as:

• Charging annual premiums upfront instead of monthly subscriptions.
• White-labeling or licensing deals with other industry players to generate monthly revenue in addition to your core business.
• Offering equity as part of compensation packages to reduce salary costs.

There is no shortage of ideas in regards to how you can manipulate cash flow to work in your favour. In summary, my advice as it relates to bootstrapping is to optimize your revenue model to accommodate your cash flow needs.

As for venture capital, my advice would be to look at venture capital as one of many capital options at your disposal. For example, we took on debt and grants in addition to venture capital to fund our business. Out of those three, venture capital is the only one that is dilutive (meaning we have to give up equity in the company) and for that reason, should be the one you evaluate most thoroughly. Beyond their ability to cut you a cheque, you should be looking at their level of involvement in your company, their track record helping other companies, their expertise in the sector and everything else they bring to the table. It’s important that you find a strategic fit with the investor because their network and expertise typically can impact your business’ growth trajectory more than their capital.

To tie it all together, I then take my financial forecast, optimize it for bootstrapping and then identify my capital shortfall. That sets my basic capital requirements that I need to fulfill. The temptation may be there to take on more capital than you need, to which you would then look to answer one question: Would the additional capital likely create more value than I’m giving up? If the answer is yes, then you should go with it. But be realistic, most companies don’t hockey-stick their way to unicorn status in 2 years and overcommitting your growth and not hitting those targets can end up costing you most of your equity. Read the fine print!

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

Our product and services have impacted both home buyers and homeowners.

Home buyers: We provide an optimized path to homeownership and a holistic solution where users can get pre-approved, get a real estate agent, pick the right mortgage, get a lawyer and close their deal.

• We have reduced the time required to buy a target property by up to 90%.
• On average, we save our users $5,000 if they pick their service providers and mortgage through us.
• We complete pre-approvals in 20 minutes instead of 3–5 days.
• We offer the only tool capable of helping users compare all mortgage options by total savings amount, cutting the search for a mortgage from hours or days down to 10 seconds.

Homeowners: We help users maximize wealth as a homeowner through proactive analytics that focus on minimizing the cost of debt by switching mortgages or maximize their equity by leveraging their home equity.

• Reduce time to complete a mortgage switch/refinance application down to less than 10 minutes.
• We complete pre-approvals in 20 minutes instead of 3–5 days.
• We offer the only tool capable of helping users compare all mortgage options by total savings amount, cutting the search for a mortgage from hours or days down to 10 seconds, as opposed to 2+ hours.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

I believe we are already doing that. We are challenging Canadians to be optimistic about their ability to own a home and to change the way Canadians view their home as an investment.

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

Ben Horowitz. His book ‘The Hard Thing about Hard Things” was extremely informative and helped me reframe my outlook and emotionally prepare for a lot of the things that inevitably did come my way. Before I started Perch, I had never worked at a tech company and had also never run a business before. The knowledge gained through his book helped me make some decisions early on that shaped how Perch operates and functions successfully.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

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Making Something From Nothing: Alex Leduc Of Perch On How To Go From Idea To Launch was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.