T-25-007 : Valentina Ratner - Mechanical Engineer to SaaS for Hardware CEO
You're listening to TRADEOFFS, a podcast about the trials and tribulations of designing, building, and manufacturing hardware and the people that make it. Each month, we sit down with founders, engineers, and other hardware professionals to understand the unique trade offs inherent in building a business that makes physical products. I'm Nate Padgett, hardware community guy and founder of Informal, a freelance collective that helps companies of all sizes design, build, and ship world class hardware.
Chris:And I'm Chris Rill, startup founder, engineer, and fractional CTO, where I help hardware and software companies build and scale their products. TRADEOFFS captures the best of these conversations so you can learn about the numerous skill sets needed to successfully bring physical products to market. Nate and I had a great conversation with Valentina Ratner, cofounder and CEO at AllSpice, where they enable modern collaboration and automation in the electronics design process. Let's dive into our conversation.
Nate:Super excited to have Valentina on the podcast. Thanks for joining.
Valentina:Excited to be here. Thanks for having me.
Chris:I think it'd be good to start with where you started in hardware. Like, what is your first memory of getting into this industry, whether it be as a kid or whether it be, you know, when you went to college?
Valentina:I think the day that I realized that I was going to be an engineer was actually when I was in high school. I had always thought I was going to be some sort of finance or accounting person. What my dad did. So I kind of grew up to do that down the road. And I was part of this program where you get paired with a professional in the industry that you wanna work in.
Valentina:And I got paired with a bank CEO, and it was the best placement in my high school. Everyone was super excited about it. And I got to spend this entire day with this very high profile executive and going to all these board meetings and doing all these, like, finance projections and things like that. And I absolutely hated it. And it was the most boring day that I had in a long time.
Valentina:And I remember the best part of my day was when I was walking by the ATM machines and we ran into the maintenance team and they actually had one popped open. And I remember stopping to say, Hey, what's going on? How do the sexual things work? And I asked, How do you know if it's a $5 bill or a $20 bill? And they were explaining to me the mechanism and the insight, and that was the best part of the entire experience.
Valentina:And I think at the end of that day, I realized that I really wanted to work in something hands on and I really wanted to become an engineer.
Nate:That's awesome. And did you study mechanical engineering after that or electrical?
Valentina:I did. I studied mechanical engineering in undergrad and specialized in manufacturing. Everything related to automation, worked in a little conveyor belt media lab that we had at Boston University and really like machines and everything associated with that. After that, I went on to work at Amazon.
Nate:And what was the first piece of hardware that you worked on professionally?
Valentina:My first project at Amazon was actually have you ever seen those locker delivery stations, high traffic areas? And this one was actually at a university here in California and in LA, and it was to basically enable in two day shipping to these high volume areas, but they didn't have, like, delivery as much accessible. So that was mine. So it was a a flat wall of a lot of lockers, basically enabling the packages for university students.
Chris:What year was this for context? Because it seems pretty ubiquitous now that, you know, you've got two day delivery almost everywhere in the country, but what time frame was this?
Valentina:Yeah. So I joined Amazon in 2016. Actually, when I joined as part of this special projects team and about two or three months into it, it turned into Amazon Logistics. So that was about the time where Amazon was opening a lot of capacity around the country. They had been building fulfillment centers for a long time, those giant buildings that you have one every many miles apart and lots of products.
Valentina:Then they were building the last mile delivery capacity, which is the smaller, more satellite locations that you may see closer to urban centers. So I got pulled into this new team, which was Amazon last mile delivery logistics at that point, which also feels like right now it's ubiquitous. Right? Things deliver at Amazon same day or next day, and, like, it's changed really quickly, you know, short few years.
Nate:What were some of the conversations about, like, student proofing these things? Because that sounds like a you know, drunk college students keep them out of your lockers.
Valentina:I don't remember anything in particular around the lockers.
Nate:Maybe if it was at UC Santa Barbara, that would have been a different story. That's where I went to school.
Chris:Yeah. Shots fired.
Valentina:I was gonna say, though, that my used challenge is I can read Amazon delivery boxes, and I can tell you where your package has been based on the cuts of the buildings or where these things got routed.
Nate:That must be fantastic at parties.
Chris:Oh my gosh. This is such a great party trick. It's like reading the matrix. Right? You have a skill that I would say very few people do.
Valentina:Yeah. Yeah. That was my first job out of college, which was fascinating. I got to be part of this team that was relatively new at that point, but part of a giant company. So we had this mix of, like, large company infrastructure, but at the same time, we were doing things for the first time.
Valentina:Like, a lot of it was up to us to kind of decide what that should look like.
Chris:You know, obviously talking about trade offs, was there any moment in any of the projects that you were working on where things didn't work out the way you thought they would, or looking back, you might have done something differently?
Valentina:We were building these new buildings across The US, and I had buildings in Texas, in Florida, New York, and I needed to be in different states to scale and stay organized and keep track of things. And I I think as a hardware engineer, we're used to this status quo of like PDFs and Post it notes and kind of making things work and what I would call the lack of infrastructure, which is like we're good at building hardware. But at the end of the day, a lot of it did come down to like an email thread or an Excel sheet with tasks and notes and all of these kind of general purpose tools. And imagine like working in these giant projects and trying to keep all of these different teams from different places on the same place, like, it was really hard to do. So I started working on the productivity tool to help us manage these projects as we were growing.
Valentina:And that was an eye opening experience for me to see how very small changes would have long consequences. And one of the easy examples is there's a lot of machinery and a lot of conveyor belts. Right? So being visual, it's really important. You can't just be, like, inviting or explaining everything.
Valentina:So we started adding pictures or attachments. And the second we turn on being able to take a picture directly from your phone so that the app opens the camera, the amount of information that we got skyrocketed exponentially. It made it so much easier. It was such a small product adjustment, if you wish, that helped the team incredibly.
Nate:Very cool.
Valentina:And then on the other side, I got to see how software is built. I learned a little bit of coding in school, but through my primary job, I got to see how a software product is built in this ecosystem of GitHub and GitLab and Jira tickets and CICD and DevOps pipelines. And it's like, wow. All this infrastructure. Right?
Valentina:And why are we still using Excel sheets and email threads? Like, it feels like there's a big gap between building fiber products versus building software products. And I was just in shock seeing that there is a more streamlined way that it's like, okay, how can we implement some of those things in my day to day that maybe we can leverage rather than trying to reinvent the wheel every single time.
Nate:So did you then go from that experience to creating AllSpice?
Valentina:So that was it. It was sparking me for wanting to work at this intersection. And what I kind of realized is software engineers build their own software tools, and it's the same scale that they use for their day to day job that they use for building their tools. As a hardware engineer, you don't have the skills to build your own software tools all the time. So you're kind of relying on either tools built by someone else that maybe doesn't understand your problem or you're using skills from hardware that maybe this is not your core expertise.
Valentina:So it was kind of like this mismatch between the skills that you use and the skills that you need to build your tools that I wanted to work at that intersection. And I decided to go back to grad school. And I enrolled at a dual degree program at Harvard doing an MBA for business science and an MS in engineering, which I focus primarily in computer science to understand this overlap of the software and the hardware because they have been historically very separate, but over time, they become more and more interconnected. I can't think of a hardware product today that doesn't have software components, right, or or at least a strong software counterpart. And software companies are becoming hardware company, and they're figuring out that a lot of their limitations are hardware infrastructure.
Valentina:So I went back to grad school, and that's when I met my cofounder, Kyle, who came from the electrical side of the world and how to experience similar problems. And we would talk about it. It's like, yeah, we tried GitHub, but GitHub wasn't quite for us because it's for code. So then we tried this Excel sheet template. That was a disaster.
Valentina:So then we tried Confluence, and that was a little bit better, but we couldn't do everything. So we went back to GitHub. It still didn't work, and it was kind of just like jumping around from place to place, and nothing felt like home for hardware engineers in terms of managing your project. And that's when we started working and what became Allspice.
Nate:Which I think will be a really great segue. If you could just describe, you know, what Allspice is because I don't think you've had an opportunity. Right? And then I think kind of the areas of hardware that Allspice is really focused on.
Valentina:Yeah. So Allspice is a collaboration and automation platform for hardware teams to build products. You can think about it as GitHub or GitLab, but instead of for code, for PCBs and schematics and bill of materials and all of the components that a hardware team may use. When I say hardware, I mean specifically electronics. So we work with electrical engineering teams that are building boards and trying to bring those products to market.
Chris:And and so from a workflow artifacts perspective, you're dealing with Gerbers and schematics and bombs. And and is there any other elements? Are you work are you working with Mechanical CAD or firmware?
Valentina:Yeah. Great question. So Opspace is a Git based platform. So from that perspective, we follow the same software principles. So you interact with it the same way that you would with any Git tool where you can use a Git client or you can use a terminal.
Valentina:And then we primarily focus on schematics, PCBs, and BOMs. And then those would be what I will call our committer or our core users. So committers will be the main electronics designers, hardware engineers, electrical engineers owning the PCBs or the schematics in that sense. We do work with a lot of other stakeholders in hardware that work with these teams as collaborators. And collaborators are think about it as the maybe the the read or review or comment version of a committer.
Valentina:And those could be mechanical engineers. So a lot of teams put STEP files to kinda collaborate with their mechanical counterparts back and forth, or it could be firmware engineers. Because it is a Git based system, you can version lock and version control the version of your firmware and the version of the hardware and kind of put everyone in speaking the same language. Or it could be downstream teams like manufacturing or procurement or vendors or CMs, and teams maybe put in the Gerber files and their releases or their final BOMs or things like that.
Nate:Very cool. Was it just you and your your co founder, or what did kind of the beginnings look like?
Valentina:Yeah. At the beginning, it was Kyle and I. The first prototype we built was actually for what became our dev tool, which is the ability to compare two versions of a design and highlight the differences and tell you exactly what has changed. I feel like there's this concept of revision control in hardware, but you know that something has changed, but what changed in it is kind of up to you and your memory and your understanding of the design or playing well those side by side. But to replicate functionality that in the software world is ubiquitous, like, what does that mean in the hardware world?
Valentina:Right? Because when you're talking about text for code and you're going to the three d drawings, right, in the engineering world, what does a diff look like? So we actually tested a lot of different approaches to it. We had this, like, slider view where you, like, go back and forth between the two or we had, like, overlays. And we even tested, like, the colors and the shades to, like, make it the most clear and tested different ways because it's something that didn't really exist.
Valentina:Right? So how do you show it to the users in a way that's intuitive and that's helpful? Then we landed in this kind of image that grayscales everything that's the same, any highlights and color codes with things that are updated on your design since the last time you did a revision.
Nate:Is your business partner a software engineer? Was he developing this, or did you, you know, get into the code enough that, like, the two of you were developing this?
Valentina:Yeah. So Kyle's an electrical engineer, and he's our CTO. So, he actually is the one that coded our first prototype. And I believe he did a good chunk of it in the long haul flight from Europe to The US. Wow.
Valentina:And I believe that some of that still runs in our core product, like kind of like sentimental value at this point, but
Nate:a badass. Excuse my French. Electrical engineer on a flight no less.
Chris:Yeah. Was this the day before demo day?
Valentina:Yeah. Yeah.
Nate:I was gonna ask, like, what was this for? A competition?
Valentina:Yeah. So when we were in school, we joined different programs to kind of test and derisk different parts of the business and we did the new venture competition, which just kind of harbors like shark tank fiction, which is you go up, you pitch your business, you get feedback from real investors, and then you move on to the next round and until there's a winner at the end. We had kind of the different types of risk in the business. Right? Like, commercial risk, like, are people gonna be adopting this?
Valentina:Are people interested in this? And then there's technology risk. It's like, is this even feasible? Right? So when we had this idea of, like, replicate workflows in the software space into the hardware counterparts, and first question was like, is this even a thing?
Valentina:Is this something that we can do and that's helpful to users before we even take the next steps? So, yeah, we built a lot of a lot of different iterations of that prototype. And then over the summer, we actually spent the summer in our incubator when we hired some software interns that helped accelerate some of that and collecting you some feedback. So a lot of testing iteration, building mock ups, testing with users, building a prototype, testing you with users, back to mock ups, and so forth many, many times until we we landed in something that was the right fit.
Nate:Chris, I imagine you've got plenty of questions as a software engineer about that process.
Chris:So it's funny. So I've lived in the intersection between hardware and software my entire career. I would say it's it's really challenging, and I'm sure culturally, it's very challenging for companies who build software and hardware because the iteration cycle in software can be as fast as seconds or minutes, and the iteration cycle for hardware can be, call it, days, weeks, or months depending on the team and and the resources available to them. I'm super curious about other than your your work at at Amazon, what was that spark? Because I think it's it's non intuitive for hardware engineers to think that there's another way of doing things.
Valentina:I think it was hundreds of conversations. I mean, talking to hundreds of engineers and hearing a lot of the issues that were happening throughout that process weren't science gaps or anything like that. It was collaboration. It was communication. Sometimes you pick the wrong component or you did the wrong design.
Valentina:Sometimes the design was right. Just this person went on vacation, didn't get the memo. We ordered the wrong part. This component went out of stock, accidentally dragged something three millimeters and shorted something else. And that happens a lot more often than maybe some of the bigger questions, And those are very hard to uncover.
Valentina:It's like, we heard countless times how it's like, yep, we ordered the board, didn't work. We spent three weeks kind of testing every single thing until we find out we'd like had accidentally dragged this and then it didn't work anymore. And it's like, it's not something that we could have prevented. Right? Like, those are the type of things that we wanted to help engineers do.
Nate:Every person I know in hardware is super particular about their tools. Right? Like, mechanical engineers, like, I'm a SolidWorks guy. What are you talking about Onshape? No.
Nate:Right? Or, like, I'm an Altium guy all the way right on electrical or increasingly people are like, I'm a KiKag guy. I would imagine getting them to adopt new tools has been a challenge. What has the adoption been like? How has it been getting these guys to change their workflow or or adopt new tools?
Valentina:Yeah. It's a great question. And that's one of the decisions we made early on of what we didn't want to build. Some of the trade offs that we made was, for example, we decided not to build a CAT tool. We wanted to focus on the collaboration layer, and we wanted to let users choose whatever design tool they wanted to bring along with them.
Valentina:So in terms of where Allspice sits, maybe the the way to explain it is we sit somewhere between ECAD and PLM, where PLM may be used when your designs are 95% ready, ready to be ordered. A lot can happen between 095%. Right? And this is where a lot of the iteration and the design choices actually happen. And you lose all of that history until you you hit kind of PLM ready state.
Valentina:So we wanted to sit in this place between CAD, ECAD and PLM. And the other trade off or choice that we made was to adapt Git workflows. Git is this industry standard in the software world. Right? And we can argue the pros and the cons, but I think we can all agree that it is widely adopted in the software world and widely supported.
Valentina:So tons of community resources out there, plenty of best practices already debugged, kind of learnings that you can share and kind of spread across.
Nate:And also, if you've done any experimentation with tech products, whether you're mechanical or whatever, you're familiar with using GitHub. So you're tapping right into that lizard brain aspect, I guess, familiarity.
Valentina:Yeah. And we we had an option. Right? It's like we could kind of come up with a brand new way of building hardware products from scratch, or we can take those industry principles that are widely adopted in this other space. And as you said, a lot of engineers already are familiar with some of them.
Valentina:And if you don't, because it is so widely used, there is hundreds and thousands and millions of resources out there to learn it. Right? But it's a it's probably a higher barrier than maybe a pure GUI system. Right? We could have come up with a way that clicking around, you can get to the same outcome and it will be easier.
Valentina:But I think it's a much more powerful tool down the road. Whereas there's like tons and tons of things that you can kinda continue to learn and add over time.
Chris:Then a change to a schematic is similar to change to software from a workflow perspective?
Valentina:Yeah. So you would make your changes in your preferred ECA tool. And then rather than hitting the save button, you will commit and then you'll push. And you set up Allspice as your destination repo. And we typically recommend teams start with two branches, a develop and a main branch.
Valentina:Right? Very simple, but you can get more sophisticated over time, and we've seen teams that that as well. So it is a bit of an analogy, GitHub for hardware, but a lot of it is actually technically true. What we're building is not a new Git. What we're building is the bridge to make Git work for electronics.
Chris:So in the software world, you have feature branches and some Git workflows. Right? So I imagine in the hardware world, I don't know, like, you're building some new element within the design. You could create a feature branch just for that one element, create all of those updates, and then run through a process that merges just those design changes into the core product, and it would follow the same workflow as a software change.
Valentina:Yes. Actually, when you merge, we call these our reviews, but they run-in a similar way where you can take a look at the design rather than the code, and you can say, hey. What's been changed since the last merge, the reproversion, and what's new now? Let's have a conversation. Let's capture action items.
Valentina:Let's collect feedback. And then when things are ready, you can merge. From there, you can create a release. Right? So one note that I do wanna make because I'm gonna get corrected by the the Git experts out there about the merging.
Valentina:One thing that's really challenging in hardware that we haven't implemented a solution that we love yet is file merging or, like, conflict resolution for files, like adding two distinct things together. There may be some different practices that we may recommend for branching and merging, but usually, like, merging conflict resolution you have in software hasn't really happened for HARR yet.
Chris:Got it. There's a tool that I use called Tower, and all of the git absolutists on the CLI will will hate me for this, but it's a great UI for folks who don't want to master every command line switch in git. I'm wondering, is Allspice compatible with the Git tooling that's out there?
Valentina:I haven't used Tower particularly, but we are compatible with all Git clients out there. Some of our customers have desktop. A very popular one is Sourcetree, Tortoise Git because some customers come from Tortoise SVM. And but you also may be surprised. Some of our customers use the command line.
Valentina:We kinda give people the option. That is the beauty of it that you can't kinda choose, like, as Nate was saying, a lot of engineers is like, kind of you find the one that works for everything else that you're doing.
Nate:Since you work with all the Git clients, are there, like, copilot tools that work with Allspice? I know that's, like, kind of all the rage in software development right now. I guess, are
Chris:there AI assisted tools? You're revealing their pipeline of features, Nate.
Valentina:In terms of Copilot, the way I see hardware evolving is following similar history in the software world. And if you think of software first came GitHub, they came CI, they came Copilot. So what we actually released this year is Actions, which is Allspice's continuous integration engine to enable teams to build automation into their workflows. That's kinda like the first step into enabling. Because at the end of the day, what we saw with a lot of engineers is there is great best in class point solutions for a lot of different things, right, simulation tools, supply chain visibility information tools.
Valentina:The problem is that for a lot of those, it comes down to having to export or download something, manually type it in some other program, get a report back, and then feed that back in. And that process is broken right now. So with Allspice actions, what we wanna do is enable engineers to automate some of the tests and tasks that they have to do and then also connect to the different parts of their workflow and bringing it all in the place where they're making the decisions. Right? So some of the best in class, like, information, it's really valuable, but can we bring it into the design review directly?
Valentina:Right? Can we have a test to run automatically and pull the information and post it as a comment in your design review or bring it into where the engineers are making those sessions so that they don't have to go outside of their workflow to use those?
Nate:That's awesome. So this hooks into Slack. Right? So you get notified about stuff.
Valentina:Yeah. So we actually do have a Slack bot and actually our customers are using it. I was at an event, actually, one of yours I were meet up, but I met someone and it's like, oh my god. You are Allspice. I know you're a Slack bot.
Valentina:My company uses it and we get notifications when they're sending your review or things like that. So the yeah. Definitely that, right? Like notifications, communications, and also more like hardware specific things like, for example, right now, some of our popular ones have been like generating BOMs for Mhmm. For new designs or checking different data sources like DG key for component information.
Valentina:Right? Can we do a BOM roll up for costs or can we get end of life flags and notifications for certain components? There's been requests around integrating with PLM systems. So I think the beauty of actions is that we've built it as a framework. You can either add the test that Artemis is building.
Valentina:We have a library of actions that you can add to your workflow. But if you wanna do something that's not there, you can also build it your own.
Nate:Cool.
Valentina:If it's a test that we don't have, you can build it on your own, and we've seen our customers do that as well.
Nate:I love it. I love making it more extensible. I just love the idea of software development becoming as flexible and fast as software. I love that you guys are at the did I say that twice? I meant hardware development No.
Nate:You say it's fast. Yeah. As software. And this is leading into kind of my next question. I feel like there's been an explosion of software for hardware companies, and and this is all happening at a time where it's harder to raise money and harder to build a startup unless it's got, like, AI in the title.
Nate:So, you know, I guess the two questions are, what's the growth in this sector been like for Allspice? And then how has the current macro environment impacted your team as well?
Valentina:I find it incredibly exciting. When Kyle and I started building AllSpice, it was summer of twenty twenty in the middle of COVID. And at that point, investment into hardware was a bit unclear. Right? And then the cheap supply shortage happened.
Valentina:And then it suddenly put front and center the issues that the hardware industry is experiencing. So it became a very different conversation that shifted the mentality from is this a problem or is this an area that needs solutions to, okay, what are the solutions or how are we going to solve some of these problem areas here? So I find it incredibly exciting that there is more investment going into the space and companies trying to solve problems for this industry. And I think that's also stemming into more investment into hardware companies, period. Like interest and investment into, like, developing new technology and understanding that, yes, hardware takes longer and, yes, it's more capital intensive.
Valentina:But by the way, this is how we're gonna change the world. So I I think it's been great. And from our perspective, it's made our company mature faster than we were expecting. So when we launched our tool, we were working primarily with SMBs on startups or small businesses and small companies. And we still do that.
Valentina:We build a self serve version of our tool that you can go to our website, sign up, and you can get started right away. But because it's kind of this macro shift, one of the things that happened to us is we got pulled into the mid market and enterprise segment sooner than expected because these companies, their products have only gotten larger, more complicated, more expensive, and they have to be delivered faster. The problems keep growing exponentially. A decade or two decades ago, a hybrid product may take three to four years and then maybe two or three or four iteration cycles. So you're talking about a year per cycle.
Valentina:Now the products need to be out the door in twelve to eighteen months and you need to do nine to 12 iterations. So it's more iterations, shorter cycles. In the past, a lot of the bottlenecks used to be manufacturing and the ability to produce these things. Even if you could design faster, you couldn't make it faster. But nowadays, there's been a lot of evolution in that side of the house that there's the external market pressures for the companies.
Valentina:It's like if you are a consumer electronics company and you miss certain windows of the year, that's really bad. If you don't come up with a new product, if it takes you three years to develop, by the time you launch it, it's obsolete technology. So you have to be able to adapt, and then there's all these other forces like supply chain. It's like you need to be more nimble and flexible in hardware development.
Nate:So you're saying hardware has grown up a little bit and and with it, the tools.
Valentina:Yeah. I think for us, the shift to go in like, to bigger companies is kinda helping power this. Feel like a lot of the last two years, it's gotten harder to raise money, but at the same time, it's like there are still rockets going to space. Right? And there are still cars coming us, But the products that we use as tools hasn't really changed.
Valentina:For us, the biggest impact has been having to keep up with the customer requests.
Nate:How has fundraising been for you guys? I know you're selling and you're in marketing, you've got customers. How about the rest of it?
Valentina:Yeah. So luckily, we're not racing this year, but we did raise a $6,000,000 round last year that we announced in December, and that was to catalyze this shift from the SMB, more self serve model, into more of a mid market and enterprise segment. And that came after this pull from the customers and and seeing some engineers come through our funnel that work at large companies. And you can use Allspice. You can use Git in a small team within a large company.
Valentina:So we weren't trying to convince every single engineer all at once, but it's like even if you use it with your own team of five or even if you use it yourself as some of these teams get started, you can still get value. And you can collaborate and and make it easy and then grow on scale as you, like, see the the value on the tool over time. But I think at the end of the day, there's a lot of ups and downs in the venture market. I'm a personal belief I try to raise or not raise outside of the trends despite the hype of, like, super high valuations sometimes or super low. It's like raising when the time is right for your business and when you have the proof points and the theories or the milestones and the plan for what to do next.
Valentina:So maybe I'm a little bit unconventional in that sense of a founder that I almost like try not to think about the market. Like, it's impossible to term the market. So last year, for example, like first time we're ready to get back to market, the whole Silicon Valley Bank thing happened like the week I was starting to phrase. So I was like, okay, this is not happening, you know? But at the end of the day, strong business fundamentals and more than anything for us is like customer love.
Valentina:I think our highlight and our endorsement metric has always been customer usage, customer love. It's like building a product that people wanna use and that's giving them superpowers is like, I think there's a lot of other questions that you can figure out on the road.
Nate:How are you measuring customer love?
Valentina:From an engagement perspective, we look at different types of activity that, users may have. So there may be commits on the platform or opening design reviews or basically any, like, interactions or activity that they're doing in there. So the volume of activity, the time spent on the app, and then more qualitative, like, surveys for user feedback. But for me, personally, my best metric of UserLab is repeat customers. There's nothing I love more than to see a new customer one of the engineers was a customer at a previous company and they changed jobs and they brought the tool with them.
Valentina:That to me is customer love.
Nate:Totally agree with that. But you don't use net promoter score or any of that stuff?
Valentina:No. We haven't in the past. So we made sure, like, interactions per per user per week, and we have our metrics of our goals or where we wanna be in terms of touch points and what we think good engagement looks like in the tool.
Chris:Cool. What's been the most surprising feedback you've received from customers? Because I imagine there are some electrical engineers out there pushing back, like, we can't do it this fast. We can't operate like firmware engineers. So I'm curious from that context, the culture shock that you bring to organizations, which I think is a good thing.
Chris:I'm curious if there's any negative feedback there that surprised you.
Valentina:This is not negative feedback, but for me, worse than negative feedback is no feedback at all. For example, like when we test certain features or things, if people don't comment it, that's almost like worse to me than like saying this is bad. It's like you didn't even notice it or like there was no value here for you. So it's like the opposite of love isn't hate, it's indifference. Totally.
Valentina:That's what for me is worst part. But from my negative feedback perspective, the hardest part for companies is getting through that fear of change barrier that you see. We may see teams where we have a very strong champion and we have maybe half of the team is bought on and the other half are like, Yeah, I'm not sure about this yet. So the challenge is the pain to gain ratio needs to be there. For the engineers to adopt a new system, it can't be 10% better.
Valentina:It has to be 10x better. And being able to kind of showcase that is probably the most important part.
Chris:In talking to other founders building software for hardware, you get into this pilot purgatory where I'm sure customers are piloting software. What was one of the one things you could speak to that enabled momentum within the organization for adoption?
Valentina:Something somewhat controversial we did early on is charging money for Good.
Chris:Trials and things. Counterintuitive. Yeah.
Valentina:It's like asking for more money meant more customers, not less. We had this idea if the thing is like, oh, you wanna give a free trial and make it really easy to get started. But actually making it a little harder meant that the teams that got to the end were so much more committed. So we charge for our tool. We don't have a premium tier, not because we don't think there's value there, but because data has shown us that it makes the teams adapt it less because they that there's no skin in the game and no commitment to giving it a try, so it kinda ends up sitting on the shelf.
Chris:I imagine you guys wasted a lot of resources going after customers that were lukewarm because they weren't willing to pay any money. And as a result of, call it like a weak internal demand signal, you probably would have had better luck with customers who were willing to spend a lot more because they obviously were willing to part with money before even using the product.
Valentina:Yeah. It's like there's one way to know if people want your product is or not. It's like ask them to pay for it. Right? It can be kind of scary early on when your product is not at the level, but you don't have to charge skill pricing.
Valentina:At the beginning, what you're charging is not gonna be what you charge at the end. So asking for people to pay is a very clear indication of, like, is there value there for them or not? But if you're not seeing any value in this tool at all, then there's probably something wrong with it.
Nate:And the skin in the game is so totally true for this too. We've we found that at the studio. People always ask. They're like, hey. Can I try working from the studio for a day?
Nate:Well, we don't do free trials, but you can buy a day pass and and try it out. And 100% of the time when we did let people work for free, they didn't come back. But 100% of the time if they pay for it, they come back.
Valentina:Yeah. Same analogy for tooling. It's like, we we don't wanna make it ridiculously hard, but at the same time, if it's too easy, there may be no conviction there. And it's kind of a waste of time on both ends.
Chris:Have you had to raise prices at all? And if so, did you grandfather in your older customers or have you updated pricing for every user?
Valentina:Yeah. We we have since we launched the tool about two and a half years ago at this point, and the tool has grown and matured so much also since the early days. But we always make sure to to derive our existing customers as well.
Nate:On the topic of growing and maturing, I wanted to kinda come back to, you know, shifting the focus of your customer segment, you know, and the size of businesses that you're really trying to target. What motivated that? And then how have the two been different? Like, how have you had to adjust the way that you support your customers, the way that you prospect? How has it changed now that you're going after these bigger fish?
Valentina:Great question. So what motivated it was seeing the pull from this team. So through the early days, we had engineers coming in through our funnel that were part of large organizations. Our growth at those accounts was exponential rather than linear compared to some of the other accounts. Intuitively, it makes sense for the type of product we are.
Valentina:We're helping collaboration, coordination, automation. The bigger the company, the bigger these problems get. Right? So it was just a natural fit in terms of we can bring a lot more value to these companies, and that was reflected in the usage and the engagement and the growth in those accounts. From a business perspective, there's been some changes on our road map in terms of what we prioritize.
Valentina:Like, there's a lot of requirements that larger companies may have that smaller businesses may not around security and compliance, admin functionality, access control is a question that comes up every single time in an enterprise conversation. That may be something that a small business handles in a different way. And then there may be some more technical details like integrations, like SSO providers versus NAR. Right? Or what ECAD tools these teams are using.
Valentina:Like, a lot of the smaller teams use Kica. A of lot the larger teams use Cadence depending on what designs you're working on. So there's been some of the, like, kinda, like, tool support Mhmm. Changes based on the teams. And then it's also important for us to make sure we grow our support.
Valentina:So we hire engineers from the industry to answer questions, help these customers on board. It's like larger teams making sure that we we get up and running is like we're doing as well as like the least proficient engineer on the tool. So we wanna make sure we bring everyone along along the way and and also stay with them as they grow. A lot of our customers start with a team, and then they may be adding second, third, fourth teams over time
Nate:Mhmm.
Valentina:As the company scales. So being able to support that growth and also making sure that the tool is scaling to those needs as well.
Nate:It sounds like the scope of operations has expanded quite a bit to meet these clients because you are growing with their teams. And then your sales are much I imagine you've got more of a traditional kind of account management type of structure for your sales team or did you change the way that you handle sales in order to approach
Valentina:these Well, we changed it in a way that it's separate from where it was before, but before it was me. Excuse you. Okay. We had to change it at some point, But we built a team to basically be able to work with larger companies, and and that is, for the most part, necessity based on how these companies buy. It's like a large enterprise, they have a procurement process, and it's a matter of you have to learn about it and learn how to navigate it.
Valentina:Versus like the small and medium businesses, I feel like a lot of people just prefer to go DIY. We built a self serve model that enables them to do that. It's on your own and we're here if you need us, but for the most part it's kind of like DIY. And then for the sales perspective, large companies look slightly different. You have to adapt to the process from going through approvals and reviews and things like that to get onboarded.
Valentina:Definitely a change, but the transition from founder led sales to building a team has been very interesting.
Chris:How has your role changed? So the company, two co founders building the product to where you are today. How has your role as CEO changed?
Valentina:I think my role changes every three to four months. It's constantly a game of picking up something that I know not a lot about, learning how to do it, getting good at it. The second I get good at it, hiring someone to do that and then going on to the next job. So I'm constantly learning the next thing. In the early days, was a lot of customer discoveries, like learning what we need to build, Like what is the right tool?
Valentina:So lot of customer discovery in the early days, then there was a lot of selling to SMBs myself. I did hundreds of demos on my own and awarded customers. Then I have to fundraise in the middle. So when I'm fundraising, that's my full time job. Then it's been hiring to grow the team.
Valentina:This year and last year, we had a lot of team growth, a lot of interviewing and meeting new candidates and getting those people up to speed on the company. Now we're back to sales, but now we're doing enterprise sales. So Mhmm. It's been kinda like full circle.
Chris:What's your favorite interview question?
Valentina:Oh. Think we would have different questions for different roles. This is not a question, but my favorite interview practice is doing a take home exercise.
Chris:Oh, very controversial, I
Nate:was just about to say.
Valentina:Uh-huh. Yeah. Very controversial. So here's my approach to it. I think that it's a two way street.
Valentina:It's both a way for the candidate to showcase their skills, but I also would do it because I want people to get a feel for what the job would be like. So when we put take home exercises, it's typically a real project or problem that we're trying to deal with that may be part of this role. We may change the data or the details about it. Right? But it's kinda like giving you a feel for it.
Valentina:The other side of that is I do want people to take it as a real job. So we actually offer a stipend for our projects. So if you get to that stage, then you're gonna take some exercises like a four hour project. This is a stipend, and then we can meet and evaluate it on the other side.
Nate:Valentina, that's what makes it not controversial because you're respecting people's time.
Chris:That's awesome. 100%. Yeah.
Valentina:So, yeah, we it's like I I think it's important if, like, if you're getting to that stage, it has to be very serious. We want you to take to take it as a as a real job, and we'll treat it the same way.
Nate:Cool. And everybody gets one regardless of role, engineers, salespeople, support?
Valentina:Yep. It doesn't matter. The projects may be different, but every single person gets some version of it. In sales, it's around sales staff and marketing to our marketing staff. I was just hiring a chief of staff role, that also had a project.
Valentina:So it's a staple part of our process.
Nate:And do you write the prompts and the exercises or is it a team effort?
Valentina:Depending on the role, usually, the hiring manager will be the primary person putting it together. There are some roles that it's a collaborative process. When we hire a product manager, both Kyle and I were involved because it's like this is a role that kind of works with a lot of people and aspects of the business versus someone on the sales side, I was writing those.
Nate:And how big is the team now?
Valentina:There is a I don't know actually if I should answer that question.
Nate:Okay. You you don't have to answer that question.
Valentina:You're fine. Okay.
Chris:You don't have to answer any question you don't wanna answer just for context. Exactly.
Valentina:Yeah. I've actually been told in a recent event that we are much smaller than they thought we were. So, apparently, we're punching above our weight.
Nate:That's good. That's really
Chris:good. Stretch your fundraise out as long as possible so you don't have to go back to the well. Yeah.
Nate:Right. You were saying you were doing all the sales in the SMB context before. But when you started doing more enterprise sales, was that you as well until you hired someone to take that over? I I assume you hadn't done it before.
Valentina:No. I was a mechanical engineer building Amazon delivery stations.
Nate:Yeah. What was your process for stepping into enterprise sales?
Valentina:There's training, but there's also practice. And I hadn't practiced sales. And I feel like it's one of those that you just have to do it. There's two types of thinking for this, and I've heard both. There's still like, This is not my area of expertise.
Valentina:I'm going to hire someone that knows how to do this better than I can. And then there's where I was, which is like, This is not my area of expertise, but I wouldn't even know who to hire because it's like, I don't know what good looks like because good salespeople, you could be great at b to b for HR tech versus field sales versus inbound versus sales teams or managing SDRs or really are. So there's a lot of goods, but it's like, what is the good that your industry and persona needs? And I didn't know what that was. And I felt like it was so important for me as a founder to understand that part of the side that the house, which is like I had to go learn it myself to do it.
Valentina:And probably my first couple of sales calls were a little awkward. And thank you to all those customers that became customers nonetheless, but you learn so much by just being in front of our customers of what they want. And I didn't wanna hand that off before I knew what I was looking for and what we needed for a particular product. So what was my approach? Combination of things.
Valentina:As a technical founder, wanted to do sales and business. The first was actually one of the investors that I chose for Allspice. One of the things I liked about them was that they were sales and marketing experts, which is an area that we're not strong in. So I wanted to complement their skills with people that knew the expertise. And actually one of our investors, they have people on their team that help with the recruiting part and the business development part.
Valentina:I met with one of them every week for a few months. Was basically like an unofficial sales coach, which is like, I know nothing. So that person really helped me get from, hey. Like, have no idea what I'm doing here. Like, how do I start from scratch?
Valentina:So sales coach, lots and lots of reading from books to blog posts.
Nate:I was gonna ask if you had any book recommendations relating to
Valentina:that. Oh.
Chris:What's your favorite book on sales?
Nate:Yeah. Like, other other than founding sales, which is kind of the de facto answer. Right? Yeah.
Valentina:It's actually one of the last books I read was founding sales. I didn't find out about it until later.
Nate:Yeah. I haven't finished it.
Valentina:For sales, there's a couple. Maybe the sales acceleration formula or the qualified sales leader. And then one book that I liked that's not specific to sales, but I think it's helpful in general, it's called The Mom Test. It's about asking good questions.
Nate:Love The Mom Test. Everybody I talked to about The Mom Test. So good. Yeah.
Valentina:Yeah. There's another one called Never Split The Difference, which is about negotiation.
Nate:It's a great book. Mhmm.
Valentina:It's not a sales book, but I think it's it's a helpful book to read. Right? And it kind of helps understand some of the that side of the of the house. And the map test was great for for questions, the tipping point about the power of incentives, And there's this book called People Power that's about communities.
Nate:I'm curious what was salient for you. You and I have talked a lot about community, but I'd love to hear from you kind of the role community plays in marketing sales for you post or prebook.
Valentina:Yeah. Yeah. It's called People Powered by Jono Bacon. And for me, it was helpful to understand different types of communities and what are the incentives or benefits of each of this. So it could be a community for a superstar in their funds.
Valentina:Right? So that's a type of community, but then they could also be open source project where everyone's contributing. So there's communities where people contribute to. There's communities where one person does something and the rest are kind of more observers to kind of understand the differences and being more intentional about what this looks like for us and what is the type of community that we wanna build. I think that was really helpful.
Nate:Do you have a community manager? Do you have a community team?
Valentina:We don't, but I think everyone in our team is partly a community manager. We have two hardware engineers that are kind of our most interactions with external customers. Like, we still thinking about how we wanna continue to build and grow that. And I think there is also, like, the informal versus formal communities and how you manage that, but thinking about what's the maybe relationship you wanna have with your users and how you wanna structure that, I think it's it's very powerful.
Chris:Totally. The developer relations for the software side of things, I think there's a lot of similarities if you're pulling from GitHub, like the DevRel community managers might be an interesting domain or skill set to pull from.
Nate:Yeah. But, yeah, that that's
Chris:great that you mentioned that two of your engineers are those folks that are the most engaged with the community. That says a lot about the culture you're building.
Valentina:Yeah. And I think it's an interesting question because I think engineers at a core are very collaborative and very creative. But at the same time, there's this kind of hesitation in the industry where Harvard never got to the open source pace of we're going to open source our designs. A lot of companies are very hesitant to do anything like that. So one of the questions that we think about is how can we create a similar sense of community while respecting the kind of companies' hesitation.
Valentina:And there's been attempts to build an open source community of sharing design components and things like that, and I think that has its own benefits in the software space. Right? But what's the equivalent of this in the hardware space when companies don't wanna open source their designs? How do we create the same community feel?
Chris:That's challenging.
Nate:That is the question. Although, I I bet there are a lot of lessons for how big corporates ultimately started embracing open source software. You know, there was the same paradigm, right, of, like, gotta keep these things secret, and they got over it in software. I think we can get over it in hardware.
Chris:But a lot was driven by organizations that you could write checks to. Right? So Red Hat was the predominant Linux distribution. Right? Companies are comfortable writing checks from an accountability standpoint.
Chris:So when Apache go wrong
Nate:all that stuff.
Chris:You can not necessarily Apache, but Linux as the operating system. We're talking about open source. And, you do have foundations and and and consultants that companies can look to, but I think it comes down to risk management. Right? If something goes wrong and you're using an open source project, there's no one to turn to.
Chris:From a hardware perspective, I'm curious, you know, who do you turn to when a open source hardware design goes wrong? There are a number of companies that will open source their designs. Right? And so the community can leverage them. But ultimately, there's a company at the end of the day who you could go to for support and training and and a lot of that.
Chris:So I imagine if we're looking out ten years and following the same playbook that open source software has, I imagine there will be hardware entities that will be available for companies to leverage.
Nate:Valentina, what's your take on, like, what's necessary to create an open source hardware community?
Valentina:The way I think about it is what is the type of the community that we could create? And I think that assuming that companies don't open source their designs, I think there's an opportunity to build a community around sharing best practices across companies that isn't that related around like their specific schematics or PCBs. Right? So is there an opportunity to collaborate on lessons learned and things we have seen in one area that could be applicable to everything else? I think it's probably a lot closer to being possible.
Valentina:It's just a matter of figuring out, like, how do we enable that? And then is this something that the teams can benefit from?
Nate:That's what we're trying to do with hardware meetup. Get people in a room to swap war stories, share what challenges they're experiencing with product and with business, and leverage the community to resolve them.
Valentina:Absolutely.
Chris:What was your favorite hat you wore? I would say or ask another way, like, what's another role that you would take the organization that you've already had?
Valentina:If you're gonna ask me, like, when I started, there was nothing. I wanted more than to get our first customers and move on and never do sales again in my lives. Then I started to love it and it became like, I'm spending all my day talking to customers. This is awesome. Like, why did I not think about it this way or things like that?
Valentina:So I really enjoyed sales. Took me some time to get there, but I really wish I had more time to do more of that over time. And I still try to get involved as much as possible. So, customer conversations is like the best part of my day. Feel like as a hardware engineer, I don't build hardware products myself anymore, but I get to contribute a little bit to each of the products our customers feel.
Valentina:And every time I see a product on the street from one of our customers or read about it on the news, I feel like we help them get there the best way possible. So I get to leave vicariously through them. So every conversation that I have with a customer is probably the highlight of my day.
Chris:That's awesome.
Nate:So, yeah, we like to always wrap up interviews with just some questions that help us get to know you a little bit better. One I always love to ask is, you the type of person who starts 100 projects and finishes one or starts one project and finishes one project?
Valentina:Everyone in my team can attest to this that I cannot stand not closing the loop. Like, it's gotta be finished some way or another. So less projects getting them to completion.
Nate:Cool. And professionally and personally?
Valentina:Probably.
Nate:Probably.
Valentina:Maybe this this will answer your question. I'm a Xero inbox type of person.
Nate:Perfect summary.
Chris:That's another question we need to add.
Nate:Yeah.
Valentina:It's like zero or 3,927. There's no in between.
Nate:I feel that pain. I do. You could take your hardware journey or your startup journey, founder journey, and write a book about it. What would it be about and what would the title be?
Valentina:It's a good question. I think if it was about the company, it would be about taking best practices from industries and applying it to new places. So about, like, kind of how you can leverage the learnings, right, which is kinda like the open source community field, which is like, hey. This problem is like collaborations is not unique to Harvard. Right?
Valentina:So this has been solved in other areas, in other ways. So is there something that we can learn from these places and bring it here? But but but also being able to know what's the same and what's different, I think it's kind of the important part. If it was about me personally, it would be about learning to do sales as a technical founder. And I didn't quite understand it when we started the business.
Valentina:There's two jobs at a startup. You have to build a product and you have to sell the product. And then Cal was building our products, so I was like, I guess I'm selling the product. You know? It's like, I I guess this is my job now.
Valentina:And as a as a nontechnical founder, it was really, for me, important to go through that process and not shy away from it or try to outsource it as quickly as possible, but kinda, like, pushing through. And I feel like I have a much better understanding of our customer base because of it.
Nate:What would you tell a technical founder and CEO role who needs to sell their product but maybe is a little reticent about it?
Valentina:Something that someone told me, Juana, was like, it sounds a lot more awkward in your head than maybe it sounds a reality. And a lot of sales is just saying you with a straight face. So it's like practice embracing the uncomfort maybe or embracing the uncertainty and understanding that it is sometimes that 30% hit rate, by definition, our role with a lot of rejection and a lot of ghosting and a lot of these things. But that's part of the job. It doesn't mean there's something wrong.
Valentina:It just means that sometimes people are not gonna love it, and sometimes people are gonna be having a really bad day. And sometimes, like, people are not gonna get it, and they're not gonna be interested. But I think the people that do love it and seeing that moment live happening, I think it makes everything else worth it.
Nate:So practice and patience.
Valentina:That's like practice, scripting, patience, coaching, advice. It's like you don't need to to know it all. So I ask a lot of questions. And some of those things I use, some of the things I figured out didn't work for us, and then I changed. But at the end of the day, it's probably one of the most important jobs you're gonna do for your business.
Nate:Yeah. And and as a founder, you have to wear it. Personally, I have struggled with that. Right? Like, always wanting to take off the sales hat as a founder, but nobody sells the products like you can as a founder.
Chris:No. What's it like to go from being an engineer working on Atoms to now being the CEO working on Bits? Like, you lit up when you were talking about the last hardware product you built, and I it just I'm curious to know because you were a mechanical engineer, and now you're the CEO of a digital product. So you don't have the same interaction with the product that you once did.
Valentina:Yeah. I think the engineering me is still there where I think engineers love creation. And I think starting a company has that feeling where you're making something out of nothing. Right? You're making something happen.
Valentina:And then it's been about getting to live through our customers vicariously, which is like, don't build the products anymore, but I feel like I'm contributing to a lot of products out there. That's kind of the satisfaction of it. I'm a part of the journeys of all the engineers and all the super products. I don't know. I treat it as my thing too.
Valentina:It's like it's not my product obviously, but I feel like I was part of that journey and that makes me really proud.
Nate:I love that. I love the way you put that. Just to wrap things up, Well, Chris, actually, did you looked like you maybe had one more question.
Chris:I was gonna say, you know, are you hiring? And are you active on social media? Where can people find you?
Valentina:For social media, LinkedIn. And I love hearing from engineers in the space, and I'm also local to the San Francisco Bay Area, so I love meeting people at different events and going to visit offices and things like that. So if you know about any things that we should be doing in The Bay, I would love to do that as well. But we are hiring software roles for our development team right now, both in the front end and the back end of full stacks. And we do have some more roles opening up that are coming down the pipeline.
Nate:That's great. And if anybody wants to stay in touch with you or learn more about Allspice, which they do?
Valentina:Yeah. Visit our website, allspice.io. Sign up for our newsletter. We share a lot of best practices and updates there. We also have a very popular hardware guide if you wanna learn how to use these principles in the hardware space.
Valentina:It's a very popular ebook. You can also get it on our website. And, we also host webinars and events regularly for people that want to stay in touch.
Nate:Great. Cool. Cool. Well, Valentina, this was really, really fun. Thanks for rolling with our questions.
Chris:Thank you again, Valentina. Appreciate the time.
Valentina:Yeah. Thanks for having me. I really enjoyed the conversation, and and thanks for having me here.
Chris:TRADEOFFS is hosted and produced by Chris Rill and Nate Patchett. Editing done by the illustrious Alex Michael. Our logo is designed by the talented pixel alchemist, Tanya Shika. If you'd like to be a guest on the show, reach out to us on our website at tradeoffs.fm.
