20VC: Five Lessons Scaling Toast to $14BN Market Cap | The Biggest Mistakes Founders Make in Fundraising, Hiring and Selling with Aman Narang, CEO @ Toast
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 21 August 2024
⏱️ 64 minutes
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Summary
Aman Narang is the Co-Founder and CEO of Toast, one of the best-in-class vertical SaaS companies of our time with a market cap today of $13.5BN. Five astonishing stats that show the quality of the Toast business today:
- $1.2bn in ARR with 48.4% from payments.
- Toast Capital has reached $1bn in annualised loans originated.
- 875k restaurants in the US (Toast has 112k: 13% market share)
- 75% of locations are coming from inbound channels
- The first investor in the company invested $500K at a $3M price
In Today's Episode with Aman Narang We Discuss:
1. The Biggest Mistakes Founders Make:
- Why does Aman believe that founders should spend more time fundraising and with investors early?
- Why does Aman believe founders should hire managers before they think they need them?
- Why does Aman believe that founders do not give up control early enough?
2. Lessons Scaling to a $14BN Market Cap:
- What did Aman and Toast do so successfully that allowed them to scale to $14BN market cap in 12 years? What worked?
- What are the single biggest mistakes Toast made that hindered their growth most?
- What are the first things to break in hyperscaling companies?
- What opportunity did Aman and Toast not take that with the benefit of hindsight, he wishes they had taken?
3. Crucible Moment Decisions: Expansion:
- How did Aman and Toast know when was the right time to release a second product?
- What has enabled Toast Capital to scale to $1BN in loans so efficiently?
- How did Aman and Toast scale so successfully into both enterprise and SMB? What are the biggest lessons from doing so? What did not work?
- How do Aman and Toast approach geographic expansion? How do they choose which countries to expand into?
Transcript
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| 0:00.0 | If there's one thing to do over, it's very much recognizing that once you see signal that you've got product market fee, you got to move fast. |
| 0:06.0 | Speed matters a lot in business, a lot. |
| 0:07.9 | I actually think personally there's so much value in just getting stuff out, iterating, learning, and recognizing that when you move fast, you can also pivot fast if something doesn't work. |
| 0:18.5 | I always tell people that toast wouldn't exist without Android and cloud and embedded payments. Those are the three trends that really drove the beginnings |
| 0:24.3 | of toast. One of the mistakes most founders make is you don't want to give up any control because |
| 0:28.2 | you're like, well, I need to know what the heck's going on. The reality is you can benefit from people |
| 0:33.1 | that are domain experts and specialists in specific areas, but you also don't want to lose your |
| 0:38.5 | entrepreneurial spirit. So I am one of the biggest vertical SaaS nerds, and with that being the |
| 0:42.8 | case, Toast is one of the best in-class vertical SaaS companies of our time, today with a market |
| 0:48.5 | cap of $13.5 billion. I'm so excited to sit down with Amanourang, CEO and co-founder of Toast today. |
| 0:55.8 | And five astonishing facts. They have 1.2 billion in ARR. Toast capital has reached a billion in |
| 1:02.1 | annualized loans. They have 875 restaurants in the US. 75% of locations are coming from |
| 1:09.9 | inbound channels. |
| 1:11.3 | And finally, and this is incredible, the first investor in the company invested 500K at a 3 million price. |
| 1:18.3 | Is that the best ever angel investment? |
| 1:21.3 | But before we dive in today, all of you listening use tons of software every day. |
| 1:25.8 | Sometimes it fills us with rage. |
| 1:28.1 | You can't figure something out. The chatbot in the bottom right is useless. You keep getting bombarded with these |
| 1:32.5 | useless pop-ups. And for those of you who build products, no one wants their product to feel like |
| 1:37.2 | this. Thankfully, a company exists to help users without annoying them. Command bar. It does a couple |
| 1:42.8 | of very helpful things. First, it's a chatbot |
| 1:45.6 | that uses AI to give users extremely personalized responses and deflect tickets. But it can be beyond |
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