42. Pioneers. with Björn Raupach, the CTO & Founder of E2N

"Building a SaaS startup from scratch driven by enthusiasm and focus on technology. How Björn managed that Journey from a one-man show to a great team, earning substantial revenue, being 100% self-financed and staying humble and down to earth should be a guideline for everyone." Markus Lorenz, Host.

Topics discussed:

What is e2n? What is the Purpose of the tool and which value does it provide to your customers?

Who are your Clients?

How can you target / win customers like Nordsee and Burger King as such a fresh company?

Why Saas? Following google trends since 2010 there is a rising demand on SaaS applications. You founded e2n in 2014? Why did you decide to go for a SaaS Business in 2014?

Tech Stack. As far as I know you are fully on AWS and you also build your application around that ecosystem. Why did you decide as a young CTO in those days to go all in towards one hyper scaler?\

What did the development process look like? Did you receive help in building your SaaS model on AWS or did you figure out everything on your own?

What was the most challenging part of building the application?

Was there ever a day where you had to do a pivot?

What would you recommend young founders or CTOs when building a product from scratch?

How do you figure out the problem solution and product market fit? Did you use any methodologies like “lean startup” or was it caused by accident?

Team. What was the challenge for E2N when growing the tech & product team?

Why should young professionals work for you?

How did Corona and digitalization affect your business?

What’s are most exciting tech trends you follow up at the moment?


Transcript:


Markus Lorenz: [00:00:47] Welcome everybody to today's episode of the CTO to CTO podcast. It's a pleasure to be here today with Björn, a CTO and founder of E2N a Software as a Service company for  time-tracking in the gastronomy industry. But Björn, please introduce yourself and may tell us a little bit about your career for our listeners.

A fun fact, Björn likes to sleep with his Macbook. And I guess that he's the only one who I know who sleeps with a Macbook at night, but the stage is yours! [laughter]

Björn Raupach: [00:01:18] Hello. Markus, thanks for having me! Great to be on your show. Yeah, I'm one of the co-founders of E2M, an independent software vendor. We provide a web-based cloud software of the same name and our target audience is the hospitality industry. We consider ourselves experts in personal organization, time tracking, roster scheduling and staff planning. So we have been doing this for the last 10 yearst. We have 1500 customers at around 4,000 locations in Germany, Austria, and Switzerland.

And yeah, the fun fact. Yes, it's true. I used to sleep with my Mac book, but I'm happily married now. So the spot is taken. But I wonder why you find this so funny considering that nowadays people, you know, they carry their smartphones and their tablets into bed. 

Markus Lorenz: [00:02:26] I was just wondering who has the priority, the Mac book or your wife, but I know that there's your wife, of course.

Björn Raupach: [00:02:36] Yeah. For a long, long time. So I think I, well, I got my first laptop in 2005 and yeah, I carried it around everywhere then it was just, you know, now we have the videos and stuff, everything entertainment on your smartphone. Back then you had to use a laptop.

Markus Lorenz: [00:02:54] Okay, cool. So maybe you can give us a little bit of intro about, and what's your purpose and division there so that the audience learns a little bit more about each of those. 

Björn Raupach: [00:03:06] Sure. So first and foremost, we digitalize. We do the boring operational work so that our customers don't have to do this. So in the end, this saves some time and eventually money. So for example, what we do is we can prepare the payroll. We make sure you don't plan your staff more than you should. We can keep track of vacation and sick days. We can show you very irrelevant KPIs for your business. And we also help you stay in touch with your employees.

And we do this in a very pleasant way. We focus on great user experience. Software is already complicated, right? And business processes are too, so software shouldn't be even more complicated. Not only do we say this, we actually live this, for example if you need help, we provide you with help free of charge.

Customers can cancel their contracts within a month. We do free webinars. And learnings. We really help our customers succeed in their business. We want successful customers and we want our customers to focus on, on their business, on their customers. We just provide them with tools. 

Markus Lorenz: [00:04:32] That sounds amazing Björn.

So if you were talking about your customers being happy when it comes to those circumstances you provided,  you can give us a hint who your clients or your customers. 

Björn Raupach: [00:04:47] Yeah. So 80% of our clients are from the hospitality industry. So bars, restaurants, hotels. So if you have between 10 to 3000 employees, Then we are a great fit for you reasonably. We started working with the big franchises and bakeries, for example. 

Markus Lorenz: [00:05:10] Nice. So that sounds that you find your niche within this industry. And as far as I know, and I did some research on your target, very big customers like North Sea, Burger King and in Germany as a fresh company on the market, how did you achieve that?

Björn Raupach: [00:05:27] If you have something that people need, then it's easy, right? So there's no need to convince someone. There's no need to sell something because you have what they need. And I think we have this tool. Another thing that really works for us is word of mouth recommendation. So if you have a happy customer, They will talk and they will talk about you.

And that if you have this letter of approval, it's much easier to engage new customers and that's for us the best way to approach new customers. Right? We also do fairly great at trade shows, which are not happening at the moment, thanks to the pandemic, but these trade shows give us a great opportunity to show ourselves and what we do. And in the end, that's probably what most people don't want to hear: luck. So if you happen to be at the right place at the right time with the right set of skills or tools, you will succeed. 

Markus Lorenz: [00:06:30] Yeah, absolutely agree. I mean, there's also this portion of luck you need, but in the on the second hand, you always have to have the strength and the capabilities to serve the customer needs so that the customer has a way of you. And I mean, you mentioned that there's mouth to mouth marketing. I mean, it's the best marketing you can have because the happy client who's talking to a new prospect will definitely convince better than average every market here on the market or every salesperson or with any industry that's totally obvious.

And maybe let me ask a question. Why did you choose a SAS solution which you now provide on the market because actually falling on the Google trends. We see that. Maybe since 2010, there is this rising demand on SaaS applications. And so why did you decide to go in for the SAS business in that earliest stage?


Björn Raupach: [00:07:28] Yeah, like many things it wasn't a decision that was made. We never sat down and said, hey, we do it. It was a thing that just happened. So it actually started in 2009 and it more or less started was, you know, I have this customer and he has a problem and I believe software could help him. And you can code, can you code something for me?

That's pretty much how it started, as funny as it sounds. And we were two people and we were focused on consulting. And so we did this web based software for time tracking for restaurants. And at that time in 2010 bar or restaurant, I think even nowadays they don't have a server room.

They don't have no it on prem. But people started to have laptops. People started to have smart phones and there was LAN  access everywhere. So you could go to the internet. I kind of grew so would it still do consulting in 2011? Our third founder, Andrea has shown. And from these early beginnings from three to four customers, we thought ”Hey, if it works for, let's say, 10 people, it might work for even more”.

So in 2014 we said, okay, just let's give it a try. And here we are.

Markus Lorenz: [00:09:10] Yeah, that sounds awesome. So basically you listen to your customer, you did that consulting job back in the days where you backed with two people, one, who's doing the business consulting. Let's call it like this, and you as an engineer solving the customer needs.

And now you're here on the market with that kind of client. Perfect. Maybe we should have a deeper look into your tech stack. So as far as I know, you are fully on AWS and you built your application completely around the ecosystem, right? Would be interesting why you decide as a young CTO in those days to go all into what's the one hyperscale, because in the end, everybody today is talking about the hyperscalers GCP, AWS, and so on, and CTOs are thinking about vendor lock-ins and things like that.

So why did you choose AWS in those early days?

Björn Raupach: [00:10:12] Yes. So, as you said, E2N never did a cloud migration E2N was kind of born in the cloud. This is where it all started. And as I said, we were three people in 2011 and we had very limited resources, time and money.

So we could only spend what we had. What we earn and to earn money, you know, you have to focus on your client. So that meant for us programming, you know, pushing new features out. And we wondered about speed and momentum. We didn't want to waste time on infrastructure. So because as much fun as it is, but setting up a server and installing an operating system and a database, and then, you know, driving to the data center near you, putting in Iraq, this takes time, this takes weeks, and this is time that I can't invest into the product.

So I had tinkered with AWS, I think. Yeah. Already in 2008 and it was just a nice fit. So the first years we just used it as some kind of co-location, you know, there was just an easy two instance, which is just a withdrawal virtual server. And there was just this first version of the application running and yeah, we never had to manage infrastructure.

We never had to, more importantly, we used a lot of managed services, like a database. So we didn't have to care for the actual machine because well, as things grow, you know, where's the cloud, it grows with you. So if you run out of this space, Two clicks and you have more that's easy. And that's what we see every day, the promise of the cloud, this elasticity it's there.

So we are not now at the time where we deal a lot with high availability and load balancing. For example, I can do this very easily. Whereas in the cloud, learning the documentation aside, I can migrate a replica of one of our core databases in a different data center. And I can do load balancing and high availability in, I don't know, less than an hour.

Now imagine doing this. Real world with brokering servers, installing software that takes weeks. And I'm not a skilled DBA. I consider myself a developer. So AWS gives us these needed services and lets you focus on the yeah. On your business. 

Markus Lorenz: [00:12:52] That's awesome. From my perspective, you figured it out very early that you have to focus on the volume for the client and not to deal with the yeah.

Things like infrastructure and spend time on it, which has definitely a huge mess later on when it comes to maintain ends updates, as you pointed out. So you was, you were just focusing on creating customer value and, and I guess that's also what your customer likes on and. They are, why you have this mouth to mouth marketing later on, but maybe we have also a look in this development process on your side.

So how does it look like? And did you receive any hop to build your SAS model? Because from my perspective, if you've never built a SAS model before, it's pretty hard to, to engineer that and to see the pitfalls. So were there some mentors or did you figure it out? Everything on your own. 

Björn Raupach: [00:13:47] Until 2015, it was just the three of us, the founding members and okay.

Yeah. We had to figure out everything ourselves. Not just  the development also technology sales and support. So we only started to get in touch with AWS in 2018. So now we do certification and training. But yeah, for a long time, we did it our way and we just adapted very fast.

So this is what taught us. So if we have a problem, we try to fix it. And what started with a lot of manual labor, you know, like compiling your software and deploying it has now become, for example, continuous integration and continuous development. We put things into production. The moment we realized we really need them.

So of course I read a lot of books and stuff, but you know, they only help you to a certain extent. I'm not Google. I know Apple. And even if they publish great documentation and create reading material. You don't learn to ride a bicycle by reading a book, nor do you learn to drive a car? So you have to make your own steps.

Markus Lorenz: [00:15:07] Yeah. Cool. I really like your humble approach here. What was the most challenging part for you by building this application? Maybe you remember some pitfalls there which you'd like to mention, or I give the audience a little bit of insight about that.


Björn Raupach: [00:15:25] There's always a challenge. It really, it never ends. I'm quoting Mr. Bezos, who said it's always day one and he's right in that regard. So that's the, really the, the joy and the pain of the job. Particularly if you work in technology, it just changes so fast. So, I mean, when we started smartphone apps just came into the picture, responsive and single page applications weren’t even invented yet. So it always shifted. So once you finished one problem, you had 10 more. You know, and now we have to, for example, we have to deal with high availability and load balancing and scale and team building and how to engage people more. So it never ends. 

Markus Lorenz: [00:16:22] Yeah. Nice one. So we tackled that pivot thing right now. And I really liked that approach, how you deal with it with things so that you try it and that you matter. Work then make it better and always strives for the customer. But I would be interested in if there was one day where you said, shit, we have to pivot the application or business model because something is definitely going wrong here. 

Björn Raupach: [00:16:55] You mean like a turning point? 

Markus Lorenz: Yeah, exactly.

Björn Raupach: No, there wasn't. So we figured out we are very successful if we adapt and if we adapt very fast, the ten first customers were nice. It was really great to see. That you can write an application that runs 24/7 and that it doesn't crash and runs smoothly. And then we reached 100 customers and that was also very nice. The jump from 100 to a thousand. Well, for me, what's less impressive, but it was impressive. Thanks to the sales and CS team, but it wasn't so surprising for me because I thought, well this is the technology that our code can do. So the next challenge will be okay, let's go from a solvent to 10 cells and there will be a challenge. 

Markus Lorenz: [00:17:46] Yeah, I guess, but it's nice to see that you, as a young CTO found the right way to improve the whole software solution for you and that you don't have that point where you have to reinvent your, your business, or you have to reinvent your infrastructure from zero. And you've always been on the right track heading towards your north star. And yeah at those very early stage technologies, as you mentioned, like the upcoming mobile trend in those days. Cool. Maybe that's what led me to the following question. Imagine there are young CTOs or founders out there on the market who now would like to build their product from scratch or build up a SaaS solution because it's actually hip to build it. What would you be or what would be the advice from you for those young guys? 

Björn Raupach: [00:18:37] Don't don't come up with an idea. Don't spend time thinking about what the next big thing would be. Don't spend time thinking about this Silicon Valley or about IPO or that doesn't help you. So what do you have to do?

Go find someone who has a problem. And there are lots of people who have problems and solve it for them could be with software. It could be with anything else and be passionate. You know, you will spend a lot of time with the things you are doing it, and you should know that. Funny story yesterday, we had a

quiz was in the company. It was just for entertainment because everyone is remote. And one of the questions was, you know, who is the guy at the company who dreams about the software? And that was me. But as funny as this may sound, you really have to make sure, do you really want to be the person that wakes up in the middle of the night and solve programming problems? Make sure you really want to go down this road. There are probably more fun things to do in life. Yeah, 

Markus Lorenz: [00:19:49] I guess, I guess, but this basically what you mentioned, I guess it's called the problem solution fit. So if you have this problem solution fit found, because you found this one guy out there on the market who has problems. How do you tackle that product market fit later on? Did you use any methodologies, like lean startup or was it cost maybe by accident to find this product market fit? 

Björn Raupach: [00:20:14] No. We never followed a methodology. I think lean startup came later than 2009. I don't recall, but I wouldn't call it an accident either. At first it was actually more like talking and listening to the needs of your clients.

And it took years until we were confident enough to say, okay, yes, we understand your business and it's totally fine that you want to do it this way, but hey, look, we have the better approach to things.

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