SaaS Stories
SaaS Stories is my not-so-secret quest to learn what it truly takes to succeed in the world of SaaS—and I’m inviting you along for the ride! I have the pleasure of sitting down with brilliant minds and industry trailblazers to explore their journeys, uncovering the secrets behind their growth, the gaps they spotted in the market, and what really drives them.
It’s not all smooth sailing—there are challenges, unexpected turns, and moments of reflection where they share what they’d love to change about their journey. Think of it as a candid, insider’s look into the world of SaaS, with just the right amount of curiosity, empathy, and wit.
Join me as I dive deep, selfishly soak up all the insights, and hopefully share a little inspiration with you along the way—one SaaS story at a time.
SaaS Stories
Netflix-Inspired Approach to Scaling Systems and Startup Leadership with Jose Moreno, CEO, Neulight
Join us for an enlightening conversation with Jose Moreno, founder of Neulight, as he recounts his inspiring career journey from Harvey Mudd College to influential roles at Microsoft and Netflix.
Discover how Jose’s blend of technical expertise and societal awareness, developed during his college years, guided his career choices and ignited his entrepreneurial spirit. Through Jose’s experiences at Microsoft and Netflix, you'll uncover valuable insights on scaling systems efficiently and the importance of prioritising user satisfaction. These lessons have been pivotal in his journey, leading to the founding of Neulight, where technology meets education with a passion for transforming student outcomes.
Emphasising the importance of identifying real problems rather than just ideas, Jose discusses the necessity of maintaining an "irrationally optimistic" mindset during the startup phase. Dive into the intricacies of marketing and leadership, particularly how introverts can thrive as leaders by fostering empowerment and collaboration. This episode highlights the integration of AI in educational tools, a key innovation that Neulight leverages to address industry gaps and boost personalised student support.
Jose shares the significance of team alignment, motivation, and the transformative power of marketing and design in optimising a startup’s capabilities. His passion-driven mission at Neulight focuses on improving student success, offering listeners practical insights and inspiration for their own entrepreneurial endeavors.
Welcome everybody to another episode of SaaS Stories. Today I'm joined by Jose Moreno from Newlight, all the way from California. Welcome.
Speaker 2:Thank you. Thank you for having me. Glad to be here.
Speaker 1:Absolutely. Now, please can you share your story with us? Behind Newlight and now? You've also worked at Netflix and Microsoft, so I'd love to know how they may have influenced New Light's development as well. Tell us that story.
Speaker 2:I actually start off with my college as well. I went to Harvey Mudd College, which is a small private school in Claremont. It's one of five Claremont colleges. Harvey Mudd itself is a pretty technical college like MIT or Caltech. Harvey Mudd itself is a pretty technical college like MIT or Caltech, which are kind of the bigger rivals. But something that Harvey Mudd that was a bit different is that it's also a liberal arts college, and so there was a big focus on teaching us like the top of the line STEM and math and chemistry and all those things. But at the same time they wanted us to really focus and understand what sort of impact we would have in society with the changes that we'd make, with the kind of quote unquote hours that they gave us. And so I think that really started off a lot of my journey for the rest of my career.
Speaker 2:But I went and worked for Microsoft for about five and a half years. I worked on Windows Live Services, and so we had over 500 million customers that we had to build large scale systems for, and so I learned how to scale systems at Microsoft. And then I spent about nine years at Netflix, and the biggest thing that I learned at Netflix was how to build software that people love. That was always a big focus, like just getting people to really enjoy their experience and being able to get to the value that they're looking for, which, for Netflix, is just starting to play something and having that work immediately and so kind of putting all of that together.
Speaker 2:After finishing a big project at Netflix, I just started wondering what's next and where I can have some positive impact, and so I started looking at the education sector and decided that that would be like a pretty interesting place to start up a company where we can bring in some top talent from Silicon Valley. And then the next question was like okay, well, what's the problem? Like what are we actually going to help with? And that's where we learned about multi-tiered systems of support, and when that framework is implemented well, it can improve grades, attendance and graduation rates. The problem is that the majority of educators in the United States, even though they've been trying for like 15 years, don't know how to implement it well, and it's because the framework is like pretty theoretical in nature and I thought that that was an interesting place where AI could maybe help them implement it and bring in those positive impacts for students and so that kind of kicked off the entire journey. Sorry for the long story, but yeah.
Speaker 1:No amazing, so much to unpack there. Actually, I mean, let's start with the scaling how to scale systems in Microsoft. What were some tips you can give us from that?
Speaker 2:I think the biggest thing is like looking at threads and what they're doing and the resources that are available to the computers. Even though you can always create a new thread within a piece of software, if you create too many new thread within a piece of software, if you create too many, then there's a lot of context switching that ends up happening at the cpu level and that actually ends up taking away from the possible performance that those computers can have, and so actually bringing down the number of threads but still having asynchronous solutions is a good way to be able to scale up your systems. Then it just becomes a horizontally scaling problem.
Speaker 1:Yeah, yeah. And with Netflix creating software that people love, I assume, like the user experience goes into that, like design, is that what we're talking about?
Speaker 2:Yeah.
Speaker 1:I'm definitely a Netflix user and I absolutely love, you know, looking for things to watch. But what went into that Like and what maybe some usage data that you saw in Netflix that then helped to change the way they displayed their software?
Speaker 2:Yeah. So I think a good way that Netflix figures out whether people would love a change or not is by running what's called A-B tests, which basically means that for a very small part of the population of users, they will deploy out a new feature for them and then they'll compare how that subpopulation reacts relative to the rest of Netflix. If people stay subscribed for longer, if they watch more content, then that's a good change. If people cancel more or they watch less or they can't find what they're looking for, then it's a bad change. And something I really loved about Netflix was that those A-B tests were the main drivers for what changes actually made it out for the users.
Speaker 2:There was a big focus on getting rid of the ego of, like, the executives and Reed Hastings. I have a couple of stories where he had like a test that he wanted to run and try out and they actually ended up being pretty negative, and then he would be like, okay, well, it didn't work out, let's move on, as opposed to being like, no, I'm the CEO, I know what's right for all the users at Netflix, like we're going to push this out, and so it's really like, yeah, getting your ego aside and focusing on the users and um and getting an understanding of what they actually do, like and find valuable yeah, no, absolutely.
Speaker 1:I actually heard his story on on a podcast and uh, I yeah he did mention that I think a lot of just being able to exactly that, like don't let the ego get in the way, you know, even if you think it's going to work, don't keep pushing for it, just fail fast, basically, and then just move on, and I heard that from a few founders. You know, fail fast. I think Bill Gates coined that actually, but I might be wrong on that one. Don't quote me on that. Coming back to New Light, you mentioned a multi-tiered approach.
Speaker 2:Yeah, multi-tiered systems of support.
Speaker 1:What is that?
Speaker 2:So traditionally and when I was in school, there was a lot of focus on whenever you did something like wrong, there was a focus on punishment.
Speaker 2:So I think a pretty classic example is a zero tolerance policy for like a fight. So if you got into a fight, either you're suspended or expelled, no questions asked, like that's kind of it. The problem with that is that one you take the kids out of the classroom right, so they, even if they do end up coming back there, they've already fallen behind from everybody else simply because they weren't present. The second issue is that you're not teaching them like how to deal with that situation better, moving forward. And then the third one is whatever issue that created that fight like was never resolved and so it just continues to be like a contentious thing, kind of moving forward. And so instead of focusing on punishment, the multi-tier system of support focuses on teaching kids how to behave, so social, emotional skills, how to deal with certain situations, handle their emotions a little bit better or communicate better to be able to resolve certain issues, and then less on punishment and taking them out of the classroom, which I think is a big reason for why you see those improvements in performance.
Speaker 1:Yeah, yeah, amazing. I mean having a daughter that's about to go through her teenage years. I can definitely relate to that. I think that emotions to helping them cope with those is a big learning, I think. Speaking of challenges, as an educational SaaS founder, what were some specific ones that you came across and how did you overcome them?
Speaker 2:Awesome challenges. So this is my first startup that I'm finding or the founder of I found it. I found the mental challenge early on pretty interesting. Something I really think about because, like you end up coming up with an idea, and something that I tell, like other founders or people now, is that instead of just like coming up with an idea without actually knowing if anybody wants that like solved, you should go out and actually look for a problem and then figuring out what that idea is to solve that problem right, which is how we started, and so we knew that there was a problem. We we saw the excitement for something like what we were building um to come out and that's why we started to commit to do it. But as you're building it before you have customers, before you have like any of that, it's really up to you to truly believe in your vision, almost unrealistically optimistically irrationally optimistically.
Speaker 2:You have to like wake up every single day and continue to build and build and build and say like, yes, this thing is going to be successful, it is going to work out. And that's pretty hard to do because it's pretty natural for anybody to have doubt kind of creep in, and when that doubt creeps in you don't really have like too much of a support system to say like no, you're onto something like keep pushing forward, and so you just kind of have to push through that yourself. And I found that to be pretty interesting.
Speaker 1:I love that word you used irrationally optimistically.
Speaker 2:Irrationally optimistic, it's so true.
Speaker 1:My daughter's teacher actually has a good quote that she tells us and my daughter keeps repeating to me, which is whether you think you're going to succeed or you think you're going to fail, you're absolutely right. So which one are you going to believe? So I love that. I think it's so true. Your emotions, your feelings, the mental challenges if you can channel them in a positive way, it'll certainly help you in the long term. What was the most surprising learning you encountered? So obviously, the mental challenges are one. Were there any others in the early days of New Light, and how did it shape your approach moving forward?
Speaker 2:I think for me the most surprising thing is how little I enjoyed marketing.
Speaker 1:I always knew that I was I want to take offense to that.
Speaker 2:Well, me personally, I've always known that I was like an introverted person and always worked to kind of become more and more extroverted. But I think that, as the head of a company, that need to be extroverted has gone up exponentially and, I think, surprising so in terms of the amount that I have to continue to push to be more and more extroverted, and so it's something that we continue to work on. I did bring in a head of marketing for us to help keep me accountable but also really get our strategy for marketing in place overall, and I think that that's going to be pretty helpful moving forward.
Speaker 1:Yeah, I'd love to unpack that introvert versus extrovert in leadership roles. I you might be surprised to hear this, but I myself am an introvert, even though I run a podcast. But again, I find it really hard in big group environments. I'd much rather have a one-on-one with a person and get into like a deep and meaningful. I have heard that introverts actually do make better leaders because they're more empowering of the people below them, which I think is a big leadership skill. So have you found that, you know, sometimes the introvert superpowers do come out, or do you find that everything works better when you, when you are, you know, acting as an extrovert?
Speaker 2:So I wasn't attributing it to my introversion.
Speaker 2:I was attributing it more to the my Netflix experience, because the Netflix culture was really focused on empowering everybody to be able to kind of push things forward.
Speaker 2:A big focus on providing people with the vision and, like, an understanding of what we're all working towards, and then having people that you can trust and know that they have the skillset in order to be able to execute and make that vision a reality, and so it's a big reason why I love Netflix and why I think that they're so successful, and so something that I brought into this company as well. I don't tell people what to do. I actually hate telling people what to do. What I like to do, though, is have conversations with them and brainstorm and, like, come up with that vision together and basically get buy-in on what we're trying to accomplish, where we're trying to get to, and then trusting that people that I know that are experienced in their areas are going to be able to help us to get there with their expertise, and that makes it so that they don't have to rely on me to be able to do something that I'm not good at, like marketing, for example.
Speaker 1:No, I totally agree with that. I think if you're telling people what to do, you've hired the wrong people. Yeah, I think people are hired. Yes, a lot of support, a lot of training may go into it, but essentially, I think if they're empowered, that's what drives a business. Um, how does new lights focus on personalized student support?
Speaker 2:impacted your approach to product development and innovation, and maybe we can talk a little bit about ai here as well yeah, so a big, a big reason why I decided to go into education was that there, historically, has not been a lot of focus in bringing in top tech talent into education, and a big part of it is.
Speaker 2:There's this kind of assumption that there isn't a lot of money in education, which is partially true, but what this next generation of AI is allowing for everybody to do is to, arguably, be more effective and efficient in their jobs like never before, and so I saw that as an opportunity basically having the ability to create a company with really top tech talent that leverages AI in every single way that can make us the most efficient possible, and that would make us the most efficient possible and that would allow us to not only execute really well but keep the number of people that we have to bring into the company down. And if we're able to keep the number of people necessary to run this company towards the lower end, then that share of the pie of money that's in education it doesn't have to be as big as it arguably had to be historically for our top tech talent to be able to be paid what they deserve to be paid.
Speaker 1:Yeah, what are some specific ways you're currently using AI to really help drive productivity and keep the team working on the human element?
Speaker 2:Yeah, so well.
Speaker 2:One of the best solutions that we put in place in terms of productivity has come from our head of UI.
Speaker 2:He found an AI tool that does pull requests or code reviews automatically whenever you open up a pull request in our repository. And so, especially when we have like lower number of engineers and we're all pretty busy, it's hard to do a very comprehensive code review, and so having an AI component that actually goes through and does a pretty effective job at code reviewing our changes, that's been pretty nice. I mean, it's caught things that I've never even thought of or seen before in my like 15 years of top companies that I've been a part of, seen before in my like 15 years of top companies that I've been a part of, and so that's been great. And then just having a conversation with it and brainstorming in terms of the sort of impact that our product can have or how we can approach a certain solution so that it's easier for users to use, that's been like a really nice kind of assistant or buddy to have on the side with our AI tool.
Speaker 1:Yeah, amazing. Do you have kind of positive views about AI in the future? Is there something that concerns you? I always ask that question because people can go either way.
Speaker 2:I'm sorry. Can you repeat the question?
Speaker 1:Just wondering what you're thinking about AI in the future. Do you think it's going to be a positive thing or a negative thing?
Speaker 2:I think overall it can be both. It's really providing a way for people to learn about knowledge that was maybe harder to achieve previously. It makes it much easier to do, and that's really what our solutions are built around is democratizing that knowledge and making that uh available to a lot more people in a much easier manner. So that's good. On the bad side, the I mean there's the, the scary sort of like are we going to build Skynet and is that going to take over humanity?
Speaker 2:And I mean to be honest there's a small possibility and I don't want to scare anybody about it, but the rate at which these AI models are moving forward has been pretty impressive so far. Maybe we hit a limit, maybe we don't, and if we don't, then it kind of becomes a really interesting future for us.
Speaker 1:Yeah, it's definitely fun to play around with at the moment. There's a lot of I don't know conspiracy theories around AI at the moment. I was really relieved to listen to a podcast by the ex-CEO of Google and he actually had some really positive things to say about it. Firstly, he said we need triggers when it reaches certain spots where we feel threatened, turn it off Apparently. You can do that, so I don't think we need to worry about it.
Speaker 2:You can. Until it figures out how to not allow itself to get turned off, then yes those are what the movies are like really kind of based on right. It's like at some point it learns how to be able to manage itself and and then all bets are off.
Speaker 1:But whether or not that's possible, I'm not sure yeah, only time will tell yeah coming back to new light and the growth so you mentioned, marketing was a challenge. Um, I'm curious how did you? What growth strategies did you adopt? How did you grow it and increase your presence in the educational space? Was it more of a product-led growth?
Speaker 2:yeah, we've done a few things. Um, when we're redoing our website and about to launch, like the new version, doing a better way of explaining what our product is has been a big focus, and show and using product videos in order to actually show users what they would be getting is, I think, a really nice way to approach it. This podcast tour that I'm kind of doing I've recorded I don't know 15 of these so far and probably have another 10 within the next month and a half in preparation for the next academic school year has been another strategy that's been working out pretty nicely for us. It's been increasing our network and also our presence in the space overall. And then I think the most challenging thing for me is just to continuously post on social networks and just kind of keep pushing and pushing, and pushing, and that's something that I'm continuing to work on. I don't think that we're great at it yet, but we'll continue to push forward.
Speaker 1:Yeah, yeah, I think someone I've heard someone once say you know, if you want to succeed, you've got to out educate the market. So, um, content absolutely is king, but I think you know, focus it on educating. What problem is this product solving? What are the gaps in the market? I love that you found a gap in the market. I have to say, every person I've had on this podcast has a story about how they found a gap in the market and I think that's why they've had such good success, because they're trying to solve something that needs to be solved essentially.
Speaker 2:Exactly. Actually, you need to. I read, or, yeah, saw a recent quote that was basically like you need to build a solution, not a product, and the difference for that between those two is don't build something just to build it. Build something that actually solves a product, and the difference for that between those two is don't build something just to build it. Build something that actually solves a problem.
Speaker 1:Yeah, absolutely, as New Light grows. What strategies are you using to maintain team alignment and keep everyone motivated around your mission? When it comes to your vision and your strategy, do you share that with everybody in your organization or how do you tackle that?
Speaker 2:Yeah, a hundred percent. Everybody pretty much gets all the information, and we'll keep that in that way as long as possible, because it's not just about telling people like what we're trying to achieve or where we're trying to get to. It's not just about telling people like what we're trying to achieve or what we're trying to get to, but also providing them with an understanding of the motivation or why that's what we're trying to do, right, like if people understand the why and this is, I think, something that I truly believe is undervalued, which is just kind of like explaining the why to people. If you do that, then they're more likely to get buy-in because they understand why the certain decisions are being made. Um, and so really providing the why as much as possible to the entire team has always been a focus of mine and something I'll continue to do yeah, I agree with that.
Speaker 1:I think, um, you know, anyone can kind of bring people into work and just offer them money, but that's not why they stay in a job, is it? I think people love to have a purpose, they love to be part of the vision and they love to see something grow as well. I think they feel like they're part of the team and the mission that way.
Speaker 2:Yeah, and luckily for us, we're really focusing on something that should have a pretty positive societal impact if slash when we're successful, and so the people that we've been able to bring into the company are people that are really excited about that part of it. They want to do good, they want to help students out and help them be more successful moving forward. They want to bring some of that load off of our educators, who are extremely overloaded and arguably underpaid, and so the more that we can help those two sides, the better just overall we'll be as a society, and I think they're more excited about that than anything else.
Speaker 1:It's an amazing mission to work on what was your first ever hire, and if you had to go back in time, would you change the person that you hired? Not so much the person, but the role that you hired for that, yeah, exactly, um.
Speaker 2:basically, the way that I've approached hiring so far is trying to figure out, like, what's the biggest missing skill set within the company, um, and how do we fill that? And so, from the get-go, like it was going to be an ed tech company, we're going to be building software for education. I know how to do that really well, but it was always going to be a really deeply integrated ai solution, and I have done machine learning things throughout my career, but I do not have a PhD in machine learning, and so getting somebody that truly understands these models and how we can put them within the system, what the limitations are, how do we deal with bias and overall data security as well, is extremely important, and so that was the number one person that I wanted to go out and grab, because if we're going to be an AI company, then we need to have AI expertise within the company.
Speaker 1:Absolutely. I've also heard that companies that have two founders are more likely to succeed than companies who just have one. I think it's because you're just able to kind of beat up each other and support each other. It's nice to have somebody else there.
Speaker 2:Yeah, it's actually so. We're a Microsoft for startup company and they do some teachings or some lessons as a part of joining that program to provide attributes for successful companies versus the ones that aren't generally successful. So, like you said, companies that only have one founder tend to not succeed as often as multiple, but they actually suggest three co-founders.
Speaker 2:So, a CEO that's focused on sales and are basically sales, a CTO that's focused on the technology and the product, and then a CMO that's focused on marketing. And so initially we started off with the CEO and CTO and as we went into it and as I figured out my not favorite part of like marketing, I was like, okay, I understand. Like, yeah, getting a C, a CMO or head of marketing person in here to really make sure that we have a good solution for our marketing approach is pretty key. And so three co-founders is their recommendation.
Speaker 1:Yeah, yeah, yeah. No, I agree with that. I had someone else on the podcast that say exactly that or that. They said it in a really funny way. They said you need the person that's like really techie. Said it in a really funny way. They said you need the person that's like really techie. You need the person, um, that can kind of nose the numbers and the data. And then the way they described the ceo and the marketing person was, um, you need someone who's not afraid to talk to strangers. Basically, that's.
Speaker 2:That's pretty. Key is building that network and, yeah, showing your value to others.
Speaker 1:Yeah, my last question for you what's one lesson you wish you'd learned earlier in your founder journey?
Speaker 2:Yeah, I think a lot of the things that I've spoken about so far the marketing, and how much more important that was from the beginning far the marketing and how much more important that was from the beginning as much as of the design skills and language that I learned from Netflix how much better our products would be if we had actually a person that was focused on design historically, and so we have that now to make that user experience easier for people. Once he came in he looked at our website and he was like we could do a much better job providing the value to users and I was like I agree, like please, please, help us do it. And that's what kicked off the redesign of the website. So, having a marketing person, having a design person, having your tech person, having the person that speaks to others right, that isn't scared to speak to others and then having the person that can build the UI, I think those are the five core components that really become important for us.
Speaker 1:It's really good tips, I think, for any organization. Jose, thank you so much for being on the show. It was lovely to hear from you. I've certainly learned a lot, and I'm sure the other founders listening to this would get lots of value out of it as well. Thank you very much.
Speaker 2:Awesome. Thank you for having me. This was great.
