A Slice on Alfonso de la Nuez, Co-Founder and Co-CEO of UserZoom
Alfonso de la Nuez started his entrepreneurial journey in Barcelona when he co-founded a user experience consulting firm, Xperience Consulting. He and his co-founder, Xavier Mestres, ran that company for six years before realizing they would have to pivot if they wanted to scale because the consulting business was just too “time-consuming and labor-intensive.” De la Nuez and Mestres knew they had a market with user experience, they just needed a more scalable product. They founded UserZoom in 2007, an “experience insights management platform” that helps businesses be more “customer-centric,” providing them with insights across all product development life cycles. They’ve since raised about $150 million, with teams in both San Francisco and Barcelona (so they’ve clearly made headway on achieving their scaling goals).
De la Nuez relocated to San Francisco in 2009, building their international presence. “Silicon Valley is definitely the hub for entrepreneurship, particularly tech entrepreneurship. What I like about Silicon Valley, personally, is that it’s a mentality, more than a place. It’s also an ecosystem of experts. You have experts like Jason Lemkin from SaaStr who have been doing this for a long time now and a whole lot of others. These guys are just phenomenal people to go to, to understand, and other startups help each other out. That knowledge is worth as much if not more, than the capital.” His main challenge living in San Francisco? Being roughly 6,000 miles away, with a 9-hour time difference, from his co-founder (along with the engineering, design and customer experience teams).
It’s probably a good time to mention that de la Nuez is not the only CEO of UserZoom. While he and Mestres were experts on the product and market, they weren’t the experts on operations and finance. They found a COO, who works closely with Mestres who is now CTO, and a Co-CEO to share leadership responsibility with de la Nuez. “The Co-CEO [Dan Fishback], is an operational leader. He’s taken companies public and ran some over $100 million. We co-lead the company in a very effective way. There are two main reasons that make this a success story. One, there’s a lot of trust. No one is stepping on the other’s feet. Second, and maybe more importantly, what feeds the trust is that we have a clear separation of duties, tasks and responsibilities. I run the vision, strategy to grow, business development and partnerships. While he makes sure that the train runs on time, so to speak.” De la Nuez has noticed many leading companies adopting this co-leading model for the same reasons.
Circling back to that $150 million… they didn’t start fundraising large amounts until 2015 and have only had three major fundraising moments at that. They initially bootstrapped the company and kept the consulting service aspect to generate revenue while building the SaaS platform. De la Nuez speaks highly of this model, noting that it can be a “great way to avoid giving away precious equity you might regret down the road.” Then, when de la Nuez relocated to the Bay Area and they were no longer running the consulting service, they had to be capital efficient. “For about five to six years, it was just a ‘trying to make it’ kind of thing. Without funding, you had to make decisions based on what kind of money you had in the bank, versus when you have a lot of money in the bank you act a little differently. Maybe you can afford to invest and be less risk-averse.”
By 2015, they had grown the business to $12 million in revenue, were profitable and started looking for growth investors (as opposed to venture investors). These investors “help you grow and scale, not just figure it [product-market fit] out.” They were able to raise $34 million with Sunstone Partners through this series A round, which was used to not only fund their growth but also buy out their early investors. This would later be followed by an $11 million extension. Recently, in 2021, they raised a private equity round of $100 million with Owl Rock Capital, who saw their “growth and potential and wanted to be part of the ride.” For UserZoom, this was the right move because they’re looking to go public in the near future and this firm has experience with that.
Throughout this ride, there have been many risks for de la Nuez and his team. “We should have raised earlier… We hired people for both the market and the product and tried to increase sales, but it didn’t work… We were burning money for a while [after fundraising]… We have a Co-CEO model… My co-founder is in Barcelona.” The list goes on, but it goes to show that risks are simply part of the journey as an entrepreneur. About risk in general, de la Nuez expressed, “I don’t have a crystal ball, [as an entrepreneur] you have to be a visionary. The most important thing for a leader or leadership team is to be able to monitor everything very closely and see what works. It’s all about taking the risks, failing and getting up right away. Hire slow, fire fast. If it doesn’t work, move on.”
His advice for young entrepreneurs is to not “let passion blind you,” and to “fall in love with the problem.” He notes that “you have this gut feeling that tells you you can do better. You can either start a new category, something completely new, or you can look at something broken that has an opportunity to be improved.” With UserZoom, they did the latter. Another piece of advice he has, coming from his marketing expertise, is to nail down your total addressable market, customer persona and user experience, three things he wishes they did better in the beginning.
De la Nuez’s goal for the future is to go from “good to great”. As I mentioned before, they plan on taking UserZoom public in the near future (he’s looking at late 2022) and prepare the business for that in the meantime. As a leader, de la Nuez focuses on personal growth, being a “student of the game” and learning from his team. Part of this growth is taking breaks when feeling burnt out (he had recently gone on a trip with his family). Down the line, he hopes to retire and spend more time with family.
Alfonso has over 20 years of experience in the Digital Marketing industry and has worked for leading brands such as Dell Computers and Icon Medialab. After 5 years of hands-on experience in the Digital Marketing industry, he simultaneously co-founded a UX Consultancy (Xperience Consulting) and a UX SaaS business (UserZoom). Connect with de la Nuez on LinkedIn.