Cristina Fonseca is a Portuguese entrepreneur, angel investor and engineer and one of the founders of Talkdesk. A cloud-based helpdesk software that became Portugal’s third unicorn after raising $100 million in Series B funding in 2018. In 2016, she was featured in the Forbes 30 Under 30. And in 2017, she became an agenda contributor to the World Economic Forum. In 2018, she became a venture partner at Indigo Capital Partners, the first Portuguese private venture capital fund in Portugal and Spain. Currently, she’s building Cleverly.ai, an AI-powered platform that makes customer service more efficient.
Cristina spoke to us about her early entrepreneurial journey, how she hired and scaled the hiring process at her startups, and how she offers employee feedback and corrects hiring mistakes.
Q. Before you founded Talkdesk, your most famous startup yet, you had founded two other startups VEEP and Bouncely. Talk to us about this journey.
Cristina: My Talkdesk co-founder Tiago and I were always curious about the entrepreneurship world. We studied together, and towards the end of our degree, we started testing our first idea: VEEP, a tutoring platform for high school students. We quickly realised that this was not going to be as big as we wanted it to be because students don’t have money to pay, the market was too small, and operationally, it would be challenging to scale.
From VEEP, we moved on to Bouncely, an add-on on top of an Amazon service. It was SaaS, and it paid the bills, but again it was a super small thing. The phase between Bouncely and Talkdesk was crucial because, for a year, we were testing ideas, putting them online, and trying to come up with something that was meaningful and had the potential to scale. We learned that as engineers, it was not enough to code something, take it live, and wait for customers to come. We had to go outside of our comfort zone, spend time learning, learn online marketing and other skills.
The idea for Talkdesk came about when someone would contact us from small businesses. We would think, who is this person? And we would go to the billing system and see if the person is already a customer or on LinkedIn to see if this person has the potential to be a customer. Everything was in the cloud- the billing system, the support system, and the database, but nothing collected this information as a customer was reaching out.
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Q. With VEEP and Bouncely did you have any employees?
Cristina: For VEEP, we had a network of teachers that we would pay as contractors, but otherwise, it was only Tiago and me. I believe founding teams should have the skills that allow you to at least get off the ground. If something is not working but you have a small and agile team, you can iterate and adjust the course. If you start building a huge organisation from the start, then you can get stuck.
Q. You started Talkdesk at a time when startups were unheard of in Portugal. Did you have trouble convincing employees to join you, and what was it back in the day?
Cristina: It was hard. Portugal is a little bit of a conservative country. When you leave university, your parents will tell you to go and find a job with the government or a multinational company.
I had to try hard to recruit the first few engineers. It seemed like there were no engineers, and all we needed were two or three engineers. What worked best was PR and publicity. People were very proud of going home with a newspaper or seeing the company on TV because there was social proof they could take home and tell their parents or boyfriend or girlfriend.
I was a bit against this at first because, as an engineer, I wanted to prove ourselves by doing great work. But eventually, I realised that this was the best hiring technique we could use.
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Q. When you were scaling, at what point did you bring in specialised Human Resource recruits to set up processes for recruiting?
Cristina: I like that you associate HR with bringing in processes because we did it the other way around, and it was one of our critical decisions. At first, it was only Tiago and me, and then we hired a person who is today the CTO. And then we hired three people who were not the right fit. We had made a mistake, but we needed to take a step back to learn from our mistake.
From that point, we built a streamlined interview process with an assessment round and a technical challenge. Everybody had to go through this process, even those known to us or who studied with us. And it was a win-win because it helped us evaluate them, and at the same time, it gave them an idea of how we worked. This process became our default hiring process.
Because we had this hiring process in place crafted by the founders and the early engineering team, I was very comfortable bringing in HR to scale it. And that’s the reason we were able to scale in one year from 30 to 150 employees.
Q. When you make a wrong hire, and you realise this, what’s your approach been?
Cristina: In a startup, everything is about speed. You can’t propagate a mistake for too long because it’s going to bite you. If you hire the wrong person, you try to fix the problem. If you can’t fix the problem, you have an honest conversation with that person, and you go in a different direction.
There were points when I had to fire people that I considered my friends. But it’s not that you’re a bad person or they’re a bad person. It’s just that they’re in the wrong place, and there’s no match in terms of skills, mindset, the stage of the company, and you need to be pragmatic about this. Usually, the outcome is the right one for the person and the company.
Q. As you grew and scaled multiple startups, you would have also had a personal journey of growth as a manager. What are some of the learnings from that journey that you can share with our audience?
Cristina: One is creating a network of founders that are going through the same things as you. It’s essential to have a network where you can be vulnerable, ask complex teams, and discuss important matters. Having this network also enabled me to enter the U.S., have a presence there and raise money from American investors. This network is essential to raise funds because having someone introduce a potential investor is much more powerful than sending a cold mail.
You also need to hire people that are better than you. After every interview, I would ask myself did this person teach me something? If the answer is no, why would I hire the person because I will have to teach them the basics anyway.
It’s also important to be curious. Have a ‘how can I figure this out?’ mindset. I’m a curious person by nature, and I have an engineering background, so I look at solving problems like an engineer, and I embrace change easily. When you’re on that hyper-growth journey, you need to be prepared for the fact that every six months, you will be in a different position. You’re going to replace yourself. You need to be comfortable being uncomfortable in new situations at all times.
Q. How do you give feedback to your leadership team and other department heads?
Cristina: The best way to create productive relationships with the leaders you hire is through collaboration. I prefer to work together, do brainstorm sessions, be honest and share feedback early on.
The first leaders we hired were in sales and marketing, which were core competencies that were distant from our background. With those hires, you have to trust those people. It’s a tough balance because sometimes you wonder if they’re going about it the right way, but you need to have productive conversations around these things and allow people the flexibility to do their job.
Q. Your new venture Cleverly.ai is an AI-powered platform that looks to make customer service more efficient. What is your view on the future of customer experience?
Cristina: The future is bright. I see a huge opportunity in customer experience, and that’s why I started Cleverly. The fact is that when you reach out to a company, it’s usually for a bad reason. Even the other person on the line doesn’t want to be there, and often they’re there just to pay bills. There’s a lot of work that AI can do to reduce the friction and pain of customer service processes.
If you go to a call centre, it’s one of the most depressing places on earth. The best way to make my team understand our mission is to send them to an old school call centre which often leaves them confused and depressed. There’s a lot of room to eliminate the manual work and the manual processes that are still done. There’s also a big disconnect between the managers and the agents. The agents spend a lot of time doing manual work, and the managers see this as operational procedures, and that’s wrong.
At Cleverly, our vision is to fix the root cause of the problem. We know what the queries are that often come into the call centre, and then we’re fixing the knowledge associated with replying to the customers. At the end of the day, if you know what queries are coming in and you have a reply prepared, procedures well described and help centre articles that answer things. Then the customers can help themselves or reduce the friction in assisting agents in getting to the correct answers.