Brendan Foody, Mercor's co-founder and CEO, says now is the most exciting time in history to build a company.
Mercor scaled from $1m to $100m in revenue run rate in eleven months, working with six of the magnificent seven and all of the top five AI labs.
Foody says Mercor's raise at a $4bn valuation came on a $20m revenue run rate, and that founders should treat fundraising as an input to building products, not an outcome.
Mercor's CEO on rebuilding hiring with AI and hypergrowth
Mercor is betting that LLMs can rebuild hiring, from interviewing to matching candidates to roles. Foody says matching is the hard part, and that tying decisions to performance data both improves it and reduces bias. The company's rise, from a bootstrapped start to a $4bn valuation, came from serving AI labs that need expert talent, and Foody says it was built on a high hiring bar and a long-term view.
Takeaways
Mercor automates hiring with LLMs and performance data. Foody sees existing processes for finding, assessing and matching candidates as antiquated. When ChatGPT took off, Mercor saw that resume review, hiring decisions and interviews could be automated, and it scaled from there after the founders dropped out of college.
Growth was extremely fast and AI-lab driven. Mercor went from 1 to $100m revenue run rate in eleven months. It has over half a million users, hundreds of thousands of interviews, six of the magnificent seven as customers and all of the top five AI labs.
Matching is the core product challenge. Matching blends a model of whether a candidate wants a job with a model of whether they will perform well in it. The performance model is trained on performance data, which Foody says also reduces bias.
AI interviewing can reduce bias, with limits. The AI interviewer judges only the interview transcript, not appearance or voice, and decisions rest on performance data. Foody concedes that humans still make the final call and that some fit judgments matter.
Valuation jumped sharply within months. Benchmark invested at a $250m valuation for 10% dilution on $1.5m in revenue. A series B four months later valued Mercor at $4bn on a $20m revenue run rate.
Hire to a high bar and treat fundraising as input. Foody says the first 10 hires shape the next 100, so the bar should be as high as possible. Founders who see fundraising as an outcome are wrong, since it is an input to building products for customers.
Culture and long-term focus keep a fast company steady. Mercor's values are a can do attitude, really high standards and intensity. Foody says people adjust to new milestones within three months, so he grounds long-term storytelling in a North Star metric that compounds over a decade.
Foody's early hustles
In eighth grade he bought Safeway donuts at $5 a dozen and resold them to friends for $2 each, paying his mother $20 for rides.
He once cut his price to $1 for two weeks to push out a rival donut seller.
In high school he charged $495 to build websites and help small businesses claim AWS startup credits, which he did a few hundred times.
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He did not want to go to college, but his mother persuaded him to attend.