The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:09:06 · Luke Harries
[00:09:06] S1: So we did that detour, and then we were like, we do actually want to build a big business. So we started exploring different directions, and Richie had really struggled with, like, binge eating, his mental health. I think we actually spoke to you at the time about some of this stuff. And so we were just going really deep on this kind of men's binge eating, men's weight loss space, and we set up a digital CBT clinic around how do you help people who are struggling with these eating issues. But the tricky thing with digital CBT is it's great for lots of people, but it really only lasts about six weeks from a business point of view. You can help them get to a great place, but we wanted to have, like, a much bigger impact and build a much bigger business. And so that's when we were exploring, like, okay. What are the health tech business models which can really grow and really make a lot of sense? And it seemed to be kind of you needed a hardware piece or a medication piece, and we're like, none of these quite make sense until we read the GLP one paper the day it came out. So this is semaglutide, and we're like, wow. This is, like, the biggest thing in medicine since penicillin. So we, like, race. We set up a clinic. We're like, how do we help people get access to this fantastic medication which reduces people's body weight by 15%? And we managed to get to about 300 k of revenue, which was great, and then it kind of flatlined. And this was the first company I'd really started. I was still pretty young. And truthfully, I think I was just too impatient. I was like, oh, we're only on, like, 200 k a year of revenue. I want to have, like, much bigger impact to technical product. I think we probably need to, like, pivot b to b. And Richie was like, no, Luke. I think we just need to, like, focus as is. Like, the wave will come. And so I stepped back, joined PostHog, kinda moved on. But Richie has done an incredible job, and that company is now doing over $30,000,000 a year in revenue, helping thousands of patients. So that's been really cool, but, like, big lesson for me is, like, commit for the long term, be patient. And Ozempic had a much, much bigger wave after. We were actually quite early on.
00:10:59 · Harry Stebbings, Luke Harries
[00:10:59] S0: Fucking nuts. Also, importance of market timing. Yes. Like, if you'd done Valor five years before and Noah's hand pick... [00:11:06] S1: Oh, yeah. It wouldn't have been a thing. [00:11:07] S0: There's no business there. [00:11:08] S1: Yep. [00:11:08] S0: I totally get you. Fascinating. Dude, I have to then skip to another bit that you said there, which is that you were in the lake when he was pitching you with Matti, this is for ElevenLabs. And it's like, we're gonna be everything for one. This sounds bad. Like, I like a tight ICP where we can market to, we know which channels we're selling to, we can craft a product for them. How has a horizontal product offering worked so well when it is completely counter the narrative that we're always told?
00:11:35 · Luke Harries
[00:11:35] S1: I 100% agree. And actually, when I worked for PostHog, part of the magic was you have one ICP, which is a product engineer, and you're selling multiple products into it. So you're selling product analytics, you're selling session recording, feature flags all in. And each new product you add, it gives you another entry point. It enables you to, like, integrate the products to do completely new use cases, which couldn't be done before. We don't have any of that in some ways. And so with ElevenLabs, because we have the best AI audio models, so turning text into speech, speech into text, for making sound effects, for voice cloning, voice isolator, this is like a very horizontal foundational layer, which we sell as an API. So that's kind of your first product, the developer product. And then you can sell that API at scale. So you can sell it to enterprises. You can build around workflows during conversational AI. So that's fantastic. But then because the team is super ambitious, you know, Matti and Peter literally want to build a bigger company than Google. They want to build something absolutely massive. And then they see, oh, we could actually build this to build a reader app for your phone to read articles. So that's now a product. Then we're also building a creative platform. So this text box, which anyone can type in text, that's now creating whole audiobooks and voiceovers. But the interesting thing is it's actually really working for us. And I think the reason we've managed to get it working is because we've started with these incredible audio models. All these people come naturally to us. We've then been able to raise money, hire incredible founder type peoples who really own these individual products and grow them. And so, yeah, it's definitely not the norm. I'm not sure I'd recommend it, but for ElevenLabs, it seems to be working really well.
00:13:13 · Harry Stebbings, Luke Harries
[00:13:13] S0: When I listen to you, it sounds fantastic. Yep. I'm also going, woah. Woah. Focus. Like, reader apps, communities. How would you advise founders on focus when it comes to product expansions? [00:13:24] S1: If I was to advise people, it would be choose your one ICP and build all the products around it to have them compound. However, that's not actually what we're doing. Instead, we're building discrete products, and the way we then tackle that is we basically shard the company. So we have a consumer app focused team, which has an entire growth team with a growth marketer, with paid ads, with community. We have creator growth with their own paid ads, affiliates, and so forth. We have developer marketing, which is standalone. And so all [00:13:54] S0: of these sharded teams have their own growth elements to them? [00:13:57] S1: Yes. Yeah. Exactly. [00:13:58] S0: So there's not a horizontal growth team which sits on top of them?
00:13:58 · Harry Stebbings, Luke Harries
[00:13:58] S0: So there's not a horizontal growth team which sits on top of them? [00:14:01] S1: There is. So the structure we've set up is we have horizontal growth team, which are channel specialists. So we have a head of performance marketing who used to lead performance marketing for Shopify. We have a SEO expert who used to do most of this for Canva. We have, like, incredible individual specialists. But then within each team, we have a product growth lead who's responsible. They're basically CMO for their product, and they're thinking about all the metrics, the activation, the awareness, and then they have their own sub teams which are specialized just for them. Wow. Yeah. It's pretty funky. Our enterprise marketing team by the end of this year will be 20 people, and that's just for enterprise marketing. And then separately, our mobile app will be its own five to 10 person growth team. [00:14:45] S0: Wow. What was this like when you joined? And, like, if you were to advise founders on the scaling of that team and that structure.
00:14:51 · Luke Harries
[00:14:51] S1: Yes. What it was? Yeah. When I joined, we were three people, all very junior, very specialist. I hadn't actually done a growth role before, and this is the advice that I normally give. Start with one generalist growth marketer, and they should be responsible for everything from messaging and positioning, working with the founder, up to awareness and setting up channels and testing. The reason why you need them to do all of that is if you only hire a product marketer, great. Your positioning's lovely. Your messaging's lovely, but no one's heard of it. Or if you only hire someone who's very quantitative and channel focused, then they're only going to be focused on getting out there, but no one's actually gonna convert or resonate. So hire one generalist person, and the most important thing is that they really understand your product. And so this means if it's a technical product, they need to be technical. If it's a consumer product, they should really get the consumers and the virality. So it depends on the person. But start with a growth marketer. Normally, the second hire I recommend is a growth engineer who's front end leaning. And so this is like a software engineer who's hacky, who's running into metrics, and they should be setting up landing pages for SEO. They should be doing mini tools. They should be doing automated outreach, and then you can keep growing from there. Other great ones are, like, motion designers, back end focused growth engineers. What's it? Motion designers? Motion designers.