No Priors: Artificial Intelligence | Technology | Startups
00:01:18 · Alexander Taubman, Elad Gil
[00:01:18] S1: Yeah, that's right. So we've taken an approach since the beginning of investing very heavily in our horizontal AI platform, we call Nexus. I'd say roughly 80% of the infrastructure is shared across the verticals, and then there's a lot of work to take it and deploy it into those end markets. And the deployment involves mapping workflows, understanding data sources, cleaning up data sources, integrating with them to make them easier for the models to access. And sort of our next platform sits in between the models on one side, and we're model agnostic, and the data sources, the skills, the workflows of the business. And so that takes a lot of customization and significant applied AI engineering capabilities, which we've built at Long Lake. So once we can take that platform, we buy a company now or partner with a company now very quickly. You know, in the beginning, it took us over a year with our first acquisitions to actually, find the real potential of AI and see it in the business outcomes. But now within days of partnering with a company, we can deploy this very quickly and see immediate impact. So you can [00:02:15] S0: buy a company, and then within a couple weeks, you have instant margin lift because the employees of that new acquisition just go on a platform you've already built for similar businesses.
00:02:24 · Alexander Taubman
[00:02:24] S1: Yeah. What see is instant time savings. And then the question is how do we grow to give our team members So we actually invest very heavily in growth. We're actually not really, you know, we're not focused on cost saving. We're actually focused on driving growth and customer experience. That's our big And what we've seen, it's a much more powerful model because it's Our view of AI is it's incredibly positive some. I know this is a little bit of a narrative violation, but we actually think AI makes people more productive. And we have more productive people. You want more of them. And when your customers are happier, you grow faster. You actually create jobs, and everybody wins. And so we're seeing this in our companies. We're the fastest growing company in the HOA industry now. We are growing organically. When we invested in the businesses, they're typically growing zero to 5% a year in terms of volume. We're now growing 20 plus percent a year. And that's because we've made our team members, we've given them extra capacity to go and serve more customers. We actually have better, more attractive customer acquisition economics because we can serve those customers at incrementally lower costs with better products and services. So we've been able to take sort of the software style playbook of go to market and apply it into these sleepy industries. And and I think it's a win win win. Mhmm.
00:03:35 · Elad Gil
[00:03:35] S0: It must be hard for your employees to go and work anywhere else in the industry then because if they're dramatically more productive, they're doing less busy work. Have you found that you've decreased employee churn or about other things?
00:03:44 · Alexander Taubman
[00:03:44] S1: That's right. We've seen very, very high retention of our team members across all of our acquisitions. And actually, this is the vision. This is the vision Long Lake. We want to basically be the best place to work in every industry that we operate so we can get give the best people the best tools with the best customers, and that flywheel becomes self perpetuating. Because if you now leave Long Lake or you leave one of our partner companies to go to a competitor, you have to start doing all this mundane work again. You 25% of your day, 30% of your day, you have to go do that again. And the thought of it's like giving up email or something. You know, you're not going to It's just So actually, we've started to become a real talent magnet in these industries and our companies. And by the way, we can pay people the most. Because they're the most productive, they're actually making more money, and we're delighted about that. So we can pay you the most, give you the best tools, and we're growing the fastest. Know, that's part of our vision is it's really making things better for team members and customers. And by the way, the other important thing is you give your team members superpowers with AI, the customers are much, much happier. So, we're seeing customer retention going up. We're seeing response times much faster, errors going down in sort of things like board reporting, budgeting, email, you know, and that's driving up customer retention.
00:05:00 · Elad Gil, Alexander Taubman
[00:05:00] S0: That's so cool. Why do this via acquisition versus just offering software to people? In other words, the traditional Silicon Valley playbook would be you find the HOA industry, you realize that there's a need in terms of software, you build software for the industry, then you sell it as a vendor, and in this case sell it as a sort of AI product or tool. Yeah. Why not do that? Or why did you decide to go down the acquisition path? [00:05:22] S1: We think that you can drive better win win business outcomes with deeper alignment. And so by actually owning the companies and owning those customer relationships directly, we can drive better better results. Software companies are wonderful. We partner with many of them. But when you're just selling software and you don't actually then care what happens with the business outcomes, you just don't see the same business [00:05:45] S0: And your engineers are just viewing your employees as their customers in some sense then. Is that correct?
00:05:45 · Elad Gil, Alexander Taubman
[00:05:45] S0: And your engineers are just viewing your employees as their customers in some sense then. Is that correct? [00:05:50] S1: That's right. Our team views our employees and our team members in the field as the customer, and that feedback loop internally that's the other point is we have a much tighter feedback loop. So, you know, the old skunkworks thing of you want the engineers in the factory to be co located so you can have more innovation, that's what we have at Long Lake. So our team members and our engineers are together in the field all the time. I think there's of our engineering team, they're probably in 20 different states right now sitting with team members across our architecture business, across our HOA business, across our HR services, or, you know, specialty tax business. And so they're sort of there's a deep amount of change management that's involved. So this is a lot of, you know, sitting with the team members, understanding their pain points. And so there's a real solutions orientation of how do we take the pain point, and then we build a tool within Nexus to solve it. And that feedback loop is really important, so you get to better outcomes this way.