A Product Market Fit Show | Startup Podcast for Founders
00:15:58 · Nick Fleisher, Pablo Srugo
[00:15:58] S0: Yeah, it's a great question. I think there's parts of our product and you could say the same about many other tools in the market that overlap, right? Like some of the work in answering questions on Slack and taking in work from there are definitely overlapping. But there's a couple areas where we look a lot more like your traditional contract lifecycle management tool with real AI on top, right? Like building out a robust repository of contracts and documents for the legal team, managing complex approval workflows within the legal department. This idea of collecting context from different systems, right? Like we don't think of ourselves as like just a Slack bot or a team spot to take in work. Like for us, it's about gathering context from ServiceNow, from Salesforce, from SAP, from all these different business systems to help you answer the legal questions. And so I would say like we've come at it from slightly different angles and we see people using them on like, you know, more basic quick Slack Q&A and us as like this, the whole work management and context management layer for your legal department. [00:16:58] S1: So tell me, like you're talking about that summer where you're doing this kind of in parallel. When do you take the leap and what leads you to take that leap to kind of drop McKinsey and go full time on this?
00:17:07 · Nick Fleisher, Pablo Srugo
[00:17:07] S0: I think it's at the point where you have enough customers or design partners using the thing or starting to show interest that like you're too busy. And that's kind of how I thought about it, which was like, I don't have the time anymore. We have five or six people that are companies that are starting to use it and I don't have the time to service them and be building this on the side anymore. Like it's time to quit. McKinsey has this amazing policy where you can get like a certain amount of time, essentially paid time off when you're leaving to go find a new job. And so I use that as my time to be able to build with Jared and like it's an amazing policy and setup, especially if you want to be a founder. We quit and basically the same day raised our pre-seat from Sequoia. The reason we were able to do that so fast is we kind of took these videos like we didn't have a deck. We just went in, we demoed. We took these videos that we had from all these conversations with our clients because we had been recording all of them. And we were like, here's why we need to raise money. Like we are too busy. Here's the product. Here's our why we're busy because of these customers we need to raise. And so once we had that pre-seed check, how much was the pre-seed? We didn't publicly announce our pre-seed, but our combined pre-seed and seed was 10 million. The pre-seed was a portion of that. [00:18:19] S1: Did you know someone at Sequoia before? Yeah.
00:18:19 · Pablo Srugo, Nick Fleisher
[00:18:19] S1: Did you know someone at Sequoia before? Yeah. [00:18:21] S0: So I had been, while I was at McKinsey, I knew I wanted to get back into startups. I didn't know how, what that would form that would take, right? Like I was building stuff on the side, but I wasn't sure if I would be a founder or I would join something super early. And so I had been networking through someone at Sequoia to introduce to a bunch of their portfolio companies. And I had interviewed and talked to many different Sequoia portfolio companies. One of them was a cyber startup very early in Israel that I had become quite close with and was very close to joining. And their kind of final move was like, go meet our partner at Sequoia, this guy Bogomil, for a drink. He'll convince you to work with us. And it ended up being that like we spent two hours like talking about legal and all of the issues in the market. And then I was like, oh, I want to show you what I've been working on on the side. And that then spiraled into a bigger meeting where we actually raised the pre-seed. So it was initially a job application for another company turned into meeting a partner there.
00:19:16 · Pablo Srugo
[00:19:16] S1: Let's be honest, Sequoia is probably like the number one brand in VC. Probably if you pulled 100 founders, like they'd be on the top is just about all their lists. Like if you're thinking about early stage founder who would love to raise from Sequoia, there's the relationship building. You want to get in the door somehow like you did. But, you know, many people just like, you know, they're just not close enough for that to like happen. What do you find is some of the things that matter most to Sequoia? Like, you know, take this with a grain of salt because at the end of the day, you can't just like will yourself to raise from a particular firm. You've got to talk to a lot of them and you've got to find somebody that believes and all these sort of things. But having worked with Sequoia and having a sense of what they care about and don't care about, what would be like your number one advice to someone who's like, I just want to raise from Sequoia. What should I do?
00:19:54 · Nick Fleisher
[00:19:54] S0: Yeah. Well, I think my first push would be you shouldn't just want to raise from Sequoia. Like, you know, there's a lot of amazing firms out there and I love Sequoia and they've been great. But like, there's a lot of places to access capital that is going to be as helpful and for some founders more helpful than that. And so that's my starting point. In terms of like kind of breaking in or how to do it, I think the biggest thing is, you know, you started to touch on it, but like you have to find a partner that you are going to build a relationship with, right? Like as much as Sequoia invested in us, like it was really Bogomil investing in us, right? And frankly, he's also the reason that I took a check from Sequoia. Like he's someone who I would want on my board. I think the things that someone like that looks at are like one, it's so early in seed and pre-seed investing. Like it genuinely is all about the founder, right? Like the idea might completely change, right? And so it's like, you know, he always said to me, like, the reason I wanted you to work at my portfolio company is because in my interview with you, like the thing that I looked for was, is this someone that I would want to work for? Like if I had to work for this person, right, would I be happy doing it? Would I jump ship and go do that? And I think that's like one thing that you can show, whether it's through past experience or just how you carry yourself and talk about the vision, which is something to be, to be conscious of. I think the second one is like, we never went out and said we were raising. Like we raised because we had a problem where like we were too busy. Like I called him and I was like, I am too busy. I think I need to hire people. Like, should I raise? What do you think? To me, like going to the VCs without a deck and going to them with a demo and like customer problems is like way more compelling and way more natural than like, you know, spending all this time putting together a formal round at seed and pre-seed. And I know that that's so easy to say in practice because those things are like on the plate. But, you know, even with our series A, like I tried to not do a deck. It was like, I want you to like come meet the team, talk to customers and look at the demo because like that's what you should be investing in.
00:21:44 · Nick Fleisher, Pablo Srugo
Not like how well do I put together a fancy page? [00:21:47] S1: Well, I think the meta thing there is like be different. I mean, every VC is looking for the thing that's going to be a huge outlier. So if you can find ways to shine and be unique and then you do, you have to do it many times because you've got to find a believer and like somebody might be like, I don't like legal. And then it doesn't matter what you say. You know, they don't care or they don't believe or whatever. But you see, you got to do it enough times, but to get that serendipity factor. But I think if you can find a way to just shine and be different, that's going to do a lot for you, especially in the early rounds, pre-seed seed and series A. [00:22:16] S0: As much as it's important that you show that to the firms, like there's again, there's so many VCs out there, like you need to find a partner that is the right fit for you. Like it's so critical. Like Sequoia was so critical in our early hiring. They were so key in early customers. And a lot of that's because I found a partner there that like I wanted to get on the phone with every day. And like at seed and pre-seed to me, that's far and away the most important thing. It's series A, B, C, whatever. It doesn't really matter as much. [00:22:40] S1: So let's talk a bit about go to market, really early go to market. Like at this point, you've got some money. You're going in full time. How do you get your first few customers? Let's go deep on that. That's that's that every founder wants to figure that out.