Y Combinator Startup Podcast
00:09:36 · Gustaf Alstromer, Chaz Englander
[00:09:36] S2: curious about AI. They were like, let's do pilots to play with the software and try it out. And you were saying that this is the year when that turns into actual contracts. [00:09:43] S0: Exactly. [00:09:44] S2: And you can no longer say these companies don't buy software. That's wrong. They're all buying software now, and that's because this thing happened in the last twelve months. [00:09:51] S0: Exactly, and last year was the year of kind of proof of concepts. And now our average contracts are in the years, first of all. And I just think, in general, people are seeing a lot more shorter term or instant value. I also think, on the note of these firms historically, inclusive of law firms and others not buying software, that is, I think, true. I think the big difference here is this is like number one thing, from the very top, this is like the number one thing on everyone's agenda. So we are not selling the next CRM, or the next data vendor tool, or anything like that. We are selling what we're describing as the most advanced AI solution for financial services in the world, right? And I think if you are a CEO or an exec in general, you've kind of got to take that call. You know what I mean? And I think that's really played to the advantage for all startups, for sure. [00:10:43] S2: Can you describe some of these sales meetings? Like, who's the decider? Like, who decides to buy the software, and what are they like?
00:10:43 · Gustaf Alstromer, Chaz Englander
[00:10:43] S2: Can you describe some of these sales meetings? Like, who's the decider? Like, who decides to buy the software, and what are they like? [00:10:49] S0: CEO level or, in general, just the most senior people at the firm, regardless of if you are a top five or a top 10 investment bank, priority firm. I said, I'll sum them up, and whatever it might be. Which I think at the start, we found really strange, because we sort of thought that this would be looked at at a team or group level. It's really not. I think it's so important firm wide that everyone has to be involved from the very top. And actually, what we found is you've really got to get that buy in from the right person at the top, but then you've also got to get buy in from the people that are ultimately going to be implementing the tool. [00:11:30] S2: So you guys are flying to meet all these firms, where
00:11:30 · Gustaf Alstromer, Chaz Englander
[00:11:30] S2: So you guys are flying to meet all these firms, where [00:11:32] S0: Wherever they they are, wherever they are. So we have a bunch of people working out of Hong Kong and Singapore now. We've just opened a small office in India. About half of our overall team are based in London, and we have an office in New York. Again, I think it's clear the product is impactful, right? Because when we're demoing, we're laptop out. We're showing real use cases with real data, high use case frequency, right? So then if you think about why they wouldn't sign with you, a big part of that, I think, is trust and building that relationship. Because it's also a different dynamic. It's like a lot of times you're speaking to folks that if they make a wrong call here, they could get fired, right? And so you spend a lot of time building that trust. I think a big part of that trust is FaceTime and getting in front of people, obviously, but then spending the time the demo and how that's justified and really investing in things that are specific to the customer. [00:12:31] S2: I wanna go back a little bit to the two previous companies that you guys ran, Patlama and Fancy. Before we get into the details of what they were doing, what are some of the learnings you took from those companies into ModelML? [00:12:44] S0: I would say you've definitely got to enjoy it. You've got to enjoy building companies is my overarching thought. What about you?
00:12:44 · Chaz Englander, Arnie Englander, Gustaf Alstromer
[00:12:44] S0: I would say you've definitely got to enjoy it. You've got to enjoy building companies is my overarching thought. What about you? [00:12:52] S1: I think you've just got to be prepared for the worst. You've to be prepared for the worst and the most ridiculous roller coaster experience. I think all star fans will say the same. I think it's going to be a lot of ups and downs, a lot of the time downs, and you've just gotta be prepared for that and know it's coming. And as Chad says, just enjoy it because it's fun. [00:13:13] S2: And is there a sense that when you start the third company that you've you've gone through that before, so you've gotten used to the ups and downs and you can just kinda like be calmer about it? [00:13:24] S0: You can definitely be [00:13:25] S1: calmer. Definitely.
00:13:25 · Arnie Englander, Chaz Englander
[00:13:25] S1: calmer. Definitely. [00:13:25] S0: Definitely calmer. But there is certain things that you just cannot prepare yourself for. You know, I think, like, you know, like, it just in general, no matter how much you've said to yourself, this is normal, you're going up and down, that'll be the odd thing. It will be employee related or product related, whatever. That will still surprise you. The fundamental thing that I think we realize that we've at least brought into this company is this concept of perseverance. Not blind perseverance, but perseverance. And I think there's a clear difference where if something logically makes sense, like if in an unemotional way you're approaching a problem and it logically makes sense, then you should probably continue doing that thing and not let anything stop you. And I think the consistency that we've noticed of founders invested in or worked with is like the ones that kind of do that and really persevere tend to win. So I think that's probably the biggest learning for us, just persevere at all costs.
00:14:26 · Arnie Englander
[00:14:26] S1: Yeah, for sure. I mean, one of the big ones for me in particular is definitely hiring. I think when I was CEO of Fancy, I was 22, 23. So hiring was new to me, I think, to be honest, I didn't really have a clue what I was doing. We still don't. Yeah, then hiring is always tricky. I think one of the biggest things right now, and we say a lot, probably the biggest thing that comes up in an interview is how much do you think you'll enjoy working with that person? Think, you know, a fancy, again, being sort of inexperienced and maybe naive, was all about where have they worked before, what's on their CV. And you kind of ignored the little things that maybe you shouldn't. And now it's kind of the main thing that we look for. You know, we're going be spending a lot of time with these people. We work a lot, and everyone on the team does. And you've got to want to work with this person. So we often meet in person multiple times and make sure they're the right cultural fit, and it really makes a difference. I think right now we hire very slowly, and we try and make sure we hire the right people, And it feels like we've got better at that as time's gone on.