A Product Market Fit Show | Startup Podcast for Founders
00:42:47 · Cosmin Nicolaescu, Pablo Srugo
And I very strongly believe in that, but from the kind of theoretical perspective of having folks on your team very deeply involved in driving the change, not necessarily that I send a person and I ship them and they're gonna make all the changes. Because if I send you an engineer, an accountant, whatever in your firm, no one knows them, they're not going to understand the dynamics of different teams and people at offices, they're not gonna be successful telling people what to do. But basically having someone in that role that works very closely and deeply embedded with the firm on the change management is critical for actually rolling that out and being smooth tax season over tax season. [00:43:26] S1: The other piece that I wanna talk to you about is something that you mentioned to me earlier was, obviously, you have an engineering mindset. Your brain thinks that way, and you've taken that and applied it kind of throughout the whole company that you're building, not just around how you kind of ship software. And I my understanding is you're only 20 people today even though you've raised, you know, 75,000,000. [00:43:43] S0: Twenty first person that started last week. [00:43:45] S1: There you go. So tell me more about that. In other words, how are you bringing the engineering mindset to the rest of the organization? Why are you 20 people and not 50 given what you've raised and given how big the opportunity is? And let's kind of dive into your thinking around talent, recruiting, and and operations.
00:43:58 · Cosmin Nicolaescu
[00:43:58] S0: Going back to your earlier question about how we made choices and what we end up doing, a big factor for us was cultural. What is the culture that we can we want to create and then we can create? And a few things that that we had on our list. One, we wanted to build something where you don't need to have a massive team. And this is both pre AI in general. Like, I we both enjoy working with smaller groups of people. And when you have smaller groups of people, everybody knows everyone. It's just a very different feeling. If I think about early days at both Stripe and Brex, it felt very different. And the reason why a lot of the early folks at these rocket ships end up leaving is because the company grows and they kinda lose touch, becomes much more bureaucratic, and they don't know everyone and just lose that connection. But also, especially true in a world in which we believe individual productivity increases so much more, that the coordination cost that you had already even before, like, that's the the answer. Right? Like, as a large organization, as a whole, you can do a lot more than a small team, but individually, you do less. Each individual is less productive because you have more layers, more coordination necessary, and so you're generally slower. But the sum of it ends up being faster is the theory. That cost of coordination is higher and higher and higher as individual productivity increases so much more. Like, they used to be the 10x engineer before. Now I think those 10x engineers are 100x engineers. And so I'd rather have fewer 100x engineers than those 100x engineers not being able to become 100x engineers because of the coordination costs required. And so we are very mindful about every single person that we add in the company and how in the long run we believe we can build accrual to be a much smaller company than you would typically think. And I've gotten this comment that you just made from several folks. It's like, you guys should be ten fifty, a 100 people buy down. I'm like, absolutely not. Like, it's very strongly disagree, and I think we would be in a significantly worse place from a lot of of different reasons. And that trickles into how you run the company. So we don't have management at this company.
00:45:57 · Cosmin Nicolaescu
I think it's technically everybody reports to me, but we don't do one on ones, we don't have scheduled meetings, we trust individuals to be very mature. Is it fully remote? We are remote, so we have folks in SF, New York, Seattle, LA, and then a few other random cities where we hire. But basically as long as you're in The US and you're willing to travel, we spend a lot of time in person despite the fact that we're remote, great. That works. We hire generally experienced people, like most folks that we've hired, we've worked with at Stripe, they've kind of had roles, jobs, have seen scale, And the reason for that is not because I I have anything against more junior people, it's because I think it is they require more support around them to kind of grow. If I think about during COVID, it was miserable for new grads. It's awful to be a new grad and to work in a remote company, I think. You just don't learn as much. And so we try to optimize for the kind of culture that that we wanna have. Number three is there are very loose roles, like you're either building the product, growing the product, or enabling people to do one of those two things. That's kind of it. We have very loose lines between like people who are selling the product are building stuff nowadays. Like everybody uses Cloud Code, We've built a lot of internal infrastructure with agents that can autonomously build things and analyze things and tie things together across the company, and everybody in the company uses these tools on a daily basis quite highly. I think the other week, I was looking at some at Tokonosu, which I'm not a fan of Telkonet MaxLinx by any means, but it was not an engineer. And it's not because they built a bunch of stuff. It's just like so much analysis and and kind of tying things together, and the the independence that people have as a result is insanely high right now. And by doing this, it enables us to have a lot of flexibility. We move people around every few months. Like, if you're an engineer, you're not like I'm an engineer on the client portal. Maybe you work on a client portal for one or two sprints or like a few weeks, maybe a couple months, and then you're gonna move on something else, either because you want to or because we're gonna tell you to do it such that people get out of their comfort zone and learn the code base across the board.
00:48:03 · Cosmin Nicolaescu, Pablo Srugo
And it is likely slower in the short run, as I would constantly are optimizing for the long run. If we assume we're going to be successful in it for the long run, how do we build a company from the ground up with that mindset? And how do we make the technical decisions as well from the ground up with with that mindset? It's interesting. Like, I wonder if it's scalable or not, but another thought that [00:48:24] S1: comes to my mind is by moving people like that, you get rid of the issue of protective silos. Right? Where it's like, okay. You you're on this team doing this thing, and it's like, okay. That means this team doing this thing. Like, better continue to exist and be important for a long time. And if, you know, I got I gotta find a way to make this thing continue to be important. Right? Because it's like
00:48:41 · Cosmin Nicolaescu, Pablo Srugo
[00:48:41] S0: You're much more mindful because the code that you're writing work, that your agents are writing and you're reviewing realistically is you're gonna maintain someone else's code, someone else will maintain your code, like, there's no deep kind of domain ownership there, so I very much agree with that. And I think to your point of scalability, we do work trials, for example, example, where we spend like several days with people, typically like a couple of days with every hire that we haven't worked with, to work together through real problems. Part of it is I don't know how to interview in the day of AI, because if I just give you a problem, we're gonna give it to an agent and it'll solve it. And part of it is because I want to see what it's like to work with you. And vice versa, you should see what it's like to work with us. We try to get a bunch of people in person they would work with and kind of see if you like the culture and if it gets you excited, see the domain and kind of understand it and help you out. We could not do that if we were hiring a lot of people. That is not a scalable process. But if we hire on a person a month, much more scalable. Like, you can pay that cost. I And was gonna ask, [00:49:42] S1: you know, talking about that, like, if if that's the plan, why raise 75,000,000? Like, what what's the money being used for?
00:49:42 · Pablo Srugo, Cosmin Nicolaescu
[00:49:42] S1: you know, talking about that, like, if if that's the plan, why raise 75,000,000? Like, what what's the money being used for? [00:49:47] S0: Part of it is how you actually manage your cap table and how you think about dilution, and how do you think about getting investors to to have a, like, substantial capital involved. Like, if you get any of the large funds to go and invest, a few million dollars, even if you end up being, like, really good, like, it's just not enough dollar. Like, if I tell you I'm gonna take your $5 and 10,000 x them, you're gonna be like, okay, cool. But if you're able to put $50,000, then I can 10,000 x it, like, very, very different math to kind of use much smaller numbers. So part of it is that. [00:50:19] S1: In other words, there's value of getting the right investors on board, and those big investors with big funds need to put in big dollars.