The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:29:02 · Adarsh Hiremath, Harry Stebbings
[00:29:02] S0: It means that people will be able to build applications much faster than was historically possible. It also means that the businesses that succeed in a world where software costs approach zero will be built on network effects. The companies that could even give away their entire code base and then still be alive. The marketplaces and companies like Meta, you know, and Airbnb that have built these really, really strong network effects will be the ones that thrive. [00:29:30] S1: Do you agree with people who say like, oh, SaaS is dead because companies will just build their own software? Or do you think differently? [00:29:37] S0: I think what we consider SaaS will change. The next era of SaaS will be replacing entire services, whether it's the end to end process of a recruiting agency like Merkor or another, you know, different service or that that is incredibly manual and incredibly repeatable. [00:29:55] S1: You said about network effects there. If I were to push you to the strongest network effect that you have within today, what do you think it is?
00:29:55 · Harry Stebbings, Adarsh Hiremath
[00:29:55] S1: You said about network effects there. If I were to push you to the strongest network effect that you have within today, what do you think it is? [00:30:04] S0: It's a it's a great question. And I would break it down as... In two categories. So one is the network effect of a marketplace that you might see in a labor marketplace like Uber, where every additional company that hire through Merkor strengthens the marketplace, and every additional candidate on Merkor strengthens the marketplace as well because there's like a higher pool of really, really exceptional people to choose from. And the second network effect or or like data flywheel is around this job prediction piece. We're able to see who is performing well on jobs and the specific reasons why they're performing well on jobs, and use that end to end data on people's outcomes to to make it really, really easy to surface the person that might be the best for for a given role, even if they themselves don't know it. [00:30:50] S1: How do you think about building stickiness and switching cost and making sure that 50,000,000 is really fucking sustainable? [00:30:58] S0: It all starts with quality. A lot of the greatest products or companies of our generation have been usage based. Stripe is a is a great example of this. The reason that that revenue is really, really sticky is because you're able to create these, like, six star experiences for customers and candidates. And and I think that's one thing that has resulted in our very, very quick revenue ramp. Right?
00:30:58 · Adarsh Hiremath, Harry Stebbings
[00:30:58] S0: It all starts with quality. A lot of the greatest products or companies of our generation have been usage based. Stripe is a is a great example of this. The reason that that revenue is really, really sticky is because you're able to create these, like, six star experiences for customers and candidates. And and I think that's one thing that has resulted in our very, very quick revenue ramp. Right? [00:31:21] S1: When you think about the product today, what would you most like to change that Brandon and Surya would most not let you change? [00:31:28] S0: Maybe running our entire internal hiring process for Merkur in a completely automated way. Meaning, Brendan Suri and I don't even talk to someone when they come into the office. We walk in the conference room to meet them the first time, and we're just like, wow. This person is awesome. We couldn't have found this person even if we spent all day every day trying to find this person. We're getting there, And that's just super, super exciting for us. [00:31:54] S1: How do you think about the future of remote and remote versus in person? I don't think you can do nine nine six and do it effectively unless you're in person. I think that motivation, that intensity, you feel in the same room.
00:31:54 · Harry Stebbings, Adarsh Hiremath
[00:31:54] S1: How do you think about the future of remote and remote versus in person? I don't think you can do nine nine six and do it effectively unless you're in person. I think that motivation, that intensity, you feel in the same room. [00:32:08] S0: Yep. And that's exactly why we do, you know, in person in San Francisco. Brendan Surrey and I all get super energized by being around people. A lot of our best ideas from Recore have come when we weren't even in a meeting. Right? We were just sitting around, chilling, discussing things, and then you have that moment. And I think there's something really, really special for in person. [00:32:27] S1: What was the worst product decision you made? [00:32:30] S0: At one point, Brendan, Suri, and I all thought that chat was the future of all UI. So one of the initial iterations of the Merkur product was just built around a chat interface. Like, there was no other way to hire people unless you use the Merkur chatbot because we were so bullish on chat. I think we've come around to that. We now, like, mix chat with with other things, where applicable or leverage LLMs in other ways. But for a while, we thought, like, the concept of a web app tomorrow would be dead, and the way you would interface with all web apps would just exclusively be with chat. So it wouldn't even be, you know, you clicking a button to hire someone. It would be you telling the chatbot to hire the person. I think, you know, it's possible down the line, but we may have mistimed a little bit.
00:32:30 · Adarsh Hiremath, Harry Stebbings
[00:32:30] S0: At one point, Brendan, Suri, and I all thought that chat was the future of all UI. So one of the initial iterations of the Merkur product was just built around a chat interface. Like, there was no other way to hire people unless you use the Merkur chatbot because we were so bullish on chat. I think we've come around to that. We now, like, mix chat with with other things, where applicable or leverage LLMs in other ways. But for a while, we thought, like, the concept of a web app tomorrow would be dead, and the way you would interface with all web apps would just exclusively be with chat. So it wouldn't even be, you know, you clicking a button to hire someone. It would be you telling the chatbot to hire the person. I think, you know, it's possible down the line, but we may have mistimed a little bit. [00:33:13] S1: In terms of funding, dude, you've got some of the best on your cap table. You mentioned GC at the start. Talk to me. You've raised quite a few rounds in quite quick succession. How did you think about that? And do you agree when the money's on the table to take it? [00:33:27] S0: An interesting dynamic about of all of our, you know, fundraising rounds is just that, like, we didn't intend on on doing the fundraising at the time, and it sort of just came to us. You know, going back to the example about Benchmark, someone introduced Brendan to Victor. Brendan said we were heads down, and then Victor, you know, convinced Brendan to to have a conversation with him, and then the rest was history from there.
00:33:27 · Adarsh Hiremath, Harry Stebbings
[00:33:27] S0: An interesting dynamic about of all of our, you know, fundraising rounds is just that, like, we didn't intend on on doing the fundraising at the time, and it sort of just came to us. You know, going back to the example about Benchmark, someone introduced Brendan to Victor. Brendan said we were heads down, and then Victor, you know, convinced Brendan to to have a conversation with him, and then the rest was history from there. [00:33:53] S1: How did that process go down? So Brandon meets Victor, and then you guys meet Victor, and you have a chat. How does that get down? [00:34:00] S0: The way it went down was Brendan had the initial chat with with Victor. And then, you know, afterwards, Brendan was like, okay. Gonna gonna get back to work. Afterwards, Victor asked Brendan if he'd ever been on a helicopter. And Brendan said, no. Before you knew it, Brendan was on a helicopter with Peter Fenton from Benchmark, and we knew that they were the firm that we wanted to work with very, very quickly. [00:34:22] S1: And so Brendan comes back and goes, hey, guys. They took me on the helicopter. Let's do it. [00:34:27] S0: Had a couple more conversations with with Victor and the Benchmark team, and it was clear that they were they were the best. We wanted to be in business with them and and work with them, and they've just been phenomenal. [00:34:37] S1: Then how many months later is the next round? [00:34:40] S0: The next round is about over... About six months later.