Invest Like the Best with Patrick O'Shaughnessy
· Karim Atiyeh
And it turns out that not only did it not do that, in many ways it accelerated that growth because it incentivized our sales team to mention those products, talk about them, and it incentivized our customers to be a lot more demanding and responsive. And as a result, they helped us essentially guide our roadmap a lot better than if product was free and no one cared about it. A lot of our focus on our engineering teams right now is on continuing to build these products that drive value for customers and capture value through software pricing and software revenue. And in many ways, I mean, we're still trying to figure out the right way to monetize and price for some of the agents that we're working on and building that drive more value. I think a lot of companies are really trying to figure out, how do you charge for work? How do you price for work? And do you have a theory? You want to charge for complexity of the tasks that the agent's been able to solve. And you are starting to see more and more business models where you're essentially charging for the time that the agent is spending on a task or the number of tokens that they're using, which is fine. I worry a little bit about that model sometimes incentivizing the engineering team to not be as efficient as possible with their use of AI. If you're a company charging for how much time the agent is spending on the task, are you not incentivized to just use lots of CPU cycles and not make it super efficient? So I worry about that a lot. That's why I don't really love that model. I'm not quite sure exactly how it's going to look.
· Patrick O'Shaughnessy
[00:00:00] S0: I'd love to ask you about a few of your kind of general views of company building and the future. One of them that you and I have talked about before is this view that a lot of the best company builders will be very technical in this era. Say more about that.
· Karim Atiyeh
[00:00:00] S1: So I think we're at a interesting junction right now. And the best analogy that I can give is the Ford one where, if you had asked people before cars what they wanted, they would have said faster horses. We're probably at the juncture right now where you ask customers what they want from your products and they'll say, oh, I want an additional widget here, an additional button there. They don't realize that the car to their faster horse is possible. We as a company should be obsessing over what do customers really want? Well, they want to get from point A to point B, and what is the best way to get them there. It's, well, it's to build a car for them. And you ask questions, who even realizes that that car is something that is possible? And what it might look like is, well, the people who came up with the technology for how an engine functions and what it's capable of doing and what is possible. And these tend to be more technical people in general. I think the technical folks are more likely to see the possibilities in terms of product than non-technical folks. So as a result, particularly right now, technical folks can be very impactful in other disciplines because they see the possibilities better than other experts might. And the other side of it is the gap between not having subject matter expertise in a domain in say in marketing or healthcare or education, and having it is the smallest it's ever been. The only thing stopping you from getting that knowledge is your ability to learn and to ask the right questions of an LLM that can help you become an expert a lot quicker than you would otherwise be. I joke now that I'm a better doctor than I've ever been, but I'm not a doctor. I'm a better lawyer than I've ever been, but I'm not a lawyer. And in practice that means that when I'm having a conversation with my doctor, I'm a lot more knowledgeable and I know to ask the right questions. When I'm having a conversation with a lawyer, they're a lot more efficient and I'm asking the right questions. And as a result, I think engineers that know what is possible can help us build the future of our product much better for our customers. Even though they have not done procurement before, they have not done AP before, they have not done accounting before, et cetera.
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: You've extended that even to marketing. Can you maybe tell this story? So rewind time. I don't know, a year and a half or two years ago or something, you and I are talking about this and you decided to go take over marketing as the CTO and you've had this experience since which I find really interesting of what it's like to bring an engineer and an engineering team to a problem without domain expertise. In the same way you're just describing what did you do? And walk us through that. Because it feels like that playbook might be usable by others in different parts of their business. [00:00:00] S1: Yeah, of course. The funny thing about that is I think that was a time where all the lagging indicators were going extremely well. A lot of people were asking me at the time, what do you think has broken? I mean, things seem to be going quite well. There's no need for a change there. And I was looking at the early leading indicators and starting to see things like, well, we've made our conversion really good in a lot of segments. We are converting at more than 50%. That meant that if a customer had a conversation with a salesperson, there was a 50 plus percent chance that there will be a customer within 30 to 60 days. Which is incredible. [00:00:00] S0: Yeah.
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: Yeah. [00:00:00] S1: And you're like, okay, conversion is getting really good. We've gotten better at monetization, but conversion can't get better than 100%. There's some kind of upward limit. There's some kind of upward limit to monetization as well. Some percentage of the value that we're driving. Okay, there is no upward limit or the upward limit to how big our TAM is is a lot further because we're still to this day sub 2% of corporate card alone. And it just felt like we were starting to slow down maybe a little bit in our ability to generate leads. And while these two other things in terms of conversion and monetization were going really, really well, there's an upward limit to them. And if we didn't figure out how to re-accelerate our ability to generate leads, we would be in trouble today. That was a year, year and a half ago. And I started obsessing over that problem and I guess I turned to some sense of paranoia. When everyone else around me feels like things are going great, it's like, okay, what is the problem? And for me at a time that was the problem. How do we make that better? And around that time there was maybe an attitude in marketing broadly of we would try things and if they didn't work, we would maybe assume that. I was like, well, those things don't really work for us as opposed to, no, they have to work. We just haven't figured out how to make them work. [00:00:00] S0: What's an example of that?
· Karim Atiyeh
[00:00:00] S1: So let's say we would try to, I don't know, run an ad on a podcast or partner up with a podcast, and it doesn't work. We're like, well, podcasting doesn't work for us. My attitude would be, no, you picked a wrong person to partner with or you picked the wrong format of an ad. Why is the thing broken? It's not that the thing doesn't work. It's you haven't figured out how to make it work. Clearly all these forms of advertising do work, otherwise other good companies wouldn't be doing it. We just need to figure out what works for us and how to make it work for us. That was the lens that we brought to really everything. Direct mail, paid advertising, brand advertising, all the different things in marketing, product marketing, and how we launch products. So I went into it with the attitude of we're going to fix the experimentation mechanism and the system through which we do work and in many ways, apply the Elon algorithm to it. So in a lot of parts of marketing, you need to work with the brand team to, say, generate an image or an asset, whether it's for a product launch or an ad. It's like you want an image, an asset, some copy, and you, as part of marketing, you tend to work with the brand team on those. The way it used to run before is for every single piece of content that you wanted to generate, you had to write a brief. So you would write a brief to explain to the brand team what you're trying to do. That brief would get reviewed by the brand team about once a week. The brand team would decide who to assign to it based on skill set, and then you would get some output two weeks later or maybe a week later. So that meant that no matter what you wanted to do in marketing, if you're working with a brand team, it would at the very least take about two weeks, which is kind of crazy. What if you need to work on something that, I don't know, should take 10 minutes or 20 minutes, it doesn't matter. It'll take two weeks for it to be in front of somebody, and then they'll do the work for 10 minutes. And with that kind of clock speed, it's impossible to get anything done. And while a lot of people would have gone into marketing with, okay, great, the way to fix this is let's come up with a better campaign idea.