A Product Market Fit Show | Startup Podcast for Founders
00:13:45 · Pablo Srugo, Isaiah Granet
[00:13:45] S2: Okay, so let me just unwrap it. What did they think people would do? I mean, what do you mean no phone calls? [00:13:51] S0: All text-based. [00:13:52] S2: Is that because voice AI was so primitive, people didn't think you would get there? Or, what was driving that? [00:13:57] S0: Everybody thought voice AI was this far-out concept that would never become reality, and what they said was, and I point to this as a piece of evidence for the future. The investors believed that phone calls were a bad experience fundamentally. Not that it was just today it was bad. They believed nobody actually liked phone calls, and this was a symptom of them being, one, investors in a high-tech world like San Francisco. They don't pick up the phone very often, but two, it was this idea that it could never be better than what it is today and what we believe fundamentally is that the number of phone calls that happen will actually grow exponentially. Because it will become so painless and pleasant that you'll actually prefer picking up the phone. Because it will be the quickest path to resolution.
00:13:57 · Isaiah Granet, Pablo Srugo
[00:13:57] S0: Everybody thought voice AI was this far-out concept that would never become reality, and what they said was, and I point to this as a piece of evidence for the future. The investors believed that phone calls were a bad experience fundamentally. Not that it was just today it was bad. They believed nobody actually liked phone calls, and this was a symptom of them being, one, investors in a high-tech world like San Francisco. They don't pick up the phone very often, but two, it was this idea that it could never be better than what it is today and what we believe fundamentally is that the number of phone calls that happen will actually grow exponentially. Because it will become so painless and pleasant that you'll actually prefer picking up the phone. Because it will be the quickest path to resolution. [00:14:42] S2: But this, by the way as a tangent, and as a founder, is such a good indication of why being close to the customers is really the only thing that matters. We'll get into that, but I mean, things can go from the absolute least hot to the absolute hottest in twelve months. In 2023, you're saying there's the classic Bay Area VC is telling you voice is not a thing and nobody wants phone calls. And one year later, you go to those same people and they're like, voice AI is the absolute hottest thing in the world. [00:15:11] S0: Yeah, it flipped literally the same investors. I have a packet of all the emails, I keep them of the rejections. This investor is going, this is going to be such a hot market. How are you going to win in it?
00:15:11 · Isaiah Granet, Pablo Srugo
[00:15:11] S0: Yeah, it flipped literally the same investors. I have a packet of all the emails, I keep them of the rejections. This investor is going, this is going to be such a hot market. How are you going to win in it? [00:15:23] S2: No, no, no, no. You can't make this stuff up, man. You can't make this stuff up. [00:15:26] S0: I'll pause here, but just an idea of how disregarded we were. I had an investor who got up to cook breakfast while I was talking to him. I had someone go camera off and just start going on a walk. They went in their elevator. They weren't even listening to the pitch. We really were at the bottom, and then in 2024, we went from pre-seed to Series B in ten months. And we had this whole breakout moment. And that's why you just have to keep pushing forward. [00:15:51] S2: Walk me through in detail how you found this idea for Bland? Going through the pivot, you said it really well. Everybody hopes they won't have to go through it, and almost everybody does go through it. And the ones that don't, it's almost like the story is boring. Because it's like, I did this thing and it worked, and now I'm doing. You're like, okay, I got no learnings here. So pivots are very common. But I think I find at a high level, everybody knows, yeah, okay, start from first principles, you know, what do you do, talk to customers, blah, blah, blah. But then you go to do it and it's just so much harder than that.
00:16:21 · Isaiah Granet
[00:16:21] S0: The first thing I give advice on, on pivots is it's time to pivot when you notice a couple of things. The first is, if you're no longer excited by the problem at all, pivot sooner rather than later. Sort of the advice of don't have kids if you're not sure about getting married. You know, you want to make sure that you actually are excited by the problem. The second is, is make sure that the problem you see is a problem people will pay to solve and this is really, really important. Some people like, you know, Figma, for example, can have extreme conviction that just the world will need design software and it was a brilliant vision to understand where we were going. But for the most part, what I see people make mistakes on is they say, well, I know my mom spends X, Y, Z time every day doing certain activity and this is a really painful problem, and I can solve that. It's like, great, but would your mom actually pay to solve that? And starting by leading with the money. And if we had asked deeper questions early on and said, will you pay for this? How much will you pay for this? How much will you pay to solve this problem? We would have discovered that this wasn't actually a problem people will pay to solve and that just means, unfortunately, for the time being. It's a problem that probably you can't build a business around. So start by figuring out where the money is and then when you do go into the pivot, I've seen a lot of friends have this happen. It happened to us, as I say, it's like, expect it to suck. It is going to be probably the worst, darkest days of your startup. You are going to have no direction, which for founders typically is one of the most brutal things you can experience. Because you're used to go, go, go, and your whole job is to find a problem that gets you excited and don't pick the first thing that stands out to you. Pick something that you're excited by, that you feel you have a unique advantage in, and that you can sprint at in a way that's tangible. And for us, that was two weeks of wandering and, are we gonna build software to prevent concussions? That was a very real idea that we got close to. Are we gonna build better software for getting Ubers and Lyfts? Thankfully, we didn't do that, because Waymo came out relatively soon after.
00:18:19 · Isaiah Granet, Pablo Srugo
We looked at all these ideas, and the reason why we ended up going with Bland was I was tinkering around. I guess the very real story is I didn't want to call to order food from this place that was on the street I lived on, and I was like, I bet you I can have OpenAI call it with ElevenLabs and Twilio. And, I was tinkering around and I managed to get a prototype to work. And I just had a blast. I spent like twelve hours working on it and I didn't even care. [00:18:43] S2: Twelve hours to now make a two minute phone call, but it got your business. [00:18:47] S0: Yeah, exactly. Terrible phone call by the way. It fell apart, it didn't work. But there was something about that magic and then understanding is like inherently it had value. Because if we could do these calls, if I got value out of it, then other people can get value out of it and then it turned into, well, then maybe developers, maybe businesses down, yeah. [00:19:05] S2: And then how did you think about. So you're using ElevenLabs in that thing, then you decide not to, how do you make that decision?
00:19:05 · Pablo Srugo, Isaiah Granet
[00:19:05] S2: And then how did you think about. So you're using ElevenLabs in that thing, then you decide not to, how do you make that decision? [00:19:10] S0: So post Demo Day, we are really beat down. We don't have a whole lot of money in the bank and, me and my co-founder basically are like, all right, it's time to make this thing work. We had a plan to move back into my co-founder's mom's garage in San Jose. Because we couldn't afford rent anymore and what we said was, we are not the research guys. And this was before OpenAI Realtime, before anybody came out with anything. We said, we're not the research guys. We're not going to build the best voice AI on earth, but we probably can build the best enterprise version of it. And enterprises are going to want the same things they want today, five years from now. Security, reliability, uptime, all of those core pieces and so, we're going to pull out OpenAI, Anthropic, and everybody. And just bet on this idea that if we focus on building all the core pieces in-house, we can deliver better phone calls, but we can also deliver something that Microsoft, Apple. I don't know why those were our ideal companies at the time, but those were the companies that we thought would want to buy our software if we were enterprise-oriented and so we quite literally. A shout out to Base10, our GPU provider, we put down a commitment for GPUs that was more money than we had in the bank at the time. And we bet the whole business on doing this whole going in-house. And it was a really tough decision at the time.