A Product Market Fit Show | Startup Podcast for Founders
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.
00:19:10 · Isaiah Granet, Pablo Srugo
[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. [00:20:26] S2: How do you compete with ElevenLabs? ElevenLabs is still big at that point and build your own voice AI from scratch.
00:20:26 · Pablo Srugo, Isaiah Granet
[00:20:26] S2: How do you compete with ElevenLabs? ElevenLabs is still big at that point and build your own voice AI from scratch. [00:20:32] S0: Yeah, the CTO of ElevenLabs is an investor and a friend, and I think they built an awesome product. But our job wasn't to build the best text-to-speech engine, it was to build the best engine for enterprises and we weren't focused on out-competing ElevenLabs, and we still aren't. We were focused on delivering the best possible phone calls for everybody, and so for us. What that let us do is narrow in focus and what you have to realize is early days, the distractions are so many. Your only job is to focus, focus, focus, and what people are always amazed by is not what two people can accomplish, it's what two people with focus can accomplish. And so for a founder, you should be saying no to ninety-nine point nine percent of things. That's really your job, and the zero point one percent of things that you say yes to should be your entire all-consuming life. [00:21:22] S2: How long did you have to go heads down just until you got a phone call that sounded real? [00:21:27] S0: Probably a year and a half. So if we started, it became Bland in July of 2023, give or take, rebranded. It wasn't until around October of 2024 that I said, wow, I think we just delivered a very real-sounding phone call. [00:21:42] S2: Did you raise in between or how did you make that work?
00:21:42 · Pablo Srugo, Isaiah Granet
[00:21:42] S2: Did you raise in between or how did you make that work? [00:21:46] S0: So the first problem that we identified, and this is another key part of the focus. Was we identified that this issue of latency. Which is how long does the AI take to reply to you on a phone call, was massive. It was about five seconds for us at the time in 2023. So that was from, you know, you finish talking, AI replies, five seconds and we managed to get it down to three seconds. Which was considered the fastest in the world at the time and our bet was, hey, if we can get it down to 400 milliseconds, it won't make us the best enterprise product. But it gives us an edge and a spike that we can use to drive into enterprises. And so we basically figured out how to get it down to 400 milliseconds. We did this really cool video of me talking to a phone while it's laying on the table and you can see how fast it replies. And then that ended up going mega viral. And we managed to get about $100 thousand of revenue off that ARR in January of 2024. We raised a seed round on the back of that from Upfront Ventures. [00:22:41] S2: Because the VCs already, now they like voice AI at this point.
00:22:44 · Isaiah Granet
[00:22:44] S0: Yeah, I hope Upfront doesn't listen to this. But if they do, I've given them a hard enough time. They passed on us and they had to pay about double the price in January. And we went from $100K to $500K in February, and then $500K to a million in March. And at the end of March, we had about $3 million-ish in the bank. And we decided that we were going to do a really big billboard campaign. Everybody's seen the AI billboards today. There were not AI billboards early 2024, and what we did was we put up a phone number on a billboard. And the whole theory was like, you know, physical marketing can be really effective, especially in a digital world. Nobody puts phone numbers on billboards besides for Jesus or rehab and if we did it right, we could get it to go really viral. And so we ended up spending about a quarter of our total runway to put up these billboards that had a phone number on it and said really simply, still hiring humans? And that billboard video ended up getting now, I think, close to a billion impressions across social channels. Today, that number that we put up still gets about three hundred-ish phone calls a day and we ended up flooding ourselves with meetings. We got to $2 million of revenue by the end of April. We raised our Series A from Scale Venture Partners in June. And then immediately afterwards, we turned around and we fired fifty percent of our customers. And we dropped down to sub a million dollars of revenue, which is a whole other story. But to answer, is momentum carried us so far early 2024.