A Product Market Fit Show | Startup Podcast for Founders
00:07:24 · Isaiah Granet
[00:07:24] S0: Yeah, we have over three hundred and fifty thousand developers who are using Bland today, in addition to our a hundred and seventy plus enterprises. We do about three and a half million phone calls a week. By phone numbers, we know roughly one in four Americans has talked to Bland. Is there an element of you feeling you're running two separate businesses? Because I can understand the infrastructure pace, like, ElevenLabs or whatever. And then, actually getting enterprise and the whole enterprise sales process like there's two different worlds. What’s interesting is that we don’t think about it like that. We don’t separate infrastructure and application, and enterprise. What we really think about is we’re building phone calls, and we’re building the world’s best phone calls. And we want to make that accessible to anybody. And what the big enterprises need to be successful is a lot more handholding, a lot more in the weeds, getting direct with them, forward-deployed motion. Sort of figuring out how does this fit into the bigger picture. But that same technology can be used by anybody, really. Our job is to say, we know what a good phone call sounds like, and we refuse to allow the world to have phone trees that argue back with them. And so my short answer is, the product we build has nothing to do with the infrastructure, it has nothing to do with our application, it has everything to do with the actual call. And our real customer is the person on the other side of the phone.
00:08:37 · Pablo Srugo, Isaiah Granet
[00:08:37] S2: But then do you compete in some cases with a LiveKit or a Vapi, or an ElevenLabs, or do you take a different second to the market? [00:08:43] S0: For the most part, we really just focus on enterprise. That's the bulk of our business. That's ninety-seven percent of our business comes from enterprise and so LiveKit and Vapi have built really wonderful platforms for other people for different use cases. And, where you're going to find developers and self-serve users love us is embedding voice AI. So maybe there actually are already existing platforms, if you care about building and protecting IP. So we allow users to fine-tune the underlying models that we built, so that they can have actual intellectual property for their voice AI, and then the security reliability piece. You might end up going with LiveKit or Vapi if you're experimenting, if you're further down the stack as a solo developer, or you're a new startup just working on voice AI and you don't have any security or auth requirements yet. [00:09:28] S2: And then just to finish off that story, once they rely on you for all of the calls and you've got crazy volume going through your system. What kind of contract sizes does that lead to with that enterprise? Is that a $100K contract? Is that like a million dollar contract? What level of enterprise are we talking about generally?
00:09:28 · Pablo Srugo, Isaiah Granet
[00:09:28] S2: And then just to finish off that story, once they rely on you for all of the calls and you've got crazy volume going through your system. What kind of contract sizes does that lead to with that enterprise? Is that a $100K contract? Is that like a million dollar contract? What level of enterprise are we talking about generally? [00:09:44] S0: Good question. So our average contract value is in the six figures. Our biggest contract value is in the seven figures, soon to be in the eight figures and the craziest thing I like to talk about is most of our biggest contracts are actually with companies you would never have heard of. And what I mean by that is we work with some of the world’s biggest names. Fortune 10 businesses who are using us at scale, and they pay us a lot of money. Don’t get me wrong but the really, really big customers we have right now, the early adopters, are these businesses that are under a billion dollars of market cap. They’re generally making $100 to $300 million a year of revenue, and they spend $60 to $100 million a year on their call center. Those are the businesses who we go after and we win, and they’re willing to pay us money that never has ever been available to a software company before. [00:10:30] S2: Wouldn't the bigger, like the JP Morgan have an even bigger call center to that? Or is there a reason why these ones have the bigger spend?
00:10:30 · Pablo Srugo, Isaiah Granet
[00:10:30] S2: Wouldn't the bigger, like the JP Morgan have an even bigger call center to that? Or is there a reason why these ones have the bigger spend? [00:10:36] S0: Combined today, our current customers spend about $15 billion a year on their call center. That's just our existing part. It's a trillion dollar a year market across the globe. It is one of the most massive markets you can imagine. What I try to tell people is the call center has already been whittled down to what the minimum it can be. There's phone trees, there's hold times, there's outsourcing. If you get to a person in the United States, it's because that is it. You have found the backstop of, there's no other way to help you. There's no other way besides talking to a person in that moment and so what we focus on is these big enterprises are great and we're going to continue to work with them and deliver. But their pace of adoption is just a little bit slower and their appetite for risk is lower. What they want to see is a little bit more maturity in the AI market. We're already delivering what I would call risky calls at scale for enterprises, but they don't need to have this as a core pillar of their business. Because the fraction of their business that is call center spend is much smaller than a business making $50 million a year spending $70 million on their call center. [00:11:33] S2: It's that classic hair on fire. I mean, if thirty percent of your revenue is going to a call center, you're gonna act quick to get rid of that. [00:11:40] S0: It's a big deal if we can automate that, yeah.
00:11:40 · Isaiah Granet, Pablo Srugo
[00:11:40] S0: It's a big deal if we can automate that, yeah. [00:11:43] S2: So that's kind of where you end up, right?Where you are today, but you started with, like, you applied, you went through YC with a completely different business. What was the original idea?
00:11:52 · Isaiah Granet
[00:11:52] S0: You know, it's funny because no founder thinks that the pivot is going to happen to them. When they get started, they're like, this is it and I look back and I was so naive. We were helping doctors write appeals for insurance denials. This was a totally unrelated company. I had no business building and because it was a bad idea, we got into YC. After all bad ideas eventually end up, and about three quarters of the way through YC, for any founder, by the way, that's going through this. Just keep your head up because I remember how crushing it was. Three quarters of the way through YC, we were working on the only deal we had figured out, it was with this ten chain clinic group, and we thought they were going to use us to automate their insurance denial appeals. And we got to the end decision, it's been five meetings with them. We're like, okay, they're going to buy, and this was for a $100K contract. Which for us at the time was massive and we get to this final meeting. We're expecting a signature from them, and it becomes apparently clear by the end they don't actually know what we do. They thought we were some sort of fax automation software and so we decided, all right, we have to pivot. And we ended up coming into Bland just by exploring ideas that were exciting to us. And, it was just amazing to hear a call in the wild and somebody interact with it. When we came out of Demo Day at YC. For anyone not familiar, Demo Day is when you pitch to all these investors and you show your idea off. And that's when you see a16z invest in Sequoia, and all my friends in the batch were getting these great offers, and we had nothing. We were the bottom ten percent of the batch. The total amount was roughly one hundred eighty investors over three weeks I met with, and I got more or less all of them saying no. And their number one piece of feedback, which was soul-crushing. Was, we don't think people will be doing phone calls a year from now. This was in 2023, and so we sort of were in this perspective where it was like, they're not even saying, oh, we don't think you'll win. They're saying the market you're building for won't exist a year from today.