A Product Market Fit Show | Startup Podcast for Founders
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.
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.