A Product Market Fit Show | Startup Podcast for Founders
00:21:04 · Scott Stevenson, Pablo Srugo
[00:21:04] S0: We started experimenting with GPT-2 very early just totally on the side. It's not an OKR. It's on a project. It's on a strategy. It's just playing around and hacking. That's one pattern I had noticed in our successes is that they almost all arose from this evening and weekend hacking. They never arise from the board meeting plan or the quarterly plan. They always arise from like, oh, I'm going to try this thing after hours and see what happens. We started playing with GPT-2 early on. It wasn't really good enough to do anything with. It sucked. Then when GPT-3 and GitHub Copilot came out, that's when we really saw promise. This is when the aha moment really happened and we knew immediately. As soon as I tried GitHub Copilot as a programmer, what I saw is that I could have bespoke code on my screen and the AI copilot would riff off my bespoke code to tell me what I should write next. That was an amazing moment because lawyers had the same problem with our product where they want something that's going to help automate their workflow but it was never bespoke enough. Templates were too rigid. Templating software for lawyers has been around since the 70s. It's called document automation. It was a big thing in the 70s, but it never just caught on. We were like the hundredth company to try this and everyone was like, oh lawyers, they're so bad at adopting technology. I was pissed off at our customers; not really but I was off. I was like, oh, why don't – [00:22:30] S1: Yeah, frustrated, yes.
00:22:30 · Pablo Srugo, Scott Stevenson
[00:22:30] S1: Yeah, frustrated, yes. [00:22:31] S0: Yeah, frustrated like, well, why don't these lawyers use this product. They're foolish. It's actually, no, the lawyers were right. The rigid templating approach to automating contracts just sucked. It took me too long to realize this from our customer feedback, but every deal is unique. Manually massaging text and getting it right for your client really matters. Your client has its own unique history as a corporate entity and its own unique things it's trying to do. Everything actually is really bespoke in law. The amazing aha moment for us was like with GitHub Copilot in software engineering was like seeing that this LLM could riff off of bespoke code and generate new code. We said, oh, this is what our customers want. It wasn't like, oh, we're going to apply AI towards law. It was like we finally have the tool that solves our customer's problem and all the things that they keep saying to us, we finally have the answer to it. Almost immediately we made a V1 of that in about two weeks, actually in evenings and weekends. It wasn't even part of our main plan. We were like, yeah, we're going to hack this together. Really crappy early version, but as soon as we showed it to – this was before ChatGPT actually. [00:23:42] S1: This was what? What was V1?
00:23:42 · Pablo Srugo, Scott Stevenson
[00:23:42] S1: This was what? What was V1? [00:23:44] S0: V1 was – I don't know if you've seen GitHub Copilot but it's basically auto complete for your code. Ours was auto complete for lawyers basically. We built a word admin with a button that says draft or whatever and you could be writing a contract and you could just hit auto complete and it would complete what you were typing and that was it. That was really the first feature. We also had a feature called explain to a five-year-old where you could highlight some text and it would explain that in client friendly language. It was really the auto complete feature that took off. We demoed that to our first lawyers and it was an immediate difference from anything we had ever seen before. Their pupils dilated. NFX has this great article. I don't if you've read it, Find The Fast Moving Water. Have you seen this one before? [00:24:22] S1: No, I haven't. I'm going to check that out.
00:24:22 · Pablo Srugo, Scott Stevenson
[00:24:22] S1: No, I haven't. I'm going to check that out. [00:24:23] S0: It's an awesome blog post that came out around the same time. It talks about during these inflection points and points where really groundbreaking products come out, you actually see customers have a neurochemical reaction to seeing the product for the first time where their brain is reconfiguring to be like, holy cow, my whole life is about to change. We saw that. Just this one little feature showing it to lawyers, you could just see the rest of their career flash before their eyes and they're like, holy cow, something is actually here that's going to change how I practice. Sometimes you see a little bit of fear, sometimes you see excitement, but it was this wild moment. This was before ChatGPT. It was summer of 2022. We rolled that out very quickly to some beta users. They loved it. [00:25:17] S1: All your KPIs, the ones you were tracking, this time were in the right place, retention, usage, et cetera? [00:25:23] S0: All the KPIs were off the charts. CAC payback was below one month. There was immediate CAC payback and usage was like we had never ever seen before. [00:25:33] S1: What were some of the wording you used in those ads? How did you describe this?
00:25:33 · Pablo Srugo, Scott Stevenson
[00:25:33] S1: What were some of the wording you used in those ads? How did you describe this? [00:25:37] S0: Do I remember? That's a great question. I don't even know. Actually I can't remember. We had an ad that was riffing off of GPT for lawyers thing but this was before anyone knew what ChatGPT was. I think it was draft and review contracts 10 times faster, writing Microsoft Word with an image of the product working. It was the image or the video of the product working that I think was a big part of it. Sometimes that image or that GIF speaks louder than words and that's really important. One thing I would say is we figured out a lot of patterns along the way that went into this. It wasn't like we just struck it lucky. There was a whole bunch of learnings that we made along the way that made us build this one. We realized getting lawyers to go to web app is almost impossible. That alone is too much friction for a product for lawyers in 2024. We built the Word at it and that was a crucial decision for us. No one else did that. [00:26:30] S1: I didn't even know you could build something for Word to be honest. I don't have any plug of Word?
00:26:30 · Pablo Srugo, Scott Stevenson
[00:26:30] S1: I didn't even know you could build something for Word to be honest. I don't have any plug of Word? [00:26:35] S0: Yeah, it wasn't very popular at the time. Our developers cringed. They're like really we're going to deal with these messy Microsoft APIs. This doesn't sound like fun. That spikiness and that contrarian is part of what helped us have this big lead on the market. We knew how hard it was to even get them to go to a web app. That was crucial. The other thing we learned is you have to be able to explain what your product is in a five second GIF. If you can't, it's like no one has the attention span for it anymore. We knew it had to have that element where you have a five second video and someone's like, holy cow, what is this? We knew it had to work with bespoke documents and we knew that the time to value had to be zero. That's a huge pattern that we still use today when we launch new things is no one has time for configuration controls, setting things up anymore. It has to be, you turn the thing on and it immediately works. These things became very important to now even as we launch new features, these attributes become really important aspects for how we evaluate new features and their potential fit. If you get those right, you see actually the usage charts, which most of the time you don't.