Lenny's Podcast: Product | Career | Growth
00:36:39 · Lenny Rachitsky, Brendan Foody
[00:36:39] S1: And these, how much are they making? Is it like, like meaningful enough for Fannie engineers to spend time on this? [00:36:45] S0: Yeah, very meaningful. I mean, so our median pay rate in the marketplace 95 an hour, but it can flex up well up into like $500 an hour, based on the depth of someone's expertise. And one thing that highlights this difference relative to a lot of the crowdsourcing companies is if you look at the economics of the crowdsourcing companies, oftentimes they would pay like $30 an hour to Talon as sort of the average. And so think about the, you know, people that you can hire, the undergrads for $30 an hour versus the you know, Goldman bankers, the McKinsey analysts, the, FANG software engineers. And ultimately it comes down to what are the capabilities that labs want their models to have? And it much more falls in the latter bucket than the former one. [00:37:33] S1: I know there s only so much you can talk about with this stuff, but so Anthropic Claude has been so good at coding, so much better historically than other models. I also use it for writing, giving feedback on writing. What is it that allowed them to get so good at this and continue to be so good at this? [00:37:51] S0: Well, can't go too much into detail about customer work, but I think that it's this trend of reinforcement learning and being very thoughtful about defining the right rewards that we're really seeing across the board, and how we can mitigate reward hacking, set up the right rewards. That's super impactful. [00:38:14] S1: Evals, [00:38:14] S0: again,
00:38:14 · Brendan Foody, Lenny Rachitsky
[00:38:14] S0: again, [00:38:15] S1: Back evals is [00:38:15] S0: all you to evals. One of my favorite quotes from customers is that models are only as good as their evals, which has always held true. [00:38:24] S1: I think Greg Brockman tweeted this once, evals are all you need. [00:38:28] S0: Yeah, no, truly. [00:38:29] S1: Let's talk about Marcour a little bit more. One of the maybe... Not even maybe. I believe, the data tells us it's the fastest growing company in history. [00:38:39] S0: Yeah. [00:38:40] S1: I wanna understand what you did to make this happen. So let me just ask, what do think are some of the core tenets of how you built Morcord that most contributed to being this successful?
00:38:51 · Brendan Foody
[00:38:51] S0: I think the most important thing is looking at the leading indicators in fast moving markets. Like I remember when I used to think everyone in venture talks about the why now. And I used to think about the why now of how, from a product standpoint, less from a market standpoint of like, now we can automate the way that we review resumes or the way that we conduct interviews, etcetera. But ultimately, there is this legacy market that has all these incumbents and is relatively stagnant. What matters a ton is actually figuring out what are the new markets, the new pockets of demand that are changing very quickly, where the wealthiest customers in the world are willing to pay whatever it takes to improve model capabilities. And how do we focus on the leading indicators of those markets to make sure that we have the best solution for the flagship customers in the market and optimize everything around that? And that's what I found has been most impactful in building the business. I think that's, maybe that's one thing is like leading indicators in markets. If I had to choose another, it's customer obsession. Like we have had for the last, we're starting to like have a couple of, product managers help out with go to market, but like for the last year and a half of the business, we've had no one in sales and marketing. And so we're sort of like immature from a sales and marketing standpoint because we've focused a 100% of company resources on how do we build great products and experiences for our customers. Just getting word-of-mouth, the people that have worked with us at other businesses want to keep working with us and leaning into creating those great experiences. And so that's where I spend all my time. I think that some founders can get caught up in like, how do they get really good at marketing before they've figured out the thing that really drives a lot of customer love and creates the six star experiences that you're used to building.
00:40:51 · Lenny Rachitsky
[00:40:51] S1: I want go back to that first point, is like, okay, you found this pocket, maybe the biggest business opportunity in history. How did you first find, what was that moment of like, this could be, this could be really big?
00:41:02 · Brendan Foody
[00:41:02] S0: So there's some crazy stories here. I remember we started the company, as I mentioned, in January 2023, and then in August 2023, when I was still in college, one of our customers introduced us to the co founders of xAI over a Zoom call, saying how we had these really smart Indian software engineers that were great at math and coding. So we met them and we explained how the software engineers we had were really good at math and coding because they weren't distracted by all the humanities. They didn't have to study history and English and all these other things. And they loved it, right? So they had us in, two days later to the Tesla office, and we met the entire XAI co founding team, except for Elon, while I was still a college student. XAI was just getting started at that point, and they were super excited about our focus on the quality of the experts. And so while they were still doing pre training, they weren't ready for human data at the time and we didn't start working with them at that point. We just knew from that point forward, before we even dropped out, that the market was about to change radically and we needed to be at the frontier of that. And so then fast forward a few months, one of the crowdsourcing players came to us and actually used our platform to hire over a thousand people, where it was this very interesting experience because we started getting flooded with support tickets about how those people weren't getting paid. And we obviously felt horrible because we'd referred them to this opportunity. It was this reputable company. And we realized that a lot of the incumbents were resting on their laurels with respect to what was needed in the experiences they were creating for talent in their marketplaces to help improve models. There was this opportunity to work directly with the labs in a way that kept the dignity of the experts in the marketplace, paid them extremely well, and sort of cut out the middlemen. And so we started doing that in May of last year, and then the rest is history.
00:43:09 · Lenny Rachitsky, Brendan Foody
[00:43:09] S1: Wow. Hundreds of millions of dollars in revenue since. So what I'm hearing here is you were very open to looking for You saw some explored it, and then once you saw that there was something really meaningful there, just went deep on making that an incredible experience as amazing as possible. [00:43:28] S0: Exactly. I think if I had to distill it into advice for founders, one thing I've realized is that I spent a lot of time trying to force product market fit. And in some ways, you should be persistent. You should have these theses that you have conviction about how the world will change. But sometimes you just need to hear it from the market, and know that it's there, the pull, to know the right places to focus. Because if it's difficult to sell, if it's extremely difficult to sell the marginal customer, you're not going to be able to grow a huge business. What you actually need to find is the customer that's surprisingly easy to sell into, where you're going to be able to grow with them. You know that it's a large pain point. And so it's some combination of being stubborn with respect to your thesis around how the world will change, but also very open minded with respect to exactly what form that takes and how the market's developing and how your company will fit into it.