A Product Market Fit Show | Startup Podcast for Founders
00:11:34 · Daniel Saks, Pablo Srugo
[00:11:34] S0: Yeah, I was co-CEO for many years. And then just as, you know, AI and Agentic AI was hitting, I transitioned my co-CEO role to my co-founder. He's running the CO. It's been tremendous under his leadership. I'm still on the board and, you know, couldn't say better things about where AppDirect is headed, but had the opportunity to start again in the infancy of the AI phase. And I think there's a ton of parallels to building in the cloud era and then starting again in the early stages of the Agentic era. And a lot changes, but a lot of the same principles or learning stay the same. [00:12:11] S2: Yeah, I was going to ask, I mean, you know, just maybe as a segue type question, like what is the AppDirect today? Because obviously that vision of a market, I mean, I'll just give you maybe a stupid example, but, you know, I'll just buy whatever cloud tells me at this point. You know, I'll just interact with it. Be like, let's do this thing. What do you really need? Oh, you really need that? Okay, fine. Buy it. You know, does it have an API? Great. Like, you know, that's the kind of old world of, you know, I log in somewhere and I go into their marketplace and I see these things, like seems foreign to me, but is that still happening? Or is there a new, like, is there a new vision for like AppDirect? How do you think that plays out?
00:12:45 · Daniel Saks
[00:12:45] S0: Yeah, so AppDirect has become the everything store for B2B. And if a business wants to buy recurring technology, generally a lot of that business is going to go through AppDirect in the backend. And we have now 10,000 agents, resellers, VARs, maybe many more. We have many enterprise app stores. So think of us as like the plumbing in many ways to get access to these ecosystems. And we've grown by category. So now we sell telecom, we sell energy, we sell business services, we sell IT, we sell all types of different business technologies to many different channels. And we've become really the standard. So for a lot of startups, you may just go online and buy your own stuff, but most businesses with procurement arms are always going to buy through, people. And that's where AppDirect has really shined. And we've been very acquisitive and we own brands, including PartnerStack, which is a leading referral marketplace that a lot of people are familiar with. FirstBase, which is one of the ways startups acquire technology and their computers and laptops and other procurement. So there are a lot of avenues in which we've grown, all stemming from this vision of the B2B app-inning store. And I think in the world of AI, there's a lot that can change. Like how do we index on Cloud, which I think AppDirect is very good at because it has such a deep catalog and knowledge and network. So it's either our agents or our platform customers are probably the ones that show up in Cloud versus AppDirect themselves.
00:14:13 · Pablo Srugo, Daniel Saks
[00:14:13] S2: You're kind of behind the scenes. Like I might be using it or somebody, some business could be using it. They wouldn't necessarily know. [00:14:18] S0: Exactly. Yeah. Okay. We have like millions and millions of business users that may not know that we're powering it, but we are. [00:14:24] S2: Tell me about this transition period. Like how do you perceive what's happening in AI and how do you decide to leave something that's grown to be so big to start something from zero again? [00:14:36] S0: So I think in many ways, like in 2023, AI was at the infancy and it was unclear of how it would manifest at the application layer within businesses. And I thought if there's ever a time to start something again, that would be it. I think in terms of just managing that transition, just full confidence to the leadership team that was in place and Nicholas, my co-founder and CEO. And I think, you know, part of my maturity was knowing that, hey, I think the business is ready to have one CEO. I think Nick's the right guy to do it and that leaves opportunities for me to start new things. So I think that that was a transition that took many years and we were really methodical about, but very excited about what's occurred there and it allowed me to get back to the startup and entrepreneurial juices that I was really excited about. [00:15:19] S2: So you started this like six months or so after ChatGPT. What was the original idea?
00:15:19 · Pablo Srugo, Daniel Saks
[00:15:19] S2: So you started this like six months or so after ChatGPT. What was the original idea? [00:15:24] S0: So really the thesis was I had big conviction that beyond generative AI, agentic AI, which can take action, is what's going to be transformative for businesses. And we were one of the first people to talk about agentic AI. [00:15:36] S2: Yeah, that's early. I mean, that was like right after the moment. Exactly. [00:15:40] S0: And where we honed in was on sales and marketing or go-to-market because from my AppDirect experience, the most important thing a business needs is revenue. And it's very hard to predictably identify who you should reach out to and how you contact them to drive pipeline and conversion. So I wanted to start a business that really solves the biggest pain that I went through. And I partnered with Wa Gao, who is a Stanford PhD in machine learning on the co-founding team of EverString, which was a machine learning startup that was bought by ZoomInfo. And that team became one third of ZoomInfo's revenue and really transformative to their growth. Wa wanted to, similar to me, start again in the agentic era, taking go-to-market to the next level. [00:16:22] S2: AISDR was the most obvious thing to do in go-to-market around that time. Did you start there?
00:16:27 · Daniel Saks
[00:16:27] S0: Yeah, I'd say like I didn't ever love the term AISDR because I believe that it's better to enable humans than replace them. But what we did really hone in on was if you could be really good at identifying who you reach out to, drafting the messaging, and then executing across channels, then you can automate a lot of the manual work that goes into prospecting with better efficacy. And one of the unique things that we did with our AI lab is we actually built models. The first model was GTM1 Omni. And what we did is we actually, through partners, had access to a lot of transactional data from campaigns. And we trained our AI on what works and what doesn't. And we were able to prove about a 4 to 7x uplift in efficacy for outbound campaigns. And that was really the formational secret sauce. And over time, and this kind of applies to your listeners, what we saw is that it's getting harder and harder to have success in outbound. And there's two ways people react to that. One is driving volume upwards through AI slop and just spraying and praying. The other is actually getting super methodical and targeted about how you approach these outcomes. And we're finding the people who are spraying and praying are falling into regulatory headwinds, spam issues, really not driving a lot of value. And it can be very frustrating. The ones that are seeing most success are really thinking about how do I really hyper-target the right company and the right people with the right value proposition at the right time. And in order to do that, what we found is that you need to have access to a lot of different fields about a company and a person so you can intelligently identify the right people to go after. And that's been the biggest lever across our network in the last, I call it, year and a half for success. And we have case studies with many businesses where they have large SDR teams and the SDRs were manually going into ZoomInfo and filtering or going into Apollo and filtering. That took 35% of their time. They'd maybe be starting to use ChatGPT or Claude to draft some messages. But what we can do is we can, essentially using our models, we can train for your company a unique value prop that understands what's going to work, what's not.
00:18:39 · Daniel Saks, Pablo Srugo
We can prioritize who you should target and then we can have your reps reach out to the high value targets, call it with a phone call or even have your execs go in person but then automate some of the lower tier list. And that's driving 2 to 4x connect rates and meetings booked rates across our network. So seeing incredible value in terms of the time savings so reps don't have to list build anymore or manually think about a lot of the email and LinkedIn and that way they can be more focused on doing what they love and do best which is being in front of customers. And we're seeing the killer outbound teams be people who are very calling centric or in-person centric and they're trying to use GTM engineering via Landbase and Claude or alternatively to us, maybe a Clay to essentially automate a lot of these workflows so they can be very targeted in who they spend time with. [00:19:31] S2: I was going to ask you specifically about Clay like their ripping I mean they just raised like a $7 billion valuation seems to have been what do you think they got right right in the world of like ZoomInfo and Apollo and all these other players like what did Clay get so right in your opinion?