We had two employees that in February had already achieved the entire full year quota. Customers' success needs to be a money generation function for the business. The role of a CRO is fundamentally thinking about not the revenues today, but the revenues of tomorrow. Let's do the things that no one is doing. That is what makes me a passion. And that is what a good CRO needs to be doing because we're not here to do easy stuff. It's like the fastest product in terms of revenues that we've ever had. It's just insane. If you want to do something, budget is never going to be a problem. This is 20VC with me, Harry Stabbings, and I'm so excited to welcome a dear friend, Carlos Reiner. Carlos is the CRO at 11 Labs. One of the fastest growing companies on the planet. He was also one of the first investors there. He scaled the revenue org from 0 to over 350 million in ARR. This is a masterclass in scaling sales in an AI first world. On top of that, Carlos is also an incredible investor with his own solo GP fund, Bauer Fab Ventures, which is back in the lights of Revolute and of course 11 Labs in the early days. But before we dive into the show today, a quick shout out to a company I've been genuinely blown away by and have been tracking closely. Rox. I've been watching this team closely and the speed they're operating at and the level of applied AI talent they've assembled, it's honestly remarkable. Rox is pioneering revenue agents for the global 2000, plugged into your data warehouse and CRM and delivering board level ROI in just 90 days. These sales and revenue agents handle the end to end sales process for large enterprises from research prep to deal risk, outreach and opportunity management. So sellers spend more time with customers and less time in tools. This isn't another productivity app. Christ we've all had enough of those. 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I thought we had to do around too. Thank you for joining me, man. Thank you for reminding me. This is great. I'm happy people were interested in sales. Sales and sales comp, according to that clip, which again now it's like 5 million plus fees, which is insane. I actually wanted to start on, "You have now kind of led the way in a new CRO charge, I think. 11 apps is probably one of the most exciting companies on the planet. USRO there. All a generation of CRO is being left behind." Some of them, yes. But I think it's fundamentally that the market has changed the way that we build companies today has completely evolved. We can do deals much quicker. But also, for me, the key item is like, a deal can be done. You can hire teams that have a ton of experience. But how do you think beyond a single deal and think about distribution entirely? And I think that's what we're thinking. We're actually missing in many ways. It's great to do business development. It's great to think about affiliates. How do you think about much more on a strategic level? But also able to execute? Those are the key components. How do you embed AI in your entire distribution component so that you are able to actually do more with less? What do you mean by that? Is that simply using Artisan, qualified Monaco and having my AI STRs to outbound for you? No, that doesn't work. Good. Glad I suggested that. It doesn't work. Like, you're not hiring. Don't you start the interview. Nope. You're fired. It's like, I've tried a very large number of AI go-to-market tools and they don't work. And they don't work because they see everything as a transaction. The product, if I was building it and hopefully some people will be able to actually use this, if I was building an AI like, a gente platform for sales, right? I'll be like, okay, let's actually understand each one of the core potential leads. What do they prefer? Do they prefer to actually be reached out or email? Do they prefer to actually attend events? Do they prefer to actually have a phone call? And you can try to map some of those components, but what people put on LinkedIn and social media. That is the most fundamental element. But what we actually see on the AI STR front is that the majority of these tools track everyone as if they actually want to receive a message. And people hate it. And you see, the response rates on Albon emails has dropped to the lowest of any point in time. It's less than 0.01%. People getting message on LinkedIn is like, it's Haskyrocketed. And you can perceive that it's actually a transaction. An email must send to everyone or it was generated by AI. That doesn't work. So our bound is that. Albon is dead unless you do it with humans or unless you do it humanly. And that's fundamental to the key item. I can tell you like at 11 labs, I spent the past two years plus trying to convince the team to actually hire engineers to actually help me build AI agents for revenue for sales. And it was only last year that actually like they were like, okay, let's do it. So we end up hiding people and we end up building IISDR, the hundreds inbound, super good results. I have now an AI proposals manager that like scans the web for RFPs and RFIs and then proposes scores and proposes things. I have like an AI custom success manager that would element the leaves in the back in an email and essentially proposes emails looks at all of the data of a single customer, all of the pricing tiers and everything that we have in the contract and then proactively proposes things. So when my customer success manager goes in the morning to check the emails, that person has a number of like drafts that the AI has created. And then that person can change those draft to put it out there and to send it back. We store what we actually sent and what it was originally created and what are the responses are to actually fine tune. So each one of the customers ends up getting a slightly different message with a slightly different tone. And if they speak other languages, then you say complete the language. That works and that costs close deals for us already. We generate money from that AI customer success manager fundamental because it is humanly, right? It's human if it's specific as human. So we cutting the size of our team. If we can do so much with these different AI agents or sales teams of the future, going to be dramatically less. I think that we will end up seeing the fact that like people are becoming much more efficient. I think like the goal for me at 11 labs like 50% improvement in productivity. That's the one that I want to do because any means that I can hire less people. I prefer to manage a smaller team that would get super well compensated. Any app sells any contracts that the AI agent ends up closing. I will pay those commissions as if like a human actually closed it and I'm very happy with that. But also that means that like the people that we want to retain in half are going to be extremely top talent that are performing at 11, then no one else is performing. That has a consequence that is the instead of actually doubling my team or doing a five eggs or doing whatever it is over the next like two years. I end up hiding less people, but they're very concentrated. You mentioned the word commissions there. I'm really intrigued to like we see like open AI don't have commissions. Like here's your salary and then here's your equity. Often people say sales people are coin operated. You said that actually last time you have a 20x quota, which is a lot higher than anyone else. We interviewed the head of sales at clay recently and they said there's a six to eight post 20.
What is the commission structure and how do you advise me as a founder on how to set the commission structure? I mean, I can tell you like we had two employees that in February had already achieved the entire full year quota I put a message in Slack saying these two people have reached the monthly amount of Limpus of sales at 11 laps because in two months already like the quarter. I mean this in the nicest way did you know massively miss that quota then? I don't think so. It's like I think you need to put a quota that is challenging but also fair. And if people miss it fundamentally because it's too high, they need to the right thing and then lower it or compensate them correctly. But also good sales people they want to be the best ones. They want to actually they'll move it by the coin, they'll move by the fact like a big challenge ahead of them. If you don't put that challenge they're just going to be like slacking, they're just not you're not going to get the best out of it. And I think for me that's the key item is like we say like hey you reach your quota 100% fantastic you and then you start unlocking accelerators. To the point that like I'm very happy like if we sign a million dollar commission check I'm the happiest person alive. For the moment because like that person did so much money for the business and for our shareholders and for the rest of the company that is an absolute no brainer. Again like for me it's like for every one million dollars in revenues that any single person signs and I don't care if it comes from like the SDR, the account exec, the CSM or it's an engineer that went all in and then managed to get a contract every single million has 33 million dollars in extra valuation for the company. If you put it that way it's benefit for everything. Some people get more equity on the engineering side great they deserve it because they don't get commissions. Fantastic they were popping up the entire value of their stock. When you get the accelerators how do you advise me on how to charge the accelerators? It depends like so the way we do it and I think it's fair is like for every single extra year you get another 25% extra commission on top of it. We start like 5% commission and anything that you sell and then we have the accelerators. Of the acquired to that is. I know that is including your quota and then after your quota yes additional like and we have like a 1.1 x 1.2 x 1.3 x 1.5 x and so on right. So the more you keep selling above your quota then you hit those accelerators but then we have like accelerators for or spifts specifically for first individual products. So if we are incentivizing one product because a quarter we want to incentivize that product that we will put an accelerator or a specific spift or that specific product and then people even are more motivated on that front. Do you find that always works? No no it's easy to get hooked on spifts or like specific incentives and lose the entire the entire site of what you're trying to do. If you put too many accelerators if you put too many incentives in one place you create the wrong behavior which is people try to sell whatever it is to actually unlock it. For instance like we don't pay commissions on pilots because why? Like it's not adding to our valuation as a company and because it's not adding to our valuation as a company the engineers, the researchers, the ops people, the people, no one is actually getting a boost in their equity. Then why should we pay it? Let's do the right thing and let's do the complex thing which is like let's do the pilot if needed. Let's convince the customer that the metrics are there and we're doing it really well and then on top of that once we sign and gearle contract or two-year contract then we pay the commission. Do you pay on retention and expansion? Yes. So like first 12 months you can close the deal it doesn't really matter $50,000 or $1 million or $10 million or whatever you want and then that gets expanded over the next 12 months you will get commissions. Great and you can hit accelerators with that and so on. If it's a strategic account and we have designation of what is a strategic account so for instance like the top 20 or 30 accounts in a given market depending how big the market is fundamentally then you will unlock commission for two years and we can change it if needed right but at a practical level we've found that that's like the first way. I will never forget one of the great CRs saying to me on the show you do not ever want your farmer going against someone else's hunter meaning you're kind of cushy but super nice CS enablement hey let's get champions in your company against someone else's all-star hunter who is there to close your business. How do you feel about that? True and then how do you think about that retaining the hunter on the account? The hunt is very important specifically when you think about distribution you think about like our bounce inbound you think about like a lot of different pieces right but at the same time a hunter that is not well managed will create more damage than actually like opportunities. So let's say for instance you're trying to close a company that has multiple companies multiple sub companies it's the big holding company we can use any name you would want right and then you have a hunter that essentially tries to go to each one of them but doesn't do it in a very structured way like trying to align what are the incentives for this big account then fundamentally you're not having discrepancies or pricing you're not having discrepancies like what is the actual like the value for them and then each one of them discrepancies ends up coming back to hunt you down essentially when you try to renew the contract or the order forms it is important to have them but at the same time you need to have like them in check you get a the customer success I actually am a big believer of customer success I don't believe customer success as a satisfaction or happiness moment for customers no it's like customer success needs to be a money generation function for the business that it works for the customer but also works for the business to incentivize growth expansion cross-set. Because I had Chris Dagnan on the show who's like one of the all-time great CRS Snowflake you know zero to four billion whatever it was and he's like yes it's complete bullshit. Complete bullshit you have professional services pay for it and what might he grind to what extent you agree or do you think customer success is in the world where like Snowflake grew up like that makes sense in the world we are in today with AI that doesn't make any sense because fundamentally like anyone can spin up a competitive your product in the next two days so fundamentally like your customer success you need to actually like go as deep as you can as early as possible and try to close it as soon as possible a single contract and then your customer success is the one that actually will help you expand it quickly and retain the customer so if it becomes a services business only what you're charging for every single penny then you become a transaction you're not building a community you're not retaining over the long term you should be incentivizing them to actually like do both things community trust and also like incentivize the long term so that's why like I am in favor of charging for like services but in not all the cases it makes sense the game has changed. Where else is the game changed? Where else the old school CRS out of date? In general like one single market going one market at a time it doesn't work. Traditional BC's like the traditional method has been like oh you open one market you go deep you win the account you show like the value then you go to the next one and then you go to the next one and so on and there's like the bullshit advice like BC's have been giving like for many years and I know like now it's changing fundamentally because like hey like the reality is like if you could have 100 competitors in the next like month because you're starting to get some traction or because what whatever reason or everyone is thinking about the same problem then going deep then go opening one market after the other one after the other one instead of actually parallelizing and trying to do multiple beds at the same time they did just counterintuitive. Is that only enabled by a PLG motion though? Like a PLG motion allows you to do multiple markets at the same time much easier because if you have enterprise motion you need you need everything from STRs to AE's to CS in that place. Not really so for instance like one of the and I know like this is going to be controversial but like I think all of the tech startups are afraid to actually hire someone that has had 20 years experience, 25 years experience and the excuse that they use is like the person is not going to feed the business and I think it's bullshit I think it's full wrong fundamentally someone has 20 years experience in sales and has been selling for the past 10 years to the same like financial services firms in the city or in the US has so much wealth so much knowledge that we can propel the entire business. Now the question is like not all of them are going to feed your business but a good portion of them if they're still hungry and they still want to actually do something that is meaningful they're going to feed really well. Those type of profiles will shorten your sales cycles because they will join and be like okay now I know the product really well I have I know the vision I know how to properly like pitch it let me call off my friends that have been interacting and all of my stakeholders that have been attracted for the past 10 years 20 years now we'll just go directly to the sea level. Dude is that not a massive misalignment of cultures? When you think about like the super young hungry raps and then you're bringing in 50 year old Simon who's been selling into the city financial services for years. The biggest example is like Google in the early days you have like Sergay Bin and Larry Page together with Alex Smith that's amazing a guy that had ton of experience was really successful ended up coming in and magic happened I think food invented like both parties want to make it work it can happen but you need to make it work and you need to hide the right people that will have like will be in the same brainwave as you are. Do you worry that people pull 11 labs so much out of your hand that anyone could sell it? No I don't think it's that easy to sell especially in this environment of course I think if you have a big brand like an opening eye or like an un-tropical you live in amps it is a little bit. And the nice thing about this being around two is I can push back more. You can't have a 20x quota and say it's not easy to sell you can't have that much better people than ever and else. I think you can. I think your people are not I love you the people are not for it's better for X than everyone else in market. I do 100% believe that our people are like for X better like without thinking twice and I would take them to war I would go with to war with them every single one of them it's because like we are tough on them but also like that tough on us like they give us the feedback the difficult feedback and I get it every single day and I'm happy that they give me the right the the tough feedback because what we're trying to do here and I've always believed and grew up with the idea of like we're trying to find the ground truth and what the ground truth means like today means X tomorrow means something else and the following they will mean something else so if you don't have people that are constantly challenging you and constantly thinking beyond what they actually is happening today you're not going to be able to survive and those are the people that we hire. And where are
are people challenging you where you don't have an answer? Which market should we be opening? How deep should we go into some of the structure changes? Like the company is growing very quickly, do we need a global account team? So I'm already thinking about a global account team. When do we implement it? How do we implement it? How do we motivate people? Should it be 20x? Should it be something else? What product should we be selling? Should we be selling to competitors? Should we be selling to resellers? So there is all of those things like the team challenges every single day. And I love it because it's intellectually stimulating, but also because it forces the entire business to rethink our position every single day. So you would advise families today to go to as many markets as possible as soon as possible. Not as many markets as possible. I think you need to map out and have a reasoning and a thesis of why that market, so that you cannot refer to that and understand whether the market conditions have changed and then you have to actually like evolve your thesis. But for me, this like go to market is similar to like investing in venture capital, right? You need to test like 100 things to be able to find like the three, four, five, six things that actually perform and do really well. We do the same in venture. We invest in companies knowing and believing that all of them are going to work and all of them can be like a billion or trillion dollar company and then we realize like shit, it not worked. But I still have like three or four or five that are going to be working really well. Go to markets is actually the same thing like test as many things as you can. Not only in the opening markets, but also like do you need to try like self-service? You need to try like working with resellers like with partners with the cloud ecosystem, like with a grants program within a phillyage program. There's so many things in opening markets is one of those ones. What did you test it in work? What did you learn? I tell you I must have tested like endless endless amounts of things and I absolutely love it. For instance, like media entertainment in the beginning did not work for us. It just didn't. What does media and unsemit mean? So big brands like big entertainment studios and the thesis was like they're generating so much content. We should be able to actually sell to them and make a ton of money on this. And the reality was that like yes, they do make a lot of content. But when you have an industry that essentially like is very heavily influenced by the public, the audience, the quality, the use of events, all of that stuff, then potentially the industry might not be ready for technology that you're trying to sell. That was a big learning. And we spent months and months trying to break into the entertainment industry to realize that like we were not growing as fast as we wanted. So we ended up switching and having another ICP was like, okay, let's work with media creation platforms. That worked really well for us. And then we ended up saying like, hey, actually the wall is moving. We had a thesis around like the wall is moving towards the agent systems. How do we also bring a product to market that fits really well in the agent to go and we had a vision on that. So we ended up working on that. And today, AI agents, it's actually fantastically huge for us fundamentally because we had the vision we bet. We went early. We had to work with partnering with like some companies and that panel really well. You said the words not growing as fast as you wanted. Yes. Now you're an investor on the other side of the table. You've seen how fast a company can grow with 11 labs. You still see it with a revenue to be fair to edge cases to be fair. But that's our business. Like that is the business adventure. My favorite thing with VCs is when you get other VCs, be like, I don't know if Carlos is very good because like if you actually take out 11 labs and you're a good, he's not that good. And you're like, yeah, well, I've done four unicorns. That's fine. Okay, sure. But my point is has it changed how you think about a trige if nursing company growth? I don't know. I think you still need to have companies to grow from one to four or from zero to one and it takes them like 18 months to get there. And I think that's actually not bad. It's like, this means like you need to incentivize the portfolio to be able to actually like iterate and experiment as much as they can because we don't know what's going to work. And it's like, I still even with new products that like I'm heading and I'm trying to get to market, I truly don't know how we're going to price it. I truly don't know if it's going to work out. I'm just trying to iterate. Is it going to take us a little longer to get to like the first million and the first five million and the first 10 million? Fine. We have the ability, but we need to iterate. And I think it's exactly the same. At 11 labs, we have like a business that grows extremely quickly. Like we're like smashing it. All of that stuff. But at the center, we have like brand new bets. Like I'm not generating an revenue. And that's great. But it's bets that we're doing for next year. So I think like the idea of a set you've got state is not generating revenue. So we have, we're generating a good amount of revenue, like government work. Fundamentally, it's just like it's a tiny portion of it. And I think that's okay because like the role of a CRO is fundamentally thinking about like not the revenues today, but the revenues of tomorrow. I'm already thinking like all of this quarter, I've already been thinking like how do we put the pieces together so that the 11 labs next year grows even faster than this year. And I know this year will spend the numbers. I have the right team. We're going to continue hiding. We have like the motion that we set last year. It's going to grow really well. How am I doing it for next year being very creative so that I can start putting the right bets? That's what being my quarter. You'll hit a billion and revenue by an year? Who knows? I would love to hit a billion dollars in revenue by the end of the year. We have some targets entirely. If we create a week and do it, if not, it will be a little later. That's fine. That's absolutely fine. Any big glass in zone 4 costing? Working hard today. It's just impossible. We forecast and then we realize usually that we would just like, but that's different. Traditional sales leaders on the shelf lost three or four years because I've done 20,000. I've been like, oh, I can pretty much get there to 3 to 5%. Yes. I know. Wow. Now, impossible. And impossible. But it's impossible if you think about it from an experimentation perspective. And I always tell my team like, I want us to test as many things as possible. I only need one of those ones to work really well to give me another 100 million dollars in revenue, or 200 or 300. And so when you say things, do you mean like channels like affiliates, like partners, like referrals or do you mean like products? Channels, products, ideas, shall we be pitching services? And I was like in a meeting with a CEO of an airline very recently in a few days back. And we were talking about agents and all of that stuff. And then at some point he was like, but catalyst, like everyone keeps pitching me. And I get over 100 pitches every week of pitch like companies doing like customer support. I don't want to have another another pitch on that. And I was like, and you're 100% right. And I hate it. Like, actually don't get me wrong. We do it. And we do it really fucking well. But at the same time, it's boring. The Magitif companies will start with the bottom line optimization. So what's boring customer support? Custom support optimization for me is like, yes, your mindset is like, yeah, I want to automate, increase a bunch of percentage point, my profitability. And that's what I'm focusing. And that's great. Don't get me wrong. It is fantastic. What I'm actually interested is like, how do we figure out a way to partner with a company and create a lapse area? So it's company X laps so that we can figure out a way for them to generate new revenue opportunities for them. That's what makes me passion. But that's we have to prove that that is the right thing. So that is one of the experiments. And I'm spending a lot of time these days on like, how do we prove that the idea of laps for companies where we essentially are the consultants and help them build those agents that would generate top line revenue with new way of the original products is actually something that we can scale in generate like hundreds of millions. How do you think about the trade off between doing that? Well, it's maybe a little bit more low margin given the fact that it's quite hands on. I'm thinking like, British Airways Labs where you have amazing voice agents who call you up and are very personalized, give you tips on how to enjoy New York with your wife. No, great. Super nice idea. It may get more money from it. Boom. I think we're going to have a lot of time to talk about how we can compete with all the avatar companies. Higher margin, very adjacent product. I don't know. I think like I would rather do things that are actually much more complex than the ones that actually like less complex. I think we are here as like startups and NBC's to the difficult things. I don't believe in like doing the short path like things that actually like and much easier. If someone is doing it and someone is like super good, maybe we should be buying the company. Great. Or maybe we should just partner with them. Fantastic. Right. That is what makes me passionate. And that is what a good CEO I think needs to be doing because we're not here to do easy stuff. I think customer support is uninvestable. I get so much shit on Twitter for this because everyone shits on them. But I might see our own deck on obviously two market leaders in terms of brand and how much money they've raised. And you've got 16 providers who've raised over 75 million in the last 18 months. And then you've got all the incumbents and your sales force and Atlassian and then your income and Atlassian, everyone in between, opening up. If they continue doing new products, no question why that product is maybe it was going to happen. Maybe not anymore. Do you agree it's not investable? I would not personally invest. But I also think that like the opportunity for companies that are like established and growing a lot to go into that space is good. It's big. Why doesn't 11 apps turn? We do. We do custom support. We do our customers touch with customer support and we make an absolute ton of money on that. And the ROI for our customers that like uses for customer support is insane. Insane. What percent of your revenue is customer support? Give it 20, 30, 30, 40. We don't share that. But I think like it works really well. It's just insane. But also think like you look at like all of our competitors like you mentioned Sierra, Deck, Gone and all of the other one. We power all of them. So we actually make money of like literally customer support with our agent's platform. But also we make money from our API, foundational model layer across the board. So that's the good thing about 11 apps is like spread so widely. How do you think about empowering your competitors? I think like it gets to a point where like I think like fundamental like we've been very happy to actually support the entire infrastructure layer because we believe that like the opportunity in the market was like way bigger than anyone was expecting, right? And and and interaction with humans and human technology interaction like it is the fundamental piece that was missing in the entire puzzle. Now you end up having a situation where like similar to
I don't know, like a Nvidia that was like competing with like powering everyone, but also competing with everyone, right? I think that's actually fine. Like it's, it's okay that the market is big enough for multiple companies to coexist and then try to target the same customers. I'm not going to deny it. I think like also means that like everyone needs to be aware that that will happen. So when we launch our agents product, I called the biggest platforms agents platform. They were were operating in our platform and I told them like guys, FYI, in the next couple of months, we're going to be launching our agents product. We're going to be competing with you. Just wanted to make sure that like you're okay with this. I wanted to make sure that like you understand that like we are going to this space and the funny part was like all of the founders that I interacted with telling them this, they were like, yeah, welcome onboard. That's okay. And it's good because like if you're able to actually be transparent with that and say like, hey, I'm going to be competing with you. But at the same time, I'm partnering and in some deals, you will win it and in some deals, I will win it and in some deals, we will partner together. That's when you're upgrading a good ecosystem in parallel. So I think you have to be unwaveringly aggressive now on BDN sales because I think you have an 18s, 24 months period where CIO is CISOs. Like AI, we have to have it. We have to have a message for it. That won't last forever. Do you agree? 100%. And our team is dedicated to that. It's like everyone is like selling agents left and right. We've had the best quarter ever. It's been fantastic. But people are incentivized to sell agents because we know like we're competing with other companies. And sometimes those companies that end up complaining to us, being like, why are you competing with me when you're also like selling me? But the reality is like, hey, if you'd pay me like $1, $1 and I could be charging the end customer like all your charging the gas and customer $20, then I'm like, I mean, maybe I'm doing something wrong here as well. I totally get that. One of my dear friends is Jason Lab can who built a game and he used 11 laps further voice. And he was like, it was great. Amazing. It was such a beautiful product. So amazing. So amazing. Fuck it was expensive. And then people started using it. It became even more expensive. And he's like, this will be the year of substitution where you try a great product like 11 laps. It's amazing. And then you go, fuck, it's expensive. And then you substitute for the cheaper, but 80% of it. Do you think that's true? No. I think like there was a lot of like conversations last year. And I actually, and I've evolved my mind on all of these things. And of course, it will continue to evolve, right? But a lot of people were talking last year or like, open source models are going to take over like even on the AI voices space, like you're going to get commoditized and so on. And for a period of time, I kind of believed it. I was like, yeah, I mean, there's a point I'm like, open source models will take over. Like it will be fully commoditized. Great. Like we just need to continue going deeper on the product integrations, full verticalization, distribution, all of the stuff. Great. And what I mean that I'm realizing is like, even if open source models become extremely good at the same quality level that we have, like it is the additional hustle, it is the additional components that like make it very difficult for any organization. So if you're a bank already, you might want to play with the idea of what if I use open source models, the problem is that those open source models are not built for the skill that you would want. You would still need to maintain them. You would still need to actually make them operational. And 11 laps actually takes that away from you. And you level up agent takes that away from building the entire administration and managing it. Everyone can be building anything from scratch. It just do you have the time and you have the resources. And if the priority in the company changes, are you going to be able to continue just making sure that you get the right funding in there? And I don't think that is true. And we're seeing it all around the world. We're like, yeah, we could go with open source models. Excellent. Do it. You try to operationalize it and develop three months and they come back. For interesting 11 apps, I'm going to spit like open AI in the way that we're anthropic in the way that it's like, it's this foundational layer and you can go in any strategic product direction you want from that foundational layer. There's this alarm. Who was his voice? And the question is, will I be qualified? So to speak, then there's a question of will I be a lab 11 labs the fight? You can do as the our agents with voice. How do you think about weighing that off in terms of where your product direction goes? I think it's a no evolving, evolving question all the time. Like it's not that simple to decide. Do you have a vertical sales teams? We have vertical sales teams right now in specific markets. Markets that are much bigger or markets that are much more mature. 100%. We'll have people that only do like BFSI. Only teams that do like healthcare. What does it take to do vertical sales teams and what have been your big lessons on what mistakes people make? So I will give you an example in India, like I try to implement vertical sales team to early and essentially kind of the price of revenues for a single quota. And it was like an absolute disaster. And then I realized like, no, what have I done? You divided everyone and then it didn't work. It didn't work because like, a people who are not passionate enough be like in a little long time to actually close like some of the biggest sales. And see like, I like the team was way too small. And like if you do it like early on, you've used segment to early, then you fundamentally end up like screwing things up. So what I realized, like, I have this placeholder in my in my calendar every single week that is called pipeline construction. And that pipeline construction, it's like similar to like portfolio construction that you're familiar with. But for me, it's like pipeline construction. How do I take a VC term and put it in like in my mindset? How do I design the perfect pipeline for any given market and segment? And that's when you start thinking is like, actually, you need like the liquidity, but you also need the big whales. So each one of my account execs needs to have the ability to like closing big whales, specifically on the enterprise segment, but also having like liquidity in the pipeline so that they don't lose a confidence because people were losing the confidence. Towards me, you have pipeline construction. What's the next subsequent step you break out? How many sellers you have in that market? Correct. Yes. How many sales? Let's say we have 20. Let's say 24 any given market. That's not really matter. I mean, we have a lot less than those ones. Sure. Let's just say, but like, what do we do then? 20 average dayl sites? I look into the average day size. I look into like what are the numbers companies in there? What's the average dayl sites? 100K? Depends on the market. Let's just say 100K is easy for a month. 100K. And then we're like, okay, if I need to hit what's the mass we're trying to get to? I'm just trying to want to start. So for me, the key item is like how many companies are in that market? How many like very complex enterprises in that market? And how do I creep enough liquidity in that market to close deals every single week so that the team stays motivated and sees the challenges of closing deals? Have you ever had a situation where you're like, shit, the ramp I need to get on my sellers to get to my quota is too high. I'm not equipped enough to hit that quota. 100%. Government vertical is one of those ones. We said, you know what? Like, and he was one of the big bets that I made this year. It was like, I don't get too much government. In the nicest way, hard sales cycles tough to get in. Yeah. You're crushing in other areas. Why do government? For the moment, because one is very sticky. Number choose like it's a benefit that we make to society. If we can deploy agents for people to have very interactions with like the actual like government and government services, it's an absolute no brainer. And I don't care if I don't make enough money to justify it or like I lose money. It doesn't really matter to me. And then the three is like, it's a hard industry to get in. So the moment you actually get in, then it's just like, you never leave that industry. When you start mapping those things out, you need to make the bets. And one of those, some of those bets will pan out really well. Some of the ones will not like pan out that well. But it's like literally portfolio construction. How quickly can I do some of these sales so that I can spend time also like in the difficult ones. And my investors don't call me saying, what the fuck are you doing? I'm going to fire. Right. And I think that's like a fundamental of idea of like portfolio construction. And you do it at a like a country level. It's one of the new countries that you actually want to be launching. And that is a completely different concept than what the majority of like zeros are actually thinking these days. If you tap it into like A.I. agents for like go to market and all the pieces, then you have like something that is quite unique for your business. So what did you do in India then? If I like lines to a segment to a lane, depressed them all for a group and back to zero. We went back to like horizontal. Let's do horizontal. Let's people allow people to do like much deeper. And then we will start segmenting again when the right time incomes. And what ended up happening is like, I would then we would then give them like I would then give them like a name account list and negotiate with them based on like fundamentally like how I was thinking about like the portfolio construction. And that would really well. Like literally we lost a quarter. We ended up changing all of that for the ground tab. And then you could see like people starting closing deals in the first month. And it was like insane because like it was day and night. We had changed the culture in the team in the local market by getting it wrong. Let's go back to the basics that redo it from scratch, except that we made a mistake and then move on. It does brand dramatically reduce enterprise sales cycle. When you come back like no offense 11 labs in India. I'm sure like a year ago not actually a very big brand. No versus in the UK and the US very big and much easier. It does brand reduce enterprise sales cycle. Yes. One million percent. And whoever tells you now it's like just lying that is a fact. Anything like the idealist scenario is like no one gets fired like the idea like you remember like IBM right? Like no one gets fired for actually buying IBM. It's like that is the idealist scenario for any brand is like literally you become the safest asset in the block. Great. I think like the two companies that today have been able to make it is what three companies if you want open AI and tropic full respect for them cursor the three of them I think for me are like cars killed enterprise unbelievably well. Yeah they don't super well. It's fantastic like those are the three like brands that are like blue cheap organizations right now in the procurements like teams perspective and 90 teams perspective. It's fantastic. It's great. No but everyone on Twitter it's one thing's really funny one. I went on Twitter. It's like and no one needs them anymore. We use cloud code you have such ideas and it's like sure we're going to HSBC and Hong Kong or wherever around the world like Barclays Bank in Swamsey. That's a promise you they're using cursor actually in their local dev shop and it is great like it just means like brand will help you solidify your position but also you need to like the bigger pro like the stickiness of these big enterprises like that's also the
and weight range. And it's not that easy to get into the big enterprises anyway, right? It's not that easy. You've done it with the portfolio companies, you know how difficult it is for them. But once you start getting into the motion, there's a voucher capitalist I've done it in period. I have. All of the companies we invest in, we basically found, you know, we do all the work really. That's exhausting. Would you do it with LPs? So imagine your LPs, it's exactly the same content like your LPs, like the big sales cycle. Multi sales. Exactly. I mean, seriously, multi sales cycle. One of our biggest LPs was a six year sales cycle. I'm not surprised. Absolutely. But how do you create enough foam or how do you create enough brand to be able to actually reduce that six years to like a lot less? Yeah, brand also. Exactly. What percentage of your new sellers work out at the majority of them today? We're talking about like our churn rate on the sales side is actually not that big. Really? It's because like when I make an offer, I tell every single person like 11 labs is going to be extremely difficult, extremely difficult. We are a hard company to work for because we have extremely high expectations. We're going to work like a huge amount of hours. I expect full commitment and people of it. So you end up filtering out people that actually don't want to have that type of life. And I think that's okay. Do you think it's possible to retain that at scale? Yes. You get these soft management people who are like, oh no, we need to filter down the messaging. Do you think that's possible at scale? I think it is possible. But it is possible if you try to retain like a small team and you implement the latest technologies to actually like become and make everyone more efficient in general. Of course, like the bigger the company, then I think you get softer. But you look at what Mark Andreessen was saying the other day and like companies are overstuffed by 25% and even more, right? Of course, there is a trade between like overstuffing and understuffing. So like if you and the staff and people have like even in sales or like revenue, you have too much pipeline. They end up not closing nothing. How many sales people do you need to highlight this year? We would about adding about like another 120 people more or less. So we will keep the entire sales team at the sales team now. It's 130 people. So we will keep it under 250. But you're doubling sales team. Doubling the sales team. Yeah. And the sales is going to grow much quicker than that. But do you worry about that? Yes. And that's a lot to prove your board. A lot doubling in sales team. Yes. What are the pitfalls that you need to avoid? One is the dilution. Like if you're not upfront about the expectation, I think you end up diluting because people come with different expectations. They essentially like behavior in a specific way that it is not the way that you wanted. How fast can you correct it? I went to a company the other day. And essentially there was a sales leadership board of all the reps and the light seven reps. Six reps had between 5,000 and 8,000 points and just points. Just think of that. And then the bottom one had 2,000. And the net is best one had 5,000. Pretty freaking clear. This person is way off. Do you just cut it there and then or are you like give them time? It's only been a month. Yes and no. For those like all of the stats are publicly open to everyone. So everyone knows how much revenue we make. Everyone knows each one of the reps. Do you have a leader board internally? Yes, what do you do? How do you do that to create that competition? So people like we post automatically we have a bot that actually will post automatically into the sales channel every single week. A summary of like what percentage of quote that they man year to date for that specific quarter and all of that stuff and the phone car at basis on a pervert basis. So anyone can see it anytime. And if you're at the bottom then hey you're going to be able to see that you're at the bottom. At a practical level for me is like it's beyond that. It's like that's one component. But if you have someone that is like building strategic accounts then I'm not sure if someone is actually building like the right pipeline. I'm also not sure what it right. But they need you need to see the action. You need to see like how many meetings are going. If I open a calendar and someone has a full calendar that ladies empty I'm like what did you do this week? Do you worry about demoralization or losing? I mean I've never did a five like so I'm looking at the report and it's like Harry bottom next week Harry bottom. Oh fuck. Wow. It's so mean. It's like public. You know I was the fact kid at school and it was horrible because you had running races and you're losing in public was so public because everyone could see how far behind you were. Sales attracts a different profile. Sales attracts the people that are much more outspoken. People that are much more extrovert. People that will actually want to do something different right. So by definition you don't go into sales if you're not willing to take like the harsh feedback. If you're not willing to actually start. Do you know what they're doing? Most of the sales reps is often today. I think a very large portion of them are because they don't have the environment to actually like just push either or because they've already lost the passion that they just want a normal job and that's okay. Don't I'm wrong. That's absolutely fantastic. Well, it is not what I'm hiding for. What's your towel for the obsessed wins? For me like you can get it very quickly right? The people that have extremely high energy that are sharp that like are thinking quick. And also like there is other people that like will be slightly opposite but also like they're going to be very very deep. And it's like it might take them a little bit more like more time to actually like get there and those are like less obvious. But once they do it's just insane. They go right? Like if people are like sharp and they're energetic and passion and they come across like someone that really wants to win and you can ask them like, Hey, like pitch me 11 laps as if I was like a fish. Whatever it is. Like then you get a sense of like how quickly they're thinking and how passion they have like how much passion, how much actually that research the company, what are they thinking, all of that stuff like you end up having in a very short conversation. Like I don't need to spend more than 20 minutes to know if I want to hire someone or not. And I will tell you like the majority of times I end up putting my feedback in asp we use asp internally. I end up putting my feedback in asp during the conversation by the middle of the conversation I have my feedback. And I'm one of those like crazy guys that like write a lot while I'm talking to someone. I hate when it gets recorded. Then people end up behaving in a very specific way versus actually like being themselves. So I write a lot when I'm while I'm interviewing people and then I have my summary and in parallel I'm writing and I'm doing my summary and that's it. And it was really well for me. And why do you hate the recorded element? So for me, all of us in the launch fund are recorded because it's important for us that we can share them and I can ramp up without being in the room. My personal take is like interviews like people behave differently if they think that they've been recorded versus if they think that actually they have freedom to say whatever they think is best. In sales we are always like asking everyone to record it and we have like it's mandatory for everyone. He is gone. He is gone and then automatically fills out all like sales force and so we try to automate as much as possible. And by the way like low all has the best CRM that I've ever seen. Those guys have really smashed it like shout out to them. Lovable CRM. Yes. So lovable ended up building their own platform. Like you should have been here. No, you should have been here. Imagine if they didn't. I mean, we should be building our own platform as well but like we're not. Do you buy that? Do you buy the SaaS apocalypse of like you will customize your own software entirely in the future? For summary is yes. Where will you, where will you not? I think like for like core things. Yes. So a CRM, I would love to customize it. I would love to actually build it myself. And like it doesn't really matter. You can you don't have to spend that much time. It's just like a pool of there you have in yourself. We haven't we haven't done it. We use Salesforce. But for some other applications like I mean why wouldn't you do it? If it fits better in your entire ecosystem of applications, if it's easy enough, then maybe you should. Would I build an entire Google drive or a GMM? No, I wouldn't like it wouldn't make any sense. But for a good amount of applications for sure. If I was like a procurement guy, I would be building a procurement software for myself. So you think the SaaS core collapse is over exaggerated? I think there is a very large portion that is over exaggerated, but I think like there is a real fact that like people will end up building their own applications. And I think that's that's key. I think it's it's why not. What would you like to do with 11 apps today that you're not able to do because of lack of budget? Oh, we've never actually like put any constraints on the lack of budget. Like if you want to do something, budget is never going to be a problem. And that's been since the beginning. So what is the problem? If you want to do something and you're not allowed to, why would that be? It might well be because you haven't proven with a test or experimentation that that is the right thing to do right now. So for me, it's like you want a budget. What do you want? 100K, you want 50K, you want 200K to actually prove that things do it. Don't ask me for a million dollars and ask me for like dedicated and entire team to it. Don't ask me to actually dedicate six months of your time to for that specific thing. I'm not going to do it. But if you do it on the side and then you prove me that like you, you can actually make it work and I start seeing some results, we'll scale it and we'll give you all of the budget that you want. You want to see our, and you said that and so on and saying, but I want to see the data before I scale it. You now do paid and you do paid, but you know, on an F1 car. Yes. Oh, the Rue de la F1. How did you way up the decision to do that when it's a big investment and you had no data on a seat to suggest it would work? It took us a long time to actually get comfortable with the idea. How much did it cost? We spent even good amount of money like the budget, like we had a budget in mind that we wanted to spend and we went to different teams and we ended up negotiating. We like, this is the budget that we, we have this. How much we want to be spending for year one, for year two, all of that stuff. What are the options? And then all of the teams that we spoke to some of them were like, now, like for this, no. And or like for this, you don't get anything. You don't even get the logo. Some of them are like, oh, we'll do all of this stuff. And then we end up like a narrowing out two teams and then we end up negotiating with that two teams in parallel. And then there was one like, which is all the A Rue de la F1. Like, we were very impressed. But it took us a while to actually be comfortable with the entire content. Which you rather premium branding on a worst team or secondary branding on a number one team. Premium branding on the worst team. 100%. You get more exposure and also like you have a lot more creative freedom. And also you're betting. So the reason one of the main reasons why we ended up picking like all the A Rue de la F1 is because like if you look at the history of like, how the, is
like every single sport champion that's entered, they've again ended up winning within five years. And that's fantastic. And they're building the car from scratch, they build it on engine, they build everything from scratch. They're competing with all of the big ones and I'm a big Formula One fan. And I actually feel that this idea of incumbents, they're very technologically driven with a really clear mindset, drive, idea to win and so on, it is who we are as a company, it level ups. But also, it's who like, Koonik and the team are at Revolute. So if fits really well with your entire narrative as a company, if you try to do the way. - What was the biggest paid marketing event that you did, event/channel/activity that you did that was a mistake? And what did you learn from that? - The majority of them end up producing good returns. But like when I look at like the ones from an enterprise perspective that like, have a better ROI for us, it's like dinners. When we do a dinner with like execs in a given city, that has the best ROI that you could have. If I go to a trade show, the majority of them don't have good ROI. How much does a dinner cost? You could have a dinner with like four, like 15 people and cost you like $3,000, $4,000, $5,000. If you wanna go bigger, then essentially you need to like shut the entire place and all that stuff, so you will have to spend more. Depends on the city, not the same doing it in Mexico City or doing it in Barcelona or doing it in London. But the ROI is actually quite solid. But so dinners, the benefit of the dinners is like, you end up imagining you're inviting competitors. So you're inviting like competitors of like different customers you're trying to close. So like those guys are gonna know that you are actually talking to these other guys. So there's a photo that ends up being created in place and it just plants out really well. And because they know, they know like, it's usually same ICPs, so they know like who's doing procurement, who's doing like whatever, who's doing like the sale, who's being like the CTO, who's the chief AI officer, all of that stuff, they know each other. Now who is works really well. The worst like ROI for us has always been like conferences. We just do not write in there. - What's the takeaway from that? - We should be spending less on those things and should be building our own events more. - We should be building our own events more. - That's why we did like 11. - You did this insane 11 labs event which reminded me of like some kind of rock concert meets Steve Jobs kind of event. Do you need to see ironically a return on that or is it like 100%? - Why wouldn't you? - It's always difficult to know. - No, like so you end up like having like this concept of like influence revenue and then direct revenue or like close revenue, right? So there's a lot of like different variations, all of this that you can plan it. And the event that we run in London, the 11 labs summit in London was fantastic. Like we wanted to prove that like a European company can actually be running these big events with like like so many people and then like put up a show that actually people get passionate and talk about it. And also motivated and presented, we presented some ideas, we presented like we brought some like guests to talk in front of everyone else. What is your biggest tip for me? If I'm thinking about one company in particular of Osnay, I solve intelligence, amazing business in London, AI for patent lawyers, they should do an incredible event for patent lawyers, specifically be an amazing close knit community. If you were to advise say them on you should know this, if you're going to do an event for your customers, having done it so well, what would you say that it must be? - Bring the right ACPs, design the content really well and think carefully about the content that you want to want. What would be your advice on the content to sign it well with that mean? - It has to be like not salesy. I think it needs to feel natural. Like you should do like a presentation about your company, like some insights, talk about like the things that are coming next, your vision, but if you make it to salesy, people will walk away and never come back. And I think that's the fundamental trade off. Like for me like these big events are like, we talk a little bit about 11 labs, so Mattie ends up doing like the big keynote. But then after that, for me is not about how do we put those partners, those companies that are building in our platform or are using our technology in front of us, many people as possible, so we learn about them. And I did my, I did a fireside chat with three amazing companies, like BCG and Naturgy and Connector. For me was more like, how do we incends their appearance? How do we like talk about like what are they building, what they're using? It's less about the lab, it's about like them. And I think that's like you need to plan the content in a way that like it feels less salesy. You talk about it, but also you bring partners to validate what you're doing is actually right. Totally got that. You said that partners, how do you think about partnerships as a channel at 11 labs? What are the big misnomers that people have around partnerships? There is a concept that I really like that we've actually done fairly well, I would say at 11 labs, which is like the strategic partners. And that is strategic partners like we put in that bracket is like companies that have a CBC. And I know like this is going to be controversial, but like I actually love CBC, it's like corporate venture capitalists because they help you navigate big brands. They are your champions entirely. And they're incentive is to actually make it work really well for the business. Just for people to kind of understand that like sales force ventures, that's exactly like Deutsche Telekom capital, like T, T capital, what do you think is that they have one? They all of them end up having one, like entity talk, comm adventures, like all of them have like one of them. But the good thing is they know their business. And they were not sexy. Up until like a year and a half ago, two years ago, they were not sexy. It was like returns were not there as we know, right? Like CBC getting the time is like really difficult. And they were just like trying to like fight to get a location in the best companies, but like it's just not possible. Today we've proven with 11 labs. Like we dedicated time to actually partner with like Woffing Capital from Toyota with the Deutsche Telekom guys, with the Telefonic guys, with Liberty Global, that actually join our cap table. All of those pieces like that is a fantastic deep-rich strategic strategy. And so you get them to invest a small amount and then you distribute through them. Exactly. And you essentially, we never say contracts with them. And essentially they end up like depending on the situation, you have one side or another one. Do they have to bring a certain amount of pipe or promises to get a certain amount of allocation? Yes, they do. (laughing) We are 11 labs, so nothing is free. But I think I like it because like it incentivizes like the way I organized this concept initially. And it was so funny when I pitched it to Matthew. It was like really people are gonna give us money as a contract. It's like investors and I was like, yeah, let's try, right? And I think like the reality was that like, you end up aligning incentives. If the incentive is told only invest, the incentive is only to invest, but your incentive is actually to close the deal. So how do you figure out something that works along the way? So that like you put and I'm saying, you know what? You will invest for every million dollars that you wanna invest. You need to actually like bring X amount of revenues in the next 12 months or 24 months. What about time for you one? And there has to be some penalties on some consequence if that doesn't happen. That is the way they like flams. So I have to actually, if you don't bring it, we strike your last like, is that possible? We buy you out. I think what's perfectly fine. And then everyone is incentivized. And the logic and I strongly believe that is the case. That's how it pitched to everyone. It was like, we want the best. So if you invest in a million dollars in a level apps and you bring a contract, you help us close a contract, then your valuation goes up. So you're making money from the VC side, but also your business is getting more efficient because it's implementing a level apps. It's a win-win for everyone. - I totally get it. I think the other thing that you also get is a public market messaging story, which is like we're close to the partner with 11 labs, a pioneer in the industry. And four large telecoms providers, wherever you are around the world, or whatever enterprise you are, that helps a lot. - 100%. But also like the beautiful side, like you and the building, new products, specifically for them, because then you get the inside of the industry. So we went into the telco industry. We had no idea about the telco industry. We've actually learned everything about the telco industry, partner with like KPN, Deutsche Telekom, Telefonica, Entitio.com, all of those really amazing brands that have been in the industry for a very long time. We work very closely with the Warp and Capital guys at Toyota. We're learning a lot about the automotive industry because they're in the cap table, so everyone is motivated to it. Like in the same, like in financial services, or even going into different markets, like there's a number of advantages of having corporate BCs in your cap table, just because you incentivize it, and you increase your opportunities of being successful. - What are the biggest mistakes that you think people make with partner ecosystems? I think people think of them as like a silver bullet. Oh, we'll have a partner, and then it's done. I think you need to have people who nurture those partners incredibly well to teach them, train them, onboard them, what would be some others from your perspective? - It takes time. It takes fucking long time. And that is the reality is like, if you're coming into like the distribution side with partners, or you're building entire partner ecosystem, thinking that you're gonna be like making another 20% of revenues like in two quarters, you're wrong. Like that doesn't happen that way. You need people dedicated to it, you need incentives for them, because people lose interest, and you need you're incentives for your own team. So initially, start using like SQLs, sales qualified opportunities, or SQLs as sales qualified leads to be able to actually track how much volume has been generated, and what is the actual traction being generated. And then once you start having a solid like motion in there, then you start tracking and move it towards like the revenues. So each one of the SQLs needs to be generating a certain amount of revenues. Other than letting them invest, how do you incentivize your partners to push you? You can always end Salesforce has done it extremely well for me there at the reference on this, is like they built a partner ecosystem that like where they get deals from like Salesforce, but they send deals to Salesforce. And in some cases like in the markets where they can not be building the customer, they actually do send the deal. I mean like, oh, you're my partner, and you will be building the customer, and then I will build you independently, right? That's a fantastic ecosystem to be building. How do you think about the justification of rep time across account? And what I mean by that specifically is like, any company that's very large could spend a large amount of money. And with PLG, everyone tends to start small, and then the hope is they expand much bigger and bigger and bigger. How do you think about what ACV is large enough for reps to spend significant time
on trying to get it. A thousand dollars a month. When you start spending a thousand dollars a month as a business, your brain completely switches because you don't want to put it any more in your credit card. And at that point, you start believing like, "Shit, I'm spending a lot of money in there, with that software. I do have high expectations." At that point, if you have a motion from a sales perspective that is fast enough, then it doesn't really matter. And you're ready for a weird one. One of my favorite things I've had recently is like, "Fear is a mile wide and an inch deep. And you need to take the step to realize it's not as precarious, you think. Where have you thought the thing was very scary and difficult?" Where it actually wasn't once you did it. I had a very clear conviction that like at 11 laps launching India was going to be extremely difficult and we might fail. And what ended up realizing is like, I didn't know enough the market to realize like if you do it well, you can make a ton of money. And also generate a ton of us and generate a lot of ROI. Do you have to send OG team members to every market you open? No. But we do it centrally. We always try to like build a market like centrally from HQ trying to close some deals so that for me it's free to actually like deploy a single person on the ground. Sorry, how much is free to deploy a single person on the ground? Because like I'm already making revenues. I'm profitable. I'm making revenues in that market. I've proven that like it is a market that is getting so you only go into new markets when you've already got a lot of customers and you can see the PLG. No, not on the PLG. I don't even look at the PLG numbers. I don't care about those ones. I look at like what are the enterprises, what are the companies in the market? How is my portfolio construction in the market? And how can I close some of those companies to get to a certain level of revenues? At the moment that I get to that certain level of revenues, for me, I've nailed a product idea that needs to grow and needs to prove that like it can scale and it can have like product market fit. But at least I've proven that actually can start selling in there. Then that's the moment that I actually I can get the team on the ground. What market are you knowing today? Geography or sector that you have most likely to be in. We everywhere. This days. And that's everywhere. Everywhere. I have teams all around the world. Some of them have been announced. Some of them have not been announced. But we have teams all around the world. Yes. Where are you weakest? I think in general like we've been weak in some of the languages. And that is like entirely my fault on believing that like you could sign contracts. Everyone is in the world. Everyone in the world speaking English only. And then you realize later on that it's like that's just not possible. And on the wrong leg I start I open like Japan by myself without speaking Japanese. Japan's hard. It's really fucking hard. My friend is Daniel Dunes from your I-Poth. He told me before how hard Japan is a major market for them now and it's phenomenally successful. But it's hard to spin up. It's really hard. And I started doing it like two years ago going myself to Japan like constantly and meeting companies and we started generating much and it was great. And then I hired my first rep. And then I hired the GM, Jim and the rest of the team. That was a really hard market and you could not sell in English everywhere in the world. But you could also like not sign contracts that are always in English. Like so if you end up having a team that is mostly has mostly high experience in the US, then I believe is that like you can repeat that or anyone in the world. The reality is like you look at Latin America less than five percent of the population speak English. If you want to open France and launch in France, good luck. It will only be speaking English. Good luck if you don't offer like French law in your contracts. No one's going to be signing it. So there is some of these learnings that we've had that are really really tough. There's like we wanted to actually sell in France and well I was not speaking French then let's get someone that speaks French right. So there is some of those things that we've learned by doing that is my entire fault but it's also like part of the experimentation I think. If you think that stuff careers fucking hard. We are there. We have an office. Yes. It's really really really tough. But also like the benefit of Korea and that's why I was saying earlier like you need to have a thesis on why you're launching a specific market. But the thesis on Korea was they produce a ton of content. They're very innovative when they want and they're producing products and services not for the local market but for the international market. So in reality, yes, you need to be selling in Korean but the majority of your usage will not be in Korean. We likely be for the international market. So how do you support and map those languages they care about that you can target those companies at least for us. I even have paid to be powering the decline of Hollywood and they don't mean that horribly but like there there was a brilliant article the other day on the permanent decline of Hollywood and I think it was all shit journal article but it essentially said about the democratization of content creation and what that's done against humor attention and hence the decline of Hollywood is producing less of that content. You are in large part powering that. I can paint a very positive case for democratization, income, equality, equalizing content and also declining Hollywood. Is that a good thing? I don't think that's how I will put it. I think Hollywood is declining in this model that they have today. We're like very big budget productions that require a ton of people that require a lot of different things. And I think they're going through a crisis but I actually think Hollywood will come out even stronger than this. And I think at the end of the day, it's like imagine that you get a startup and the startup tells you like, you know what? I need $100 million or it's $50 million per seat just for this idea and then it's going to take me five years to get it out. I don't know who's going to buy it. What are you going to say? Like why don't you raise a million dollars? That's going to be like raise a million dollars, prove like some points and then start going in. And I think that's the problem with Hollywood right now. I don't think it's like AI voices. I don't think it's AI video. I think those are like additional solutions to make sure that you're democratizing it and you're reducing your cost of launching new ideas to the market and that is going to be part of the solution. It's actually why I find defense so hard to invest in which is like it takes five years and $200 to $250 million before you can make your first offer of revenue on an advanced product quoting from Matt Stackman who's the president of the CBO Vandero. I think he knows it's shit. That's just tough for me as like a seed venture investor to get on board with that cost curve to dollar gain. Do you know what I mean? And that's the that's what needs to change for the moment is like how do we create content that it takes less money dollars to actually be created. You start very slowly but also then you run public once you realize that actually did his product market fit in that content. And I was talking with a lot of studios over the past like three years. I've spent a lot of time in LA in the industry and my pitch always to them is like hey let's try to create content that will capture people's attention across like the channels that they operate today and if it works well let's scale it then you have the $50 million budget and I think like what's where AI can benefit a lot but you have and because like you can iterate a lot you can create content that is personalized you can create that is like is engaged by people and then we were talking just there are like this idea of like cost per engagement why don't we use exactly the same framework. How much is the cost for every single person that gets engaged in your content and that content can essentially expand to be extremely high quality as you're proving that like fundamentally dynamic changes right. You mentioned a couple of times but also investing as well. Fantastic investors we've invested a lot together should more operators be investors at the same time. Yes yes yes yes it should always. But it should like my thinking is like it is because like founders want to be backed by all the founders they want to be backed by the best operators. Those want to be backed by the best investors. If you are like an operator and you are willing to deploy time not money time to help a company like navigate and try to be successful at some point you will end up realizing that like why not to actually do it from within institutional money. Okay because flip side when you take institutional money it's a great responsibility of taking on someone else's money and you have already made a promise to your employer that you will devote your best efforts and all of your energy to making them successful and the company successful. If you're suddenly looking at defense companies at seed you are not doing that job to the best of your ability. I don't think so. I think that you can do like both things in parallel and one contributes to the other one. Like I don't think there is any conflicts in there fundamentally. I don't think so I think you can because you have reached and I'm your friend. You wish an ash long that you can. But I don't think otherwise. Like honestly if I was one of your sellers and I was going home and in the bar of time reading about net generation drone companies and the cost curve to launch drone companies you'd be like dude your mother fucking turf is France and it's media you could route that instead. I would be saying that if I was 100% and I would understand it like I know but I'm getting the best out of myself but in that. But you know what but the interesting thing is like I think you put it really well in the other in the other podcast which is like you are the hardest working person in the office. I am the same and if you want to do both things at the same time you need to prove everything that you are the hardest working person in the office. And I think that's when it works. Fundamentally like you will work really hard for the company but also you will work really hard for your investors and you're at peace and I was when I was negotiating my my LPA with my L piece we got stuck in one's clause. You know like always you get stacking clauses and things like that. What was the clause? I can't even remember but like and I remember like that clause which was like for me was absolutely silly and I was like pushing back and like for them it was like core to them. I was like I call my my my my my my LP which is absolutely fantastic like since then a capital that's really amazing guys but like I remember calling them like guys like we need to get over this like if we are fucked if I don't return the money and I don't do all of these things we don't fact it doesn't really matter how we see it right it just doesn't really matter so let's move on let's close this thing let's make sure that I start deploying the capital and then we will celebrate and if doesn't work out I'm fucked I'm account of a photo of this I lost all of this money will figure it out but I don't think I will lose your money I think I will do like a 10x and I'm happy with it and we ended up like moving on what fund would you be happy with it what do you say to a master I would be very happy with the 10x I'd be very happy with the 6x I'd be very happy with the I think like for me is like
The way I thought when I was raising a fund is like I will be very happy The moment that I actually have seven unicorns in my fund seven. It has to be seven. I'm not gonna be happy I'm seven. I don't know. It's a number that I have like baby back Don't watch for but Soccer sorry Okay, well he was number seven which is why I think that's the key like people that like want to achieve something There's different have a very clear idea of like what is the actual like vision they have like I'll care if you'll see it only I don't care. Yeah, I don't care Because you do the a of 11 apps with 350k you make a fuck ton of money sure I did the precede No, I mean it needs to break my Okay, I got you I didn't like pre-preseed No, but I think like at some point like you need to kind of makes like all some others But also like I think it's important to stay within your lane as well, right? Like I get a lot of like a's and amazing companies I just it just know my area of expertise as a fund investor and that's not what I'm gonna have a lot of fun as a As an investor is it no not not for me I love like the scrappiness. I love the crazy ideas I love the companies like the founders are like no one to no one wants to back them I like those ones. I love things that are like not obvious. Which is did a deal together and it it it wasn't I mean for me It was very obvious for your team was like you're and and and and for you was like pretty obvious But I also like talked to a lot of other BCs and they were like no I'm like how is this enough for you? I don't understand it. Those are the things that I really like my favorite There's a one we did it then they had like town people cool and be like by the way super should speak about the round Should you know? No, no shit. No, no, no, no Wait, so you were not interesting a week ago and now that you know that don't you be seeing about what about doing it Then you're interested. No, thank you. I totally agree with you. Unity con does it matterly you said there it does a lot of the time with AI companies It's like inverted and I actually if your unity cons good it almost means that no one's using your product I don't think it matters in the early days. I don't I think it's more of how like how do you get speed? But if you're building an entire brand new market from scratch I think you have like a power of deciding the pricing and that pricing will help you a lot in terms of unit economics So the key item is like are you building something from scratch? And it's so then you have like pricing power If you're not and you're only looking at like building something that other people already have Then you're gonna get screwed and then you will have to figure out how to actually go deeper to be able to charge more What's your single biggest advice for me and pretend I'm an operator or a company? I'm a head of sales. I'm a head of product. I had a very few any of the kind of coveted people that you're born on a cap table I'm like I'm thinking about it more investing. What would your advice to me be? Having done all that you've done? Be helpful like the money that you're investing is not worth it Like I mean, it's just not worth anything for any company Like if you put like a 5k check or you put a 10k check or you put like a 50k each Not gonna make a break the company and you need to be very clear that like in your mind that that's another case One of the most common ways companies need your help. What's the number one one? Go to market hiding people getting to car sales hiring Sales hiding for me like I go into customer calls with my my portfolio companies and absolutely love it I do interest for them I ask them like to send me like their decks at their pitch like record themselves pitching and I give them feedback and I love it Because then I can figure out essentially how potentially we can change it how like are we in the right market? Are we not are we getting the right traction or not? I absolutely love it and I think that's you can be Helpful with your portfolio companies in your own way just forget about the money do small checks It doesn't really matter. I always say do the same size check every time do not do the whole oh, I think this one's great I'll put 50 this one. I'm not sure I'll do 10 and just do 25 every time whatever it is I think there is like different variations and methods. I've not done it in my life I've essentially as my wealth kept increasing then fundamentally started doing bigger checks and that's okay But and you know like sometimes like of course we fool ourselves Saying this is the company and you know how like the majority of times that we do it like you end up getting disappointed We get disappointed, but also like we would do it again What's your biggest investing mistake? Like I've done a few investments where like I was coming to the market I was convinced on the founders, but I did not check how hungry they were to actually like do go to market I ended up finding out that like yes, they were very hungry to build product to execute But they were no hungry and actually like eat rate on the go to market How do you test hunger on go to market specifically? I think it's very difficult I think it's like for me is like if in the first conversation I want to understand like how are they thinking about go to market already and you they tell me like sorry I'm just like I'm not only thinking about like building research and doing all of the things like Fantastic, I love your product. This is great. It's fantastic. Your mindset your ideas It's just not for me because then you're gonna be fighting with them for like go to market And I have a bunch of my portfolio companies that actually I'd like that and it's great Don't get me wrong. They're doing super well and I love them and I'm as helpful as I can But at some point the party ends and if the music ends and you're stuck without having a Product what you monetizing it and you stuck with the idea that like we can always make more money later on Then you get a fact you can invest all of your money into one company that you've bought which company? Combat that one maps 11 laps for sure. Obviously. Come be okay. You cannot be 11. You cannot be the revolver Yeah, I love that there's a company in Spain called tech aerobotics th eke Er they're doing like robotics for like the manufacturing industry and like like warehouses and all that stuff Absolutely most geniuses guys that have seen in robotics space ever like Amazing. I'll just dump all of my money. How quickly do you think you know a company is good? Was it obvious very quickly that eleven? Yes, yes, yes, I mean you like I stopped the mighty for the minute and I committed right because like for me Like you know one of my best from fun one. I think it was linear Well, I yes, I know Sakura and very early and I it all look great But it wasn't what it is today for a couple of years actually it was a Bit of a slow partner. Do you believe in slow burn? Yes, yes, that's absolutely fine Like not everyone learns at the same pace not everyone like not everyone's market like grows at the same pace And I think that's okay like life is not perfect. Why would we want to have like perfect companies now portfolio? No, let's do the tough things always I think like the reality is like for my my LPs I always told them like guys we're gonna get right and we're gonna get wrong like and that's okay Like if I if I invest in a founder that like it doesn't work out and the founder wants to learn another company I believe the first time why not to do the second time which is like you are like trying to fall in the same place multiple times Yes, and I will because I believe in people and I believe in like that They can do something that they can do like learn from those mistakes and execute and move quicker and quicker and quicker I think that's okay. I'd love to a quick fire So I say a short statement you give me your immediate thoughts. That sounded okay Okay, the reason I look kind of dazed and confused there is I was trying to remember this brilliant quote and it's like What would you need to achieve to be happy in 2026? I mean for me like if I get three unicorns and 11 laps crosses a billion dollars in revenues over very happy Wow three unicorns for the fund over very happy. What's the single hardest thing for you today? Time it's like it's not an answer. It is like I love you do It is like it is I don't have the time and I love to spend it's like job into me. I work too hard No, no, no, no, no, it is not and the promise like if you don't have enough time for certain things then you're sacrificing like your partner Your friends all of us have and that's the hardest thing for me like it's I choose to actually work like the amount of Of course that I work and work for 11 laps and work for my fund for my LPs But there is a choice and then you're choosing to do things putting aside all the things that are also equally important What's your escape plans like like gardening? I absolutely love it. I talk to my plans I have so many plans at home. I talk to them all the time. I water them I like I take like small scissors and I chop chop them like it's so nice I really like it and that's when I'm really stressed when I don't understand like how to fix a thing Then I start essentially like a spend an hour or two hours like looking after my plans I can like spend time like looking at them and not doing anything just talking to them that gives me back energy Fucking away It's very strange but no no there's no such thing strange I think we need to be a bit more strange. What is the thing that makes Matty so good? What makes him so good is like I think this is a bit of listening to people and then making a decision Regardless of whether he gets a right or wrong and he will acknowledge if he got something wrong and then change it immediately And I think that's what I really value because like you get CEOs that will tell you like most of the times I need to get it right and then make some mistakes and there and I feel for me the it's actually the opposite is like You should be always getting it right or like 99% right in like 5% of the things that are really mega important Like in the 99% 95% remaining things you should be getting it mostly wrong I think that's what Matty is trying to do and he's very successful at that like allowing people to like experiment and get it wrong And then push back will also run with their ideas and if there is a thing that he believes like it is like fundamentally Like in his to have a specific way he will say it and he will do it and everyone gets to be it needs to be aligned And he has that ability of like Combining both things in different moments in time and it works really well with senior Tati level apps Final one point. What are you most excited about when you look forward to the next 24 months? I am actually looking forward to the next wave of foundation model companies I believe that like there is a brand new wall of opportunities that we are unlocking or that is gonna be unlocked with any wave and Where were you looking at generation of open AI next generation of open AI But are you actually think like open AI and dropping in Google and 11 apps were learning about like all of the new foundation model companies that will be popping up and Creating research and paying just like a few billion here a few billion there and like just dropping them in but I think like exactly We were all the buy open AI at 830 or anthropic at 500 and tropic I'm a and I put it online like multiple times. I think like I
I love OpenAI, I don't get me wrong, they're amazing, pushing the boundaries, but I really like how-- - Do you think they are? - I still. - I think they're still like pushing it, and I think they're like, they're trying to think, like good things for the world, but they were spread to thin. And I think it's the problem, like, even us at 11.5 with facing, and anthropic is facing, everyone is facing. Like, don't you start being very successful, you wanna do too many things, and then you end up like getting too stretched, and then not doing anything correctly, right? It's like, how do you do less, and then doing it really well? But do you not think that it's been stretched too thin for too long, and the anthropic acceleration has been too great? - Yes. - They need to start from scratch, and for me, the key item is that, like, how do they start building the experimentation, thinking like, yes, we're still number one, we make all of this money, but at the same time, like, let's go back to the basics. - What do you-- - Anthropic, I use cloth, and I'm very happy. Like, cloth is my best friend. - Like, it's actually true, I use it all the time. - What do you feel personal and everything? - Personal, like, fund, 11 laps, everything. Biggest advice to someone who hasn't got it set up who needs to. - Oh, probably I'm the worst one of all of them, but, like, I mean, I, like, the cloth scales, for instance, and all of that, like, it's really amazing. But I see some of my, like, team members, and they're, like, they've just nailed it. I'm just, like, an amateur. They're professionals of all of this, and I would love to actually be, like, you know what? Back all of this, I'm going away for an entire month, and I'm gonna be a pro at all of this stuff. I would love to do it, and hopefully one day happens. - Dude, I've so enjoyed this. Thank you so much for putting up with me. You've been fantastic. And I actually preferred the second time, if I can say that. - Really? - Yeah. - Nice. (phone ringing) - But before we leave you today, a quick shout out to a company I've been genuinely blown away by, and I've been tracking closely, rocks. I've been watching this team closely, and the speed they're operating at, and the level of applied AI talent they've assembled, it's honestly remarkable. Rocks is pioneering revenue agents for the global 2000, plugged into your data warehouse and CRM, and delivering board-level ROI in just 90 days. These sales and revenue agents handle the end-to-end sales process for large enterprises from research prep to deal risk, outreach, and opportunity management. Christ, we've all had enough of those. Rocks gives reps a single interface on top of their GTM stack, powered by a knowledge graph across your internal and external data. So if you want to boost AE productivity, increase the revenue per rep, and consolidate your stack, try
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