YC said his idea "would never work". So he lived in his office for months—then raised $17M from a16z in 14 days. | Marty Kausas, founder of Pylon

Marty and his co-founders lived full-time in their office for several months. They worked on their startup 24/7. To come up with the idea, they messaged 120 potential customers every day for 3 months.

Originally, when they pitched YC they were told their idea would never work. YC said they'd seen it several times and it was destined to fail. So in 2 weeks Marty landed a customer and built a product-- and YC let him in. He went on to raise a $3M seed round from General Catalyst in 6 days and later a $17M Series A from a16z in 14 days.

We go deep into how to come up with massive ideas, how to get to product-market fit, and how to quickly fundraise from tier 1 VCs.

Why you should listen

• Why all 3 founders living in the office was the best decision they ever made. 
• How to raise a seed round in 6 days and a Series A in 14-- all from tier 1 VCs. 
• How to leverage LinkedIn to get exposure and lots of leads. 
• How to get more mindshare from your employees.
• Why Pylon has almost no meetings.
• How to come up with an idea using both top-down and bottoms-up processes.

Keywords
founders, startup, customer support, Pylon, co-founders, omnichannel, B2B, venture capital, product market fit, entrepreneurship, startup, Y Combinator, fundraising, product development, market trends, customer support, AI integration, team dynamics, venture capital, entrepreneurship

Timestamps

(00:00:00) Intro
(00:01:35) Why he chose to sleep in the office
(00:07:11) Project Management instead of People Management
(00:11:24) How it all started
(00:23:33) Cold Messaging Potential customers
(00:28:02) Finding the Trend
(00:35:49) Building V1
(00:38:32) Getting into YC as ChatGPT Comes Out
(00:42:37) Why fundraising is a "social game"
(01:01:21) Raising Series A from A16

Chapters

• 1:35 Why he chose to live in the office
• 7:11 Project Management instead of People Management
• 11:24 How it all started
• 23:33 Cold messaging potential customers
• 28:02 Finding the Trend
• 35:49 Building V1
• 38:32 Getting into YC as ChatGPT Comes Out
• 42:37 Why fundraising is a "social game"
• 1:01:21 Getting Series A from A16

Transcript

Marty Kausas (00:00)

The three founders, we were living in the office, you know, working all the time, even today, you know, I get up at seven 30, get home at 11 and like, that's my day. we wake up every day, we go on LinkedIn, we're messaging 120 personalized messages, between the three of us every day, you know, booking probably seven, 15 minute calls for each day for probably three months. I had the idea probably on a Saturday, the next day we talked to YC, they tell us the idea sucks and they also say that they've seen this idea a million times and it never works for anyone. We end up raising a seed round from General Catalyst right before the end of the batch. We had a big LinkedIn post about that where we raised our seed round in six days, $3.2 million, GC led it. And one important thing I'd say is how the investor hears about you is one of the most important things, especially early-stage advice we got was- 

Pablo Srugo (0:49) 

do you think the product market fit show has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars.It lets us reach more founders and it lets us get better guests. Thank you. Well, Marty, welcome to the show, man.

Marty Kausas (1:03)

Pablo, Thank you. Excited to be here.

Pablo Srugo (1:05) 

I found you on LinkedIn. Like I tend to find actually quite a few guests these days just through some of your posts. And I pulled up here, I guess this is your most viral post. And it starts, “we used to live in our office. Most people reacted. Why would you do that? We reacted. Why wouldn't you?” So what? I mean, well, and there's a picture there, by the way, if you want to see it of you guys like sleeping in the office. which I honestly like, I must admit I kind of love it. But what was your thinking? Like why did you set things up that way?

Marty Kausas (1:35) 

Yeah, I think it's funny. Most companies I feel like used to start this way. And for some reason it's gone out of fashion, even though I feel like if you're with people you really like and you're working on something that's really exciting, like why wouldn't you want to be in that place all the time? And I put a bunch of disclaimers in there. So, you know, it is both my most viral posts and I'll tell you, so. you know impression counts on LinkedIn and how hard it is to get something to the high hundreds of thousands that post got 1.2 million impressions. Nice. and so, you know, and it's because one, there were a lot of people who were like, my God, this is so novel, even though in startup land, it shouldn't be. And also a lot of people hated it. So like the best posts, obviously, you know, there's some sort of like, okay, people love it or they really don't like it. And so if you go through the comments of that post, there are a bunch of people who are like, This prevents a lot of people from working at Pylon or, you know, it’s not a safe environment. But, I think that if you actually knew the situation, if you knew the people, if you knew us, that's obviously not how it is. it's actually just a really fun environment where you're just trying to build the future with your friends. 

Pablo Srugo (2:40)

Well, it's funny, man, how engagement works. and I post, you know, a couple of times a week and, no matter what I say, there's somebody out there that's going to find the other side and why, like actually. It's completely wrong. every now and then it's actually useful because it's a way of thinking. And most of the time it's just kind of annoying because it's like, listen, it's a LinkedIn post. Like it's not a book. Like I can't cover all of the edge cases. You know what I mean?

Marty Kausas (3:04)

 So yeah, I think so we had lived in our office, you know, to start when we were starting the company and had, were like pivoting through ideas. So we were essentially in an apartment. Then we upgraded after we raised our seed round into a kind of like a Baker loft. And we actually scaled in that loft to up to 10 people. And it got so packed that, first off, you painted the picture pretty well in the beginning, but Robert literally, one of my co-founders had a mattress on the floor in the living room area. So it was just like on the ground and we had this pop a shot and his closet was like underneath the pop a shot. And we actually, that photo I think is going to be iconic if you know, Pylon makes it as a big company because we'll obviously show those early days. And we actually included that photo in our deck when we actually went out to pitch our A. and so that was the second slide. First slide was our logo. Second slide was Robert looking up from his mattress with like the pylon, you know, living room, essentially in the background and investors loved it.

Pablo Srugo (4:05)

I'm sure they did. It's that level of obsession and all inn-ness. i think that speaks to me. How did you- So you had 10 people working together? How all in were the rest of the employees, like the three co-founders clearly lived and breathed it all day. seems like, what about everybody else?

Marty Kausas (4:18)

Yeah, so I think it's funny, just like where people are in life at the company, most people are in their mid 20s to early 30s. And so actually, I think that the impression people have of us when they see us on LinkedIn is that everyone's a mega grinder. People do work hard, but not in the way that I think most people imagine. So, yes, the three founders, we were living in the office, you know, working all the time, even today, you know, I get up at seven 30, get home at 11 and like, that's my day. it's the middle is just all-

Pablo Srugo (4:50) 

five days or seven days. 

Marty Kausas (4:51) 

so I do five days of that schedule. And then Sunday I do like three quarters of the day. basically Friday night to like Saturday more or to like Sunday morning is kind of my free time. Advith, one of my co-founders, he does not take a day off. I just can't do that. I stop being as productive. yeah, I do kind of that schedule.

Pablo Srugo (5:15)

My religion, we just call that Shabbat. Friday nights. 

Marty Kausas (5:21)

But the rest of the team, it's interesting. So we're hiring only senior and staff for every role. So everyone's actually very, very experienced and they are in the office 24-7, but they're really good at what they do and they do it in the time that they have, whether they're, you know, at home. So Jesse, for example, he was the second engineer on the team. He goes for, you know, his morning run at 6 a.m. then like, you know, works a little bit from home and then shows up to the office at like 10 and then like works until five goes home, gets dinner with his girlfriend and then continues working. So it's like, it doesn't look the same way that I think a lot of people picture it where it's like, everyone's like grinding. You have to be in at 8 a.m. and stay until 11 p.m. We don't really care about what it looks like. We just want people to be working really hard. And we do value the in-office time so we can actually work together. But the kind of the image that people have of like being in the office all the time is actually like not the case for the rest of the team as it is for the founders. 

Pablo Srugo (6:19) 

I think what you want, I mean, I see two things that - one of them is it obviously it sets the bar. Like nobody's going to outwork the founders. So that, you know, like you're basically putting in the max. Like if you as the founders are working what you're working. That's the most, so if it's 40, like 40 is the peak you're to get out of anybody. If it's 30, that's the peak, right? And, and I think the other thing is like the thing you really want from those early employees, obviously, frankly, like you need a certain amount of hours to get things done, but it's really, want mind-share. Like that's the thing, at least for me, I remember in those days, like it's not so much like, Hey, when do you get in and when do you get out? It's like, do you come in on Monday with new ideas? Because like, you know, off times during the weekend, like you were organically thinking about what we're building and the mission and what you're doing within there. Or do you like clock in clock out and you know, kind of government employee style. Like as soon as I put my thing down, I'm not thinking about this anymore. And that mind share is really important. I think it really gets the wheels spinning a lot faster. 

Marty Kausas (7:11)

Yep. And then another thing I'll mention that is probably very unique to us. And I think allows for the time that people are in the office to be super productive is we have zero, there are only two scheduled meetings on anyone's calendar. so one of them is design reviews. So, Advith and Robert, my two co-founders, They lead product and customer success. And so they work with our designer, Wendy, and do maybe it's like twice a week or three times a week. They have like a block for design review. Hey, you know, looking at what Wendy's produced and, you know, brainstorming, cetera. The only reason we have that on the calendar is because otherwise their calendar is filled up with recruiting stuff or, you know, customer calls. And so we just have to like force, keep the time. But otherwise we have zero one-on-ones with anyone. Like no one on the team has a one-on-one scheduled on their calendar. We don't have any like all hands. A lot of the communication is done through, you know, I send out our monthly investor update to the entire team. So everyone sees cash and bank, everyone sees growth rate, everyone sees, you know, what's going well, what isn't customer feedback, et cetera. And so the time that people are here, there's no meetings. If you need something, you just turn to the person and ask them for help or, you know, try to solve the problem.

Pablo Srugo (8:25)

How many people are you today?

Marty Kausas (8:27)

 We're 20 people today. 

Pablo Srugo (8:28)

Do you think that'll scale? is it just what works today? How do you think about that? 

Marty Kausas (8:31)

Well, the thing is, I think while we're hiring really senior people, it is scaling well because it's more about project management than people management. And also we don't have a concept yet of levels. And so people, think the moment we hire someone and I know this is going to happen and good people should be thinking about this, but the moment someone comes in and they're like, like how do I get promoted to the next level versus like just I think salary discussions can be different than that. The moment it's like, I need a title and I want that title and that to be visible, suddenly the whole company has to change. And then I think that's where we'll have to start doing one-on-ones and stuff like that. I don't know at what stage that will change, but we want to prevent it as much as possible because right now everyone actually just works on the projects that are most important. They get shit done. They ask the right people who are right next to them for help. And so that's how we… I think that's how we execute really, really fast.

Pablo Srugo (9:25)

 I think you're totally right, man. And I think to the extent that you see, you know, in the world, start-ups outperform bigger teams. Like sometimes you're like, man, how could a little startup build this product and a big team can't do it? It's not because they're mimicking what the big team does and just doing it with fewer people. It's because they're taking advantage of their strengths and like those things around levels and all the bureaucracy and the meeting that comes with it. Those are costs associated to growing up. They're not the things that get you to grow up. And I think a lot of times people get that confused. founders, but even more so investors, right? Who want to see like startups or companies like look like a bigger company and they want to see org charts look a certain way. And you're actually like putting in friction where the best thing you could do is take advantage of your 10, 20, 30 people and just do things in a different way. 

Marty Kausas (10:08)

100%. And right now we have no managers. So it's just, you're either a founder or you are a non-founder. So that's, that's what the leveling looks like. And so we're trying to hold off on-  I think the first time we'll start hiring managers is actually probably going to be more for recruiting than anything is my suspicion. Cause like now we're starting to see, okay. the project management, the ICs , the engineers, product designer, everyone's able to work together really well. And they, there just needs to be some like top level guidance from a product person. So right now, you know, my two co-founders are playing that role. but eventually I think the recruiting piece, especially for example, on the sales side is going to become like more of a need. And so I think there will be more like management work that's needed there, but more on just like getting more people in the door. 

Pablo Srugo (10:59)

So we went on a crazy tangent there. Maybe let's back up. We’ll get into all of it. You just came off raising $17 million series A for May 16. You raise maybe a year before that you raise a seed from, I think general catalyst, you went through YC. So we'll talk about all that and you did them in like record time, but maybe like. high, high level, like what does Pylon do? And more importantly, like where does the idea come from? How did you get into this startup in the first place? 

Marty Kausas (11:24)

Yeah, 100%. So Pylon is building the first customer support platform built for B2B companies. The simplest way to think about it is we are replacing products like Zendesk, Intercom, Salesforce Service Cloud, but building it specifically for the B2B persona. And what B2B companies need these days, especially in tech, the audience we focus on, are one, the ability to talk to their customers wherever they are. So these days, a lot of startups, instead of doing email support, they're opening up shared Slack channels, Microsoft Teams channels, Discord communities, WhatsApp chats, et cetera. And the biggest problem, the initial problem that we actually discovered was that you couldn't do that with the traditional support platforms that existed. Now, how we actually got to this idea, so we didn't take the traditional path. Actually, we tried to do the good advice, which is go try to solve a problem that you have. Unfortunately, we tried to run through all the problems we had and we actually didn't have any that seemed like they could result in a big company. 

Pablo Srugo (12:21)

 just to back up for the context, you have you and your two co-founders decide we want to start something, you're all working and you're doing this on the side.

Marty Kausas (12:28)

It's a longer story than that. so starting with myself, I was an engineer at Airbnb on the payments team. That's where I went like right after graduation. I was there for two years and I really wanted to start a company like the entire time I was there,  entire time I was in college and I was like playing with ideas always, but never took the leap. So two years into Airbnb, I was like, screw it, it's time. I really want to try it. And so I go out on my first startup journey and I tried to start this health check product where we were helping people with Parkinson's disease track their symptoms. And so super random, my co-founder at the time. He had early onset Parkinson's. And so we were trying to solve that problem for him. And so I worked on that for a whole year, full time. And once we realized, okay, that idea wasn't going to work out, he wasn't the right co-founder to move on to other ideas with. so, you know, kind of went and grabbed one of my buddies from Airbnb who was still there full time and said, Hey, you know, I have another idea. Like, do you want to do this with me? And so he started off part-time and my goal was okay, over time we'll have success and I'll convince him to join. six months in. We have some revenue, things are growing, but he's never going to leave. And he's never going to join me full time. And so here I am a year and a half in and you know, still like I've gone through two sets of co-founders now, two different, like completely different ideas, very little progress to show frankly

Pablo Srugo (13:58)

And basic question, how are you paying, how you paying in the day to day?

Marty Kausas (14:01)

So the two years I spent at Airbnb were very financially lucrative. So even like coming out of school, just like talking about the numbers, right? I was making 125K per year on like base salary. There was like a small signing bonus. There was equity that was not liquid at the time, but became liquid like two years later. So I had, let's say, you know, a couple hundred K that I could live off of. And this is me two years out of school, no girlfriend, No responsibilities. 

Pablo Srugo (14:30)

You didn’t live it up like during that time because you can spend 125 really easy, but you I guess you played it- you were saving. 

Marty Kausas (14:36) 

Exactyl, Yeah, I was super frugal and one thing I recommend to people who are thinking about starting a company and they're like nervous about it. One thing that helped me a lot was I just wrote down into Google Doc. I was like, okay, here's like best case scenario. What happens if I leave here's worst case scenario. So worst case scenario is the opportunity cost of like not being at Airbnb for two more years and like getting that equity, getting that salary. And so I think I did the math. It's like, okay, I will potentially lose like 300, 400 K, which is a lot, right? That's, that's a huge amount. That's like more money that I was making more money out of school than either of my parents. and so, you know, that's a very big deal for me. And then on the best case scenario, and then also worst case scenarios, you lose that money and you make no progress and you just like, go back to being an engineer. Like that, that for me felt like the worst case. And I was like, okay, I like wrote that down. Like I can digest that. That seems fine. Then on the best case scenario, it was like, okay, I build a company and I go on that path and I start learning and you know, things go well and obviously that's what I wanted. So it's like, you know, is the worst case scenario that scary for me right now? Turns out it wasn't. And so I had enough runway to survive at least a couple of years and minimum two years, much more during the like one year into it. I actually ended up moving back home to San Diego to live with my parents.

because I wanted to cut burn even more. was just like, no living costs, it's the pandemic anyway. I'm just going to move in with them and work from there. yeah, plenty of runway. It's very easy to not spend a lot of money, especially if you're at this stage in life. And then even if you aren't, think you can still- you can live very cheaply. 

Pablo Srugo (16:16)

You can, it's just a lot, as you spend more over time, it's so much easier to spend 10K more than 10K less. It's crazy, but like, yeah. And even me, like I look back and I look back sometimes at what I spent five years ago and I'm like how did i do it? But yeah, you can do it. mean, if you really want to start something, it's totally doable. 

Marty Kausas (16:36)

Funny story. so after we got into YC and we'll get there in a moment, like add with Robert and I, started paying ourselves 35 K per year, which is like the minimum salary that you can pay in California. and we were making money every month. Like it wasn't like we were. Like I was paying 1.2k for rent for like a room in a hacker house in the mission. That was like a bunch of founders. I was paying around, I think 400 to 500 for food. Like I would go to grocery outlet. It's like discount food. That's gonna expire soon. and the funny thing is I was so healthy because I was like buying all my food, meal prepping, like eating lentils, chicken, broccoli, like every single day. And so I'm super healthy and super high energy. I'm not spending a lot of money. And I'm actually making money every month, even with a 35K salary. 

Pablo Srugo (17:24)

When you buy into that mindset, because I remember when we started GymTrack, you enjoy it, like you enjoy being like frugal. You know what mean? You're like, man, this price is so great. And then you see something special, like what kind of idiot would buy this thing? You know what I mean? Like you just get into that zone and it helps, it helps a lot.

Marty Kausas (17:38)

So yeah, no, it helped a ton. and it worked out that myself and my two co-founders now, Robert and Advith, we all had that similar mindset where we want to do whatever it takes to win. so, everything else is not important. Like we were just going to focus on this and optimize for winning in the startup game. Okay. So going back, I've now worked a year and a half on two different ideas. Neither of them worked. Both co-founders didn't work out. and I had my buddy, Advith, who was a former roommate of mine. I had met him through the Kleiner Perkins fellowship, during like a summer internship. And then we had lived together for three years after graduation. He was working at Samsara for like four years after graduation. I was working at Airbnb. And, you know, I reached out to him. was like, Hey, are you interested in starting something? And it turns out he was already exploring ideas with Robert, our third co-founder. And so they had been like exploring ideas for literally a year beforehand, at their full-time job. And then they have, and at the time when I approached them, I was like, Hey, we should work together. They actually said that they thought three cooks in the kitchen was too many. And so they actually rejected me at first. And they're like, you know, I don't know if we're that complimentary. We're all technical. We're all like kind of the same person, just like duplicated. And so I basically had to court them for like three months before they actually agreed

Pablo Srugo (19:02)

This is a first, we've had a lot of people come in here and be like, I got rejected by this investor, by this VC, this customer, but my co-founders, yeah, this is definitely a first on PMF show.

Marty Kausas (19:10)

 So it's crazy. Because I knew, because I had gone through all the different types of co-founders. I had gone through the co-founder who is the very experienced co-founder, right? Who has the business background and like, so that was my co-founder number one. And older and different stage of life. The co-founder number one, co-founder number two, tried to work with a person who was still at full time at their company and wasn't willing to take that, the full two steps out, right? So I had done both, I made both those mistakes and honestly, one of my learnings was I was just like, I just want to work with someone who's kind of similar to me, who I'm to be excited about working on any idea because we're likely going to pivot. And so I want to be able to pivot with the same people and just like work with people who I'm going to enjoy the process with. Ended up basically having that realization, started pursuing Advith and then eventually Robert as well as I got to know him better. And probably three months in. You know, we finally made a decision to work together, but it was not easy. They in fact had rejected me multiple times. They even at one point had said, hey, we decided to go work with this other third co-founder who was like the business guy. And that business guy basically tried to screw them over on equity. the timeline was literally like, okay, Friday, like let's say I come up to SF because I was in LA, during the pandemic, I was kind of bouncing between LA, San Diego and SF. I come up to SF, I'm like, hey guys, we should work together. they say, no, we're to work with this other guy. Then literally the next Monday, they're like, hey, you should like come like cowork with us out of our apartment. And so I come in that day, demoralized like, okay, I need to find someone else. And then they're like, actually we're not going to work with him. We should work together. And so it's, it was like very tumultuous, not like linear path. So, I think honestly, finding the right co-founder is super hard. think they're at least in my case, the advice I think that YC gives where it's like, you probably already know your co-founders played out. so, yeah, definitely not linear. yeah, but, and not like even though I knew the person I wanted to work with, like it was not that simple. So.

Pablo Srugo (21:26)

Starts off with a struggle and a fight. I like it.

Marty Kausas (21:28)

So, we decide, okay, let's work together. I was like playing around with some like fintech idea. They were playing around with a logistics idea. And so we had to like come together and be like, okay, which idea should we work on? And so we were looking at all dimensions and one specific thing we looked at was, okay, like what is the TAM of each idea? And so we like literally made a Google sheet. Like each tab is just, one tab was the fintech idea. We're like, okay, best case scenario it looks like if we like, knock this out of the park, we're going to make like tens of millions of dollars in revenue. The logistics idea, it's like, okay, we knock this out of the park. It's going to be like a couple, it's going be hundreds of millions in revenue. And then we're like, okay, wait, also like, let's compare this to like a good company, like a company that we know is like really great. And so we looked at Rippling as an example, and we're like, my God, they can't, their TAM is like orders of magnitude bigger because they just take every person who works and like multiply it times eight bucks a month. It's literally like tens of billions of dollars. And it's like, holy shit, like that, that's, that's crazy. And so then we started exploring as well. we're like, okay, let's look at the, like, the, like public companies that exist that are SaaS companies. and I actually don't know if you know this, do you know how many public SaaS companies there are that are worth over a billion dollars?

Pablo Srugo (22:46)

 No, no, not off the top of my head. 

Marty Kausas (22:48)

it's like, when we had looked, it was like 76. So it was not that many. And then we looked at how many companies are worth over $10 billion. It was like under 30. And these are, to be clear, public SaaS companies. And SaaS, like they define it like over 50 % of revenue from cloud software that they sell. So it was very, very few. And when we looked at the companies that actually made it to that size, turns out they all were, almost all of them were like horizontal SaaS companies. And so they had basically picked markets upfront and by accident or intentionally that you could sell to effectively any type of company. So like payroll, IT, sales, marketing, customer support. 

Pablo Srugo (23:29)

Salesforce would be the classical B2B SaaS, horizontal company.

Marty Kausas (23:33)

And the other thing we realized is no matter what industry you build in, or what market you're building in, you're always gonna have competition. you really want to be, you could say, if you build on a very competitive market, it's gonna be hard because there's all this competition. But there's also gonna be competition in these smaller markets too. So like you're gonna compete no matter what. And so you may as well be competing over the really, really big markets. And the example, once again, let's look at Salesforce who you just mentioned. How much of the CRM market does Salesforce own? Do you know?

Pablo Srugo (24:03)

No, I would say like 20%. I'm just throwing a number out there. 

Marty Kausas (24:07)

No, no, so that's very close. 24%, I think, last time I checked. So they are a $300 billion company, biggest SaaS company in the world, and they only own 24 % of their market. Like that's mind blowing, right? 

Pablo Srugo (24:21) 

Before hubspot started, like it was way later, like, and then from then there's been a bunch of others. It's true. Like you can always slice and dice these massive markets in different ways. And as long as you have some angle, whether it's on go to market or on product, there's an opportunity. 

Marty Kausas (24:35)

Right. Exactly. So we, basically said, okay, if first off, like our goal was to build a really big, fast growing company. And so the really big part, it was important for us to then go after the really big horizontal categories because we thought that's like that it looks like based on like what has happened historically, like the companies that actually make it, it's really hard to get to a billion dollars in revenue. That's like insanely hard. They're like, and you will just get capped somewhere no matter what, but it seems less likely if you build in a massive market where your initial product can be really, really big. So we kind of decided, okay, let's only work on B2B ideas. We skipped consumer because we're like, it feels too random, too hard. B2B in a horizontal SaaS category. And, let's find something there. And then the other piece of like, the company we wanted to build, we wanted it to be very fast growing. And we thought the fastest growing companies are the ones who solve like new problems on some sort of emerging trends. So like, the great example of this is like crypto. If you build like a crypto wallet, and crypto is small today, but it could one day be all of money, then it's like you kind of capture the market early and then grow with it as it expands. So we were looking for some sort of trend within horizontal SaaS category. Now, the way we went about trying to find that trend was very methodical. We basically said, OK, if we're looking for trends, maybe there are new job titles that didn't exist before that are starting to pop up that could be an indicator of new business workflows or something new is happening because there's a new title and new person. So we specifically were looking at post sales roles, like support engineers, customer success managers. We were looking at all of those different new role types and we were messaging those people on LinkedIn, just asking for 15 minutes of time to just interview them. So Robert, Advith and I, we'd wake up every day, we'd go on LinkedIn, we bought sales navigators so could message. I think at the max it was like, 40 people per day. we're messaging 120 personalized messages between the three of us every day, know, book probably like seven, 15 minute calls for like each day. And we're just asking, what do you care about? What do you do? Like, what does your boss care about? What metrics are you measured on? What tools do you use? how do you operate? 

Pablo Srugo (26:49)

And your message, by the way, to them was like, Hey, I'm a founder exploring the space, like would love for you to use your time to ask questions.

Marty Kausas (26:55)

Literally that sort of thing. It's just that. Yeah. We're founders who are pivoting. Like, do you have 15 minutes to tell us about like what CSMs do? 

Pablo Srugo (27:01)

You'd surprised how many people answer that. 

Marty Kausas (27:03)

Yeah. And shout out Sebastian, he’s one of the early people, if he ever sees this, who said yes. And, you know, we've stayed in touch with since. So, you know, it's great people who were very generous with their time.

Pablo Srugo (27:14)

 How many do you think you did these calls? 

Marty Kausas (27:16)

Oh so many. Like, let's say like seven, let's say five to seven per day for probably like three months. So what is that? Three months times, I'll say seven times-

Pablo Srugo (27:27)

 Is that one 50 or something? 

Marty Kausas (27:31)

420. Funny number, but 420. I mean, probably less than that because that's probably max. it's basically our days were filled with, we start the morning trying to book meetings, essentially. We hop on these 15 minute calls and then between calls, it's just like a lot of thinking, exploration, potentially making mockups. And so that's... kind of the the process we were going through. 

Pablo Srugo (27:57)

Did you change your questions over time as those months went by and you learned more and more things?

Marty Kausas (28:02)

 Yes, definitely. We definitely changed our process or the questions we would ask just as we would learn more. We'd like sometimes dig deeper into things and there I don't know if you can like be - you basically just like follow your nose to try to find something and eventually like we started spotting trends and then we'd be like, this seems like problem but like It seems like this is already kind of solved or this seems like a problem, but no one's actually going to pay for it. For example, there was like one, like there's one idea where we had, where we asked a guy, like, you seem to be spending like 30 hours per month, like doing this like tedious thing. Like if we could solve this for you, how much would you pay? And he's like, I'd pay like 15 bucks per month. And I'm like, what the hell? Like that doesn't make any sense. So, you know, all sorts of explorations, we would like sometimes make mockups if we wanted to like present them in follow up calls. sometimes people would be generous with their time and give us like another call. And so it was, you know, we were just doing that for like three months straight, hyper pivoting through ideas, like week by week, essentially. And then finally, we stumbled upon this trend, or we like heard like this, the similar trend of like, a lot of people are starting to talk to their customers over shared Slack channels. And we thought that was kind of interesting. We're like, okay, like it's interesting, HiTouch, who ended up becoming our first customer, they have 300, they had at the time 300 shared Slack channels with customers of theirs. And these are all the important customers. Everyone who's not important, who's like a self-serve customer for them gets email support or like intercom support, but everyone important gets a shared channel. 

Pablo Srugo (29:35)

I'm really worried because listen, like you've been listening for like what 10, 20, 30 minutes now, clearly you like it. And the thing is the next episode is way better and you're gonna miss it. You're gonna miss it because you're not following the show. So take your phone out.

and hit that follow button. 

And this comes out like randomly on a call. Like maybe you asked them like, yeah. And where do you talk to your customers? And like on Slack and then you just kind of dove into it. What do you mean? 

Marty Kausas (29:58)

And so exactly what happened was we were talking to lots of people. We would always take notes. And so we had a like, in like a notion or like Word doc or like Google doc or something. So like it was all searchable. And the insight didn't like hit us until we were actually talking to a buddy of ours who works at a series B startup. And he told us he was like, Hey, I specifically am trying to solve or like I'm like looking at tooling to help manage this slack mess. And I think the first thing he actually brought up was not even like the ticketing side, which we ended up focusing on, but sending marketing updates. So like product updates to like many of these customer channels at once, cause that's where all their communication happens. So he explicitly is on the phone with Advith and you know, tells him, like, you know, this might be worth exploring. Advith calls Robert and I. And we're actually not even in the same place at this time. I'm living in a hacker house. Advith is at his apartment with Rob, his and Robert's apartment. Robert is driving up from LA. And so it's a very memorable moment. He calls us. He's like, Hey guys, like there might be something to the Slack thing. It's kind of interesting. It seems like if the world moves in this direction, a lot of workflows are going to break. You're like, you can't do like ticketing anymore. You can't sync activities to your CRM. You can't track product feedback. You can't send marketing updates. And it's not only Slack, it's also Microsoft Teams, which is popping up. It's like Discord, it's WhatsApp, it's Telegram, like, you know, all these places where you have to do customer communication. And for the first time ever, this is happening, not just for like consumer, not just consumers are going Omnichannel, but B2B is going Omnichannel as well. And so that's like the emerging trend. And so I hang up the phone. I'm in this hacker house. I go upstairs. I'm like, Yo, Tejas, the founder of Hightouch, who I was living with at the time, like, Hey Tejas, do you guys have this problem? And so like probably 30 seconds. And then he's like, Marty, you're not going to believe it, but we not only have this problem, but we're actively looking for solution. and so it was that magical. like, go upstairs, like go ask my roommate who I'm living with in the mission at this hacker house called mission control, 10, mostly founders living there go up ask him, do you have this problem? Boom. Like he's like, yes, we do have this problem.

Pablo Srugo (32:04)

That's incredible. 

Marty Kausas (32:05)

So, you know, we start talking, what’s even funnier about this is that he had worked on this exact same idea, like the whole shared Slack channel thing. In fact, I don't know if you know Hightouch, but like their name stems from Hightouch support. So they were like originally trying, like now they became like a reverse ETL company and now like data activation platform for marketing teams, but they started as Hightouch support. And that was like shared Slack channels was like the way of doing Hightouch support. and so they, they like already knew about this way of operating. They started doing it because they, believed in it. And then, you know, now, I dunno, maybe a year or two later, they're like looking for tools that can solve that problem for them that they worked on like a long time ago. and then he introduces us to their head of support engineering, Teresa, at the time we don't have a website, we don't have a name. He introduces us to our Gmail. So like we book like, you know, a calendar, like at a time to chat with Teresa. the next week with our Gmails. It’s super unprofessional Google meet, whatever. and, yeah, she basically says like, yeah, here's the problem we're having. And we're evaluating like these tools and like, we're using a tool called help, which had been acquired by Atlassian and was not like really being, you know, developed anymore. And so they needed to switch off in like the next few weeks. and so we're like, okay, this is like, this is our shot. So we, first off, we like looked through our notes. We're like, okay, wait. It seems like they actually had this problem too. They actually had this problem too. And so we did a quick run through, called up some people, tried to validate that, this is a problem. And it just felt like, OK, there's a clear  pain point right now. It seems like we have an advantage if a lot of tech companies operate this way, because we just are very in the tech network. And it fits into our emerging trend plus larger market thesis. So yeah, basically had that idea. now in tandem. we had booked some like open office hours with YC. So YC, I think they experimented with this, for like one batch where, as part of their interview process, they were allowing existing YC founders to refer, like non YC founders to get advice, in open office hours. So they refer us to this, this is like open office hours where they're just going to grill our idea. So we have the idea on probably like a Sunday. The next day we talked to YC, or no, we had the idea probably on a Saturday. The next day we talked to YC. They tell us the idea sucks, and they also say that they've seen this idea a million times and it never works for anyone. they, but they're like, you guys seem really good. So, you know, do you want to have an interview, like an actual YC interview, and you can have it in two days or in two weeks. And so we're like, okay. let's do it in two weeks so we can show a ton of progress before then, and then show up with a customer or a user, because we've only been thinking about this for one day. The next two weeks, we're grinding, trying to figure out, setting everything up, trying to also talk to Teresa and convince her to start implementing version one of the product. And also Thanksgiving's at the same time. So we're basically trying to sell them during Thanksgiving. We're also trying to prepare for this YC interview that's coming up.

And then, yeah, it all kind of comes together. Teresa starts piloting right before our YC interview, so we could go in and say, yeah, we had this idea two weeks ago. It's in a customer's hands right now, and they're gonna start paying for it ASAP. And so, yeah, it was that fast. And then we were also able to start getting some other people, prospects who were interested in the product as well. And so, the next two customers-

Pablo Srugo (35:49)

And what was that V1? What was the first thing you decided to hone? 

Marty Kausas (35:53)
It was so simple. It was... if your customer sends you a message in a shared Slack channel, you can add a ticket emoji to that message. And that would thread, like it would thread and say, Hey, a ticket's been opened. And then it would send that message to intercom. And then you could reply from intercom and it would show up in Slack.

Pablo Srugo (36:12)

 Wow. So you're just tying in, you're tying Slack to intercom basically.

Marty Kausas (36:16)

That's right. That's right. That was like version one of the product. It was just like an integration. That's it. 

Pablo Srugo (36:20)

And obviously your goal was to get rid of intercom. 

Marty Kausas (36:23)

No, So we didn't know where we were going to go. We just knew that, okay, like we're in a broad- we basically, thought that it was a good category to be in and we'd probably be able to find something big within it. if we just like followed this trend, that was like the hypothesis and we didn't know we're like, cause we're like, like marketing updates are hard. Support tickets are hard. Product feedback is hard. Like it, like all these things are kind of broken. So maybe we're like a workflow layer where we're going to be like, between Slack and Microsoft teams and discord and like go to Salesforce and intercom and Zendesk and product board. like, maybe we're like a workflow layer in between. actually the entire time we were going through YC, like that's all we were doing. we were just building this integration out. did it for Zendesk. We did it for fresh desk. We did it for Salesforce service cloud. were building integrations on either side. 

Marty Kausas (37:11)

whatever customers seem to need, you would just build the next thing.

Marty Kausas (37:15)

Exactly. Exactly. 

Pablo Srugo (37:17)

you have this, this crazy, duality between on the one hand, very top down, like needs to be a big TAM, needs to be horizontal SaaS, like almost this checklist. But then you also have this classic bottoms up, just solve the problem, solve the next problem, solve the next problem. And I must admit it's original. Like I've seen both plays I've seen, you know, and you have like everybody would know maybe like the Jeff Bezos story, right? Where he just sees the internet blow up and he's just like, Hey, what should I do? Let's sell stuff online. Like that's, know, and then it's hands on. And then everybody knows the bottoms up, like take a Shopify, you know, it's like, want to sell snowboards, you know, happens to build a website. And then people are like, Hey, what's this platform and it's Shopify. So like both of those exist and both of them can work, but you kind of had, you had kind of both and, I find it's, it's unique. And it also makes a lot of sense because what you end up is you end up with a checklist. That means that you're not just going to climb up any sort of mountain, but you also allow yourself to realize that you're also not going to know what the end state is until you get in and you just start trying things. So you kind of have the best of both worlds and, yeah, I must admit it's, both refreshing and. kind of like logical actually surprised I haven't seen it before. 

Marty Kausas (38:32)

Yeah, no, I think you're totally right. so a lot of things still had to happen to like, for this to work out. In fact, as far as we know, and we tried counting, we are the 13th company to start from the same starting point. There are like 12 other companies who have started with the, add a ticket emoji to a message in a Slack channel, like send it to Intercom or Zendesk, at least 12 that we know. In fact, our first customer literally did that as their product before we did. So like, it was not like an uncommon idea. Again, YC had said we've seen this idea a million times. They have like multiple companies and multiple batches who had tried and failed.

Pablo Srugo (39:08)

But they just let you in because you guys, they were impressed by you three and you were moving fast and they're like, whatever, let's take a shot.

Marty Kausas (39:13)

Totally. So YC, I think is like very much about team and progress and like just trying to figure out, you really grindy? Are you really smart? Are you really technical? And like, boom, that's it. So when I talk about like timing, getting lucky for us, you know, so we have the idea and we didn't know it at the time, but what happened, which was critical, we had the idea on one day, the next day, again, we didn't know this at the time, Zendesk gets acquired by private equity, like literally the next day. And then like seven days later or something, ChatGPT comes out. And so. These two things were critical. And also just in general, Microsoft Teams is becoming more popular. They're pushing shared channels now. 

Pablo Srugo (39:53)

This is what year is this that you're talking about? 

Marty Kausas (39:55)

2022. So we've been around, we just turned two a week ago. timing was November 22nd is when we started. So one day later, Zendesk gets acquired, some days later, ChatGPT gets released. This is so important for us. again, we didn't even know it at the time. So first off, Zendesk being acquired meant that Zendesk was starting to, you know, they get acquired, they announced layoffs, they start increasing prices, like they stop building things. They're like, let's see, they start focusing more seemingly on like enterprise customers and like moving up market and like, kind of not caring about their SMB customers. Again, we didn't know this, but this, that was the start of that. And that continued to progress for like the next year. ChatGPT comes out and it was very tempting. So we were in the first YC batch. was kind of crazy. The first YC batch after ChatGPT is coming out. the very, the most common idea, there's always like the most common idea at the time based on like market stuff was ChatGPT for customer support. like everyone's doing like AI. 

Pablo Srugo (41:03)

How many companies probably just pivoted whatever they had, just threw it out.

Marty Kausas (41:07)

Totally. So there were at least like 10 companies in our batch who were doing just that.  And it was funny because people would look at us and they're like, why are you this like Slack app  thing? Like it's so dumb. Like, like you could be charging, you could be like automating customer support teams. And like, instead you're like helping them like convert Slack messages into like intercom. Like what the fuck? And so I wouldn't say we were the laughing stock, but it was definitely- people were like-

Pablo Srugo (41:34) 

well, you're kind of off trend. 

Marty Kausas (41:38)
Yeah. you're not going where the puck is going sort of thing. Right. And they also thought they're like, why don't you just do AI support? Like, it's just better. Like, it's just a better idea. we had, we did have like a thought here, which was AI, the AI support companies were getting revenue really fast. But one challenge we foresaw was, Hey, if you are like, these platforms probably are going to be able to build AI very easily into their  product. Or at least like what these like add-ons that people were building. So if you want like just an AI support bot and it's just like a call to GPT, like that's probably not that hard. I think we correctly predicted for a lot of these companies, almost all of them now have their native AI support bot. And the moment they introduce that, it's really hard to sell an AI bot on top. Unless you're very enterprise-up market, where the scale of support tickets you have is so massive that they're optimizing for a percentage point. So that's where you get companies like Sierra, for example, who are just trying to automate high-volume consumer support up market. We're going to focus on our Slack thing and just be heads down and focus on that. We end up raising a seed round from General Catalyst right before the end of the batch. So we had a big LinkedIn post about that where, we raised our seed round in six days, $3.2 million, GC led it. We compiled all the advice we could from all the founders that we knew on how to fundraise well. Basically, it's like a social game where people are asking each other, they're like, are they good? Like, it's important who you get the intro from. You have to seem like you're available, but not too available. And so, you know, we basically compiled, we booked, it was like 40 to 60 meetings with investors in one week. And so, you we came into that week and we're like, okay, hopefully in the next week or like two weeks, like we're just going to like go through as many people as possible. We're going to play like the social signals game. We're going to tell our friends, tell investors to come to us. And like, you know, we did that whole like, you know, whole like social situation.

Pablo Srugo (43:35)

And so you got- first of all, you did a lot of meetings, you packed them tight, you got warm intros to them. And on top of that, you went to others and said like, Hey, tell this investor, they should be looking at us just to kind of get that FOMO momentum ball rolling. 

Marty Kausas (43:48)

Totally. And one important thing I'd say is how the investor hears about you is one of the most important things, especially early stage. So, when you say warm intro, it was actually, it was, was even different than that. So what, what we did and the advice we got was have your founder friends. go to the investors they know and say, Hey, are you looking at Pylon yet? Like I'm buddies with the founder. They're really good. Like if you're not talking to them already, like, let me know. And I can get you in. And so, basically that was the message they were receiving instead of, Pylon wants to talk to you. 

Pablo Srugo (44:23) 

Right. Right. Pylons raising they asked for an intro. Like, you want to meet them? 

Marty Kausas (44:28)

Yeah. Exactly. So we just started pounding the investors we wanted to talk to. We're just lAs like – as five founders are telling them like, you looking at Pylon? They're in the current YC batch. Like they're really good, blah, blah, blah. And because seed rounds are so, you know, still team-based rather than like product or market, et cetera. You know, that I think was super important for us to have a fast round. And our eventual investors, so Zach Kukoff, who used to be at GC, he was like the main guy involved. Tamana from GC who's still there. Nico. And then Andrea is our current partner there. Basically, they all got involved. So Wednesday was our first meeting with GC. Friday, and that was a Zoom call, 30 minute Zoom call probably. Friday, they invite us into a mini partner meeting at Seed. It's not that big for GC. So they have one partner there. So they invite us in. And so we meet Nico for the first time. And then Saturday, Zach invites us to his apartment rooftop. And so we have a social morning there and are talking. And then by Saturday night, he's like, hey, we should get sushi tonight. So that's when we knew, OK, this is probably going to happen. So it was basically on Monday to that Saturday. Saturday, we get the offer of the initial offer, which we ended up negotiating a little bit. And then, yeah, officially ended up saying yes the next week.

Pablo Srugo (45:47) 

the round was like $3 million?

Marty Kausas (45:49)

 It was $3.2 million total. And GC did, I think, $2.2 million of it. 

Pablo Srugo (45:54)

So $3 million in six days, not bad. Half a million a day, that's good.

Marty Kausas (45:57)

Exactly. Yeah. And the funny thing is people don't realize this, but like, it's very hard to stop the money from coming in once it starts coming. Like the moment the lead’s there, everyone wants to put in money.

Pablo Srugo (46:08)

 If you've set it up the right way, where you had so many meetings, so tight, like 100%. And I think a lot of the times, like, it's kind of one of those things where you, if you put in a lot of effort upfront, like more than you probably “should”, should in quotation marks. You end up doing it so much faster than if you kind of try to do it casually. Like I just don't want to spend so much time fundraising. You just spend more time. then the moment, like if you suck momentum and FOMO out, everything will just drag. Right. But if you have like crazy FOMO momentum, then you just force people to make a decision really quickly. You get nos quick, but you get yes, it's so quick too. And then, like you said, once you get that lead, if you're in that situation, you're going to get all of them to scrap.

Marty Kausas (46:48)

100%. Yeah. So that's exactly what happened to us. And yeah, if I could give like any advice on raising. It would be make like how investors hear about you is super critical. That's like probably the most important thing. And then the other like common mistake I think people make is they will accept intros to investors from other investors. And I learned this from YC. That's like a big no-no. So for example, let's say I talk to an angel investor and they're like, you know, th is isn’t my type of company, but like I can intro you to blah. That's super bad signal if they do that. If like, cause that fund will be like, Hey, why aren't you investing? And like, they better have a really good reason because if you're seed, it's probably like a team bet. Right. And so it's, you know, there's something wrong with you. And so you can't even accept, like, you have to be careful. Like how people hear about you and from who and in what context. 

Pablo Srugo (47:37)

it sounds like, know, obviously if you hear this, kind of sounds a little- you can't really believe that it works this way, but the reality is this. Nobody really knows at seed. Like, honestly, nobody really knows. so signaling becomes so maybe more important than it should be, but it becomes. So important. I think getting all of these things right can be the difference between raising or not. And certainly between raising fast and taking like months to close the seed round.

Marty Kausas (48:00)

And then also just, I think it's always fun to have numbers here. So, the, when we started  raising, we like timed it and I mean, we didn't time this perfectly, but we were trying to show like a quick revenue increase right before this conversation. So the first like number investors were seeing was like, okay, in a couple of months, we got to like 30K in like ARR and then like literally a week later it's at 60k and now like two days later it's at 80k and so like they're like seeing this and like and again we're back channeling this information to our founder friends to like you know distribute to everyone so they're like shit like they're growing and so it's like okay got to close them fast like before they they grow too quickly and so we did all that and you know very- We also watched the episode in Silicon Valley where they're fundraising and it like felt exactly the same. We're like so tired talking to like so many investors all at once. and yeah, it was a, it was crazy experience. 

Pablo Srugo (48:57)

And then maybe just, I guess like a couple of questions. So you raised that round. how quickly do you hire and then what, does growth look like over the next year? 

Marty Kausas (49:07)

After the YC batch ends we’re super burnt out or at least I was really burnt out. like probably spent the next three weeks sitting at my computer pretending to be working, but like not being able to get anything done because I was just like so exhausted. we had, so Advith, he used to work at Samsara and one of his buddies who worked at Samsara too had been traveling for a year and he was like kind of looking for his next role and he messaged Advith and he was like, do you know any like cool startups that are hiring? Advith initially was just like, no, because we weren't in the mindset yet of hiring. And so then we were talking to our YC partner, Harj, we're Hey, when should we think about hiring, blah, blah. And Hart was like, well, you guys have a lot of money. You like know what you want to be building. You explained to me why you wouldn't hire. And so we had like no good reasons. And so he was like, yeah, it sounds like you guys should just like go hire your friends now. And so, you know, he goes back to Alex. He's like, just kidding. Like he in fact recommended Alex to go look at other companies. And then like the next day, like next week or whatever, he was like, actually you should like come join us instead. And so Alex, you know, comes over. It was really, I think for him. Hey, this is going to be fun situation. I think actually most of our early employees were not picking us because of our product or our market, because we were just a Slack app, to be honest. And so, you know, we got, it was very much, hey  it seems like it's going to be fun to work together. And so that's why they were joining. And so that's, that was the secret to getting, for us to get like really good talent upfront was just people we'd worked with already. 

Pablo Srugo (50:38)

And so maybe walk me through like quickly how things start evolving product wise and vision wise to like what they are today. 

Marty Kausas (50:46)

So we spent, believe it or not, and it's almost like embarrassing to say we spent a whole year working on the Slack app. So we've been around for two years. Half of that time was working on our like Zendesk intercom, like Slack integration people and we're charging. I mean, we're charging like 10K for the app. Like, you know, it's like we're making revenue. In fact, by the end of our YC batch, we were at 120 K in ARR. And so, turns out like people were buying ZenDesk, were buying Intercom and it wasn't working because they did all their support in Slack. And so they literally were in some cases paying more for integration than they were paying for Zendesk. So we did this for a whole year. And we're, you know, we're constantly learning. We're, you know, there was value in us being able to sell this into our customers companies and like getting FaceTime with them where we're having like calls with them being like, Hey, what can we improve? What challenges are you guys facing? And they start to tell us things like, yeah, actually, like, Intercom has this problem or Zendesk has this problem. these are things that we know they're never going to solve. And then at the same time, and it seems to be getting worse, they're also starting to say that, hey, I've had five CSMs with Zendesk in the past year. And I can't get in touch with them. hey, I can't even change my seats. They're just not even present. Or, hey, it looks like all these AI things are coming out, but they don't seem to be on top of it. So that's the feedback that we're getting from our customers. And at the same time, our smaller customers or smaller prospects are coming to us and they don't resonate with buying a Zendesk at all. Like they're like, hey, we need a support system. Like we do a lot of our support in Slack. Like why? And we were pushing them away. We're like, just buy Zendesk and then buy Pylon. Like that's all you need. And they're like, we don't want to buy Zendesk. Like it doesn't feel like a product that like we want to use. It doesn't feel like it's built for us. And, why do I have to buy two tools just to do the one thing I want? We're only like a seed stage company, right? we're getting kind of feedback from both sides. We're learning a lot. the assumption, the hypothesis we had originally made, which was that Zendesk and the support platforms would be impossible to work out, actually like starts to crumble in our heads because we're seeing like the small companies don't want to use it. And the bigger companies are not- there are a lot of gaps and like cracks in the product that are not suitable for our segments, which we were selling to, which are these B2B tech companies. So over time we're like, okay, starting to realize, okay, this is this problem, this problem, there are these things you could build, but they'll never build it. Eventually, we just say, okay, maybe we should actually first start serving these smaller customers and allow them to use us as the full product. And then our larger customers surprise us and say, hey, if you just build out a couple more things, we'll actually switch off Zendesk as well. And so they were pulling it out. We actually thought it was a terrible idea to start of, hey, we should replace Zendesk, because it's like, Just like with Salesforce, it's like you hire a VP of sales, they're going to buy Salesforce, right? And we thought the same thing with Zendesk. We didn't know any better, but because they were acquired by Private Equity a year before, it was already starting to go downhill. Like already the experience was going downhill. Like people were not trusting it as much as they did. And so we make this bet. like, okay, like I think there's a path in competing with Zendesk to be kind of like a modern ticketing system. And we're going to serve these like B2B omni-channel companies who talk to their customers, not only over email, but also shared Slack channels or Microsoft team and like these new age channels, that are like growing. And that's like the majority of these tech companies that, we're seeing in like YC and, know, kind of around SF. so that, that's the first thing we're just going to serve them. We're going to build a basic ticketing system, and then start evolving from there

Pablo Srugo (54:27)

And after you built it, like how fast was that pull? Like, I know the first product you went from zero to like. 100 ARR and maybe what, like two, three months, How big was the pull on your V1 of this Zendesk replacement?

Marty Kausas (54:39)

 So we slowed down a little bit. we had a big revenue drop when we made the switch because we had gotten pretty good at selling this connector product. And we were able to immediately go to larger companies. You could be a series E company and we could sell that to you because it's just an add-on. But the moment we made a decision of, OK, we're going to be the full support platform, we can no longer sell to a series E company. What they need to replace Zendesk is insane. Even today, it's like very, very hard for us to go in and replace a Zendesk for a Series E company. It's like, imagine going to like, you know, like a big company that uses Salesforce, they have all these automation set up, all these custom fields. 

Pablo Srugo (55:20)

Yeah, the switching costs are terrible, 100%.

Marty Kausas (55:22)

It's terrible. So we knew that if we make this bet, we're going to have to start with the small companies and kind of work our way up or like find some sort of like really special wedge to convert bigger customers later. And so Yeah, we start, know, revenue drops a lot and like we take a big hit We probably started like January of 2024 so started this year. Actually, I won't say I won't say the exact numbers I'll say but I'll bet I'll say the growth So, you know basically from we'll end this year at like around like 5x what we started the year at and It's been like very consistent revenue growth in percentage like percentage growth has like basically remained flat

Pablo Srugo (56:01)

But you're above about a million, you're above a million ARR?

Marty Kausas (56:04)

Yes, yeah, we're low digit millions. We start selling this small support system and we start picking up smaller customers for the most part. And we're first just like, okay, we'll do Slack and Microsoft Teams. We're going to capture that market. And then there are people who are like, I want to use you, but I need email as well. So we're like, okay, now we have email. And then they're like, but I have Intercom too and I don't want to track things in Intercom and pile on. It's like, okay, then we built out the chat widget.

And so slowly we're adding these things and we're like, okay, we're probably gonna be an omni-channel B2B support system. That's the thing. a lot of companies I think got started. think, in fact, Zendesk had a lot of reasons I think they succeeded, but one of them, there were a couple companies that also did well who were all about consumer omni-channels. So like, Facebook is popping up and you need to manage the Facebook messages or Twitter as well. all these social media channels. There were some companies that did that were like, okay, maybe we can do that for B2B now, because B2B is having its omnichannel moment is what we told ourselves and what we were telling investors. And so, yeah, we were kind of like building off on that vision, like continuing to grow, selling to really small companies. And yeah, we're starting to hire more people. And pretty quickly, I think like in May of this year, I don't remember exactly when we were closing like year long upfront contract deals. we're actually like cashflow positive. We're like super lean. And so literally just a, yeah, a little over a year in we're like making money. And, you know, staying super lean, super like nimble and constantly also still thinking, okay, how do we make this like the billion dollar revenue company, a company we want so that we can eventually go public because that's the end goal. So remember still like really big, we want to become a really big company really fast. And so we're kind of always questioning, okay, are we on that right path? Will this be like a big enough market? you know, all those things are like constantly like keeping us up at that omni-channel support system. We're doing it, we're moving. And we start to also now have like more insights that, and one thing that was confusing to us, so we were selling to a lot of customer success personas versus support personas. And that was like an interesting thing for us. And it's because in B2B, especially early stage, you're typically hiring customer success managers before you have anyone who does support. The CSM kind of like owns all of post sales customer communication. 

Pablo Srugo (58:35)

Yeah, because there's so much expansion opportunity. Plus you just want to make sure your customers are so happy. You need somebody better than just kind of traditional support.

Marty Kausas (58:42)

And what these people start telling us is like, hey, they start asking for things that support systems typically don't have. Like, hey, I want to manage my accounts in here and leave notes on customers and set up onboarding workflows and also send the product updates and all these things that aren't in traditional systems and definitely not built in the way that these B2B tech companies wanted them. And so we start evolving and we start to think, okay, maybe there's actually an opportunity to eat up not just the support system, but actually combine a lot of point solutions that these B2B post sales teams use. So we start thinking, and this is back to the original insight and learnings we had of, hey, you can no longer do your customer marketing in these channels. Like, hightouch, before us, they were going into every one of their customer Slack channels, copy pasting the same message into everyone. Like hundreds of messages if , they want to send out a product update. Like, it's crazy. So it's like, OK, there's the ticketing side, there's the marketing side, there's product feedback tracking, there's CRM activity sync and general account management. And all of these things start clicking for us where it's like, OK, actually maybe this has always been like more than just support. In fact, like success personas keep buying us, not support. And maybe like, yeah, there's like a new type of product that we're actually building into here. And so we're actually probably consolidating a lot of different use cases, a lot of different platforms that people buy separately into one tool, customer marketing, support, success, like some like product management stuff and yeah, all into one tool. And so, like that's what we started evolving into. That's like where we're going. And then the last piece I'll say is we held off from AI for a long time, but now that we have the platform built with all the, like the, the data, the workflows we have, you know, views, like all these, like everything you would want from like the core platform built out. Now we're starting to layer in AI, like in every part of the product. And like that alone, that is becoming a massive differentiator for us. And then this long-term vision of building out like all the point solutions is the other thing. So we're kind of doing both at once. And it's really, yeah, it's really resonating with people. 

Pablo Srugo (1:01:00) 

maybe just to wrap it up, like the last story I'd love to hear is actually this is how I found you, which is the $17 million Series A in 14 days from none other than A16. them and I would say what, Sequoia, some of the most coveted VCs to get on your tab table. So how did you make that happen?

Marty Kausas (1:01:20)

We were not looking to fundraise. As I mentioned a moment ago, we were already cash flow positive. And so we did not need the money. weren't thinking about raising money. We had spent, at this point, we had raised like 3.3 total with YC's initial check. And we had like 3.1 in the bank. So it's like, what are we going to raise money for? It doesn't even make sense. But we were sending our monthly investor updates and we had included some people who were angel investors and that includes our growth, what we're thinking about. So every month at the end of the month we're sending this. And one of the angels who works at a fund was really bullish on us and they come to our office and kind of say, hey, I know you're probably not thinking about raising right now, but we should start a conversation. What would it take to get involved? they kind of kickstart that process in our brain. the questions going through our head are like, OK, one, we don't want to get distracted by this, but also at the same time, if there's someone who's interested right now, should we take advantage of it? And if so, how? So we basically asked ourselves, are we going to get a better offer than what we could get right now if we wait like three months or four months? The answer was no, because realistically, we could probably just get a good offer right now. And then true, there's also risk that something else happens in between that time, where suddenly we're not as appealing for some reason. And so, you know, it, that was our thought process. And so we said, okay, we should take advantage of the opportunity that's in front of us. And so we, once again, we kind of let other people do the work for us. So, you know, there are other investor friends, founder friends who we start like signaling to you of like, like someone seems to be interested in pylon, like, you know,

blah, and so people come to us again. And then in Andreessen's case, we actually, we had known Jennifer for quite a while in like a social context. So that Kleiner Perkins Fellowship that Advith and I met in, she, I knew her through that and Robert had done the fellowship with her like the year before Advith and I. And so we kind of like had known each other not super well, but like well enough that, and we had like bumped into each other in a couple different, like meetups. so, you know, we also engaged her, start the conversation. And for us, like, you know, things just started really clicking. Honestly, all the funds were really great is the hard thing. So, you know, we had great offers on the table. But yeah, basically, there was this very quick process. People liked the vision, they liked the team was super grindy. So back to that, image of us like sleeping in the office, they like that the market's big, that they like that the incumbent is weak. And everything is aligned and it's like basically all like- 

Pablo Srugo (1:04:13)

There was probably not much time put into the deck. like no data room really. Like you just kind of went there.

Marty Kausas (1:04:19)

 we prepared the deck the night before. and I practiced in the morning and my co-founders were like, is this all we have?  They were thinking, it could have been a lot better. but so, you know, and it was very much storytelling. I literally had slides with images and like three bullet points on each and it was kind of just going through the story and Exactly what I told you. Hey, like, you know, we you know, here's the team. Here's how we met We want to build a really big fast growing company. We thought big market, you know emerging trend So we talked to like the new age companies we discover this trend of shared slack channels turns out like that causes a lot of problems and then here is Here's like evidence of that starting to work with our customers. And then here's the market with Zendesk making 3 billion in revenue, Salesforce service cloud making 8.3 billion in revenue. you know, all, all these companies in, in this is the market that we can now capture. So, we just told that story, and it really resonated. It was very conversational. we had, yeah, like three partner meetings in one day. It was very much once again, Silicon Valley, like out of the movie, taking us out to Omokase, taking us out for steaks. Like they're talking to all the good firms. and like, you know, literally having like late night- I actually remember, so I'll share this detail. This will be fun. So I was talking to another, I won't name the fund names, but I was talking to a tier one fund trying to rush them to move faster in the process because we now had offers from Andreessen and a couple other people. And so to get competitive, you get as many people into the deal as possible. I tell them, look, if you want to be like, I don't know how else to tell you this, but I'm talking to Ben Horowitz tomorrow. And if you want to be involved and you want to be able to talk about this, we need to move faster. and so that's like the time we were playing that game as like, as best as we could. so there, you know, 14 days after the start, we ended up getting the term sheet, closing the round. and then, yeah, and that was $17 million. so now, you know, with our basically 3 million that we have left from everything else, we, have 20 million in the bank and like, still don't know how to use it.

Pablo Srugo (1:06:29)

You got 20 million in the bank and you're not using it. Dude, well, listen, Marty, it's been, it's been great, man. We're going to stop it there. Clearly things are off to the races. I think you've built a great team, a great culture and, you're playing the game. And like, I think that's the thing, like, you know, at the end of the day, if you're going to be a star tech founder, like you're probably going to need capital and there are things that work and things that don't. And if you try to swim against the current. It's just going to be a lot harder. So I think you're doing all the, those things, right? Thanks for, thanks for sharing the story here, man. It's been awesome. 

Marty Kausas (1:07:03)

Thank you. Thank you so much. 

Pablo Srugo (1:07:05)

Wow. What an episode. You're probably in absolute shock. You're like that helped me so much. So guess what? Now it's your turn to help someone else share the episode in the WhatsApp group you have with founders, share it on that Slack channel, send it to your founder friends and help them out. Trust me, they will love you for it.