How I Raised $17M in 14 Days | Pylon, Marty Kausas

00:00being a Founder is very very stressful should I keep going do you have a job do you have a career that's going to going to work out my suggestion is frankly if you feel like you should stop going you should probably stop going and if you can't not continue then you should continue hey you know this is what you need to be doing you need to keep trying and all you need is one thing to work out and then that'll you know blow away all the failures in the past I have considered giving up many times but there was just something nagging inside of me that wouldn't let me interviews

00:28like this is that hey I'm someone who already gone through it maybe you can learn from some of my mistakes instead of going through the same two years of pain that I did as well I think you should stop being lazy and learn how to build yourself my name is Marie I the co-founder and CEO of pylon we're building the first customer support platform built for B2B companies we're going to consolidate all the products that you would get from a customer support platform customer success platform product marketing I'm tooling for Solutions and Professional Services

00:55teams and combine them all into one our initial Insight was that a lot of people are talking to their customers not over email anymore but they're starting to open up shared slack channels Microsoft teams channels WhatsApp we got to 120k in AR within 3 months of having the idea got our first customer in 14 days we've raised $20 million from investors like injuries and Horwitz General Catalyst and white combinator frankly the vision is shaping up so fast um because of what's evolving with AI might sound stupid but I was definitely inspired by movies like The Social Network or Pirates of Silicon

01:31Valley kind of learning about how those companies got started I guess I could relate a little bit to the characters in the movies where like oh I'm kind of nerdy too I like computers I like programming and maybe this could be a path I could go on too YouTube videos were an early teacher for me and then started making games and high school building website then it was only kind of sophomore year of high school where I joined our robotics team where I got really excited about after leaving high school I went to Purdue to study computer science I immediately fell in

01:57love with hacker culture there was this club prod hackers where every weekend they would spend time just writing code and just trying to build games or applications while I was in college I started to do internships of course so I worked at places like Qualcomm and San Diego I worked at Yelp as an intern and then airb B at airb B and I joined the payments team there and so I was working on back in infrastructure helping basically money move around the world to be honest I don't feel like it prepared me that much for startups I actually think it probably was not helpful it was

02:25anti- helpful I learned all the things not to do because big companies operate so differently and so slow compared to Startup while I was at Airbnb I really was not enjoying the work I was doing I was like looking at all these other Founders who were starting companies on the side even the ones who were failing I was more excited about what they were doing and the pot they were on than what I was doing at airb be when I left airb B I started working on one idea which was a health Tech idea we were trying to build an app for people with Parkinson's disease to better understand their

02:51condition it was a terrible idea for a lot of reasons and we spent a whole year on it the end I decided to Pivot not only away from the idea and the industry of Health Tech in general but also the co-founder I was working with even when I started working with my now co-founders adith and Robert we spent months pivoting together until we finally came up with pylon what we were interested in doing was building a really big fast growing company I have considered giving up many times I think in the back of your head you're always questioning okay should I keep going but there was just something

03:24nagging inside of me that wouldn't let me hey you know this is what you need to be doing you need to keep trying and all you need is one thing to work out and then that'll you know blow away all the failures in the past pivoting is really really hard you are going to Pivot a lot and you're going to Pivot so much that my co-founders and I we call it pivot hell now once you actually get into pivot hell and you start working with people and every week you might be switching ideas it becomes really really hard to keep going your parents are going to ask you what you're doing with

03:53your life your girlfriend or boyfriend are going to question hey like should you maybe start looking for a real job and you're also going to have this like creeping doubt that hey maybe I'm not actually good at this and uh should I keep going my suggestion is frankly if you feel like you should stop going you should probably stop going and if you can't not continue then you should continue and that was the case for me I basically didn't feel like I had a choice I had to keep going because that's just how my brain is wired one of the learnings for us was you just have

04:21to start in a really really big Market what type of idea you want to be working on to make something really big that can grow really fast what we did was we kind of like observed the biggest software companies in the world and turns out there aren't that many public SAS companies if you look at them like they're probably 76 uh Billion Dollar Plus public software companies that are B2B and of them almost all of them are horizontal SAS products meaning hey they're selling uh products that can be sold into almost any industry so think like payroll it sales marketing customer

04:53support Etc we decided okay let's to make sure we don't get stuck in a market let's go after something really big so we chose kind of post sales customer support as a category to go explore what we did was we went on LinkedIn And We messaged uh 40 people a day that's what LinkedIn would let you do let's say 7% of those people respond you know would create a cycle of us just cold interviewing people in Customer Support roles that we wanted to learn from I think you need to be very clear with yourself what type of company you want to build we wanted to build something

05:22explicitly very big and for us that meant a $10 billion market cap public company that was making let's say a billion dollars in revenues and also fast growing meant that usually there's some sort of emerging Trend that's happening in the world where you can capture that and grow with it so where we saw this emerging trend of B2B communication moving away from email to kind of new channels if I were going through and trying to find ideas now the strategy we used I think can be effective for other people we basically decided okay we're going to explore the customer support and success space um

05:52you know kind of horizontal category and then within it we said we're going to go and cold interview people also at the same time a was popping up and turns out all the data is flowing through pylon is conversational so now for the first time ever There's an opportunity to structure it who have newer types of roles so like new job titles that didn't exist let's say 10 years ago a lot of customer success managers support Engineers Solutions Engineers those people didn't exist 5 years ago now they did so we thought hey new roles might mean new workflows which means new software and

06:22maybe there's opportunity there the best time to raise a series a is when you're going to get the terms if investors are pounding on your door even if you haven't hit a certain Revenue Milestone it might be the right time to just go and take that we raised our $3.2 million seed rone from General Catalyst in 6 days that's a catchy headline and and it did really feel like we were living in an episode of Silicon Valley the story is we were 2 months into our YC batch 3 months old as a company overall we were probably around like 60,000 in annual revenue at the time 2

06:54months into YC that's when people start to think about fundraising bring on investors before the end of the batch well we did was we scheduled as many calls with VC's in the course of one week tried to create some sort of like time pressure between the investors themselves spreading it out basically going in with the mentality and kind of signaling to every investor hey yeah we're fundraising really hard this week and there might not be time for conversations next week so we kind of need to knock everything out uh right now all at once every time we got in

07:23touch with an investor it was important how they heard about us so instead of just like cold emailing investors directly saying hey we're pil on like you should invest in us we instead got Founders that they respected and knew um some that were even our customers already go message them and say hey VC I know this founder the founder pylon they're going to YC right now are you talking to them yet you should because they're a hot company I think what they're working on is really good we got a bunch of really great introductions through that and that just meant that

07:50the investors were coming directly to us like basically ready uh to have serious conversations and we'd skip straight to partner meetings the social proof was just already there and at seed round social proof is everything your business is still so nent it's so hard to kind of understand you know where you're going to go so having Founders vouch for you who the investor trust is is really really important to give you a sense of the timeline here so we start our initial conversations with investors on I guess it was a Monday Wednesday is when we had our first discussion with

08:18General Catalyst who eventually let our seed Dr Friday we had in-person partner meeting with General Catalyst uh investors and then Saturday went to the apartment of one of the investors uh went to the roof had like kind of a social conversation and by night time that same day they gave us uh a verbal offer that they wanted to invest the general advice that we got was hey find people who are good partners for the long term who have a reputable brand um that brand then helps you bring on employees because you have that social proof and then we'll also help you you

08:47know close customers they can help you get investors for the next round so General Catalyst was basically the top of our list and so we were going after funds like them to for for the seed run the whole process took around 14 days at the end of 14 days we ended up closing with andreon um who led a $17 million series a run the process of like talking to all those investors was not easy they actually tried to fill your calendar as much as possible to make sure that you don't talk to other people once they express interest because there's only downside for them to wait if they

09:17express interest then they know that other investors will suddenly get interested just because of that like social Dynamic low dilution was the thing that was really important for us we just didn't want to sell 25% of the company the only way to get low dilution is to have a competitive round we want INRI into better terms then you have to go to someone else they respect so you have to go to like a benchmark or Sequoia and andri has to feel like they're going to lose you if they do not lower the dilution amount it's kind of this like social game where they need to

09:43make the terms better for you and the company when he was trying to figure out how to have a good fundraise he basically was like okay how do you have a fundraise fast like the Twitter guys that was the example he gave and so he asked investors he's like why did the Twitter guys have such a fast fundraise there are actually no secrets it's you have to have a really good team building in a really big Market with a really good product that people love and you know high potential for growth you have all those things you've kind of already done all the work here are the numbers

10:08here's the growth rate here's you know what customers are saying and they're just going to be convinced based off of that so really just the fundamentals are what's actually important basically riding a big wave and then we have the founder SL compan that's a a great Surfer and so as a result you can surf the the big wave hi I'm uh tah Nam a co-founder of storm Ventures and also co-author of uh survival to thrival I started working in Silicon Valley in 1985 and then uh started storm in 2000 we've invested in uh over 200 B2B software companies since then of which 12 have become unicorns

10:50probably the best knowns are like maretto we also have uh unicorns like Vado techon algolia pipe drive and so forth want to talk to you about what happens after you unlock growth in other words you've spent all this effort to catch the wave and how do you stay on the way I hope that everyone that's in a startup recognizes that it's a an emotional roller coaster where you can go from the highest of highs the lowest of lows in 5 minutes and so in those moments I hope you realize life is never so bad or never were so good and at the end uh enjoy the [Music] journey when you're competing against

11:44incumbent you're not actually competing with all the employees there most of them are not working on R&D most of them actually do not care because you know they're just getting a paycheck we were at the time especially living in the office working 14-hour days the number of people grinding at Zenda trying to accomplish the same thing is very few I think at this stage what has worked for us in terms of what the founder should be doing and what leader should look like is just doing the work yourself so leadership at pylon is very much just doing the work yourself and other people

12:14kind of following by example so like 6 months ago we were actually living at the office it was like Robert had a bed in the living room and that you know everyone just had desk surrounding or our salesperson his desk that he would take sales calls out was literally like 5T away from had this bed I was like sleeping in a meeting room for us leadership just meant doing the work and then people kind of seeing that kind of being motivated and excited by by that being a Founder is very very stressful at the end of every month that's when we do our reporting on how much revenue and

12:43how quickly we've grown we keep doing it and part of me feels like oh my God this is magical it just keeps happening but it's very stressful I think the only way through the stress is by just addressing the problems and grinding really really hard so you can more consistently maintain growth and you know hiring Pipeline and building great product both myself and and I think my co-founders feel very similarly where we just want to win we want to build a company and so we just didn't let ourselves give up I think the really important thing is to be able to build and solve problems

13:14yourself say heyy I'm just going to go find let's say a technical co-founder who will build the product for me I think you should stop being lazy and learn how to build yourself there are lots of resources on how to do it you could go watch YouTube like I did go to a boot camp or any free courses that exists around the world at this point just learn how to build for yourself especially with AI it's becoming so easy then the world is your oyster you can have an idea make it and then just try it and see what happens so first off if you're not like purely set on starting a

13:41company immediately I do actually recommend just trying to get a job at a startup you can create a network and kind of like be immersed in the startup community so for example you work at pylon we have events here all the time for Founders and um other startups that are coming through so you just have an opportunity to mingle with a bunch of people if you are just set on starting a company immediately I would probably go live in a hacker House of some sort I would probably just attend a lot of Meetup YC has meetups now and events I would just go to as many of those as you

14:07could find the best people and then try to get into their networks I would probably tell myself learn from others more I think I'm one of those people that often likes to just go figure things out on my own which I think is really helpful but I think there's also a lot of advice for example I could have gone to successful entrepreneurs and been like hey what do you think of my idea like is this good what do you think are the risks whatever and I gotten to the same point 2 years later in months had I just like listened to their advice taken that instead of just trying to

14:35like discover everything on my own interviews like this is that hey I'm someone who's already gone through it maybe you can learn from some of my mistakes instead of going through the same two years of pain that I did as well so that would be one piece of advice is just go learn from other people who have done it before and are a couple years ahead of you