Six customers and $1 million made PMF feel real

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 25:29

   yeah so true um how long did it take before you it became clear to you that you had pmf and what was the was there like an obvious like oh yeah here we go i wouldn't i don't think there was like a like a clear cliff or anything it was like a gradual yeah scale up i think maybe we were like a million in revenue it was just me and ashman then still but i think it's repeatable enough where how many customers ish six okay maybe yeah six customers a million in revenue it's like okay well yeah there's a lot of people that want this people are willing to pay us real contracts like there's probably something to be done here in hindsight i would say uh yeah there's also we're kind of lucky to choose a space i mean this space and coding maybe are like the two big ones for ai that are like very horizontal and just like very obvious maybe law use cases yeah law

2. 26:25

   um those are a bit more vertical um i think there's other vertical use cases as well like law like some health care use cases but just in terms of like big horizontal like um we didn't know that going in obviously like it wasn't like we were mapping out the market and in fact i don't think it's wise to do that because that's pretty noisy but it's not like we were mapping out the market it's like okay you gotta do this but i think around that time we felt like there was product market fit and then did you raise the a right after that pretty much yeah so all of our rounds so far have been uh aggressively preempted i mean it's not always gonna be like this but we never really did a fundraise we just every round is just someone giving us a term sheet i guess and then we had to decide if we wanted to do it most of the time

3. 27:12

   in the past we were pushing it off because we're pretty adverse this goes back to like generally we've been pretty conservative about hiring we've also been very conservative about fundraising because i mean there's so many like instances where you raise too high of a valuation and then oh well you know there's like cycles you know it's like it's not always going to be super easy and super you know hot in in the market so we have always tried to push it off um but yeah i mean there's some there's obviously some benefits of raising uh in the early days raising gives you validation gives you sort of more people around the table well after a certain point though i think there's diminishing returns of that and like raising mostly helps you just like reprice your equity if you're hiring really fast then like maybe

4. 28:00

   Higher valuation helps with that because people just, people shouldn't do this, but pretty much everyone just takes the dollar value of your equity. So that's why. And it's like kind of a marketing event, right? Yeah, it's a good marketing event. Yeah, I think like one thing you could do is just like raise small rounds more frequently. Yeah. Like Ramp does this very well, for example. Yeah. Because every time you raise, you could announce something and it's like something that a lot of people will guarantee you to read.

5. 28:28

   So you just put some messaging in there. Totally.