Exciting week here at Newcomer. We just announced our Cerebral
Valley London AI summit. We are going across the pond.
How are you feeling about that? Daunting.
No, I, I think we're ready. We've got the venue, we've got a
great speaker line up. Very excited to have, you know,
dark Hazra Shahi, the CEO of Uber.
Oh my gosh. Wait, you're, you're the Uber
guy. What's it like, you know,
booking him into your own event? It's flashbacks, you know, I
covered to the insurance and outs of Uber, including the CEO
search. You know, when it was a what it
was going to be Jeffrey Immelt, it was going to be Meg Whitman.
And then out of nowhere, it was sort of the dark horse, dark
Hazra Shahi. And, you know, I've met with him
a number of times. When Uber went public, I was
there on the floor of the New York Stock Exchange when
newcomer launched, Dara was kind enough to give me an interview.
They've been pretty savvy, honestly, about independent
media. I, I, I'm sure you saw that they
did what one of the inauguration parties with Barry Weiss at the
Free Press. So they're, they're definitely
up on this sort of indie media. I've known them for a long time.
It helps that they have a partnership and investment with
Wave, the great self driving car company of Europe.
Alex Kendall is going to speak with Dara and Uber, of course,
needs to show how it's relevant in a sort of self driving future
with Tesla beating Instrum very loudly and Waymo partnering with
Uber but showing, hey, we can do our own thing.
So yeah, I'm definitely excited about that one.
Yeah, that'll be a great hit. Also, I mean, I'm super pumped
about all the, you know, like spicy hot early stage startups
that everyone's talking about going to be on the lineup.
We got the CEO of Granola coming, the hottest AI note
taker. I know I've started using it
though. I'm like not good at being chill
about it. You know, I feel like part of
the sales pitch with granola is that you just like let it run
and don't bother everybody. But I'm like, oh, I need to tell
everybody I'm using that, which sort of complicates everything.
And obviously, we have Dylan Field at Figma, which we're
equally excited about. Yeah.
June 25th, Cerebral Valley summit.com.
Check it out. It's, you know, we want founders
to apply. Basically, if you're a real
insider, you should join us and apply or shoot us an e-mail.
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Jumping into our main story of the week, spoiler alert, it's
not tariffs. We're probably the only podcast
not talking about the tariffs right now.
We cover private companies, not public stocks that are tanking
across the country. I know of anything that's one of
the great privileges of being a private company.
You're like we raised the money before we think on longer time
horizons, we don't have to sort of have the ebb and flow.
Obviously, private markets will not be insulated, given that
this is likely to be an ongoing problem.
Of course, but for an now it's, it's we're in that's over in
public markets and over in private markets.
They're having an awesome week. Open AI raised the largest
venture backed round of all time at $40 billion.
Wow. We've grown so numb to it.
I I've, it's always like, wait, this is the largest, you know,
we, we did make a big deal of Wiz when that was like what like
the biggest M&A and now we have the largest round for.
All the downturn naysayers right now.
This quarter has been ridiculous.
Just to catch everyone up on the Bulls points of the round, I
know it's been out in the ether for a while, but it open AI
finally announced it this week here.
Kind of the rundown of the main stats you should know it was a
40 billion total dollar round, but it's kind of tranche.
So it's a little funky, but that raises the company's valuation
to 300 billion, which is wild for a private tech company
that's like one of the most valuable companies ever.
We have SoftBank leading initially with a $7.5 billion
investment and then 2.5 billion from an investor syndicate that
includes Microsoft, CO2, Altima, Thrive.
People have backed them before and then the round is tranched.
So the remaining 30 billion of capital, which is again divided
between SoftBank and those investors will come at the end
of 2025 as long as Open AI converts to a for profit
company. So it is dependent on that
transition happening before the end of the year.
Yeah, that's kind of staked, you know, funding there, but it's
still a huge raise. And just for some reported stats
behind how Open AI has been performing to justify this crazy
valuation. They have projected 3.4 billion
in revenue arr around 4.4 billion.
So the implied valuation multiple is around 68 X, which
is high but not the craziest we've ever seen.
They they just have to do this one little challenging thing of
figure out how to go from being a non profit to a for profit
company. They don't figure that out.
They don't get all the money. Hard to see how investors return
all this money if they're investing investing in a non
profit. So there's there's a big.
Flip the big question on everyone's minds, of course, is,
is open AI worth this? Is this just in La La land right
now or is it actually the most valuable private company of all
time? Eric, you made the bear case a
few months ago at the 157 billion valuation.
Now we've basically doubled that.
I, I know I've been searching through the piece because I was
like, I definitely caveated it. I said there's inevitably going
to be more momentum investing in Open AI to come.
Open AI is probably going to have to raise money again next
year, even with its 4 billion revolving credit line.
Open AI could very well raise an up round based on the same vibes
it raised money on this time, especially if investors continue
to prioritize revenue growth over cash flows.
So I'm prepared for people to mock this story in a year or
less when Open AI raises an up round.
I should have foreseen SoftBank specifically.
I should have been. Yeah, this is October 24.
I, I should have said and you know, SoftBank hasn't even
sufficiently marked it up and obviously until they top ticket,
the bears are not safe. I'm still holding on to bear
case at 1:57. I mean, obviously it's easier to
transact private market stocks. So there's an argument that I
was just wrong because should have invested, pulled a thrive
invested 157. I don't know that they're
selling, but you know, you could exit the position potentially in
the next round. And so there's certainly people
who are riding a momentum stock and there's plenty of money to
be made there. But if we're talking on a sort
of four year time horizon or a sort of long term settled out
public market price, yeah, yeah, I I still I think I'm in the
bare case. I mean, if you review what I
said here are the bullets money losing machine.
It's a company that loses a lot of money.
Tenuous and expensive intelligence pole position.
Man, we've talked about that a lot.
We had the DeepSeek moment this year.
Anthropic keeps getting better, there's serious competition,
Google has one of the top models at the moment.
It is a tenuous and expensive intelligence, pole position,
talent exodus, Altmans limitations and Open AI's weak
alliances. I mean I do think the Microsoft
relationship continues to be a little muddled.
I mean, Sam is depending more and more on Brad, the Chief
Operating Officer and Sarah Fryer.
It'll be interesting to see. I don't, I don't know as much
about them. So I'm excited to see.
I mean, I know Sarah Fryer. I don't know Brad.
Brad Lightcap, he was running the investment fund out of Open
AI that was backing some early stage AI companies.
I talked to him briefly about that one time.
He seemed, yeah, he seems legit. In that, yeah, he's the chief
operating officer, clearly important guy.
On top of all of that, they are a non profit company being sued
by Elon Musk that has not made the transition to being a for
profit and it's an insane risk factor.
And also Elon is now one of the most politically powerful people
in the world. Obviously Altman's, you know,
work in his own relationship with the Trump people, but.
I'm going to come in and make the bull case for this round.
Yes, the price is crazy, I won't deny you there, but they have
really, really upped their sales game.
I mean just the demand there's already I think they saw reports
that they people have already generated 700 million images
just since they launched within the last few days the image
generator tool, right people are clearly.
Madeline usage means they spend more money.
Yes, it's good to have customers want something you wanna do, but
you give something if it costs more to deliver it.
Obviously they will have to find some way to financialize and
make some money off of all of their demand.
But in the classic Silicon Valley form, you get the users
1st and then figure out how to make money later, right?
Like that's how this always goes and I think they've captured the
market in especially in consumer like there is no Chapel hot that
comes close to them. Enterprise is a little bit
rougher. Like obviously there's like, you
know, more competition there. Anthropic is really popular, has
a really popular API. It's a little bit more varied
DeepSeek. Obviously we've talked to death,
but I do think in the consumer market, people love Chachi PT
that is the killer AI app. There really has not been
anything that's come close to it.
And so I think they have kind of like lightning in a bottle with
their product and they're like the main productizers.
So I could see this being worth it at some point.
Yeah, I mean, I agree with everything you're saying.
You know, I've personally probably spent 300 bucks on Open
AI, you know, because I paid $200 for their ultra premium
version and then subscribe to the Plus version.
So they're clearly making money. I mean, they deliver value and I
do think, you know, there's no question.
It's not like sort of Uber, you know, they never really proved
out like pool for example, feels like for sure they're going to
be able to figure out a way to make Studio Ghibli photos in
profitable way. To me it's more of the is that
commoditized do sort of specialized apps when and the
final creative bear case that I will make if open AI does too
well that like say we are an AGI and it still this sort of
nonprofit like are they really going to be able to like harvest
everything or is it going to be like you were set up to be for
the benefit of the world. Now you have the world
controlling technology. Are they really going to be
allowed to be the $2 trillion company that runs the only sort
of non human competitive intelligence?
That being said, opening I I think is really going to work to
make this for profit conversion work.
They'll lose half of this funding round if they don't,
right? So they're working around the
block. They want it, definitely, yeah,
there's no question about that. From the biggest funding round
of the year to the juiciest espionage spy drama of the year.
So I had a fun story this week. I'm going to give you the brief
facts so that you remember where this all started with a rippling
lawsuit, right? So it's like Rippling, the
company run by Parker Conrad, the sexiest, you know, payroll
and company information, you know, like internal corporate
management company you could have It's so.
Funny that this all like came down over just like specifically
payroll. Well, that's what's funny about
it. It's a very boring sector.
You know, you got Rippling and Deal competing with each other.
Deal is the company backed by Entries and Horowitz.
The firm that screwed over Parker Conrad is Old Companies,
these benefits. So you have all sorts of
competing alliances and Deal and Rippling, they hate each other,
clearly. So Rippling then drops this
lawsuit and says Deal has been spying on us.
We had this employee, it was working for us and feeding
information to Deal, which was like a pretty crazy explosive
allegation. And then even crazier is
basically Rippling says, we know this for sure because we set up
a trap and we suggested the idea.
We sent a letter to three deal executives and like, I think
they're outside counsel and mentioned a particular term that
we hadn't sort of mentioned anywhere else, a fake Slack
channel. And then that mole, though, the
spy searched frantically for it in our Slack channels.
And, you know, obviously was like totally made-up, but he
wouldn't have been able to hear about it if not for sending this
to the executives. And then we went to confront the
guy. He's in the bathroom and they're
like, hey, we've got like a court order and like a court
representative here that says you need to hand over your cell
phone. And the guys basically like,
I'm, you know, there was some interplay, like, I can't find
it. But eventually it's like I'm
willing to take the risk and sort of fled the scene.
It is wild that like, this is maybe the first case of like a
Slack orchestrated sting operation I've ever heard of.
Like, Oh my God, the honeypot trap.
The Slack Channel, their sexiest spy thriller breaking down on
Slack. And so, you know, this was
already like a great story. We'd gotten far more than we
ever deserve in the boring world of, you know, writing about sort
of payroll startups. And then this week this is all
playing out, by the way, in Ireland like this employees, I
think in Ireland. So the guy's name is Keith
O'Brien. He is the alleged spy mole sort
of whatever we're calling him. And according to sworn
affidavit, he confessed like in court, basically he was like,
yes, this is all true. And not just is this true, but I
was coordinating with the CEO of deal.
Like, like literally we were like going back and forth.
And also, he was only getting paid $5000 a month for this.
So it's like $60,000 a year to, like, do what seems clearly like
criminal, you know, just for like, some small amount of
money. The CEO of Deal, Alex Bozes,
likened what Keith was doing to mean like, James Bond.
And again, like if you're James Bond, you need more than $5000 a
month. Anything else stand out to you?
I mean, I feel like first of all, just glossing over that in
the chat with Boise is there's also his father, Philippe deals
CFO and this mysterious figure named the watchman not explained
what's going on there. This is just like like Deep
Throat, but like boring. I don't know.
Do you watch Billions? You're watching Billions.
There's a there's a character in Billions who's like this sort of
like hatchet man basically for. Is he the watchman?
Yeah, I feel it feels like that sort of role.
Yeah. You have to imagine all these
like, by the way, all these executives like watching like
the villains on TV being like, oh, I guess that's how business
is done. We need our like corporate spy.
You know, it's like it's very like, are we the baddies or more
like that's the model for. Sure.
And I'm it's just still not over the fact that Deal's lawyer
allegedly told O'Brien to destroy evidence where he
smashed his phone with an axe and flushed down the toilet.
Allegedly whenever you make allegations like that against a
lawyer, you got this shout like allegedly a billion times.
But yeah, it is a pretty strong allegation to say their lawyer
was in any way involved because that's that's not good.
You know, absolutely not. And of course, you know,
allegedly Keith O'Brien has claimed in his confession that,
you know, he was coached by Deals legal team to shift the
narrative here. And they were they were like
suggesting he like potentially like flee to the Middle East.
I'm sincerely excited to see deals response like.
I know deals been quiet this whole time.
This is a wild case of accusations that they have not
yet commented on. Most of this, again, of course,
is coming from this confessional and the rippling lawsuit, right?
So what are they going to say about this?
But also, how do you come back from this?
Like even if like this is some degree, if it's proven untrue,
like where did you land in the court of public opinion after
all of this as a. Company I can't claim to totally
understand. Keith O'Brien and all this.
I'm sure they'll be reporting at some point being like, how does
this guy totally flip? Fascinating.
Also this week, Politico reported that Elon is exiting
the Trump White House in the coming weeks.
Oh my gosh, the number two guy moving on out.
Define coming weeks. Nobody else is saying this is
the coming weeks sooner than late May or early June when
Elon's special advisor status is supposed to end and he sort of
signaled that. Maybe I'll wrap it up by then.
The administration is not flat out denying the story, but
they've reported back to that, you know, signifier initially
that was like, this is always going to end.
So it's not like a full denial, but that's kind of the thing.
So maybe it's just like they're saying he's not extending upon
this. But I guess the main thing was
there was like ruffles around, you know, how well Elon and
Trump are really getting along, which was sort of the intrigue
they're going for. I almost wonder if tariffs like
are good for Elon because it's like this, this one isn't his
problem. And like, he was generating a
ton of negative press with like, Doge.
And just like, you know, they're destroying random things.
You could also make the case that he, like, lost that
Wisconsin race. Right.
Oh, my God. Exactly.
Right. Yeah, exactly.
He not only did he lose it like, fine, they were going to lose
it. It's classic politics that you
don't say I'm staking my whole reputation and the whole world
hangs on this race if you can't probably pull it out, you know
what I mean? It's just like, why?
Why raise the stakes of some random Wisconsin Supreme Court
case? Like, I understand it has
implications for like, members of Congress and like, it's
important, but why put your whole reputation behind it if
you know anything about politics?
It was a little bizarre. For sure.
So anyway, that's not looking so hot for him.
And they're saying he could, you know, stay on as some kind of
advisor in some capacity. Still, it's not like he's going
completely away and leaving DC. I can't imagine that's going to
happen unless he has like a major Trump ego clash.
But that hasn't happened yet. I'm not sure that that's going
to happen given that they've done so well together.
This as far well-being a very relative term given everything
we just discussed. But in terms of the rumors
about, you know, the big personality billionaires
eventually just going to flame out like that has not borne out
yet. So I wanted to bring up what
Elon's doing here is what he did at Twitter, right?
People talk about it. He's like running the Twitter
playbook in government. And so the Twitter playbook, the
similarities are you come in, you RIP everything out and some
things break and then you put those back in.
But if nothing really breaks, you're like, oh, that wasn't
that important. We just saved a whole lot of
money. We got rid of it.
And it's at least a way to cut costs.
It doesn't necessarily drive revenue.
And I don't think the federal government is going to have a
hypey foundation model company that we can merge with to save
everything. But putting putting even that
aside, if we're just running the Twitter cost cutting playbook, a
key part of it is that you sort of like get the feedback from
the world and you feel like, oh, we we cut Social Security.
Did that. Do people get really upset?
You know, and I feel like government and society is slower
and bigger than Twitter, right? It's not like looking at code,
did the app break or like waiting till Disney like calls
you shouting about something. And so, like, I don't see how
Elon can expect to run even in the most charitable sense, this
Twitter playbook, an exit by late May or early June because
there's no way he's going to have the feedback to know like,
oh, we should put back the pieces and he hasn't cut the
budget, you know, as the other besides.
Besides, he doesn't know if he should put anything back, and he
hasn't even achieved the savings he's supposed to.
We should remember the Doge, you know, savings website
continually being debunked. So the savings aren't even what
they're saying they're doing. Are you making the point, Eric
here, that government and businesses are run differently
and you don't actually run the government like a business?
They're they're different, right?
The, the, the metaphor isn't very good.
Perhaps yes, it it does feel like that whole argument is
basically like if USAD was so important, Elon and Trump
personally would hear people psychologically like, you know,
making would be so upset. It's like, oh, I'm, I'm such an
elite disconnected from people who are hurt by my decisions
that I don't feel it. And therefore that is proof that
it has no impact. Is like exactly the problem at
the end of the day. We are going to be able to judge
their success because they're not very transparent about all
the details on just like did the deficit go up or did it go down?
And I think it's clear that the deficit is going to go up.
Yeah, if you're combining this with tax cuts, yeah.
And if you're combining it with cutting revenue, you know, like
IRS agents and like other ways to make things in.
And if you're sort of hurting the economy by putting a bunch
of people out of jobs, like it's, it's not if tax cuts are
part of it, but it's also like the things that they're doing
with Dodge are going to hurt our ability to collect revenue, Have
people employed, have a strong economy that produces taxes.
I, I want Elon to stick around because I think he should finish
the job, like prove that it can do it, not just say, oh, I, I
tried, I hit the deadline. I got to get out of here.
You know, it's like, do the thing you said you're going to
do if you're, if it's so great, you know, I mean, I'm still in
the like, run, run the country your way.
I mean, we're getting it right now with tariffs.
Notably, a lot of the VCs that are, you know, also involved in
these efforts are not part of this exiting plan.
So I can assume right like Sriram and some other people may
stick around The A16Z people doesn't seem like they're
leaving anytime soon. Scott Cooper, you know who is a
top guy to Andrews and Horowitz? I still think he hasn't even
been confirmed yet. I like him.
We can we can bring this episode full circle, honestly.
So Parker Conrad, the CEO of Rippling, the one going after a
deal, was also in my piece after the election saying like, this
seems like a disaster, but like a godspeed.
I wish you the best for the country.
But Parker to me was like, you know, they're probably going to
get their faces ripped off like everybody does with Trump.
And he specifically made the point everybody thinks Trump is
going to do their crazy thing, but then he does, you know, some
other crazy thing instead. So anyway, Parker tweeted today,
I hope we don't forget Marc Andreessen's grand proclamation
about the economic coiled spring that would be unleashed with the
Trump presidency. It's like, yeah, exactly where
is it? That's our episode.
Stick around. I'm I have a conversation with
the CEO of Clay, the top company on our mid stage enterprise 30
list with Wing and a fun conversation digging into his go
to market AI company. Give it a listen.
I'm here with Kareem Amin, the CEO of clay #1 mid stage company
on the enterprise 30 list that we did with Wing.
And so this is our second video after talking to Paul Klein, the
browser based CEO digging into companies that you know are now
thrust on my radar that where I'm like, oh, I want to know
everything about what you guys are doing.
Kareem and I were on a panel the other day at NASDAQ celebrating
the Wing 30 list and happy to have you on the podcast.
Hey, hey, Kareem. Yeah.
Thanks for having me, Eric. Great.
Well, yeah, so I think, you know, we sort of want to get to
like how did, how did you get to #1 on the mid stage list?
And then where you're going, you know, the best place to start is
how, how is Clay founded? And I think, you know, you, you
guys have been at this a while. Yeah.
Tell me about the the early days.
Yeah. So we started a over maybe just
seven years ago and the motivating idea was how do we
give the power of programming to an order of magnitude more
people? So we were very much in this
continuation of the idea of how do you make programming
accessible. And the reason we wanted to do
that is that we knew that if you could essentially have that
power, you would be able to level up kind of like the work,
the type of work that you're doing and just have access to
capturing a lot of more of that value.
And we were anticipating that there will be more and more kind
of like AI set of features that would automate work.
Obviously we were not kind of like seeing that LMS would be.
What year the way to do that was clay from?
2017. Yeah.
And who is this first customer type?
Great question. I think when you look back at
it, yeah, you do need to have a clear customer and you need to
have all of like, like who's your Tam and all of that stuff.
But I don't think that most people, I think that's just one
way of like articulating your idea.
Like we started it off from what is it that we want to have in
the world? And then we thought, OK, well,
if we want to give the power of programming to more people, do
we want to give it to engineers and make them a lot faster?
Or do we want to give it to non engineers?
And we started kind of exploring to see like what is possible at
that time time, there was already things called
programming by example. So in Excel, and I haven't
talked about this actually before, but you could go in and
let's say that you had like a phone number and some of it was
missing the brackets around the first 3 digits.
You could add it and you show kind of Excel like, OK, you add
it once and it can add it to all of them.
But sometimes it would add a double bracket.
So you go delete that one. And now it learns, OK, if
there's a double bracket, don't do that.
And so we started to say, OK, there's going to be more and
more ways to program by example, to program by showing the
machine what you want. And we were kind of exploring
like, what is it? What's possible today?
We eventually decided that actually it's much, much more
powerful to give it to non engineers.
And we started thinking about like, what are the metaphors
that people understand? And decided, OK, the
spreadsheet's the world's most popular programming environment.
And Google made it collaborative.
So many people could work on it at the same time.
But the next step was to make it connected to all of the
internet's data. And so that's kind of like how
we came to Clay because once once we did that, we were like,
well, who is going to use this And there could be financial
analysts or there could be people building lists.
When we looked at people building lists, it was
recruiters, salespeople, marketers, customer success
people. And so we decided to focus it on
a go to market teams. So I, I think at the end of the
day, you need to focus it on who you're selling it to, to get the
product going to build the business, but it's ultimately in
service of this bigger. Goal and so just the core
customer action so that people just understand yeah, are we
going to use the product the way that most people use it First
off is what. The core customer action is you
want to grow your business, right?
And to grow your business, you need to build a list of
potential new customers or existing customers that you want
to reach out to. And you need to figure out what
properties predict that someone's going to be a good
customer. So Clay allows you to aggregate
all the data sources on the Internet to build the list of
potential customers that you want a message.
Using those data points, you can figure out what you're going to
say to them. So let's say you find all the
people on the Internet who don't have SoC 2 compliance, but are
SAS companies that have been built and you sell a SoC 2
compliance product. And that's a perfect moment for
you to reach out to them. So was that possible pre LLM or
how much? How much of the product really
existed before through the model explosion?
Yeah, it was totally possible. Pre LMS, there were all these
different data providers that scrape data from the web and
packaged what was difficult. So that's what we did first was
say OK, like why use one data provider when you can use all of
them? And it depends on what you're
looking for, which data you need and make it makes it easier for
you to work with that data to build the list.
What LMS made it possible to do was to then also get unique data
properties that no data provider kind of had.
So let's say you want to say I want to find all companies that
have remote offices in South America, right?
And maybe that information you could kind of extract from
existing data providers, but it would take a lot of work.
You would have to say, okay, do they have an office in South
America and an office outside? And where's the headquarters?
And that means that they have a remote office in South America.
So it extracted a lot more value out of these data sets that
you'd gotten together because there's exactly logic and sort
of pulling out pieces. Yeah.
And you could do more real time things, right?
So you could say check if this company has the logos of some of
our current existing customers, right.
So you can do things that maybe you'd have humans SDR's normally
do. Do customers pay to use all the
different data sources or you just license it yourself and
they it's subtracted away from them?
Or how much interaction do they have with?
Yeah, we have an interesting model here.
So basically you can use most of the data sources using clay
credits, right? Because we have licenses with
them. If you already have the contract
or agreement to the data provider, you could just use
your API key and click and it's free to do so.
So our idea is very much a collaboration with data
providers. We focus on a segment of the
market that they don't normally have the resources to sell to.
And some of the data providers are smaller and they have really
high quality data, but they just don't have the full UI or go to
market team to sell it. So and the other thing is once a
customer grows big enough, we prefer that they actually have a
connection to the data provider and they have a direct kind of
like contract and API Q with them.
Our belief is that, yeah, we don't sell, We don't necessarily
make the money off of selling the data.
It's how you make use of the data to create a campaign that
we think is like where we provide value.
Yeah. And then on sort of the content
generation side and sort of the outreach scheduling, how much
are humans in the loop or like how much is it sort of still a
human firing off emails versus setting all these triggers or
how do you think about that? The way we think about it as
humans are there to come up with the ideas like which triggers
when, how often, to whom, we just facilitate doing all of
that work. So the way to think about clay
is like if Figma is for designers, clay is for go to
market teams. You're still involved, but it's
a creative tool that allows you to express your idea quickly.
We don't necessarily believe that there is one solution that
fits all or that there's like one magic button that you should
turn on and let it go. You have to constantly be
iterating on who are you? What are the guesses that you
think makes a good customer and what predicts that?
What should you be saying to them?
Your products are changing, their products and their needs
are changing. So you need to stay up to date
and you also need to stand out from the crowd.
Does. This only work if it's like, oh,
I can sort of AB test my customers and there's a huge
universe like if I have a business where I'm sort of like
whale hunting is AI is useful where it makes sense to focus a
lot of total energy in particular.
Right, because it's not just for outbound, right?
Clay is letting you build, let's say, a deep research dossier
about this customer, right? You might want to figure out,
you know, who are all the how many people have they hired in a
particular department? What is their organizational
structure? What have they been publishing
lately? Right?
You can look at their financial statements that are public.
So what are their actions online?
What are they doing on social? You can like do social listening
and you don't have to send them a message.
You could send all of that information to your own team.
The other the other thing is that, you know, I think of
outbound as similar to advertising.
So Coca-Cola still advertises you need to have it on your
mind. So just you need multiple touch
points for someone to know who you are right and why you
matter. So and even example in clay
isn't just to be used to find new customers.
It's also to expand your existing customers.
So imagine that your Figma, you release this new product dev
mode and maybe you reach out to all of your customers who have a
lot of designers, but you know they none of the engineers have
onboarded. And you figure out who their
head of engineering is. And you message them and say,
hey, your designers are building a lot in Figma.
Should your developers be using it too?
Do you send the actual e-mail through Clay?
And so we basically connect to a bunch of third parties to send
the e-mail, but we have an interface that allows you to
draft it and figure out what you're doing.
And the reason we we stay kind of separated from the channels
is that people do all kinds of things with Clay.
So there are companies that send physical mail with Clay, that
send gifts, personalized gifts that have created personalized
websites so you can people have created personalized ads.
So we're kind of agnostic about where the end channel is.
You've obviously been intentional about the product
besides sort of coming up with a great feature set like what's
what explains your like explosive growth at the moment
or what, what would you point to that sort of like really
clicking for clay and why you're having this moment where
investors are so excited about what you're doing?
I think investors are excited because they see kind of the
potential that is made possible through Clay.
So if you're every company needs to grow, right and there are
only three ways to grow, you either find new customers, you
convert existing ones or you expand existing ones.
Clay helps with all three, right?
But we found a particular kind of gap in the market, which is
that most schools in go to market want to sell you a
solution that helps you automatically grow your company.
It's sold to reps or people who are on the front line and lets
them kind of pull a list quickly and send some messages.
Whereas what Clay does is it assumes that there is a new type
of role, Rev OPS, growth marketing, we call them go to
market engineers. And we think that AI has
actually enabled this new role that's going to be be really
well paid and really expensive. That is a more technical person
that can take on that job and can 10X the whole team and that
and you don't need to AB test things, right?
It doesn't have to be that scientific.
It's mostly like you have an idea, we can turn it into
reality quickly. And so we're a very, I think
we're the first creative tool in the go to market space that
actually allows you to speed up any idea to reality.
And you can apply that for sales or for marketing or customer
success. So the Tam is huge and people
are making a lot of money using clay and also getting promoted
using clay. So that's why customers like it.
If you get this tool, you're gonna, yeah, get a promotion.
On the flip side, is it hard to get a company to embrace a new
tool when you say you need really to rethink what employees
you have, if you have clay or like that's normally it's like
we want to meet, meet you where you are so that you're excited.
We meet you where you are right, like the the role already
exists. It's it's called Rev OPS.
I think it's just evolving. Also advanced AES or SDR's can
pick it up. So it's basically you start off
where you are and then you can essentially parlay it into this
job once you prove that it's working.
So we tend to kind of meet people where they are and then
they quickly find that they're getting results.
And then it transforms into, and don't forget that this is the
particular moment where people are willing to experiment
because they're like, what is our go to market strategy with
AI? And the answer is you should be
using clay. What can you say about number of
customers, size, the business employees, whatever snapshot you
can give? Right.
So the last public numbers that we gave out was were in the
forums article and we announced our raise at 1.25 billion and we
had 5000 customers and over 30 million ARR and we've grown
substantially since then. The jobs question, I mean, do
you, do you have an intuition on whether AI is going to reduce
the number of jobs or from your sector?
Like how I mean if you sort of, you know, 10 Xing or more the
capacity of an employee, does that sort of imply fewer
employees or how do you think about that?
My current sense is very much embodied in like things that are
like previous technologies that we've encountered.
So, you know, when you build more roads, you just get more
cars. I think that our system is set
up to, regardless of the efficiency gains, to do more.
And so let's say we get more efficiency games.
Well, we're just going to want to try to grow faster.
We're not going to say, OK, great, now we can grow as fast
as we did with fewer people. I think some people will do
that. And hence you have a lot of
people coming out saying, oh, we're going to build like, you
know, 10% company with like 10 million per employee.
And maybe you're satisfied with that.
But I think there's going to always be competition at the top
for markets where a winner takes all, where you will try to do
more. So I don't think that you will
have fewer people. I think you will have more
productive people in certain elements of the business and you
will find new areas where you want where things weren't doable
before, it weren't worthwhile. The other thing is I think a lot
of the current predictions are predicated on LLM's becoming one
to two orders of magnitude better.
And I think that that is different, right?
If it becomes 2 orders of magnitude better, I do think
many of the jobs will become less needed, but I'm not totally
sure. I don't have an intuition on
where we are towards that. Do you spend a lot of time as
the CEO of a very forward thinking AI application company
gaming out like AGI strategy or so much of the business is like
new model comes out, figure out how to make use of it and we
react when they come or like how much is there sort of like war
gaming going on inside clay about what the capacity is going
to be. I think you know what I've told
the team in general is 90% of your time should be executing
10% meta reflecting on anything, otherwise you're wasting your
time. And so we're focused on
delivering with what we have now.
There's already a lot and 10% of the time we think about the
future and what are the possible kind of options.
But regardless of what the options are, we will be in a
better place the more successful we are right now.
Right, Yeah, to make a decision the what how do you think about,
you know, I, so I use Superhuman a lot.
Yeah, different, different products interested in using
clay. I every, every sales product or,
you know, could be a reporter tool.
And obviously, you know, we, we have customers too now.
But, you know, Superhuman or e-mail providers that can feel a
little bit like you're fueling a war on both sides where it's
like you're making it easier to e-mail people, but you're also
making it easier to like then filter out sort of the emails.
How do you think about it with your product?
I mean, you're sort of you're more focused on arming sort of
one side of the equation. But do you think, oh, there's
just going to be another AI company on the other end that's
making out filtering out all this like emails estimate that
I'm going to receive? Yeah, yeah.
But I think we're so, yeah. I mean, I love Superhuman and
Raoul. I think they've done a great
job. I think that you know that.
Have you ever heard of the idea of the Red Queen?
I think there's a yeah. It's been a while, I feel like
it came up with Uber context. Right.
I think, I think the author was met rightly.
The idea is that, you know, the Red Queen keeps running and
stays in the same place, right? So, and I think it was about the
viruses and like human genomes and like you're constantly
changing and and meeting it. So there's always this cat and
mouse game. I think it just depends on how
you approach it, right. So we are not thinking about how
do we give people the power to send more messages.
Quite the opposite. We think that you should be
doing deeper research ahead of time, send fewer messages, do it
over time, right? You don't want to blast your
whole tan or all of your customers.
You don't even know if it's going to work.
So you should pick smaller segments that are deeply
researched, spend the time deeply researching them, and
then send a more worthwhile message.
We just help you do that at a scale where it becomes feasible.
And we give you the tools to do that if you, that's why we, we
don't own kind of like the messaging channel because we
don't know what you're going to send and we're not responsible
for that. If your product sucks, your
message won't work regardless of who you target and what you say.
So that's also information, right?
And that information is helpful. I think it doesn't make sense to
claim that we will help you grow regardless, because what you're
selling might not be worth growing.
There are good customers out there that fit.
We'll help you find them, but we can't.
Promise, Right. Yeah, We'll help you figure out
how to go about doing that. And so I think we're much more
aligned, actually, with customers and people sending
messages that are worthwhile. And we try to guide people to
use this in this way. Because by the way, if you don't
use this correctly, you're the one who's going to get banned,
not us. Get banned just by like e-mail
providers if you're sending too many.
E-mail providers. Yeah, exactly.
Or like by having, you know, add messages or you're the one who's
not going to get the results. And so, yeah, I think that's a
key element of it. Can you walk me through just
like one of the most interesting customer case studies?
Yeah, for sure. There's a couple.
I won't name the names right now, but some of the case
studies are on our website. But I want to tell you a couple
of them that we don't have on the website that I think are
great. One company actually sent us a
message where they started looking at our status page and
seeing whenever our product was down or had issues.
And then they were a dev OPS tool and they would see what we
said was the issue and they'd be like, well, if you were using
US, you wouldn't be down. And here's why.
And it was very effective. I read it.
And so I thought that was a pretty creative way of lately
there are no data sets that look at status pages, but they used
our AI agent to monitor us. There's another company that is
looking at to. Double click on that like they
built a tool or like how no. So they used Clay as AI agent to
look at our own status page and monitor it to see whenever we
said that we were down, looked at the reason that we were down,
matched it to one of the products that they could sell to
us and then sent us a message. There's a tool that sort of
triggers when websites are down in real time or.
No, that's the beautiful thing. We have an AI agent that you can
program to do whatever you want, including look at our status
page. Interesting, right?
So what's great is that we don't need to have a tool for every
possible use case. Actually, customers discovered
new use cases. But are they?
Then they're hosting a tool they built on or that becomes a tool
that all Clay customers can use. Or no, no, no, no.
It's just they told the AI agent to go look at our status page
and then message us when there's an issue and high it to their
products. We can then take that use case
and make it more templated for everybody else.
Yeah. And that's something that we can
choose to do, but we don't have a marketplace where you can then
sell that strategy. Yeah, I see.
Yeah, yeah. Got it.
That's the Super interesting one.
Yeah. There's another one that I think
is pretty cool where company has a way of kind of doing brand
normalization. So it's just like, is your brand
the same in every channel that you're using it?
So they use clay to look at like a company's brand identity.
Then they look at all the social channels that they send messages
through and whenever they see a discrepancy, they message the
company and say, hey, you just tweeted out something that
doesn't match your brand identity.
You could have been using our tool to have brand consistency.
Interesting. So these are very unique go to
market strategies. And what's amazing about this is
a very custom to your company. But the tools that you need to
do that are not custom. They're the, you know, clay
primitives. And that's obviously why we're
called clay because you can build different things with it,
right? The same way that every website
you know could look completely different, but you can still
build it in Figma. Do you allow customers like how
much this is, this is going to reveal how non-technical I am,
but like direct like API access or like, you know, I feel like 1
trend in the AI world is like we're only an API business and
you could sort of flow, flow through US without really
interacting with our interface. It sounds like what you're
describing though, is the opposite where it's like we have
a great interface, you'd want to go through clay.
Or how do you think about the rise of, you know, these sort of
API first businesses? Right now we don't have a public
API for you to do that. Sometimes we work with companies
to enable that, but I think it depends who the customer is,
right? Is the customer an engineer or
is a customer a non engineer? And so we believe that the more
features we make in our UI, the faster you can build some of
these things without me being an engineer.
And then there's obviously also room for engineers to use some
of the capabilities that Clay has by API to build things
themselves. That's something that we'll be
looking at in the future. I want to ask you a couple
questions about sort of AI applications broadly and where
things are headed. Any I guess last words on clay
or like you know where, where you'd like to be in sort of two
years. Are there any other reflections
that I haven't covered on your business before?
I ask you to play pundit for a second, I think.
That the thing that's so exciting about Clay is that we
have this really large community, so there's over
20,000 people in our Slack channel, there's clubs in over
40 cities. We just opened out funding
round, the community funding round that was basically allowed
our own community to invest cuz we're getting ideas from the
community so that they should share our ability to grow.
But I think we've created this new go to market engineer role
that isn't a really like powerful persona where you're
able to kind of control all of like the third party data that
you can find on the Internet about a company and then your
own first party data. So like, let's say someone's
been using your product lot, but stopped using it recently, but
would use it if you released a new AI feature, you should
message them or has been complaining in gong calls about
your support and now you've improved your support.
So this go to market engineer can turn all of these ideas for
growth into reality. And I think those people are
getting promoted really quickly, starting agencies as well to
help other companies making a lot of money.
And so in two years, we want this to be a role that's in
every company. Each one of these companies is
using clay to grow. The idea of, like, a service
provider who's using your tool to then sell it to other
companies. I mean, it's funny because
you're also seeing AI businesses, you know, in the
legal space. There's sort of an ongoing
debate of whether you should be the service business that uses
your secret AI tools or sell the AI tool.
Yeah. I don't know.
Do you worry at all? Like, oh, again, if you can
build a company up to sort of consult just using clay, we
should be sort of selling those consulting services or how do
you think about that ecos? No, we're very much wanting to
partner with that ecosystem and we have a very large number of
people making a lot of money building on top of clay.
It's a small percentage of our revenue.
Most of our companies use it directly.
But if you look at HubSpot, for example, about half of their ARR
comes from basically revenue that that a consultant has
touched. And so you can build a very big
business doing that. Right, Yeah, We almost signed up
for HubSpot, and it's like, we'll give you this person
architect at all. It's like, my God, I'm gonna be
spending this money forever. I'm never gonna get out of it.
That's exactly what they want. Right.
I walked away at the last second, but I know I said I was
going to move on from Clay, but it's super interesting.
I mean, how much are you learning from Figma?
I mean, I hear like community centric.
Are you allowing employees to start using Clay before the
company starts paying for it? Or what is sort of the adoption
sort of journey for most companies?
No, we have a, we have a reverse trial.
So you get all the features for two weeks and then you have to
pay, right? Yeah.
And so we have a free tier, but we are really selling to people
who have a product that they want to grow.
So our profile is a little bit different than like it's not.
The rogue employee, it's sort of like, oh, no, this company is
sort of deciding to consider using it.
Yes, Yeah, yeah, yeah. And that's a better fit for us.
Yeah, because it's how come just more intense or it's like.
Well, it's just more that you need to have something to grow
before you can grow it, right? Whereas some other products,
like if you're in Figma, you might Draw Something, it doesn't
really matter if the thing exists or not and you would
still be playing around there. So it makes a bit more sense.
We're closer, we are more closely tied to revenue.
Once you start making revenue, we can help you grow that in.
Right. Yeah, which is why investors are
excited. It's like we're close to the
money you can see that you're making.
You can see the fact, yeah, yes, for sure.
And don't forget that the biggest SAS company in the
world, Salesforce, is basically a go to market kind of like
toolkit. Like it's ostensibly a CRM, but
really it's everything that you need to have the information so
that you can grow your company. Do you have the CRM piece?
Is it too or no? I don't think that that's kind
of where we want to be. We are a system of action, not a
system of record. I like that, yeah, yeah.
What, what lessons do you think you know, other startup founders
can learn from Clay in terms of building applications like
whether it's the relationship with model companies that you've
taken or, or sort of anything else that you you think is sort
of more broadly applicable that you can give away in other
categories? I think that the key thing
without knowing a specific situation, the core ideas I
think are you have to have alignment between the various
parts of your business. So like what is your product,
right? And how does that align with
your go to market motion? How do they feed into one
another, right? So where do you start?
And then how do you take it to the next step?
Those things need to make sense, right?
So if you are, I'll give you an example, right?
We knew that we wanted to have a PLG driven business.
So like people can come and sign up for the product, product,
they don't need to have a demo. So we built the product so that
you can use it without needing a demo.
And then we figured out who has the most acute problem that is
similar to the one we want to solve.
And it turns out that there's all these B2B agencies that are
helping people grow their companies, but they are at the
forefront actually because they're helping so many
different companies. So they have the most
complicated set of problems. And if we solve theirs, they
would go and talk to other people about us.
And so we knew that we could help them.
And then we you can also do the same thing and go directly to
companies. The use case is not different.
The functionality isn't different, The feature set isn't
different. If you're gonna help someone and
then jump to another set of customers and the functionality
is different, that's too far of a leap.
It needs to be kind of concentric circles that are
overlapping. Your success is to sell your
product to somebody else without having to build something
totally new. Exactly.
And then you need to have the sales motion to be aligned.
You can't start PLG and then suddenly be like, well,
everything needs to be sales based in the future because you
built a different culture. And you also have to have a
unique insight, usually by turning something on its head.
So you could build the simplest tool in the world or you could
build a more complicated tool. You need to figure out what
where are you on that spectrum? And you could build a tool.
Tool for everyone to use, right? Or one person to use and those
end up 'cause those assumptions change what you build.
What do you make of this idea that, you know, sort of, I don't
know, software companies are screwed Or it's like, if I'm
gonna build, I mean, you talk about Salesforce.
That was sort of the situation with Klarna.
It's like I'm gonna build my own Salesforce so I won't have to
pay them. Like is it just you have to sort
of outrun the capacity of somebody to build it internally,
or you think that's sort of overhyped?
Or what do you think about this idea that every enterprise just
builds any application that becomes core to what it's doing?
Yeah, I mean that that was already happening, right.
And just dependent how much how willing you were to spend money
on this and how willing you are to kind of set up a team to do
this. So a lot of people had clay like
things internally the same way that people had built CRMS
internally before Salesforce. So there's always a build versus
buy conversation in in software, whether it's skews more to build
now because it's cheaper. I think the question is, who is?
It's not about building most of the time, it's about
maintaining. Everybody knows this, right?
That's the total cost of ownership, right?
Who is going to maintain this? Who understands how this thing
works? Who already is, you know,
knowledgeable? Does this look like something
else they've seen in the future? Are they starting from scratch?
And I personally like the idea of personalized software, right,
that you can build something quickly, you know, some internal
tool that you need. I do think that for tasks that
you're regularly doing and that look similar across every
business, that you will still have software off the shelf that
is just built to be very configurable very quickly.
So that has tons of integrations that is easy to manipulate or
mold right into whatever you want.
So I think that software that is very easy to customize will
still be in high demand. Yeah.
And I, no. And I, I, yeah, I think that
you're not going to build from scratch.
Even if you can build it, the requirements gathering, knowing
what to build is still a lot of the work.
It's most of the work, by the way.
Right. Yeah.
And so imagine you're gonna have to figure that out.
Your data relationships give you sort of a pretty big mode if a
customer is using a lot of them and wants this sort of sense
that I can pull from a lot of. Different sets, even if they're
not. Using a lot of, mostly just
using like one of them all the time.
Like. Do you worry about that?
That's not possible, right? Yeah, I'm not super worried
about that because everybody has tried to build the one data set
that rules them all. But you're working with living
entities, people in companies, and there's so many different
ways to view that. So there were so many different
properties and you can't have them all.
And it's also very different, right?
Like you might have data about company than North America
versus companies in Europe. So that hasn't turned out to be
the case. There's definitely a mode in all
of the data provider relationships and data cleaning
and all that. But I think a lot of the motives
in the workflows, right? Enabling you to build any kind
of workflow quickly no matter what it is, and then also seeing
what are the most interesting workflows and enabling that for
everybody else, right? How much do you adjudicate which
data source is more accurate or score it or you're like, oh, if
you're, if you're depending on phone numbers, like we think
this is the best source versus leaving it up to the customer to
sort of pick between multiple. Lists, we do a lot of due
diligence before kind of working with a data provider and we have
a team that looks into that and compares kind of like, you know,
whatever the data is in a particular, you know, set of of
functionality like technographics or demographics.
But we leave the choice to the customers.
In the end, we'll be doing more and more of that as we figure
out ways for us to be really accurate so that we can actually
give really high quality information here, right?
You know, I love the idea of like truth and AI and obviously
with sort of existing companies, there are actual facts and so
you can sort of decide overtime like what what's real and what's
translating into yeah, the world does exist.
Do do you use coding apps internally or I'm curious what
you guys are obviously super sophisticated.
There are lots of them running at each other right now, like
Codium cursor, Lovable, you know, there's Replit, there's
obviously Claude code. It's go straight to the source.
Like what are you guys using and what's your read on how much
that's helping Clay build quickly?
A. Mixture of all of the above.
I mean, I think people internally use cursor, some
people use Windsor if we don't have a unified kind of ideology.
Go forth and use what you want. I think it's too early to kind
of decide and I think actually letting engineers decide what is
best for them. You know, if you're using Bolt
or Replit to like whip out product managers could use this
to show like a quick prototype versus if you're using cursor as
your IDE, that's a very different thing.
Or some people use GitHub Copilot.
We're still finding that a lot of like AI codes requires, you
know, heavy human review and you also need to know what you're
doing and so that you understand what you actually implemented.
Otherwise we'll have there are like very subtle bugs that you
can introduce. You know my friend Meryl runs a
company graphite dot dev that does AI agent like code review.
Yeah. So there'll be AI agents doing
the review and then you'll review it.
It is moving helping us to move faster for sure, especially if
you're writing a lot of boilerplate.
I do think that the the barrier is still the ideas what your how
they all work together, coordinating all of these things
and then being able to bring them to market through a unique
kind of go to market channel. So we use clay internally as
well to figure out like what are the tactics we're using to sell
clay. And I think that you don't wanna
just build a bunch of low quality things.
Congrats, you know a mid stage winner and we'll be following
everything you're doing and thanks for coming on the
podcast. Appreciate it, Eric.
Thank you. Cool.