Vinay Hiremath is the first tech leader I have had a chance to interview through all these episodes of PMF Convo. Vinay and I were connected by Jai Relan, an impressive young builder / hustler who is presently an Associate at The Council Fund. Now, I have always been curious as to how tech looks at PMF (product-market fit), and this talk did help in getting that perspective. Now, Vinay is not just a tech leader. He cofounded Loom, and through that and the stints running the People function at Loom, has a rich holistic perspective of the business. He brings all of that to bear on this episode, giving us this wideranging interview covering his origin story, how Loom was founded by spinning out the video creation feature out of Opentest (a user testing marketplace), his definition of PMF as indicated by the right metrics going up without you having to put in additional linear work, the importance of picking the right metric (and why the time to first view of the video is Loom’s key metric), and finally the role of the tech leader (or indeed tech) pre and post PMF, and how that changes at each stage. I thought this was a fun and fascinating conversation, with lots of advice for founders, and not just from the technical front.
Sajith: I wanted to start by hearing from you about the Loom journey to PMF (product-market fit). I know that you guys pivoted, had maxed out your credit cards and so on. I would love to hear you talk about it and what I’m going to do is I’m going to take notes even as this getting recorded. Essentially, how was the Loom journey early, and feel free to talk about yourself a bit please, because you’re not as well known in India I would say. So, a lot of the tech or engineering folks who read this might find your story very interesting. So, it’d be great to hear your story a little bit as well.
Vinay’s and Loom’s Origin Story
Vinay: I’ll give you a quick background about my story. I’ll be very quick. I know this is product market fit focused. I grew up in a small cornfield town in Illinois, which is in the center of the United States, it’s the middle of nowhere. My dad’s a mechanical engineer. He moved out there because they apparently build factories in the middle of nowhere and mechanical engineers like to work at factories. I’ll skip over a lot of details, but it was a pretty rough childhood. Being an Indian person in the middle of nowhere is apparently pretty tough in the United States and I won’t get into all of those details, but it’s what you could expect. It’s a lot of fights. It was a lot of stuff. Basically, to sum it up, people put Confederate flags on their trucks and going to school and the Confederacy in the United States is kind of a symbol of the South wanting to leave the North and to some people it’s like a symbol of pro-slavery. That’s kind of what it was for some of the people who went to my school. I grew up in a pretty rough area in the United States and luckily I made it out. I went to college, I went to the University of Illinois where I actually studied material science, so a lot of physics and chemistry. I found a hack in the computer system and was able to sign up for computer science classes without transferring in, which was great because the computer science program at UIUC was competitive, and I didn’t have great grades back then.
And then I ended up dropping out, two years in & I told my South Indian parents that I was going to go do this internship at Facebook and they thought Facebook was a joke. They’re like, that’s a social media company, what are you talking about? And I was like, yeah, I’m going to go do this internship and I’m actually not going to come back home. I’m going to just look for work as a developer. And they were concerned to say the least, but they supported me the best I think two South Indian parents could and I went out, I interned at Facebook, I didn’t get a return offer. I was very, very junior. I applied to over 70 different startups just trying to get work anywhere. Most of them, almost all of ’em rejected me except for two. One of them was Pinterest where I got an offer to be the 14th employee at Pinterest and another one was Backplane where I got an offer to basically run Lady Gaga’s social media site. And I shot an email to Paul Graham at the time who’s one of the founders of Y Combinator, just seeing if he could give me some advice. He told me to go where I felt like I was going to learn the most. Unfortunately that wasn’t Pinterest.
I went to Backplane, which was a company that was poorly run to say the least. But I also met a lot of really great people. I learned how to hack. I learned a lot there. I learned how to develop product very quickly, very, very quickly, and that’s really important. I think some of that ethos is actually lost in the (Silicon) Valley these days. I think there’s a lot of entitlement. I think people don’t build as fast as they used to. And this was a true hacker culture, just a bunch of misfits, probably not the most popular kids at school.
This is where I met one of my co-founders, Shahed, who interned at Backplane, and from there I left Backplane to go to a startup called Upthere, which was Run, it was founded by Bertrand Serlet, known as the father of OS X, the operating system. He worked very closely with Steve Jobs at NeXT and then at Apple he hired a bunch of incredible engineers, Bogden Cocosel who and was one of the first engineers at Google, like the 34th engineer at Google or something, built out their data centres. I learned how to build data centres at Upthere, so started at the web stack, made my way down to backend services, then microservices and then the data centre and found myself working within the data centre for a little bit. Made my way all the way back up to the web team which I managed because our manager left and I was a terrible manager, so I ended up hiring my replacement, which was great.
I learned a little bit about how to actually manage people from my replacement, who was this guy named Brett who ended up becoming the director of engineering there. And then during that period, I was moonlighting Opentest, what would then become Loom with Shahed and one of our other co-founders and one of my best friends, Joe (Thomas), and it started out as a user testing tool, but then we pivoted in the user testing space multiple times. Once it was a two-sided network where there’d be product experts who would give feedback to other startups on their checkout flows or landing webpages, whatever, and then to a platform that had a video recorder and then to eventually decoupling that video recorder and just shipping that by itself. And the combination of how quickly that video recorder rendered and uploaded the video with it just coming at a pretty unique time where remote work was taking off….
The tech ecosystem, which also helped, I’m sure, and also internet speeds unilaterally were taking off, video was a format that in general, consumer leads enterprise by about six to seven years. And we were right at that sweet spot of about six and a half years since Instagram reels and YouTube had really started taking off and so, or Instagram stories. And so there was a lot that we had going for us when we released this Chrome extension. We had no idea, when you release a product and it ends up having a bunch of tailwinds, it’s not like you’re on the All In podcast and you’re just pointing to a bunch of graphs and you’re like, oh yeah, this is the perfect time to release this thing. It’s like you’re just grinding with your friends, you’re trying to make it work. You’re with a small team that’s under resourced, constrained and hopefully you win. And I think that product market fit is all about the exit velocity of that sort of story.
Sajith: Thank you for this. I want to just double down a little bit on two aspects. One is when you, Joe and Shahed decided to launch this, you started with Opentest, you wanted to do something in user testing.
Vinay: Yes, yes.
The Pick, or how they honed in on the (user testing) space
Sajith: I want to talk a little bit about the space. How did you pick the space? Then, I want to go into the pivot from Opentest to Loom because pivots are a key element of PMF, every company goes through a pivot. Very rarely do you have a company that’s not gone through a pivot. I find the story of the pivot very interesting as well. So how Opentest and then Opentest to Loom, if you can just double-click on these, two or three minutes each would be great. And then we could get into that a little bit more.
Vinay: Sure. Opentest was me, Shahed (Khan) and Joe (Thomas). We got together and started talking about the different markets we wanted to tackle. And Shahed just threw out this idea for a better user testing platform. At that time, the only other platform was usertesting.com. Most of the videos you got were duds, they were terrible, they were absolutely terrible. And we were like, well, what if we could do that better and just do it with product experts? And you just got feedback from product experts, that would be useful to the startup ecosystems everywhere else in the world. And it came about because we were all product people. I was product-minded, I went really deep technically, but I cared about the product the most. Every time I’ve built something I’ve cared about the user experience. Joe was a director of Product at a company called MyLife down in LA. Shahed had only designed really his entire career. He was in this VC world, but he shouldn’t be a VC, he’s a builder. We’re all product builders. And so we understood this problem intimately where it’s like, okay, well what do you do between feature flagging and kind of releasing to your audience? What if you don’t have an audience and you want to put things in front of people? You need a better way to do than usertesting.com. I think usertesting.com has gotten a lot better by the way, but it wasn’t great. And so picking the space was less about being super sophisticated about the market capture and all this stuff. It was asking first-time founders and being like, we understand this problem. We just wanted to get to building our aspirations at the time to build something with some level of success. Honestly, just assumed that we were going to fail, and it’s like we just wanted the experience. And so, we really just started jumping into it. We set up this meeting to evaluate different markets and it was literally the first idea that Shahed threw out. We just jumped on it because we just love to build. And so that’s how we landed in user testing, the pivots through user testing. I’ll say a couple of things about iteration.
When you iterate, what you ideally want to happen is every single company that is looking to solve a problem they think people have and are willing to pay money for…It’s really easy to come up with problems that people have. There are a bunch of people in the middle of Africa, who are starving. That’s a real problem. It’s easy to come up with problems. I think that figuring out how to solve those problems in a way that’s commercially viable is where a lot of people struggle. You don’t really know until someone pays you, until somebody pays you a dollar or rupee for it. So, I think that what you’re essentially doing is you’re trying to find product market fit is you’re trying to find that moment where someone pays you a dollar, someone signs up for your service, they pay you with their attention, whatever it might be.
And that’s built off of hypotheses you have about the world because in order to solve problems for people, you have to have an idea about how the world works and you have to have an insight about how the world works, that other people don’t have or haven’t tackled for some reason. And if you want to be successful, that idea has to be more and more contrarian. It has to be so contrarian that people don’t want to go after it or don’t even think it is possible. So, in the idea of SpaceX, it’s like let’s revitalise the space industry. It’s like, are you fucking crazy? Sorry, excuse my French. But it’s like, so the more contrarian your ideas, but also right, the more successful you’ll be. And so what you’re doing with iterations and pivots is ideally you’re building up a hypothesis about how the world works.
And every time you shift, if you don’t get traction, that is, if you reach out to a bunch of people, people don’t want to sign up, maybe you don’t find the right audience, whatever it is, but at some point, you have to say, this pivot is not working. And you iterate again when you do that, when you iterate, you should be doing it, based on some insight or some assumption you have about why the assumption before that you had made is wrong. And so you build up this hypothesis about the world and then there’s a lot more texture and richness to the space that you operate in. And so now we’ve been operating in video for so long, it’s like I see startups and I’m like, that’s going to work or that’s not going to work. I had no idea seven years ago, eight years ago, but now I’ve just been in the space for so long and I’ve met so many people in communications that I feel like I really understand the space and I’m willing to bet that with Elon Musk for space itself, it’s the same thing I’m willing to bet for Sam Altman with open AI, it’s the same thing. He’s seeing all these startups pop up and he is like, I am the platform.
So, the way that you get there is a founder. Where you see these founders moving several steps ahead is that you pivot off a hypothesis and you build up texture to this hypothesis. And then with traction in dollars, you get a bunch of proving points with all these little grooves around the hypothesis and then the proving points solidify, and then you no longer have a hypothesis. You have a theory, you have a theory of the market that you actually understand really well, and that becomes a huge competitive advantage even at the later stages. It’s amazing. I won’t name who this is, but me and Joe met with the CEO of a very large video company, we were talking to them and they said that the pandemic happened. This was in 2020, the pandemic happened and they were like, yeah, we’re really not sure if we’re going to go all in on-screen recording.
As soon as they said screen recording and they didn’t say Async video, me and Joe knew we were going to crush them. We were like you don’t understand anything about the space. You don’t understand how critical it is to make sure every single feedback loop is as fast as possible or nobody uses video, so they’re still thinking about it as screen recording. So, these hypotheses that you build up early on and these iterations, you ideally want to be building a bigger worldview about what assumptions people have that are wrong about the worldview and that you’re right on. And then eventually you get to a point where you’ve solved this problem, this insight in the market that other people didn’t have, and people are paying you money for it.
There’s traction and you have an IP base to build off of. And so, for Loom, it started as user testing. We eventually built a demo because there were non-technical people who were signing up for this user testing meets video platform where they wanted to embed video feedback on their websites. And that demo had to be instant because people would start playing around with it. There was an i-frame with their website in the background. We tried to hack it to make it look like someone was recording a video and walking through their site, and we knew that it had to upload and be instant, otherwise they would just churn and go away. And then when that video recording was instant, there was a combination of a bunch of different hypothesis we had about video growing in the workspace, customer insights of, Hey, I’d love to use this recorder for these other things.
There was a bunch of different proving points about why video would take off at this moment in time. Hey, we have a remote team. We’d love to be able to collaborate. We didn’t know whether or not that would be fully true. In the moment, you have no idea. You just take these as input points and you’ve probably lost a lot, so you just assume everything’s going to fail at that point. You’re kind of with your tail between your legs, and so it doesn’t feel like you’re making a giant leap of faith. But for us, we’re like, okay, we have enough input about where video is in the workplace. Okay, this team said that their team has better internet in South Africa now, so maybe they’ll use this video recording thing. They said they would use it for this use case, and now we have this hypothesis about the market and video and let’s just unlock it and ship it.
It was really a Hail Mary for us because we only had two weeks’ worth of money left. All of our credit cards were maxed out, but it was built off of a hypothesis. And the other thing I’ll say is that as you’re iterating and developing your hypothesis, this is a great way to create leads for investors. We had a giant email list at that point of a bunch of investors who had said no to us over and over again, and we’re like, that’s cool. Nothing personal. We get it. We haven’t been winning. We wouldn’t invest in us either if we were being honest. And we’re like, but here’s all the progress we made. And so at that point, a bunch of investors who would’ve come in cold all of a sudden saw all this traction and knew what we had done before, and they’re like, oh, okay. We not only trust that they landed on something, they have a framework for how they’re going to prove out other ideas down the road. And so that’s a huge rant about iterations, like hypothesis, the contour of solidifying your hypothesis, how it turns into intellectual property down the road, even way down the road against big competitors, and how important it is to have a unique insight into the market. Most of the time you don’t have a unique insight into the market, and so that’s a long run. I’ll pause there.
Sajith: Riveting stuff, I enjoyed every single word of it. Thank you. I want to just double-click on your definition of PMF. Do you have a formal definition? Did you, Joe Shahed at that time, do you even talk about PMF? Was that very consciously? Oh, are we getting to PMF, one of the things I’m trying to understand is do founders think about PMF or do they just think about growth and retention? So, first question, is PMF a VC construct, and then I would love your definition of PMF. Whatever comes to your mind.
Vinay’s definition of PMF
Vinay: I feel like PMF, I call it party market fit because it’s kind of like if you’re at a party and someone’s like, oh yeah, this party is cool? It’s like you don’t need to tell someone a party’s cool. I kind of look at product market fit the same way. There are multiple indicators that might lead to tell you there’s product market fit. It could be traction, it could be retention, maybe there’s terrible traction, but you’re an insurance app, and so as long as people stay on your platform, you’re fine. There are so many different metrics for different products in different spaces that I think what people are looking for when they say product market fit is that you’ve had the right metrics go up consistently without needing to put in additional linear work. You don’t need to continually put in additional linear work.
It’s a sustainable business. Maybe there’s word of mouth viral growth. Maybe there’s just internal network effects within a company. There could be a number of growth channels that caused this. With Loom, it was word of mouth, thank God. But I think that you’re in this, founders really just chase the growth at all costs because they need money. And then there’s a certain period of time where you don’t know, and it’s actually pretty unsettling because most founders that are in this period of time, they don’t know and they’re like, fuck, I really hope it doesn’t go down again. And yet you have to understand that the context of almost all founders is that at least for a year, six months to a year and a half, they were just totally getting pushed on their back over and over again. They had to get up over and over again, so they’re not at their most confident.
I don’t think a lot of founders who find product market fit are crawling out of their caves. They’re like, oh my god, is this sunlight finally? And the VCs are thinking the same thing. I’ve been on the other end of the table where it’s like, okay, cool, something has worked. Is this going to keep working? And I don’t know if you really know, it’s kind of like a limbic resonance thing. There’s some sort of limbic resonance where you just wait a certain amount of time and then eventually everybody’s like, okay, yeah, there’s product market fit. And you can tie a narrative to why the metrics are growing and continuing to grow. But at the end of the day, I think especially with internet software, at the point that we felt like we had product market fit, we had hundreds of thousands of signups. I couldn’t tell if you were to fill a stadium like a cricket field with a hundred thousand people. I couldn’t even begin to tell, there’s no way my brain couldn’t capture all the human complexity of how the product grew with all those people. So what you’re really doing is you’re just projecting the hypothesis once again.
I mean basically, I think that founding a company and then being an investor, on both ends, I think it’s a lot of pattern matching. You’re doing a lot of pattern matching, you’re building a lot of hypotheses and you’re trying to find answers to unanswerable questions. It’s like you have certain metrics that fire. that make sense to your story and your product, and they continually sustain growth without you having to put in a ton of work for the next level of growth. It should be a sustaining flywheel & then you have product market fit. I think that for Loom, it was this concept of a video’s first view. It’s the idea that when a video gets its first view, we know that we have delivered value on that video and that video has been sent to someone, it’s been shared, and that’s what we anchored on is our activation metric.
Sajith: Got it. Thanks. Just double-clicking, for Loom the clear sign, you talked about metrics going up to the right, so clearly signups due to word of mouth, are very critical. That was one and the second was videos getting its first view and that leading to retention. Were these two broad dominant metrics like growth and retention or were there other metrics that you looked at? For example, this seems to look like the first view, how many videos get the first few and how fast? So do you want to just double-click into that?
Vinay: At first, we were just happy to get signups. I remember me and Joe and Shahed, we were looking at the graphs. We launched on a Wednesday or a Thursday, and on that Saturday we got more signups than the seven months of pivoting through user testing combined, where we had to grind to get signups. So, there was some element of, okay, this is spreading whether or not people are successful on it and recording videos, this is spreading. And then we double clicked one more layer and we’re like, okay, well within the signup, what logically makes sense? Okay, are videos getting recorded. Then we started looking at that and then we’re like, okay, of those videos, which videos are getting a view? And then there’s a distinction between do you want to count the total number of views or do you want to count the first view?
And we knew for us with Loom, we were like, okay, since this is in the workplace, the hypothesis we had made is that actually the thing that’s most important is the first view. Because if we’re looking at total number of views, we’re kind of anchoring on being a marketing video tool. We’re being a one to many tool. Whereas the single first video view we’re like, okay, well if this is word of mouth viral growth, people are recording these transactional videos, let’s lean into that because there’s actually a lot more content creation that can be created. And so we leaned into this video first view and trying to make people successful on recording more often. And Loom is an interesting journey where as we started doing that, we started using the tool more. And the great thing about dogfooding your own tool is that you build conviction in it.
And so we started to say, oh crap, we’re using it for analytics overviews. I’m using it for interviewing people, I’m using it for recruiting outreach. We were using it for investor updates. And so we eventually got to a point where once we started scaling and people started leaving the company, people were like, Hey, I’m using Loom at this new company now too. And so in the concept of product market fit and how important, what’s the elasticity of demand for your tool? The nice thing about the Loom journey as well is that we could also use the tool internally and dog food it, which isn’t something everybody gets to take advantage of.
Loom and their GTM (Go To Market) strategy
Sajith: I want to just go a little bit into the GTM. So, it looks like it was largely word of mouth. There was no need to market it, on Facebook marketing or any consumer marketing team. It just spread wildly through word of mouth. Is that fair? Was there any marketing that you had to do at any point?
Vinay: So, our Series A investor, Ilya Fushman at Kleiner Perkins, made a joke two weeks into investing in Loom and he is like, I feel like I’ve been duped, I feel like I’ve been taken advantage of, I thought I was investing in a B2B SAAS company, but I feel like I actually invested in a consumer company. And that’s because me and my co-founder, we monetized way too late. I’d say we monetized way too late. We hyper-focused on product quality. We hyper-focused on making sure the UX was as seamless as possible, expanding the multiple platforms. But when it came to getting people to pay us and then also go to market, making sure more people found out about Loom, not only were we late, we probably did a pretty exceptionally bad job at finding good marketing and sales leaders, not to the people who came on by the way, to the company’s fault, to mine and Joe’s fault.
I just think we’re product focused founders, and this was our first time trying to figure out, okay, what does marketing look like at Loom? What does sales look like at Loom? I know this is going to sound insane. I feel like we finally landed on a really solid growth marketing motion and we’re starting to see the beginnings of a really solid sales motion, which is going to sound crazy, eight years in the game, and we just entered into an agreement to get acquired. But yeah, I don’t know if this is going to be one of your entries in your book where someone’s going to get great insights in a go-to-market. I can tell people what not to do. I can tell them a lot of what not to do.
For us, we scaled up our sales team at one point, our enterprise sales team, way too quickly. We had a bunch of inbounds because Loom was a word-of-mouth viral growth product. So, we had a bunch of warm inbounds, and when people were signing up with multiple thousand, sometimes multi-10,000 seat deals, we incorrectly assumed that meant we had an enterprise sales motion, which for anybody who’s been doing enterprise sales, they’ll be like, of course, you don’t. There are a lot of complexities in an enterprise sales motion. You have to think about the information architecture, we’re a communication product. Where does it fit in your org? Who’s the buyer? And we really didn’t have a repeatable enterprise sales motion. And so, we scaled up our enterprise team thinking that we did. When we exhausted our warm inbound leads, we found out we didn’t. And now we feel like we actually kind of do and we’re getting there, but it’s after making this pretty perilous mistake of thinking that we did when we didn’t just because we have leads.
And the thing is, if you have a viral product, just because you have warm leads doesn’t mean you have repeatable leads that you can go out and farm. And so, we’ve learned a lot since then. We have Nick Feeney who’s leading our sales team right now. They’re doing a bunch of amazing work. It feels like we have the beginnings of a pretty repeatable motion in mid-market, and there are some inklings of enterprise (motion) as well. But that’s one huge learning. Another is that for a product like Loom, we are lucky to have a brand that people care about. We’re so lucky because today’s world’s so noisy. It’s like it’s so hard to build a brand people actually care about. And we have a brand where people associate their face with being on top of their work. And so, there’s a lot of people who love Loom, and I really think Loommates broadly are grateful for that, but they sometimes need to be reminded.
And with our marketing motion, it’s like we really leaned into a lot of brand marketing early on. If you have a brand that’s working, I don’t know how much you really need to lean into brand marketing. I don’t know if I would do that (if I were to go back). I think a lot of people look at Apple. I know we did. They look at Apple and they’re like, oh, amazing brand. You need to nurture it by building out the brand and corporate marketing team.
You don’t need to do anything. Your job is to not fuck it up. That’s your only job. Your job is to not fuck up your brand and your job is to understand why people come to your platform and continue to deliver on that. And we lost sight of that. And so now we’re finding out that actually, the best type of marketing for Loom is just regular paid ads. It’s growth marketing. It’s like the really unsexy stuff that just like, what’s this channel? What’s the LTV to CAC? And for anybody who has a great brand, don’t scale up a brand marketing team. Just start figuring out what your channels are, start doing paid, see if that works. Start looking into content. It’s not the sexiest thing, but you don’t need to do a sexy thing. You already have the brand. And so that’s another mistake we made, man, we made so many mistakes, honestly.But those are some of them.
And I think in go-to-market, there’s an interesting thing going on right now by the way, where these platforms, like clay.com or Pocus, they’re automating away a lot of the BDR motion, like business development rep motion where you’re going out and farming leads. They’ll actually do that for you based on your customer base and based on customers you don’t have. And that’s really exciting. Go-to-market largely is going to be automated even more. The things that require a human touch…will bring in humans at the right time. And so right now, if you’re running a go-to-market team in your early stage, I would really think about how much can you automate as humanly possible versus just doing what go-to-market has done in the past. I think sales and marketing teams are kind of going through a revolution with AI and automated marketing and sales platforms, and so you should really lean into that. It’s an efficiency gain of an entire person’s salary. So, that’s the other thing that I’d say.
Tech’s role in prePMF and postPMF
Sajith: Interesting, really interesting. Just a thing around the tech leader and PMF, because you’ve been an engineering head / CTO etc. How do you see the tech leader’s role in the pre-PMF stage and how do you see the tech leader’s job in the post-PMF phase? What happens? Early on it’s very hacky, you’re just trying multiple things. You’re not bothered about documentation or you’re not bothered about code, how well is it written elegantly? You’re saying let’s just test it out post that you end up rewriting much of the code base? How do you look at it? How do you clean up? Where do the energies go pre-PMF? How should the CTO, the tech lead, think about life post PMF, both pre and post?
Vinay: The most important thing is that you’re delivering value to your users no matter what. And so no matter where the devil’s in the details because then it’s like, okay, well what about this technical debt that’s slowing us down? What about this thing that maybe is going to become a security concern or maybe not even maybe definitely is going to become a security concern? There are all these holes in your system, and what I’d say is that not even pre-PMF, just early stage, while you’re still proving other things out and you need to continue to build a product for your users, I think the most important thing is that you just listen to your users and you solve their user pains, that’s so important. I’d say that if you’re thinking about documentation, there’s a tonne of good material out there of what’s the right documentation.
My personal belief is that architecture diagrams and stuff like that goes in the wiki. Documenting what’s happening in the code files, you try to document at the source. I’m a big believer in documenting at the source, not creating a read maze, and not making devs switch context. But that technical debt is an interesting one. Building platforms is an interesting one. I’m a pretty big human believer in the operating system of a company and in 0% interest rate environments, we got this wrong. We actually flipped it, as a bunch of founders and VCs got this wrong. It’s funny how quickly people forget this, but it’s like you have a vision and mission and then you have strategies to solve that vision and mission, and then you have the work and then you have the people. And the same thing applies to tech. It’s like you have the vision and mission, you have the strategies and then there’s a bunch of products you want to build for those people. That’s the work.
And what you need to do as a technical founder is understand the type of work that we need to solve for our user; do we need to start paying down technical debt that gets in the way of that work? One type of technical debt is that you’re slowing down the velocity of the team. Sometimes that’s the case if your CI/CD pipelines are slowed down, maybe it’s like the velocity within this part of your product, so you need to redo just that. There’s going to be, as you get bigger, there’s going to be an itch for developers you bring in who maybe come from bigger companies to be like, whoa, we have a ton of technical debt, like code red, let’s rebuild everything. That’s a mistake. You want to rebuild the parts of the stack that are slowing you down for the strategy you’re trying to execute against.
And so that’s really where you want to focus. And anybody who tells you no, you actually need to take a wider lens needs to really be able to back that up with, well then what is the user value on the other end? It’s like, well, this part of the product is faster. It’s like, but our users don’t give a shit about that part of the product. They care about this part of the product. We need to iterate over here. So, you need to always quantify even with technical debt, either developer velocity in an area that aligns with your strategy, or lost revenue or traction for a product that maybe you’re not focusing on but is still critical to your business, or a massive security hole. Those are really the three things. And if you can’t answer that question for those three things and it’s just kind of like, oh, well the auth service is something that we think needs to be really refactored and beautiful and everybody uses auth, yeah, but it’s working, who cares?
So, this is where technical founders get that wrong. Something that really helps when you have a complex system, and let’s say that you’re paying down a bunch of technical debt is to back it up with facts and metrics. So, you won’t always have observability in every single one of your services. So, in the case of auth, it’s like, well then add the observability and let’s see how bad it really is. And maybe you will find if you don’t have observability on something that it’s actually quite bad and then you’re like, okay, let’s fix this. So, there’s another part of this journey, which is once you get to much later stages and you have kind of a core set of key workflows and you have very strong product market fit, a lot of customers, let’s call it a million in annual recurring revenue, one to 7 million in annual revenue, you should probably identify your key flows billing, auth, in our case recording, viewing. And you want to at least make sure there’s observability over every single one of those key flows. And that’s really important too.
So, that’s kind of like the last thing that I’d say is like you’re going to add observability. There’s some engineering leaders who say, add observability right at the beginning. I think that depends on how critical of a product you’re building. If you’re building foundational models for OpenAI, yes, please add observability right at the beginning. If you’re building a sales CRM tool and you have no idea and the space is really hot, you are just figuring it out, just build the tool. Don’t build observability. Who cares? The service might become irrelevant in three months.
Vinay’s thumb rules and guidelines
Sajith: Alright, thanks for this. I would like to ask two questions. The first question is now you do angel investing, you do investing, so when you interact with younger founders, what kind of advice do you give them? Are there any ready two or three thumb rules, guidelines, or top-of-mind advice, some of the stuff technical that you said, which is very interesting, like don’t add observability everywhere right at the beginning. You don’t know how it’s going to be, right? And don’t obsess over refactoring everything, just figure out where the user value is not happening and focus on that. So, are there similar tips on a larger scale that you give founders? Not necessarily technical, but yeah, even if it’s technical, it’s interesting. Are there any 2, 3 or 4 tips? Whatever comes to mind.
Vinay: I think that, well one thing is there’s always a type of founder that I think VCs may gravitate towards. For me, I really gravitate towards founders who are very high energy, to be honest, high energy founders who have a pretty massive chip on their shoulder and it, it’s usually not hidden or if it’s attempted to be hidden, it’s poorly hidden. I like investing in founders like that. High intellectual horsepower, very obviously. Maybe even think that most people are dumb, including myself when they meet me. I like those types of founders. And that’s an important backdrop to the type of feedback that I give founders. But for me, I mostly focus on yes, product and strategy and stuff like that. I give localised feedback, but I really focus on a lot of people’s problems. If they’re at a very early stage, I focus on the founder dynamics and make sure you have a weekly founder dinner or meeting where you all are able to give each other feedback, unfettered feedback that you have to accept.
At the very least, you have to accept all the feedback and say, hey, I hear you. And then give back your answer to that feedback. So, frameworks for feedback and effective communication, weekly founder meetings. I think that I also give a lot of feedback on performance management. It’s like, look, when you start having people problems, your natural tendency or most people’s natural tendency is to actually eliminate the work. That’s the easiest. It’s like when you start scaling with people, you want to make sure that you’re eliminating the work that feels the crappiest because that’s actually emotionally weighing you down, and that’s a really hard reprioritization that needs to happen for all effective founders.
I give a lot of feedback on people fit, honestly, I think the crux of most people problems is that the founder knows that someone is not up to their bar or is not performing and they just don’t pull the trigger. And so, a lot of the feedback, it ends up being feedback that’s essentially just encouraging the founder to pull the trigger as fast as possible because everybody else around you is going to tell you, whoa, slow down. Wait, no, we need more information. And that is the death of an early stage startup.
And so I find myself giving a lot of advice that’s actually not really technical. I invested in a company called Magical, which does autocomplete, it’s an auto complete Chrome extension, and I’ll give that founder feedback technically just because there’s overlap with Chrome extension. But I think most great founders figure out all the technical stuff.
They figure out the craft and the product and building roadmaps pretty easily. They just do it and then there’s something that’s not perfect about it and that’s fine. I think when things are not great in the people’s world, it usually is not fine. So, I really focus a lot there because a lot of first-time early-stage founders, young founders, they have no idea. They don’t know what it’s like to manage and nobody does. It’s something that you just figure out as you go along and the types of people that I try to tell founders to surround themselves with too, it’s not a one size fits all sort of thing. You should really surround yourself with a team that hopefully fills out some of your gaps. And so, I wish I could give direct advice there, but it really depends on your archetype and who you are and what you need around you.
Vinay’s recommended resources
Sajith: Very interesting. The thing about the people problems, and the last question, and this is sort of a fun one, resources, books that you like to read, recommend or gift or something that you found useful. Could be technical books, could be anything at all. Could be linked to PMF, but not necessarily.
Vinay: Totally. I think that near Nir Eyal’s Hooked is one that gets referenced a lot. We actually used to run a pretty regular book club with the entire ‘company’, and I put company in quotes because we were like six people back then. Hooked is a book about forming habits and products. We learned a lot about retention graphs and L7 graphs and all this stuff. I would just read that if you’re an early stage team trying to figure out how to build a habit in your product. Now that might not apply to every single team.
I think it’s actually important to read about early founding stories with your team just so they get the ethos. And so we would read Hatching Twitter, which is a book about the Twitter founding story. It’s also a spectacular story about how to not treat your co-founders, I think in many ways. And so startup lore and really steeping your team in that is really good. You want to ignore all of the pessimism about, Hey startups, you’ll never get an exit. You want to create sort of a reality distortion field, and part of that is steeping your team in that startup lore, other material, the early Steve Jobs, there’s these videos with Steve Jobs giving a lecture at MIT, I highly suggest that it’s him talking about the future of NeXT and Apple. Amazing how far ahead he just sees the world and how that affects users. I think a lot of times when you’re early in your startup journey, you’re really focused on the product-product and you forget to think about the market over and over again. It’s like a jigsaw until eventually, you’re like, okay, I have a holistic business. I have to think about all of it from the start. Those Steve Jobs MIT lectures are an amazing way to think about, okay, when I build SDKs, what does that mean about the quality of the products in the app store? The people that can build for it. There are a lot of light bulb moments that I think go off there. He also has amazing recorded lectures with this team during an offsite, the NeXT offsite. And if you’re thinking about doing a strategy session with your team, I think that’s a great resource as well.
Man, there are so many. Elad Gil has a really great book called ‘High Growth Startups’. I think it’s a great way to think about people scaling and business model scaling if you maybe have a little bit of product market fit, but if you don’t have product market fit, I think the best thing you can do if you don’t have product market fit is to just keep building. You’re kind of in the seventh layer of how it’s like if you’re making it through the seven layers of hell, I don’t know how much I’d be like, Hey, take a rest. Let’s read some books. Maybe some people would, if they’ve been in that hell for a long time and it’s like, look, I’ve been iterating for two years. I need to just take in new information. But the last thing that I’d give to that person who’s kind of in the middle of that personal help, there’s this really good 45-minute lecture called The Joy of Living Dangerously by Osho.
Osho himself is a pretty controversial figure. I actually love Osho. I pretty much subscribe to most of what he says, maybe minus starting a cult in Oregon. But I think that he has this great philosophy on how important it is to take risks. And for me at least, it’s led to an unlock in remembering, oh yeah, every time I’ve been at this juncture where I need to take more and more risk, I get why I’m doing it. I remember why I’m doing it. It’s really easy to hold on to your animalistic instincts of protecting yourself when you know the right thing to do is to take that risk. And that’s going to happen many times in the startup journey. And so I’ve revisited that 45 minute lecture on Audible. It’s like a dollar and 99 cents. Most people can afford it. If you can afford a computer, you can afford it and it’s 45 minutes. It definitely changed my life multiple times.
Sajith: Very interesting. Thank you for this Vinay!