The Profitable B2B Growth Playbook and Mutiny’s Story
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Hello, acquired LPs. Today on the show, we are joined by Jaleh Rezaei. Her story is incredible. She immigrated to the United States from Iran when she was a kid. She was obsessed with math and science. She went on to study engineering at Berkeley, got her master's at Stanford.

went on to the Stanford GSB alum of famous acquired co-host David Rosenthal for business school. She worked at Sequoia. She went on to join Gusto early, eventually leading marketing. This is quite the resume, David. We don't normally start episodes like this, but I felt it was warranted. And all of this is sort of helpful context to know because since Gusto started their business with very low price points for their customers, just payroll for startups,

She had to be laser focused early on on profitable growth, measuring things at a very granular level for their customer acquisition funnel at every single point throughout the funnel. And we wanted to talk with her about this idea that she had, this great tweet storm that was the playbook to profitably grow a B2B company, something that is very useful now that capital is scarce again.

Indeed, indeed. This conversation was so great. I'm so glad we did this and that we get to share it with you all. I think it'll be very helpful for a lot of founders and investors out there. These current weather conditions that we are in right now in 2022. Yeah. And of course, she's become a real world expert at this because she has productized a lot of these learnings into Mutiny, the company that she started four years ago.

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With that, this is not investment advice. Do your own research and on to the interview. Jaleh, welcome to Acquired. We are so excited to have you on here. Thanks for having me. Super excited to be here. Super cool. Our mutual friends over at Sequoia introduced us and we chatted a little while ago. We're like, wow, you've got like your story is awesome. You've got such great insights to share from Gusto and Mutiny and we're excited to get into it.

And maybe I've had my head in the sand a little bit, but I think maybe since following you on Twitter or maybe the last few weeks, you just blew up. But you have some of the most prolific tweet storms I've ever seen that are unbelievably helpful to founders. Thank you. And I want to use that as the point to just dive right in. So you wrote a B2B profitable growth playbook. And

And this was a talk that you gave at Sequoia and at YC. And then you shared this great sort of summary of it on Twitter, which we will link to in the show notes. But I'm sure many listeners have not read that. So can you walk us through that a little bit? Yeah, absolutely. If you trace back the history of marketing and growth, it starts in the 60s with what we call the Mad Men era, right? This is when there was enough competition in products that...

It was like, well, we need a story. Why would you grab our cereal box versus someone else's? Well, because our oats are made with love in Idaho. Our tobacco's toasted. Our tobacco's toasted, right. And so this started that storytelling. And the main distribution for this was offline channels. So, you know, TV was probably the most prolific technology that advanced this era. And then...

With the internet, that basically shifted to online distribution. So platforms like Google and Facebook gave us a ton of data and AI to be able to find all of the right people on the internet and be able to tell our stories and put our messages in front of them. And so the field grew pretty significantly and exponentially during the past couple of decades. But it has one really big problem.

And the problem is the waste attached to it. So today, 19 out of every $20 that companies spend on advertising and this type of demand spending ends up going to waste. And typically that's because

That's even worse than the old Wanamaker quote of half my dollars go to wasted. I just don't know which half. Right, right. Yeah, exactly. It's a lot more than half that's wasted. And typically what happens is that you have really good technology that gets the message in front of the right person. But then once that person ends up getting passed over the fence to someone

the customer's website and their own properties, there isn't really a ton of technology there to make sure that they have the best experience and they end up becoming a customer. And so they bounce and goes with it all of the money that you spend on getting them to that point. The third phase that, you know, has started, I would say a few years ago,

with the shift from a lot of companies putting growth teams on this problem has been to really focus on the entire flow, right? And make sure that we're actually turning all of that spend into customers and revenue and impact for the company. Now, you know, fast forward to the current moment, what's happening is we were in a bull market, right?

And so nobody cared what was happening to efficiency. You know, it's like, okay, just throw more money at the problem. That'll get us more people. As long as top line numbers are growing, that's all that matters. This has been the case, I would say, post the 07-08 recession and post COVID with the big, you know, V-shaped recovery was truly the YOLO years of this.

I hope that goes down in history as the way people describe it, by the way. That's like a fantastic term. What's happening now is investors, both in public markets and private markets, are saying the game has changed. And now the focus is back to profitability, sustainability. We're looking at things like CAC. And so the message to the CEO and the executive team is you have to become more efficient and

But the challenge is we have been using these ad-centric growth engines that we've been building over the past 10 years. And you can't just cut expenses and all of a sudden that problem goes away. Most companies have to completely rewrite their growth playbook in order to be able to do it efficiently.

And so because we're at this really important inflection point and most companies are scrambling to figure out how do they do that, you know, YC and Sequoia and a few of our other investors asked me to come and speak about how we did this at Gusto. Because the unique thing about Gusto is that we sold to small businesses. And when I joined, our average deal size was $500. Right.

And what that meant was that every investor wanted to make sure that we could grow and acquire small businesses cost-effectively from the beginning. So that bull market didn't really apply to our business. And as a result, we had to build a very efficient engine. And so I talked a little bit about some of those lessons learned, and that's what the Twitter post was based on. What do you think it is about human psychology where, or maybe it's about organizational design,

where everyone pointed so much of their energy at top of funnel growth, getting the most cost-effective traffic to the very first touchpoint that you have with the customer, but very little optimization ended up being done in conversion relative to, obviously, your discussion of efficiency on the ad platforms, let alone on pricing. I mean, we had Patrick Campbell on this show where he was pointing out that people revisit their pricing once every two to three years, but revisit their Facebook ads 50 times a day. Yeah.

Despite the fact that all three, acquisition, conversion, and pricing and packaging, are all gigantic levers for the business. Yeah. So I think the first root cause of this is you're going to play whatever game you're told to play, right? And so if the game is grow as fast as possible, and when you're fundraising, nobody cares to even look at your efficiency metrics, right?

That's what you're going to end up doing, right? I think the second really important piece here, though, is technology. So we have a ton of technology to do advertising as effectively as we can. Literally the smartest minds in the world. Absolutely. I mean, people think of Google and Facebook as...

Google is search and Facebook is social media or metaverse or whatever the hell it is these days. But-

Really good at targeting. Right. They make all of their revenue from marketing. They're, in a way, MarTech companies, right? They're some of the biggest companies in the world, and their entire revenue is paid through the budgets of marketing. And so they have done a really good job of making that type of technology accessible to everybody, right?

and such that everyone can be reasonably successful, even if they're not very analytical or technical.

And I think this is a huge reason for why that has been widely adopted. And then, you know, the other disciplines of marketing that are also tied to demand, like content, like PR, SEO, all of these things have grown pretty significantly. And so most marketers have really good handle on this piece, but when it comes to conversion,

They don't necessarily have a good handle on that. So, for example, at Gusto, we had to solve this by building a dedicated engineering and data science team. And we did that because we did have a conversion problem when we initially really expanded our marketing. And...

And this was a dedicated growth engineering and data science team, right? Separate from the product engineering and data science team. Exactly. Completely separate from that. My background is engineering. And so I tend to tackle the problem from the perspective of what's the outcome that we're trying to achieve? And then how do we actually go about doing that? What solutions do we put in place? I went and talked to a bunch of CMOs and I was like, okay, we have this conversion problem.

Do you guys have this problem? How do you solve it? Who's the best at conversion? Because my goal was to hire the best person and put in the best technology and then great, solved, move on to the next problem. And everybody was like, oh, this is a huge problem. We know that it exists. We can't really even quantify it because that requires an analytics that we don't even have.

And, you know, we have some A-B testing. We have some nurture emails. We do some retargeting. This is kind of like maybe I would say at best 5% of the marketing resources went towards conversion. But there wasn't really a system with inputs and outputs that you could optimize that could solve this problem. The best examples of this that I found were B2C companies like Airbnb, Pinterest, and

that had built massive engineering and data science teams to go and convert users and make sure that they were efficiently moving through their funnel. We decided to do the same thing given that there wasn't really a good solution to it. So we built this dedicated engineering data science team

It was incredibly effective. I would say if you looked at the overall cost of what was going into marketing versus conversion, we were probably close to 50-50 by the end.

Wow. Which like, that's like, you think about a typical growth team and even a B2B company like Gusto, like I suspect 50-50 is way on one, you know, at the far end of the spectrum. Wait, can I push on that for a second? Do you mean that the infrastructure investments were 50-50 or do you mean that the investments all up in conversion matched the investments you were making in acquisition, including the actual ad spend and acquisition? Yeah.

I mean, in terms of the team distribution. So we were spending about 50-50 on salaries of folks. And so if you factor in the ad distribution, it would probably be closer to about a third. Okay, makes sense. It always shocks me how much every company has to pay rent to those who have aggregated audience demand at this point. It's interesting that it's a full headcount team of costs that ends up going to whatever platform currently owns people's attention.

Yeah, absolutely. So the types of things that we ended up doing on conversion was matching the website to the particular audience that was coming in. So one problem that we had was we originally started selling just one product.

to one audience startup founders. And then as we grew to multiple audiences, restaurants, accountants, and lawyers, entrepreneurs,

And our product grew to benefits, 401k, FSA, all these other things. We needed to start customizing what different people were seeing so that it wouldn't be a bait and switch, right? They come in through a highly targeted ad, they land on the website and they're like, what the hell is this, right? This is for lawyers. Yeah. Right, right. Exactly. What are pictures of all these people in offices? I'm a restaurant, right? Right.

We were doing that type of optimization. We were optimizing the signup form, the onboarding form. So lots of infrastructure going into essentially identifying who's the customer, where do we have a blockage in the funnel from a conversion standpoint? And then we would brainstorm, what do you do differently now that we know we have a problem? And then we would custom code it

And well, before we custom coded, we would fight tooth to nail over what would get to get built because you have a spreadsheet of 200 items and you can only build like two or three of them that quarter. And then we would custom build it and then measure it to make sure that it had the desired effect. And so we kept going through that loop over and over again.

After about three years of doing this, it became really clear that it had a huge impact to our growth. Gusto, I think over the years that I was there, we grew 100x and CAC dropped from 20 plus months to 10 to 12 months. So the rapid growth and the increase in efficiency are very hand in hand. The more efficient you are, the more you can grow.

spend that money on top of funnel and bid even more aggressively. It's just one very efficient loop between demand and conversion. That's a thing that we haven't dug into far enough on Acquired, which is how interrelated all these systems are. Like to your point,

Let's even take a super blunt example. If I have a product where my customer lifetime value is $100,000 and someone else's customer lifetime value is $50,000, well, I can just afford to pay more for them. So I can outbid them every single time on any of these platforms. But then once you layer in what you're talking about, where if I'm twice as efficient as actually converting the traffic that hits my site, well, now I can pay four times more.

than that other person who has half the customer lifetime value to make the numbers work. Or pay two and a half times more and still be more profitable. Right, right. And that's really what you're hoping for. Exactly. So the returns from conversion, it's almost like on three different layers, right? So the first one is you just convert more people. So you've got more customers. Right.

The second one is that because you convert more people, you get treated more favorably. So your overall unit economics actually starts to go down. You mean algorithmically by the Facebooks and Googles of the world? Yeah, exactly. And it's not just the ads. It's also SEO. So all of your organic conversions start to go up. And then the third piece is that you can then take that extra money and

And put it back on top of funnel. And really what that means is it's not just that you have extra budget. It means you can bid more for the same thing that other people are bidding for, which means you can outbid your competitors. So there is essentially these three layers that start working together, which is why it's such an important area. But the part that was really frustrating for me was that everyone would look at us and say, you have a growth team. That's amazing. Oh my God.

And for us, it was that spreadsheet of 200 things that we wanted to do. And we could only do the top, you know, few. And it was really frustrating as a head of marketing for me to be so dependent on another department to be able to hit our goals, right? It's, it's bullshit. There's no other department that operates like that. And so, yeah.

The other department that you're dependent on being engineering. Engineering, yeah, engineering and data science. And so it's very frustrating. And this was actually how my co-founder and I bonded because he was on the engineering side. He was an early engineering leader. And he's like, I want to know why it is. I know we have a good marketing team, but why is it that you guys are constantly needing engineers?

What is going on there? And so we started talking about the problem and we started brainstorming about how can we build a solution that essentially alleviates the need for this. And that's when, you know, we came up with the no-code architecture for Mutiny that essentially becomes the world's growth team solution.

helps everybody drive conversion so that they don't need to build their own independent engineering team for this. Marketing engineering team. I love it. Let's get into Mutiny and your story and all that. Before we get off your tweet thread and this topic of the profitable growth playbook, first, one more question I really wanted to ask you. You had kind of four pillars of the playbook, and one was shifting to program-level CACC.

And I thought that was really important, especially for this environment where like so many people are looking to like, hey, I just need to slash my advertising expenses. I need to slash my marketing budget. Talk to us a little bit about that and why just like overall, like you need to disaggregate stuff. Yeah. So...

I find that a lot of marketing teams, the way that they operate is they agree on a budget with finance and then they go and spend that budget. And a lot of these budget cycles are annual. And during that year, you know, obviously they have some process and they want to make sure that they're deploying that capital effectively. But no one really looks at CACC

during that process. CAC is something that the finance team calculates. It's like a nerdy finance thing that happens. But I think it's really important that actually the marketing team understands what the CAC is at the program level.

For really expensive programs like advertising, you actually want to have near real-time CAC. And by real-time, weekly is sufficient. It just means it has to be at a level where your team can react to it. And so if the program is really expensive, you want to know every week, right?

how to optimize your spend. And for the programs that are less expensive, you want to calculate CAC at least at a quarterly level so that you can cut the rotten apples essentially from your portfolio. And can you give some examples of like top five most common programs when you say at a program level? So people know sort of what you're referring to.

So program for me is essentially anything that helps you acquire customers or convert more customers. And so an event program, let's say you have an idea to invite your prospects to dinners that are hosted by the sales team once a month. And you think that's a really good playbook. You want to test that out.

The first thing that you would do is you would create a few dinners and see what the yield of that is. The danger that a lot of teams fall into is they want to make sure that they have a really good experience. And so they'll go into the basement and they'll build this big program and then they'll come out and they've committed to like a year of things to do. And that's not really...

the best way if your goal is efficiency and rapid growth. And so what you want to do is just start calculating what is the cost of this, how much headcount do we need, and then do the math to understand, well, what would it be at steady state so that you have line of sight into what the economics look like if you are successful and you hit your big vision for the program when you scale it.

And then with that in mind, then you set a very clear goal for what you want to get out of this in the next month or two months or maximum, I would say three months is what I would give to new programs. And then you would measure, okay, what did it actually cost us, et cetera.

And usually CAC doesn't look great when you start a program. It really shouldn't because you're not trying to do scalable things. But what you want to make sure is happening is you want to make sure you're hitting your other impact goals. And then you kind of then can assess CAC and say, do we have line of sight to make this thing like three times more efficient than what it is today? And if you do, then you can continue to move through the gates and

and keep scaling the program. And then once you're at a point where you have full confidence in the metrics and you have full confidence in efficiency, that's when you fully scale the program. And when you say other impact goals, how would you think about that? So it depends on the program. Marketing is...

Like I wish it was simpler, right? Sales is really simple. You have SDRs that book meetings and you have reps that close deals, right? It makes a lot of sense. All of the budget and the math goes into headcount. Marketing is a little bit more complex because you have to create awareness in the market and then you have all of this machinery that actually gets you to convert those customers.

The goal that you set for the program is dependent on what the program is trying to do. So most of the programs that tend to be very expensive are tied to driving customers. And so the goals that I would set, so to go back to the event example, I would want to see how many

how many opportunities were created from the dinners that we held. So you have the same goals for all of the demand gen programs. So you would look at something like opportunities. And then if it's a conversion program, then you would look at conversion metrics. Makes sense. Okay, so we're starting to talk about Mutiny a little bit, or at least you mentioned Mutiny in the context of how you sort of came up with it at Gusto. I am so curious how...

something that is a problem you observe inside a company where you're currently an executive can become its own company. And a lot of the times there's, you know, real technology that gets transferred out. A lot of times it's, hey, I solved this problem once in a very specific way, and now I want to build a completely new generalized solution. But if you're open to sharing, like, how does that happen where you start to gain more and more conviction that, hey, I want to start a company around this?

I mean, I think these things are a combination of how much you believe in something, which is probably part your DNA as a person and part like how well you understand the problem. For me, I mean, like my parents are both engineers, right? And so I grew up in a very special household where, you know, we were constantly experimenting. My dad would...

I always come home with these Russian mathematic riddle books. And I think it was his way of babysitting me.

That's a good trick. I've got to try that. Yeah. And I was really competitive. So he would always say, this one is for a 12-year-old, but you're only six, but I think you can do it. And that would just get me to spend... Oh, I'm taking notes here on parenting. This is great. Yeah. That was like a seven hours of self-babysitting recipe. Yeah.

You know, I would solve these problems. I distinctly still remember this one that had me puzzled for a while, which was like you had six matches and you had to create four equilateral triangles out of it. And there was this moment where I realized, ah, you have to lift three of the matches up in the air, right? And so I...

loved solving problems. I feel like that's something that he instilled in me and I found the process to be really, really fun no matter how hard it was. And then my mom, who's also an engineer, they actually met in university in Iran. She is just a trailblazer. Like a memory that I have from her was we were...

really young, maybe five or six years old. And we had a party. Persians have a lot of parties in general. And the kids just kind of roam around. So there is no like 7 p.m. bath time and then story time. You're basically there with the adults and you're fending for yourself. It sounds bad, but it's actually really fun for the kids. No, that sounds great.

Yeah. And I remember going to the kitchen because I was looking for my mom and there was, you know, all these women there and they were cleaning and laughing. And I'm like, where's my mom? And they're like, your mom's in the living room. And so I go in the living room and my mom is there with all of like my dad, my uncles and everyone, and she's playing poker. And I don't know if she had just lost or won, but she was talking smack and, you know, screaming at somebody. And it

And so she, you know, she grew up obviously in a country where women are very much boxed in on what they're allowed to do, including like whether they can show their own hair, which is tied to a lot of the protests that we're seeing right now that's going on in Iran. But even in that environment, she was very much like, okay, what are my passions? What are my values? And then she would just kind of go for it.

and never really give up. Like once she saw this is the way to do it, then that's the only thing she could move towards. And when I was young, I thought that was difficult, but now I realize I'm quite similar in that way. And so- Isn't it funny how we all grow up to be cool parents? Like I'm not like that at all. And then you're like, oh my God, I'm like that. Yeah, exactly. I truly am a mix of the two. Once I saw the opportunity-

It was impossible for me to not pursue it. Today, the way that marketing is done is you have this tech stack. I think on average, a mid-market company has 91 tools that they cobble together. It's insane. And you need engineers to piece those things together. And so...

When I imagine the world where you don't have that dependency anymore and you have AI that's telling you exactly what are the top strategies that you should be investing in. And then within a few clicks, you deploy that. And then you can see exactly what the impact is. I mean, that would be transformative for not just marketing, but like for the world, for every company, right? Their number one priority.

goal is to grow. And this is something that I think that we can have a real impact on. Well, and to your point earlier, like on the acquisition side, this has already happened. Like Google and Facebook have made those tools available that you can do that, you know, with their tech without having an army of, you know, engineers and people and experts on your team. There's a traffic faucet that you can turn now. You can pay them money and deepen their moat and get traffic. Like it wouldn't be nice if there were faucets for dialing everything else. Yeah.

Exactly. A really funny story is, so we did YC when we first started and we met with Paul Graham and Paul Graham has this really nice way of simplifying things. And so we told him what Mutiny does and he goes, I get it. You're the other half of Google. Oh, this is going to be big. That's such a PG. Yeah.

I love it. I love it. Okay, so give me the nuts and bolts. So you're getting increasing conviction because everything you're doing at Gusto is working. How do you decide to take the leap? I've always been very entrepreneurial and always at least thought that I could start something or wanted to. I enjoyed environments that were scrappy, where you had to create something from scratch. I

Not a big fan of big political environments. And so for me, I always knew I wanted to start something and be on smaller teams. And so I ended up going to business school, actually, of all places, because I thought I could go for two years, party, and start a company. That was the reason I went to business school. And during that time, we did a lot of brainstorming. We would sit in these conference rooms and we would think about

okay, what markets are bad and what markets are good and what problems are unsolved? And then we would come up with ideas. Anything from group exercise to just the craziest stuff. I started a company with a friend of mine called Snail Box. I'm not even going to describe what that company does, but we had a lot of fun building something that was probably not going to be very big. Had you worked at Sequoia already at this point? Had you been exposed to the world of entrepreneurship?

Great question. So I ended up doing an, a second internship at Sequoia while I was in business school. And it was during that time that I completely changed my mind about the right way to go about creating a company. So I started interviewing all of these successful Sequoia founders, you know, Kevin Hartz from Eventbrite and, you know, they're all telling me their story. And I

Their story was so in depth and rich, and they had such a nuanced understanding of the problem that they were trying to solve. Even at the moment that they jumped into the business.

And when I compared that to what I was doing in business school, I was like, oh, okay, this is different. I don't want to dedicate the next decade to any of these problems. And I don't fully understand any of these problems because they're not part of me, you know? And so I decided to do the second best thing, which was to go to the smallest company that I could find, you know, which ended up being Zen Payroll, which became Gusto. Was that their original name?

Yeah, it was called Zen Payroll. Nice. To go back to Ben's question around, like, how do you know? I got to a point where I couldn't think about anything else. It wasn't even a decision. It just was like, I have to go build this. And it felt so different than when I decided to build Snail Box. Yeah.

And I just was like, I don't even care if this fails. Like I just, I was like, I have to die trying. And so it honestly wasn't even a decision. How did you decide when you left and started working on Mutiny? How did you decide to do YC? I mean, you'd been head of marketing at Gusto. You'd worked at Sequoia. Like you probably didn't need YC to go raise like a seed round. What was the thought process?

Yeah, at the time I was a growth advisor at YC. And so Michael Siebel, who was the CEO of YC, he asked us to come in and brainstorm with him so that we could better understand what value YC could bring to the table.

And the two things that really stood out to me from the conversations with him and also in meeting with, you know, other YC folks was YC has this ability to get you to think really clearly about the problem that you're solving and everything that you need to focus on in order to get to that.

And then the second piece was speed. So I was doing a bunch of advising and the YC founders that I was advising were just different. They were all so much faster than all of the other founders. As I started to talk to these folks, it became clear that there was some magic happening in YC that was creating this extreme success.

simplicity in a really good way and focus and speed for these companies. And every single person that went to YC, I asked them, do you, do you regret going to YC? And they're like, best decision I ever made. And so at some point when like the seven of the smartest people you've ever met, I'll say it was the best decision they ever made. You're like, all right, I got to take the leap here. Right. And I agree. It was the best decision we made.

So I like staying here in the early stages of Mutiny. What did the path to your first customer look like? Because I could totally see how there's still a little bit of like fear and risk when you leave Gusto of like, okay, this worked for Gusto, but can I actually create a solution that works for other companies?

Yeah, totally. Because you're working with a lot of customization, right, when it's for you. And so this was a big part of what Nikhil, my co-founder, and I talked through. And so we actually spend about five to six months before we wrote code thinking through the long-term architecture of Mutiny.

Because we knew that we were building a platform. And so we had to create a set of primitives that would then power playbooks, essentially. And so, you know, we wanted to start with, let's say we start with web. Ultimately, we want it to be present in email and all of these other customer touch points.

And so we had to build the platform in a way where we could then scale really quickly across these different platforms. Once we had that, then we had a lot of discussion around what is the right entry point into this platform. And we ultimately decided with web as the right entry point because we

All data sources ultimately flow through web. So if you were to build a system of record today, web is the best place to be getting data, whether it's activity on the website, whether it's advertising data, IP data, cookies, whatever

signup form, all of that data flows through the web. And so it puts us in a position to build the system of record, which is what we're doing under the surface with Mutiny. Why is that true technically? Is that because just JavaScript can execute arbitrarily and it's amazing to collect as much as you possibly can from that?

Yeah, I mean, there's just a lot of technology that's just been built around data feeding right into the web. And so if you're running even as a JavaScript client on the web, you can collect a lot of those things. And you can still collect them through all of the other sources as well. But you get like, if you think about a platform like Marketo has about 10% coverage is what we see across our customers, because we activate all of these data sources through Mutiny.

Mutiny, in aggregate, has over 70% coverage of a website's visitors. And we're getting that by combining all of these different data sources together. You can de-anonymize, which is really powerful for conversion, and then use that to actually power a lot of customization that then turns into revenue, essentially. So the path to the first customers, you've been building this network.

sort of architecture for the first six months. And if you're open to sharing, who was the first person to sort of take the risk and say, yep, we'll pay you money for something. And what did they pay you for?

It was either Amplitude or Brex. I can't remember, but it was, but you know, we, we got like three or four customers at the same time. Yeah. Also Brex was a YC company, right? Was Amplitude also? And so was Amplitude was a YC company. So now you know what our strategy was. Yeah, exactly. The value with Amplitude, I remember was they had started a growth team, a growth engineering team.

And the lead growth engineer was like, well, we have, you know, they had their own spreadsheet, just like Gusto, right? Like they had their 200 items. And he's like, you know, a bunch of the top ones are all around personalization and customization on the website. And if I pay you money, that means that I don't have to custom build that. So I'm willing to deal with all of the gaps of the product and all the things that you

It's going to be still easier than custom building it from scratch. And so most of our early customers were design partners where I was initially the UI and my co-founder was the backend data. We set things up and I'm so happy that we approached things in that way because once we decided, okay, this is the architecture,

This is the entry point. We incorporated, next day was YC, and then we wrote our first line of code, basically. And so from that point, it was just go, go, go, because most YC companies are actually much bigger when they enter. Most of them, they have revenue when they get into YC. Right. You're still in building the platform mode. Yeah. So we had a lot of ground to cover really, really fast. Yeah.

The way that we did it was we basically said, great, you have a problem that you're trying to solve. We will solve that problem for you and be our design partner and help us build the right solution. That was one of the best decisions that we made because it made us really fast and really customer centric. So I think from a DNA standpoint, those are things that are really powerful for Mutiny. But it also helped us realize all of the things that...

was a blocker for the customer. So for example, I remember, you know, since you asked about Amplitude, distinctly, once we had built the first, you know, iteration of the UI, they were using Mutiny to create the personalization on their website. So for different industry segments, you know, they were personalizing the logos. And I think this led to like over 50% increase in

in conversions on the website. So we're having a lot of success with it. Oh, I see. Like what testimonials they were showing related to companies like you. Yeah, exactly. Because customer acquisition is all about trust, right? So you interact with something and either you immediately are drawn towards it or you're bouncing. And then that's where all the inefficiency comes from. And so what they were doing when we spend a bunch of time with them and we're joining their meetings and things like that, we realized is that

They would, before they came into Mutiny, they would download data and they would stack rank, okay, which segment should we start with? Which one's bigger? You know, we have 12 industries, but which industry should we prioritize?

By watching that, we realized, well, this is an important prioritization decision. And ultimately, we want to bring all of these steps and automate them in the app. And so we build our segment creator such that it now shows them exactly the size of those segments and the conversion rate. And it prioritizes it for them automatically based on what we believe to be the best starting point. And that's just one little example. But basically,

That's essentially how we were able to build something that was really easy, that was historically very, very challenging to do and very manual.

It's a very tangible example of the same sorts of things that Google and Facebook ad buying tools do for you. You don't have to think about prioritizing about your bid strategy. We'll do that for you. We'll figure out what customer segments resonate the most. So you just pay us enough money and then that way we'll start with a really broad audience and we'll start narrowing it down and boom, we'll figure out where you have product market fit on your behalf as long as you keep spending money with us. Yeah.

Yeah. I mean, I think a lot of marketers are frustrated by how much they spend there, but the automation that they've added is definitely something to learn from. For us, the first version of Mutiny was, okay, let's get these workflows to be no code. And then once we had enough customers and enough experiences being launched through Mutiny, then that's when we started to develop our training dataset.

And so now we have a lot of AI in the product. We automatically tell them what segments they should focus on, what pages they should focus on, what parts of the page. So we can select sections of the page that we believe are going to have a higher yield based on benchmarking data that we're getting from other customers. And we even write the copy for them. Using AI? Yeah. Mm-hmm.

Wow, cool. Wait, what's that based on? So we built this on top of GPT-3. And so we have our own training data set that we layer on top. So the segment-based data, so who's the audience, what types of...

let's say, resonated for them. That's training data that's coming from Mutiny. And then we use GPT-3 data, which has data on essentially all of the text. The internet. Yeah, exactly. The internet.

We're able to boost quality by using that base data set. And then we layer our own on top of it. This is one of the first commercial uses I've heard of, of GPT-3, where it's actually like productized in a piece of enterprise software. Yeah, absolutely. I mean, we focus on B2B companies right now. And so, you know, companies like Notion, Snowflake, Qualtrics. So we started with mid-market companies, but now we're in like lots of public companies are using the technology. Oh, wow.

That's awesome. Okay, so that's an example of how far you've come today. The interim period between hanging out in the Amplitude growth engineering meetings to Snowflake and lots of other public companies using you today, product market fit happens somewhere in that period. Just because Amplitude was willing to pay you some money to take some of their roadmap off their hands doesn't necessarily mean you have product market fit. How did you think about that?

Yeah, I actually go to YC and do a chat with each batch on product market fit and how to think about those signals. The way that we thought about product market fit was a combination of

And I don't know if this is the best way to do it, but this is how we did it. We looked at companies that clearly had product market fit at their series A, and we looked at those metrics at the series A. So we looked at revenue. We looked at conversion rate from like lead to close.

And we looked at NPS. Were you able to get some of that data just by going and asking those companies? Oh, absolutely. Oh, yeah. And if someone asked me that, not on a recorded podcast, I would probably share all of that data too. Why wouldn't you help another founder like that? Totally. 100%. You can absolutely get that. And actually, I'm happy to share what the benchmarks were. So we were looking at minimum 1 million in ARR, ideally 2 million so that you could trust the rest of the data. Yeah.

We wanted at least 25% conversion rate. For our industry, the conversion rate was much, much lower. And so that's sort of where we triangulated would make sense for us at the time. What conversion are you measuring there at 25%? Sales. So from someone talking to sales and saying, I'm interested to...

does it actually close? And then NPS, you know, above 70 basically is what we were looking for. And then there is also your own gut, right? When I was at YC, I think it was Gary Tan who came to speak and he shared an anecdote that always stuck with me, which was,

The graph that you feel the most embarrassed of showing to your board is literally the thing that you should be showing and where you should be spending all of your time on.

And I think that is probably very tied to product market fit. So what is the thing that you know is bad about your business and then fixing that? So for us, that was getting somebody to become active within the first 30 days. So when we were pre-product market fit, some people would use Mutiny and they'd be very successful because they were very motivated. And then some people would run into...

They had other priorities that would come up. So in those cases, you would close a sale, but then they'd be like, oh, yeah, we got a lot going on. We just haven't started using it yet. Yeah, exactly. Exactly. We had this issue around activation. So we would look at that of how many experiences has...

customer has the customer launched within the first 30 days. So we made that the most important metric for the company. And we started really focusing on that. And so we started, you know, revamping our onboarding the way that we handled CX. And it was with the

probably, I don't know if it was like the fifth or sixth iteration of our AI engine, where we made it easy enough for someone to just come in and then launch experiences where they could do it within, you know, in an hour. That's when the switch started to flip and we started to see a lot of success there. But it is painful to look at that because your instinct is to be like, oh, everything else is great. Let's just not look at this one thing. But, you

You know, Gary had it spot on. Like, that is exactly what we needed to focus on. Well, if it's okay, I'd like to move in a little bit more of a personal direction. We've talked a lot about the problem you're solving with Mutiny. And I love hearing the early founding story stuff about something going from an idea to a real company to a real product to having product market fit. But I want to sort of go back even before that with you. Your whole life has been anomalous, right?

in a pretty amazing way, a pretty wonderful way. The fact that you are this sort of successful Silicon Valley startup founder coming from being an Iranian immigrant. And I think English, I'm not sure when you learned English, but you mentioned it was your second language. You know, you are literally living the American dream that we want to see a lot more of. The question that I have for you after teeing some of that up is, what is your dream?

What are some of the inflection points in your life that but for that sort of amazing circumstance, you couldn't be the CEO and founder of Mutiny today? My mom and dad instilled a lot of passion and ambition in me. My mom in particular, we talked about her a little bit earlier, but she

She was very much focused on doing the right thing. Iran has a rich history of revolutions and wars, and she's very passionate about standing up for what you believe in. My mom had this friend named Khanumji in Iran, and she lost her husband in the Iran-Iraq war.

And she had three kids. And so for an Iranian woman, you know, where the man generally is the, you know, economic breadwinner, that's really, really challenging. And she knew how to sew. And so she was using that to get by, but it was really hard. And at some point, you know, a man had asked for her hand in marriage and she didn't really want to get married to him, but it was...

the only path out and everybody was telling her you should get married this is the best thing for you for your kids and she came and talked to my mom about it and was like okay what do you think I should do my mom was like well do you love him and she's like no my mom was like well your life's going to get a lot more miserable you think money is your biggest problem right now

you know, if you're living with someone that you don't want, that's going to be a lot worse. So let's go see if we can figure something else out for you. And my mom's uncle was a, I guess you would call it a fabric merchant.

there's a lot of fabric merchants in Iran. It's not really a job that you see in the US, but there's a lot of movement of fabric. And so he was very successful. And so, you know, got them introduced and they started thinking through how to turn this skill of hers into something more scalable. And now fast forward, like 10, 12 years later, when I went back to Iran, she had started a sewing factory that employed like over 50 women and

So she was very successful. She had upgraded her home and she was married to someone that she actually wanted to be married to. I sort of grew up with that in mind of, well,

That it is really important to, one, be economically independent as a woman, but also to build something for yourself. My sister and I, you know, the plan for us was originally to stay in Iran. But then as things progressed, it became really clear that, you

raising two daughters, so me and my sister, was not going to work in that country. And so we ended up moving to the States so that we could actually have the right education and the right opportunities. And so ultimately, I think that was probably the biggest inflection point was moving to the States.

What brought your family to California specifically? My dad has two brothers that are here in California. And as with all immigrants, you know, you go where you have a couple of people that you know, and then you hope to build community out from there, essentially. Right.

I remember one of the moments for me, that's probably another inflection point, was I was in school and I was right at that age where I was starting to understand like, oh, boyfriends. And, you know, I was growing up and someone had asked me to the school dance and

And, you know, when we came here, we didn't really have a lot of money. We didn't really speak English. I knew how to say I have a cat and I have a dog, but we didn't have a cat or a dog. So I couldn't use the two sentences that I knew. And so we kind of, you know, lost everything and then and then, you know, had to had to rebuild it. And financially, that was certainly something that we had to build back up.

And so when I was asked to go to the school dance, I was like, well, I want to dress nice. You know, I want to get a nice dress. But I knew that if I asked my parents, my mom would definitely get me a really nice dress to make sure that I didn't feel bad for not having it.

But we couldn't really afford it. So it didn't really make sense to ask her. So I went around the mall and asked all of the stores like, okay, can I work here? I started with the really nice stores, the clothing stores. And then there was an age limit. You had to be at least 16 to work. And I was younger. There was one store, Subway.

And they said, okay, you can work here and we'll pay you minimum wage, obviously. I came back and I was really sad. I was like, man, I wish some of these other stores had worked out. Why did the sandwich store had to be the only one that I could find? And I remember just kind of thinking through that, well, I really want the dress, so I'm going to do it. And now reflecting back on that, that was an inflection point for me because I

It was the first moment where I had to like really choose my own values and

The way that we grew up in Iran, you know, Iran is a very classist culture, right? And so, you know, in our family coming from two engineer parents, like their daughter certainly does not, you know, go to a store and make sandwiches. You can't go work in a sandwich shop. Yeah. Yeah. And, but for me, I was like, you know what? Like, I don't care. I'm going to do it anyway. And that was probably the first step of then many steps.

that started to, you know, where I was leveraging the foundation from my parents, but I was also starting to find who I am and what was going to be unique about my approach. Wow. That's so cool. Thank you for sharing. Yeah. And I have sort of one follow-up question on that then, which is, do you think you would have ended up in technology if both your parents were not engineers? And sort of how did you find your way into tech in the Valley?

I mean, it's hard to say. I had such a passion for math and science from both of my parents being engineers. So I think that had a lot to do with it. I think role models are really, really important, whatever shape or form they come in. So if not them, I would have had to have other role models that would have guided me towards that.

When I came to the States, one of the benefits of having lost all of the things that we had, right, was that there was very few things that I was actually good at. I couldn't really speak as well as everybody else. I couldn't really dress the right way. I didn't have the nice things, you know. So the one thing that I was really good at was math and physics, right?

I remember sitting in my classes and basically just being like, oh my God, this is ridiculous. Are they really teaching this? Because Iran's school system is much further ahead in terms of mathematics and sciences. And also, that was something that

That was the way my parents showed me love is they would work with me on these things. Keep you entertained as a kid. Yeah, exactly. Babysit me. Math was my babysitter. And so that was something that I really doubled down on and ended up... I remember when I found out about scholarships, I didn't know that there was such a thing. And so when I found out that Berkeley offered a scholarship...

I was like, oh my gosh, like this is it. Because like once I go to university and I become an engineer, you know, I'm

then I've hit, I've arrived, you know? Little did you know how much farther there was to go. Right, right, exactly. I think, you know, getting into Berkeley and being able to do that on a scholarship, because we certainly couldn't afford to pay for that full price. And so that was probably another big inflection point for me. And then, you know, being in school, for me, there was always this part, and I know my sister feels the same way, which is,

Our parents made a big sacrifice for us to get here. And you remember that, right? And so when it's like, oh, let's go party. Let's go do this. I'm like, well, maybe I should study, right? And so I was very focused in college. And I wanted to have a top grade. And I also loved what I was doing. My senior project was building a robot that solves the Rubik's Cube. And it was me and four buddies. And

I was in charge of the color sensors. And that is ultimately how I ended up finding my way into real technology. That's really interesting. Thanks for sharing your story. The culmination thus far for you of your journey in Silicon Valley being starting and building, you know, Mutiny, a company. Do you think any of that, you know, filters into the culture at Mutiny?

Yeah, I think community for me has always been a really big thing. And that very much comes from my childhood. So you don't really have credit cards in Iran. It's, you know, community is your everything. If you need salt, you ask your neighbor. If you need a loan, you ask your uncle, you know, or aunt. So community is the lifeblood that everybody relies on.

I think the way that we've approached culture at Mutiny, it's very focused on the people that we have and the community that we are creating together. So for example, when we went remote...

we lost a lot of our community. Our community before going remote was we cooked together on Wednesdays and, you know, we had all of these little things that we had developed. And then we went remote and, you know, we tried the Zoom version and like everybody else, like quickly gave up on that. The Zoom happy hours. You should have used mystery. Yeah, yeah, exactly. We actually tried to cook together on Zoom. I remember I was in Mexico at the time and,

And it was a lot of fun, but it's fun to do once. You can't really make it every Wednesday thing or people will kill themselves, have to sit on Zoom for three hours after they finish work. After sitting on Zoom for nine hours. Yeah, exactly. We ended up redesigning our operating rhythm around off-sites. We basically were like, okay,

How do we, instead of doing all of these things every day, how do we bring the whole team together every quarter and create this huge boost of energy and business context that people need to feel really energized and excited when they go back to the office?

you know, this is something that I'm starting to write a little bit about of like our operating cadence and how we think about off sites and things like that. You got another good Twitter thread on it. And I think for me, like if I had to go back to one principle, even on a more first principles level than community, for me, it always comes back to people, right? Like how do we make every individual live their full life?

And if mutiny is part of their journey for, you know, the next four or five, six years, how do we make this one of the most like remarkable parts of their journey at mutiny? Or how do we make this one of the most remarkable parts of their life so that they look back at that with extreme fondness? I think from that place, we tend to build relationships.

almost all of our HR programs. And to underscore that point, I mean, you've taken this very seriously. You've moved to Miami. There are no more entire company getting together on a regular basis on Wednesdays in your San Francisco office. Those days are behind you. So like you have to figure out the new path forward. Yeah. I mean, and I made the move after we had put in a rhythm that worked, right? So I was one of those people that very much believed you had to be in Parsan.

I thought remote companies were so boring and lacked culture, and it was all based on ignorance. I just had never experienced that, and I didn't know how to do it. And then when COVID happened, we were forced to do it.

And I can't imagine having a company that doesn't have a community that's not cohesive and connected. So we had to just keep iterating on how do we get that back, right? For us, like we basically arrived at this concept that we call experience-based work. And the reason we wanted to invest in that was that ultimately,

What I came to learn was that remote is the right way for people because, you know, we live on this globe. There's all these amazing people. There's all these amazing countries that we can interact with.

And even for myself, I was like, oh, I would love to be in Europe for a couple of months in the year and I'd love to be on the East Coast. But oh, of course I can't do that. Maybe after mutiny, that's something that I can think about. And then when we went remote, it started with one of our top folks. She was leading CX.

And she came to me a few weeks after the pandemic and she said, my boyfriend, you know, he, and who's now her husband got this opportunity in Germany. And I want to go and experience that. I've always wanted to live in Germany. I would love to work East coast hours. Like I think we can make it work because I want to explore Germany during the day. And then I can, you know, focus on East coast hours for mutiny. Is that something we can make happen? And yeah,

She was so important to the company that I was like, let's try it. You know, I want you to go have this experience. Let's just do it. And then watching her thrive and have so much fun and still be as good, if not even better, because she was doing exactly what she wanted to do was a huge lesson. And that kept happening for us.

And then, you know, bringing it back to my own experience, I was like, yeah, I want to do those things too. Like, this is something that everyone should do. Like, why are we making people sit in Soma? You can write code anywhere. So why not go wherever you want to go? And so we decided that we were going to be fully behind Soma.

this remote culture and that we were going to do it in a way where we did bring people together. So we called that experience-based work. Essentially, we bring people together for these really powerful experiences that energize and refuel them. And then they go back to, you know, the, the, the place that they prefer to, to live in. And it's so much nicer for families, obviously, as well to not have to commute to the office. So, um,

And you do that every quarter, right? We do this every quarter. And what's an example of one of those? We tend to go to different cities for these. So we did one in Hawaii. We did one in Salt Lake City, which was more of a ski vacation. Our last one was in Chicago. And so we tend to pick cities where we think we can have a cost-effective offsite, but also have it be an experience that people are going to really enjoy. Right.

And the thing that I think we do differently probably is I'm really adamant about the locations that we stay in being aligned with our values. And so one of our values is work should feel like play. And a big part of that is that you don't have a work self and a real self. You bring your whole self to work. For me, that starts with what is the comfort that's attached to the environment. If we are in some stuffy corporate office,

It feels like you're somewhere weird and foreign and different, right? And so we make sure that we get Airbnbs. So we're always in houses. I feel like Airbnb should give us like a huge discount because we're such consumers of Airbnb for money. They go through YC. Yeah.

Yeah. And actually, I think they've experimented with this over time. Airbnb product is a whole, but anyway, there should be a Airbnb corporate product because like so many companies use it. Yeah, totally. Their founders are investors in mutiny. So I should definitely send them an email, ask them about that. That's cool. Well, thanks for sharing. And Chalet,

Any like final words for our audience? Of course, where can they find you on the internet? But sort of any parting thoughts you would give folks? This is so cheesy. I was going to say... You can be cheesy. I can be cheesy? Okay. I was going to say trusting your gut. I think when you are a founder...

There's a lot of stuff that you may not know, right? And so I'm always asking different people who have maybe experienced that thing that we are about to experience and we are trying to get smarter about. There's investors. There's so many people that are inputs to you. And that input is really, really valuable. But at the end of the day...

you know, it's about trusting your gut and leaning into it. Someone gave me this advice when I was early in my career. This is when I was at VMware. I was asking him about a decision that I was thinking about that was really controversial and wanted to see if, you know, if I should do it or not. And he's like, Jalit, at the end of the day, you're going to be a success or a failure because of your

instincts and your business acumen. And so you might as well put it out there and start testing it and start iterating it. I love that. Yeah. It's like the old benchmark quote. The only good judgment comes from experience, which comes from bad judgment or something like that. Yeah, totally. Awesome. Well, where can listeners find you on the internet? On LinkedIn and on Twitter. What's your Twitter handle? We'll put it in the show notes too, but so people can just pop over to the app. Jolliard.com.

Great. So J-A-L-E-H-R. Great, great. Well, Jaleth, thank you so much for spending time with us today. Thank you for having me. This was fun. Awesome. And listeners, we'll see you next time.