Superhuman (with CEO Rahul Vohra)

[0] Great.

[1] One take feels good.

[2] Welcome to Season 4, Episode 10, the finale of Acquired, the podcast about technology acquisitions and IPOs.

[3] I'm Ben Gilbert.

[4] I'm David Rosenthal.

[5] And we are your hosts.

[6] Today, we are covering Superhuman, the fastest email experience ever made.

[7] This show was originally going to be a limited partner bonus show with Superhuman CEO, Rahul Vora, on understanding his algorithmic approach to find product.

[8] fit.

[9] But we realized that Superhuman was a perfect way to round out our trilogy on the modern productivity stack on the heels of our Zoom and Slack IPO episodes.

[10] And we learned that the timing would be perfect with some big news that just dropped for Superhuman.

[11] Indeed.

[12] Well, they just raised their $33 million series B funding led by Andresen Horowitz on the heels of some very rapid growth as you'll hear.

[13] If you want to read more about the company after this episode, you can click the link in the show notes for the New York Times article that broke the news.

[14] Okay, listeners, now is a great time to thank one of our big partners here at Acquired, ServiceNow.

[15] Yes, ServiceNow is the AI platform for business transformation, helping automate processes, improve service delivery, and increase efficiency.

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[19] I was at Nvidia's GTC earlier this year, and Jensen brought up ServiceNow and their partnership many times throughout the keynote.

[20] So why is ServiceNow so important to both Nvidia and Microsoft companies we've explored deeply in the last year on the show?

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[27] It's pretty incredible that ServiceNow built AI directly into their platform, so all the integration work to prepare for it that otherwise would have taken you years is already done.

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[29] Thanks, Service Now, without further ado, here is our conversation with Superhuman CEO, Rahulvora.

[30] So welcome Acquired LPs to a very special episode of the LP show.

[31] David and I are sitting here in Superhuman World HQ on California Street in San Francisco.

[32] and we have with us an awesome guest, Rahul Vora, CEO of Superhuman.

[33] Welcome to the show.

[34] Absolutely.

[35] Thank you both for having me. Yeah, you bet.

[36] To give a little brief bio, so Rahul is the founder and CEO of Superhuman, the wildly popular, blazingly fast email app that is changing the way a lot of us think about our relationship with our inbox.

[37] And before Superhuman, Rahul was the CEO and co -founder of Reportive, selling that to LinkedIn in 2012.

[38] So if you're noticing a pattern in there, I think I definitely am.

[39] Rahul is also an active angel investor and advisor to several startups, and we are lucky to have him with us today.

[40] So I already said welcome to the show, so I don't need to say that again, but welcome the show.

[41] Thank you.

[42] Are we right that this is your second office?

[43] This technically is our fourth office.

[44] Fourth office.

[45] Wow.

[46] And you're about 30 people now here, it looks like?

[47] We are, yes.

[48] It's nice and decked out in superhuman colors.

[49] It's Yeah, we do like our pinks and our purples and our blues.

[50] Although we're sort of trying to keep the we just moved in vibe.

[51] We don't want to go too crazy here.

[52] Because what we found is we grow so fast that by the time we've made a place nice, it's like, okay, time to move on to the next office.

[53] It's awesome.

[54] The problem with early stage startup offices is.

[55] Good problem to have.

[56] Yeah, good problem to have.

[57] Let's talk for a minute before we get to Superhuman, which we're going to spend most of the episode on.

[58] Can you tell us quickly on reportive?

[59] How did you started?

[60] and it was a very quick turnaround.

[61] So, reportive was basically started to satisfy my own need.

[62] It was a classic case of scratching my own itch.

[63] I was at the University of Cambridge at the time.

[64] And I, in fact, had just dropped out of the PhD program.

[65] I'd started a PhD there in machine learning and computer vision.

[66] This was way before either of those things were cool or even feasible.

[67] In any case, I dropped out because I realized that what I wanted to be was an entrepreneur.

[68] but I didn't have an idea at the time that I wanted to pursue.

[69] So I networked my way into the part of the university that helps staff and students create companies called Cambridge University Entrepreneurs.

[70] And essentially what I would do is I would actually come to folks like yourself, VCs, angels, big tech companies, and I would say, hey, can I please have some money?

[71] And they'd be like, why?

[72] And I'd say, well, I want to give that money to staff and students at the University of Cambridge who are making companies, it's going to be awesome, trust me. And these folks are sort of rub their hands together and go, cool, how much equity do we get?

[73] And I would say, none whatsoever.

[74] This is a charity that we're running here.

[75] We're trying to help people learn how to build businesses.

[76] And by the way, we're going to make some amazing businesses as well.

[77] And as we've covered multiple times on the show, Cambridge is actually a really great entrepreneurial hub.

[78] I mean, Arm came out of Cambridge, as did many other companies.

[79] It's, I mean, it's crazy.

[80] Cambridge, Silicon Radio, let's see, who else?

[81] There was that company that Qualcomm acquired.

[82] I forgot the name.

[83] And more than companies, too.

[84] My partner, Riley at Wave, was a grad student in Cambridge.

[85] As my friend, Nell's an event, right?

[86] Plenty of Silicon Valley has come from Cambridge in the UK.

[87] Yeah, these VCs should have given you money.

[88] They did.

[89] They did actually give me money in the end.

[90] But the point of the story is, I was thrust into this not -for -profit fundraising at a very young age with no training in this field whatsoever.

[91] And having grown up learning how to program and being a very competent program at the time, I was just wondering to myself, or what tools would help me do this fundraising better.

[92] And I imagined if in my email I could see what people look like, where they were based, links to their recent tweets, links to their social profiles, then I would be able to authentically connect with that person and establish rapport so much better.

[93] Hence the idea behind Reportive.

[94] I couldn't find that product in the market.

[95] So in about six weeks, I just sat down and built that first version.

[96] And that was totally magical.

[97] I remember the first time I installed the plugin was, was it first for Gmail and then Chrome?

[98] Or was it, what was the implementation of that?

[99] It was in fact always a Chrome extension.

[100] Although before it was a Chrome extension, technically it was a Firefox extension.

[101] This was in 2010 where people, it's kind of hard to remember now, but people were still skeptical that Chrome was a great thing.

[102] The tastemakers at the time, we were all sitting in Firefox.

[103] So it started as a Firefox add -on, and later on it was a Chrome extension.

[104] I do definitively remember that eye -opening experience of you can type someone's email and then like a second or two goes by and then boom, there's all this enrichment about them.

[105] And it's like, now it's taken for granted because this idea has permeated into sort of other products throughout the years, but there's something really magical to it.

[106] How did the connection with LinkedIn happen?

[107] I mean, we've also talked a bunch of on the show about the importance of email to LinkedIn and to LinkedIn's growth and onboarding.

[108] So I imagine you popped up on their radar screen pretty quickly.

[109] What was the relationship like?

[110] We had a great relationship.

[111] Ultimately, it ended up in, I guess, a technical consummation they acquired us.

[112] Initially, like many acquisitions, it started with a business development relationship.

[113] And the way that that transpired was we were consumers of an API at the time provided by, I don't know if you guys remember, a company called Rappleaf.

[114] Oh, yeah.

[115] Oh, yeah.

[116] So Rappleaf was one of those first companies to whom you could.

[117] Salesforce acquired them, I think.

[118] No, so Rappleaf ended up transmogrifying to some degree.

[119] They became LiveRamp.

[120] And then they were acquired by Axiom and have recently spun out as a large public company.

[121] I think they're now worth $3 billion.

[122] or more, so they're doing really well.

[123] But back in the day, it was a relatively small startup called Rappleaf.

[124] Yet, despite their small size, they were the only company, and remember, this was back in 2010, to whom you could supply an email address, and they would give you the full social context about that email.

[125] And so today, that's full contact, clear bit, those are the sort of providers that would be the comps today.

[126] Correct.

[127] Yeah.

[128] Now it's sort of, and there are others as well.

[129] Now it's sort of a almost a commodity marketplace for that data.

[130] But back then it was this sort of edgy, crazy new thing that you were able to do.

[131] And so me being an opportunistic entrepreneur, I was like, cool, let's take this API, let's package it up, which actually wasn't a crazy amount of work, and let's jam it into Gmail via the use of a browser extension.

[132] So that's where the data came from.

[133] Now, you can imagine that LinkedIn were non -too pleased about an upstart selling their data.

[134] Totally.

[135] Well, and LinkedIn famously has always made it really hard to get mass quantities of data out of their API because they have a network effect.

[136] Indeed.

[137] And we definitely didn't want or need mass quantities.

[138] And everything, by the way, that we were doing was for the benefit of LinkedIn's hardest core members, which is ultimately why it was such a good relationship with them.

[139] But they approached us at one point and were like, hey, listen, we really would prefer it if you were not buying our data off third parties.

[140] And I was like, cool.

[141] I would.

[142] would really prefer it if I had access to the API.

[143] Yeah.

[144] And so we both to be only internal right now.

[145] We both stated our preferences for a while until I think a few months later we realized that maybe an actual business development relationship would be the best thing, which was truly remarkable because I think at that point, in fact, it never grew beyond us.

[146] There were only ever about 20 companies that had access to this secret LinkedIn API.

[147] That's awesome.

[148] And that was probably right around.

[149] The time of their IPO, right?

[150] This would have been halfway through 2011.

[151] I don't recall exactly when they IPOed.

[152] Yeah, it would have been around that time.

[153] It was either end of 2011 or beginning of 2012, I believe.

[154] Yeah.

[155] The chap I was dealing with is Adam Nash, who went on to be the CEO well -threaton, who's now in Dropbox.

[156] And he was super nice about it.

[157] So I went in, and he was like, can you demo what you would do with the LinkedIn API?

[158] And I showed him the workflows.

[159] And he was looking for things like, is the copy?

[160] helpful?

[161] Are we trying to deceive users?

[162] Clearly no. Are we stealing data?

[163] Absolutely not.

[164] Is it for the value of the LinkedIn member?

[165] Yes, it is.

[166] He was like, okay, great, you should be a partner.

[167] I personally wanted to dive into that to sort of give context on how we got to where we are today.

[168] What I'd love to start to steer the conversation to is the founding of Superhuman.

[169] And David and I have previously talked a couple times on the LP show about things that companies do pre and post product market fit and definitions of it.

[170] But Rahul, you at Superhuman have actually built metrics around it and found sort of systematic and scientific ways to find product market fit.

[171] I'm teasing sort of our analysis section here later because I want folks to know that we're going to dive into the founding of superhuman right now, but where we got eventually is to a company that waited over two years to launch and really built something sort of amazing in a very sort of both art and data -driven way.

[172] And then we're going to sort of dive in and tell that whole story.

[173] But talk to me about the initial idea for superhuman, where it came from, and how you convinced yourself that there's a business to be started selling a new email platform.

[174] Right.

[175] It isn't necessarily obvious from the outside.

[176] I do agree with that.

[177] At LinkedIn, I ran all of our email integrations.

[178] It was my responsibility, rather, to get LinkedIn data, LinkedIn profiles into other email clients.

[179] And so I became very familiar with how professionals do their email.

[180] And the TLDR is badly.

[181] So I took a year off after I left.

[182] And during, that time, I was looking for what I wanted to start next.

[183] Due in part to the IPO and to the acquisition, I was very fortunate to be in a position where I didn't really have to work.

[184] And so I focused on impact.

[185] You know, what was the biggest thing that I could possibly do?

[186] And my mind kept going back to a 2012 McKinsey study where they showed that the average professional, and there are one billion professionals in the world, the average professional spends three hours a day reading and writing email.

[187] It's not hard at all to believe.

[188] 100%.

[189] Right?

[190] Like, that's crazy.

[191] It's, I mean, it's, it's just mind -blowing.

[192] And so during my year off, every single day I was doing the very simple math, one billion professionals times three hours a day is three billion hours a day.

[193] That go into email.

[194] And I couldn't find, I couldn't think of anything bigger than that to do.

[195] A market that big.

[196] And nobody have built a real business in it.

[197] Correct.

[198] Because people were scared because Microsoft and Google between them had systematically almost prevented startups entering this area.

[199] And so it was during that time when I looked very closely at how people were feeling about Gmail.

[200] And bizarrely, I saw this product get worse every single year.

[201] I think because I was building on the Gmail, it's not really a platform, because I was building a Gmail browser extension, I could, had a front row seat to what was happening here.

[202] So I saw the products becoming more cluttered, using more memory, consuming more CPU, slowing down your machine, still not working properly offline.

[203] And then on top of that, people were installing plugins, like ours, Reported, but also Boomerang, you'll remember, Mix, Max, Clear Bit, you name it, they had it.

[204] All sorts of.

[205] Streak and what have you.

[206] Right.

[207] It's kind of guilt -inducing for me because Reportive was the first.

[208] first to get to millions of users.

[209] And I'm like, I am sorry, guys.

[210] I did not intend it to be this way.

[211] I know.

[212] It actually makes me sad.

[213] Well, and like one of the, you know, rules, I think we've talked about at various points on the show before, like all rules and startups and venture is meant to be broken.

[214] But you can't build a big company on the back of somebody else's platform.

[215] Like, they're very, very few examples.

[216] And as long as Gmail and Microsoft are the platforms and you're just building plugins, reported being the most successful among them, you're just going to be a plugin.

[217] I think that's true.

[218] Although I would like to see, for example, Gramley be the exception to that rule.

[219] I think at this point, they're probably the highest valued, most successful plugin business.

[220] And fingers crossed, they actually break the barrier and break out into their own thing.

[221] But you're right.

[222] There's a lot of existential crises around there.

[223] Yeah.

[224] Can I ask, when you were thinking about what to start and you were fully impact driven on that, Was your mind able to go to places that weren't email because you knew it, like, is it that you knew it so well that you felt that you sort of were uniquely positioned and owed it to the world to fix that problem?

[225] Or was it more like, I tried to think of other stuff and email is where my head was?

[226] So I did absolutely go to other ideas.

[227] I spent time in the summer of 2014 researching any number of things I could do.

[228] And I got quite deep into what you would now call concierge health.

[229] So an on -demand doctor who might turn up and sort you out with whatever ailment you might be feeling.

[230] Again, I saw the potential for a very large amount of impact there.

[231] But it's interesting that you mentioned this idea of owing it to the world.

[232] I very much felt like I did and still do.

[233] I do believe that there is the perfect startup for every founder.

[234] The one where if you do it, you have an outsized change.

[235] of success.

[236] The story arc is just perfect.

[237] And it's, it's kind of the startup where if you do, everybody will cheer you on because they want you to succeed because it feels like it's, you know, it should be destiny that this thing works.

[238] Yeah.

[239] And that startup exists for most founders.

[240] And for me, I believe that it was superhuman.

[241] It was the natural, logical, progressive evolution from reportive.

[242] It is the thing that we always wanted to build anyway and was actually the solution to all the problems that we created whilst we were messing around it repulsive well you just said it resonates so much because like at the stage at the seed stage that we invest in a wave and that the PSL works out like I have some version of that conversation like every week you know like how so I'm just I'm just curious were there people who helped you through that phase or was it like a journey you had to go on on yourself on your by yourself to realize like okay like the destiny is superhuman there were definitely lots of people who helped me through that phase.

[243] We just mentioned Adam Nash earlier.

[244] And I remember when I left LinkedIn, he was CEO of wealth rent at that time.

[245] And I went to him and I said, hey, I have this idea for a new email experience.

[246] It's called Superhuman.

[247] Here's what it's going to do.

[248] It's amazing.

[249] I want to go and start it.

[250] He was like, whoa, whoa, whoa, slow down.

[251] Are you going to take any time off?

[252] And I said, yeah, I'm planning to take some time off.

[253] And he said, well, how much time do you think you need?

[254] And I said about three months.

[255] And he was like, wrong.

[256] However much time you think you need, it's actually more like three times that.

[257] You probably need nine months off.

[258] And in retrospect, he was completely right.

[259] I ended up taking about nine months off before I felt comfortable settling into what was essentially the same business idea that I'd been working on for about four years.

[260] So during that time, I did explore lots of other ideas.

[261] I had a few mentors that I would.

[262] constantly bounce concepts off.

[263] But I just felt myself always coming back to this this one idea because it's hard to explain.

[264] I just, I couldn't stay away from it.

[265] I think that's a good sign.

[266] When you can't stay away from an idea, it's a strong indication that you should probably go and do it.

[267] Yeah, totally.

[268] No matter how bad the idea is.

[269] Resonates so much for, you know, certainly for me and starting wave.

[270] I assume for you and PSL.

[271] 100%.

[272] For Kimberly and glow, like everything acquired like, yeah, totally.

[273] So cool to hear.

[274] Okay, so superhuman.

[275] So superhuman is the fastest email experience of all time.

[276] Our users get through their inbox about twice as fast compared to in Gmail.

[277] They respond more quickly to the emails that matter.

[278] And many of them see inbox zero for the first time in years.

[279] So you can imagine that's pretty life -changing.

[280] Tell me more.

[281] It's really beautiful.

[282] You've never said that before, I'm sure.

[283] Nope.

[284] I just wake up saying that every day.

[285] Not to overly fanboy here, but I can absolutely vouch for all of that.

[286] And it's, It's especially in a day like today where I'm down in San Francisco and traveling, literally feel like I have superpowers plowing through my email at the end of the day.

[287] And you guys have built something amazing.

[288] Thank you.

[289] During those, either during the nine months or at the end of it, when you first started working on it and then into the two -year process we'll get to you before you launched, there are a couple value props in there, but one of them is like fast, right?

[290] Did you land on that?

[291] Like, how quick did you get to that or whatever, like, you in your mind is like the most specific value prop you needed to nail.

[292] Speed was a value prop from very early on.

[293] And I think as I introspect this, it came out of some of the frustrations developing reportive on Gmail.

[294] Obviously, Gmail at the time was my primary email interface.

[295] I was the founder and CEO of that startup.

[296] And I was doing a lot of email -based work.

[297] And so I was intimately familiar with how slow Gmail was and how slow it was getting.

[298] And I had therefore this hunch, this inkling, that speed was going to be a very big deal.

[299] But like with any hunch or inkling, one does have to validate it.

[300] So in the first year of superhuman, as we were primarily building, we threw up a landing page.

[301] It was a terrible landing page, just like a basic square space thing that took us all of two hours to put together.

[302] And all you could do on this page was throw in your email address.

[303] And when you threw in your email address, you got an automatic email from me. And in that email, there were two questions.

[304] Number one was, what do you use for email today?

[305] And number two was what were your pet peeves about it?

[306] And I had two hypotheses going in.

[307] Hypothesis number one was that for Gmail, people were upset about how slow it had got and how it wasn't working properly offline and how they had to use Gmail plugins to make it do the things that they wanted to do.

[308] And then for third -party email clients, people were upset about how buggy they were, how unstable they were, and how they don't sink properly, all of which is still true today.

[309] So much head bobbing on this side of the table.

[310] You're talking to an Apple mail convert.

[311] Oh, boy.

[312] Yeah, I feel for you.

[313] So we had to validate that.

[314] In that first year of superhuman, I think that we had maybe in the region of 5 ,000 signups on that landing page, 5 ,000 emails that went out, a thousand conversations.

[315] that actually happened.

[316] Therefore, a thousand interviews that I did with early users probably way more than most founders would actually do.

[317] And resoundingly, those two hypotheses were confirmed.

[318] People disliked Gmail for the speed and the lack of offline and the clutter and the plugins.

[319] And people disliked third party email apps because of the stability and the sync and the buggyness.

[320] How did you drive traffic?

[321] Like, how did you get top of funnel to get all of those responses on your landing page.

[322] In the early days of a startup, I think, and this is what we did, the best way to do it is to pick one or two events per year where you can insert yourself into the cultural zeitgeist.

[323] So for us, one such event was when mailbox was being shut down.

[324] And...

[325] RIP.

[326] Yeah, sadness, right?

[327] But it was the perfect narrative to say, hey, I'm over here.

[328] Come look at our company.

[329] And the trick when doing these is to think of interesting evergreen content.

[330] So you guys are the perfect people to talk to about this.

[331] You know more than anyone else, just how hard acquisitions are.

[332] I currently have one of the most widely read articles on how to survive an acquisition.

[333] And it was written in response to the mailbox shutdown.

[334] I think it's your only medium post, right?

[335] It's probably my only medium post correct, because I usually end up, I mean, the sort of second part to your question, I usually actually end up syndicating posts.

[336] You get far more reached that way.

[337] And so that post ended up on Medium, also was syndicated to QZ .com.

[338] And yes, it was about how do you survive an acquisition.

[339] And we were able to insert it into the zeitgeist because relevant to our company, some news event was happening.

[340] And I think if we as founders think hard enough, there's probably one or two things a year where that's true.

[341] And you only need one.

[342] or two things a year.

[343] Now, it's a pretty intense period.

[344] I think to write that article probably took me about three days of not doing anything else.

[345] And then another day of shopping it around.

[346] So four days all in.

[347] But those four days bought, I don't know, north of 5 ,000 signups.

[348] And then those are the signups that you need to validate your initial idea.

[349] Yeah.

[350] When you saw the news, the mailbox was being so, like, how quickly did your mind go to opportunity?

[351] Like, I'm now going to go take four days to do this.

[352] Practically, immediately.

[353] Immediately, I said to the team, this is something that we need to capitalize on and take advantage of.

[354] We have to make ourselves relevant.

[355] We didn't actually do anything, and this is just often how startups go, until there was about a week to go.

[356] So the last week was an extreme scramble.

[357] I was like, remember that idea that we had a few months ago?

[358] Well, like, we need to do it right now.

[359] Amazing.

[360] Yep, startups.

[361] before we get into kind of our discussion, I want to talk about a kind of a provocative question, have we reached the end of the era of the MVP or ship a crappy version?

[362] But before we get there, for the listeners who don't know, superhuman costs $30 a month for an email client.

[363] Like talk about a narrative violation.

[364] This is, I think the last browser that tried to charge for you to use was like OmniWeb in the early 2000s.

[365] And I think it would be absolute heresy today to say, oh, you know, it's not even a mail service.

[366] It's backed by Gmail.

[367] It's an application through which to interface with Gmail.

[368] But boy, is it great.

[369] And oh, my gosh, I pay $30 for it.

[370] How did you come to a revenue model of we're just going to ask people to pay?

[371] How did you pick a price point and how did you validate it?

[372] I think overall with pricing strategy, you have to analyze what you're going up against.

[373] And we were going up against free or nearly free.

[374] Gmail and Microsoft are practically free if you are a consumer and if you're in the enterprise, it's being paid for you anyway so you don't see or feel the cost.

[375] The only way to win, and I think it's Reid Hoffman who popularized the following statement, is to be contrarian and right.

[376] I don't necessarily know how to be right, but I do know how to be contrarian.

[377] And there's nothing more contrarian against a free product than to charge as much as seems reasonable, or maybe even more than seems reasonable, but then to back it up with the goods that actually make it worthwhile.

[378] So before we tried to address pricing, we actually first addressed our positioning.

[379] And we ran through a series of questions.

[380] I'm a car guy, so a lot of my analogies is to do with cars.

[381] And so, for example, we asked ourselves, are we the Ford of email?

[382] No, not really.

[383] Are we the Mercedes of email?

[384] Not quite, but maybe we're getting there.

[385] Are we the Tesla of email, okay, this is beginning to feel about right.

[386] And there's a classic positioning game that you can do.

[387] It's a little bit of a madlibs exercise where you say, for a target customer who has a need or an opportunity, my product is in this category and this key benefit, unlike some other competitive product, will create this primary differentiation from crossing the chasm.

[388] Is it?

[389] Yeah.

[390] Yeah.

[391] I believe Jeffrey Mooran Crossing the Chasm came up with that frame.

[392] And then, like, it's been used many times.

[393] But gotcha.

[394] So I'm clearly not as widely read as you are.

[395] That's a framework's guy.

[396] Well, this is, you know, when you go to business school, you learn a lot of, like, useless trivia.

[397] So I actually found this piece of wisdom as I find much in my wisdom off the first round review journal, which is incredible.

[398] And it was written by Ariel Jackson, who, who, who, listeners may not know, but she was the product marketing manager at Google who launched Gmail.

[399] And I was like, wow.

[400] Okay, here we go.

[401] I have to meet her.

[402] Unfortunately, we were a first round or are a first round investment.

[403] And so that was very easy.

[404] And so I got to spend a lot of time with her working on our positioning.

[405] And I have it right here.

[406] So we came up with for founders, CEOs and managers of high growth technology companies who feel like their work is mostly email, superhuman is the fastest email experience ever made.

[407] It's what Gmail could be if it were made today instead of 12 years ago.

[408] Unlike Gmail, superhuman is meticulously crafted so that everything happens in 100 milliseconds or less.

[409] And we've since expanded beyond that very, very times.

[410] That's so great.

[411] That's what you have to do.

[412] You have to start with something that narrow.

[413] Is there a risk in starting with something that narrow that you're not going to be able to expand outside of it?

[414] Or do you feel like if you can nail it for that core group, then you're always going to be able to find more room around the edges?

[415] Very much the latter.

[416] So I think we should come back to that point because I have a, I have a thing that I should probably share with the listeners, but just to tie the positioning back into the pricing, because this is a very methodical exercise that we ran through.

[417] So step one is understand the lay of the competitive environment.

[418] In our case, we were going up against two incumbents whose products are free or practically free.

[419] Step two has come up with the positioning, like I just described.

[420] And when you read our positioning, it's clear that superhuman is a premium tool for a premium market.

[421] And step three is develop your pricing.

[422] Now, there are many, many ways to develop pricing, but one of the easiest ways, this will appeal to the business school guy and you, is the Van Westendor pricing sensitivity meter.

[423] I see head nods going on over here.

[424] here.

[425] That sounds like a fancy name.

[426] Yeah.

[427] It's just some dude's name, I think.

[428] He was probably very smart, very clever, did a lot of pricing.

[429] Anyway, so he said, ask your target users four questions.

[430] Number one, at what price would you consider superhuman to be so expensive that you would not consider buying it?

[431] Number two, at what price would you consider superhuman to be priced so low that you would feel the quality couldn't be very good?

[432] Number three, at what price would you consider superhuman to be starting to get expensive so that it isn't out of the question but you would have to give some thoughts to buying it and number four at what price would you consider superhuman to be a bargain a great buy for the money now most startups actually orient around the fourth question the bargain for the money because there's some kind of network effect or a greenfield effect or they're trying to take advantage of a first mover effect or so on so there's a land grab they want to go get all the users.

[433] We may as well price as low as we can to get them all.

[434] Exactly, which is why most founders I know have the experience of a board meeting where your board members are like, hey, you know what, maybe you should half the price.

[435] Maybe we should just like make this free and like give this away from.

[436] Oh, God.

[437] You give me the heby -divis here.

[438] Wait, have you done this to founders?

[439] I've done this.

[440] Yeah, yeah.

[441] Well, guilty.

[442] Guilty.

[443] No, no, no. My point is, it's, it's actually entirely the correct thing to do if you're building in a new market or there is a land grab or a first mover advantage that you're trying to chase.

[444] However, definitely not the case with email.

[445] Not the case with email where there's a big incumbent and the competitive products are great.

[446] Startups like superhuman should orient around the third question.

[447] When does it feel expensive, but you'd still buy it anyway?

[448] And that makes sense if you're building a premium product.

[449] now for us the median answer to that third question was $30 per month and that's how we picked the price so we very methodically went through competitive landscape positioning and then pricing using this very simple pricing methodology and were you using people who had engaged with the survey that you were driving traffic to you this was actually well before we started doing the service so this is when we were onboarding our first one 100 customers.

[450] I did all of these manually in the onboarding.

[451] And these onboardings used to be much longer.

[452] They were one hours or one and a half hours.

[453] I'd give them a demo of the product and then I'd look them in the eye and I'd be like, hey, this is the thing that you have to pay for.

[454] Now, they didn't know going in to the demo.

[455] I mean, they kind of knew, but like I was from reminding them.

[456] You can't see Rahul right now, but like it's almost like this like terse dad look that he's giving you.

[457] It's like, now son, I have some news for you.

[458] And I would actually very sternly look them in the eye and say, hey, this is a thing you have to pay for.

[459] Can I ask you a few questions about how you feel on pricing?

[460] And they'd be like, yes.

[461] And then I'd go into it.

[462] I'd write down the numbers.

[463] And after we'd done a hundred of these, the answers were pretty clear.

[464] That's awesome.

[465] That's amazing.

[466] And you haven't changed the pricing since.

[467] Well, actually, the initial pricing was $29 per user per month.

[468] We didn't think too hard about that.

[469] That was just like, well, you know, it seems to be the right price at roughly the right order of magnitude.

[470] And then I had a few conversations with some pricing experts who pointed out that if we are truly owning the premium experience in our category, then ending your price with a nine probably isn't the best thing to do.

[471] So we pretty quickly rounded it up to $30.

[472] interesting that's fascinating i never thought about that before especially because like apple does you know 1299 for your iPhone or you know or is i think it's 1299 i know walmart undercuts at like 1295 um interesting that's super interesting psychology wow super cool you said you wanted to circle back on the positioning yeah so let's dive in now to this this analysis section so for listeners i want to set the stage on sort of a timeline for this whole thing because i do think it's it's kind of crazy how long it waited before seeing the light of day.

[473] When did you break ground on designing superhuman?

[474] When was the first line of code?

[475] And when did you start rolling out to these first 100 users?

[476] I first started sketching out the concept and the business model for superhuman in February of 2014.

[477] That's five years ago now.

[478] Wow.

[479] Or more, rather.

[480] And then it wasn't until nearly a year later in January of 2015 when I started designing the product.

[481] That's when I first put pen to paper.

[482] I wrote the landing page before I did anything else.

[483] All of the copy that you see on superhuman .com is actually copy that was written in January of 2015.

[484] And I created hundreds of detailed wireframes.

[485] And the first line of code was not written until May the 4th in 2015.

[486] And just to get nerdy, like, how are you doing the wireframes?

[487] Is this in sketch?

[488] Are you literally sketching it out?

[489] What's your preferred methodology here?

[490] It depends on how Clearly, I can see it in my head.

[491] It will often start with a extremely sketchy sketch on paper.

[492] And then once I can begin to see it, my tool of choice is still balsamic.

[493] I'm kind of old school about this.

[494] I can use it extremely fast, way faster than I am in sketch.

[495] So that's what I did it in.

[496] That's your superhuman of prototyping technologies?

[497] Pretty much.

[498] Okay, so started sketching for a year, then did a year of design after that?

[499] in the week after I left LinkedIn, in my gusto to get something done, I actually went out and pitched a bunch of VCs that same week.

[500] This was the February of 2014.

[501] Before Adam Nash's advice to Yeah, he was like, yo, chill out, bro.

[502] Call you.

[503] Slow down.

[504] Which was great advice.

[505] And so I had term sheets at that point.

[506] I could have raised money, but he suggested, as did many others who knew me, they were like, listen, you're really burned out.

[507] Maybe you don't see it yet.

[508] And I did go through this rollercoaster of emotions in the following months as I was processing the burnout from the last four years.

[509] So let's say that there was like a few weeks in early 2014.

[510] And then most of 2014 was time off.

[511] Break time, yeah.

[512] And then I really got going again around Q4 of 2014.

[513] And my advice to any listener who's going through the same thing or who shortly will be is don't try and just jump straight into it.

[514] You can't go from being a professional party animal like I was into, okay, I'm now going to do 12 -hour days again.

[515] It just doesn't work.

[516] I went from not working to four hours a day to five hours a day to six hours a day.

[517] And I slowly built that muscle memory backup.

[518] And the first few things were things like let's buy superhuman .com.

[519] Let's investigate trademarks.

[520] Let's raise some seed capital.

[521] Were you pulling together a team at this point, too?

[522] I was trying to, but, you know, that is a longer -term thing.

[523] And there are things you can do even when you don't have a team.

[524] What I did in Q4 was I bought superhuman .com and I raised about $750 ,000 of seed capital.

[525] And then in January, I did the wireframes.

[526] Then in February, I engaged with a design agency to make those wireframes into really beautiful mockups, high fidelity mockups.

[527] I think that's a little bit of a contrarian thing to bring in a design.

[528] design agency is sort of that early in a startup rather than hiring a designer or doing it in house.

[529] It is.

[530] And it's turned out to be super expensive compared to hiring a designer.

[531] I think I spent $45 ,000 on turning these wireframes into high fidelity mockups.

[532] I do, speaking of frameworks, I do have a framework on this, which explains why I think it was the rational thing to do in my case, if you want to hear that answer.

[533] Absolutely.

[534] Yeah.

[535] Okay, cool.

[536] So I think the, the fundamental job of a founder is to create momentum.

[537] And in my mind, I like to imagine this gigantic flywheel and it's made up of the most dense material in the universe.

[538] And the job is to get this thing moving.

[539] Now, most founders, the first time, are probably technical.

[540] And the way that you get this flywheel moving is you make a thing, you launch a thing, and hopefully people like your thing and it starts moving by sheer force of user numbers.

[541] This was certainly how reportive worked.

[542] It took me about six weeks to build the first version, tens of thousands of users in 24 hours, and it just kept on growing dramatically thereafter, which is cool.

[543] So the flywheel just started moving by itself, and at that point it's like, okay, can I now hold on to this thing?

[544] Yeah.

[545] When you are a second time founder and you're coming back at it again, you get to do things in weird, strange orders, but it's still moving the flywheel.

[546] So, for example, the money, that initial $750 ,000 that was raised in 2014 for Superhuman, was raised on the basis of primarily one slide where I took a screenshot of Gmail and I just red lined out everything I didn't like.

[547] And I said, I'm going to make this pretty and fast.

[548] Amazing.

[549] And you'll believe me because of what I did previously.

[550] Because you built report him.

[551] Right.

[552] So there is no execution risk here.

[553] I know how to build a thing.

[554] I know how to hire the team.

[555] I know how to market the thing.

[556] This is what I'm going to do.

[557] And that's $750 ,000 starts this flywheel moving.

[558] So now I'm like, cool, the single founder, I've got this money in the bank.

[559] I'm not paying myself, obviously.

[560] I don't need to do that.

[561] What else can I do to get this flywheel moving?

[562] Well, that domain name looks pretty juicy.

[563] Let's see if I can make that happen.

[564] And the guy who sold it to me wasn't the most pleasant of individuals.

[565] They like never are.

[566] No. never fun he took a perverse sense of enjoyment out of sending me abusive and insulting emails but fortunately i didn't have to deal with this myself i hired an expert broker to go after the domain and we ended up getting a very good deal but that's another example of how you can get this flywheel moving now you might think as many people said at the time whoa so you just raised 750k and you're going to spend what was like I don't know, 20 % of it or something, on buying a domain name?

[567] Yeah, right.

[568] That's crazy.

[569] I don't know how you would feel about that as a seed investor.

[570] Yeah, I would be like, we need to have a conversation.

[571] How about the DACCO?

[572] So I think I did buy the dot co, and then I let it lapse.

[573] So someone else probably has it now.

[574] In any case, I thought about it long and hard, and I realize that in the grand scheme of things, this is going to turn out to be no money whatsoever.

[575] Most importantly, this.

[576] This is a sign to the world that this flywheel is moving.

[577] We're serious about this.

[578] I'm super serious about this.

[579] And the people I'm really signaling to at this point are potential co -founders number one and potential investors number two.

[580] And also it comes back to the market too.

[581] Like if you were trying to create a new market, it would be wholly irrelevant, right?

[582] But you're trying to compete with established entrenched competitors.

[583] And back to your positioning, like you are the, you know, the Tesla, not the, What was Tesla before it was Tesla?

[584] What was the name of the company?

[585] Oh, the E1 or something like that?

[586] The EV1?

[587] Evi 1.

[588] Yep, not the EV1.

[589] Which, of course, Rahul is stirring out us like, we're crazy.

[590] Of course you wouldn't know because it wasn't the Tesla.

[591] Right, right, right.

[592] Before the roadster before Elon Musk joined Tesla, it was the EV1.

[593] That is a pretty terrible name.

[594] Actually, it was the T0.

[595] The T0.

[596] That's because it was like, it was mathematicians.

[597] So it was like at time zero.

[598] That's kind of cool.

[599] Although it just reminds me of a Terminator.

[600] Yeah, right.

[601] sort of murderous connotation that you probably don't want in the self -draggle.

[602] Yeah.

[603] So in any case, the flywheel, the domain was another piece.

[604] Then the landing page, like a really well -crafted landing page where every single sentence had been iterated hundreds of times over.

[605] I'm not even exaggerating, by the way.

[606] I spent four to six weeks writing the copy for the landing page.

[607] And then another six weeks doing the wireframes.

[608] And then $50 ,000 to the design agency to create these beautiful designs.

[609] These are all examples of how a single founder who once upon a time was technical, I wouldn't claim to be particularly technical nowadays, can create...

[610] You did drop out.

[611] I did drop out.

[612] And then I instantly forgot everything like that.

[613] It's an example of how a single human being can start the flywheel spinning.

[614] And that helps both with recruiting co -founders as well as with raising investment.

[615] Yeah.

[616] Yeah.

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[636] I'm going to catch us up on the timeline.

[637] So it's summer 2017.

[638] So we started in February 2015, so we're two and a half years in.

[639] It's a 14 -person team still haven't shipped.

[640] This is freaking heresy for startups that are supposed to, you know, be embarrassed of your your first version.

[641] So Reid Hoffman, there's this famous sort of Reed Hoffman mindset.

[642] If you're not embarrassed by the first version of your product, you've launched too late.

[643] So could Superhuman have done this and sort of put your, maybe your worst foot forward to get some signal and then sort of iterated, iterated, iterated?

[644] Or did it have to be done in this way where you and a team went away for two and a half years and sort of created the magic internally.

[645] I think it had to be done this way.

[646] I noticed with almost every single other email app, every single other productivity app, they went through the following motion.

[647] They would raise some seed money.

[648] They would make a thing.

[649] It wouldn't be a very good thing.

[650] Not because the teams weren't talented or well -intentioned.

[651] Most people here are, but you're competing with Microsoft and Google.

[652] That and the domain is so inherently complex.

[653] It is a very very, it is a very very, very difficult thing to build an email client that people actually want to use.

[654] And it does take more than two years.

[655] I challenge anybody to do that faster.

[656] I don't think it's possible.

[657] And the same is true, by the way, of a web browser or of a database or of a compiler.

[658] Any sufficiently hard productivity tool will take many, many years to build.

[659] But back to the Reid Hoffman quotes, you know, I'm still embarrassed today by many aspects of superhuman and I probably always will be.

[660] So I think Reid is actually still correct.

[661] The nuance here, though, and I think this is the question that you might be asking, is how applicable is the advice to superhuman?

[662] And I think his advice applies most to startups that are creating new markets, and especially to startups that have network effects.

[663] So for startups that are creating new markets, the alternative is usually a terrible experience.

[664] You guys will talk about this on Friday, but remember trying to hail a cab in San Francisco before Uber existed, right?

[665] Well, you could have used cabulists or taxi magic, but yes.

[666] Yes, as we said, I remember standing in the rain, which of course made everything worse on the Embarcadero for like 30 to 40 minutes waiting for a taxi to arrive and they keep on whizzing by you.

[667] It was the worst thing.

[668] But exactly to your point, there was a moment in time after iOS.

[669] was open to third -party developers, where the time had come, and there were probably seven companies, legit companies, that all got started.

[670] And then it was like, you need to move, you need to ship yesterday, you need to move as soon as fast as possible, lock up all the supply and all the demand.

[671] Exactly.

[672] Because at that moment in time, anything you release, even if, as Reed says, it's embarrassing to you, is going to be worth it for a critical mass of users.

[673] And that gives you a small advantage.

[674] And when you have a network effect, as a all of these companies did, that small advantage is going to start compounding on itself.

[675] Great for that kind of company.

[676] But for a startup like superhuman...

[677] In an existing market.

[678] Exactly, where the alternative product is Gmail.

[679] And without an explicit network effect built into it right now, the bar is very different.

[680] I want to double click a little bit on the network effect piece.

[681] Obviously, reportive had a network effect.

[682] Or at least you were building on other people's network effects.

[683] Maybe it would be a more accurate way to put it.

[684] were you intentional about at least this first, you know, act of superhuman not being a network effect business?

[685] I don't actually think that reports have had a network effect.

[686] We may be using the term in in a different way.

[687] Yeah.

[688] So by a network effects, I mean where the value of the products becomes more valuable, the more people are using it.

[689] Right, right.

[690] Different, for example.

[691] Well, and that's what I caught myself.

[692] They're like, you didn't really, you were building on the fact that like LinkedIn had that.

[693] Uh, and then you were using their data.

[694] Yes.

[695] I think it's always great if you can build in a network effect.

[696] We believe that with superhuman, there are underlying network effects that will become apparent over time.

[697] And in the meantime, we don't need one.

[698] And the reason why we don't need one is that we can solve the marketing and the retention challenges in a different way, which would be able to by making the product very desirable, very viral, and very sticky once you actually start using it.

[699] So you mentioned competing in an existing market where the bar is already very high versus a land grab opportunity as a framework for, can you sort of take your time and be very intentional and methodical and frankly spend a good amount of money developing your first version of your product?

[700] Are there other sort of vectors on which to sort of decide whether you need to launch yesterday or you can take your time other than that market timing?

[701] Yes.

[702] So I have another framework for you.

[703] Excellent.

[704] David would be very excited.

[705] Yeah, I can see him running as we speak.

[706] I'm not going to claim credit for this one because it's not mine, but it is, oh boy, it's right.

[707] So this one came to me from Shishya Mahotra.

[708] He is the founder and CEO of Koda, another great productivity tool.

[709] And we were talking about our respective attitudes to launch.

[710] And, you know, sort of, as you've been alluding to, superhuman has at this point sort of famously held back.

[711] from a public launch, so too has coder.

[712] And he was able to put into words what I had been feeling for a very long time.

[713] And he said, a startup should only launch for one of three reasons.

[714] Number one, either you need more users or customers to sell to.

[715] Number two, you need more capital to spend.

[716] Or number three, you need more candidates to hire.

[717] If you're benchmarking well across all three.

[718] If you're attracting all the users you need to, if you have all the capital you could spend, and if you have no trouble hiring, then why would you launch?

[719] It's a relatively expensive, distracting one -time event that's going to bring an influx of people into your product.

[720] They'll find a myriad of bugs because, of course, we're all startups.

[721] We don't have perfect products.

[722] And you won't be able to fix them on a responsible time frame.

[723] So you'll just end up with thousands, if not tens of thousands of disappointed people.

[724] And I was like, yes, that's exactly the problem.

[725] What he said?

[726] True.

[727] This is the problem that happens in productivity.

[728] And so we just decided that we wouldn't.

[729] And who knows, maybe we never will launch.

[730] Yeah, you're pre -launch today, right?

[731] I mean, at this point, it's like we have a lot of users.

[732] We have a lot of revenue.

[733] We're growing very quickly.

[734] Are we pre -launch?

[735] Who knows?

[736] I think we're just doing it in a very different fashion.

[737] And the way that we actually model the company is from my favorite Paul Graham essay.

[738] Startup equals growth.

[739] Yeah, you know the one.

[740] Oh, yeah.

[741] This is such a good essay, probably his best.

[742] For listeners who don't know, he basically says, the most important thing a startup needs to do is to grow.

[743] And especially if you're a technology startup, you probably like to optimize things.

[744] and you like to optimize things on a short -term basis.

[745] So let's optimize short -term growth rate.

[746] Pick a weekly growth rate that you like.

[747] It might be 2%, it might be 3%, it might be 4 % per week, and just do it.

[748] Do it every single week, and you will be shocked at how fast you grow every month and every year.

[749] And we've been running superhuman that way for the last two years.

[750] Every single week, we just pick a number of users that we will onboard the following week.

[751] and that's how we grow.

[752] You have the finest control knobs on that of any company I've ever heard of.

[753] Well, I mean, you have a wait list of 180 ,000 people who are dying to use the product and can't.

[754] So you just choose every week how many of those people we're going to let in.

[755] Is that about capture it?

[756] That's more or less correct.

[757] Although I would say that the wait list is a relatively small funnel into the product.

[758] The fastest way in, and one of the reasons why superhuman is so exciting is that each week, 70 % of our new users are virally referred within products from the previous week.

[759] Fascinating.

[760] So do you put a governor on how many referrals can start the next week?

[761] Or if you're referred, is it, we will grant you access no matter what?

[762] there's still a qualification process we were pretty clear on who superhuman is good for and who it's not going to be good for i got qualified out six months ago because i'm a primary ipad user well there you go this was before we had ipad shortcuts and now we do yeah i'm very excited to be now qualified back in it's going to be good so i'm going to blatantly steal from your essay on first round review which if you're listening to this and you're finding this interesting you are just going to be beside yourself reading this awesome piece that Rahul wrote on the first round review.

[763] But you basically at Superhuman developed a way to measure product market fit and a four -step process to get there.

[764] Can you sort of talk about what that process is?

[765] Sure.

[766] The context for this or the motivation was we had to spend a number of years to get the product to the point where people would actually pay for it.

[767] That's not something that most teams want to go through.

[768] Most teams want to build a thing, launch the thing, make money, go, go, go.

[769] But it was very obvious to me as a member of our target market that we didn't have product market fit.

[770] I didn't need to do the big splashy launch in order to convince myself to my own level of satisfaction that our product wasn't good enough.

[771] It was just obvious.

[772] And it was obvious because I couldn't personally switch away from Gmail to superhuman.

[773] And if I couldn't, then why would anybody else?

[774] Do you feel like you were uniquely equipped to be able to hold yourself to that bar because you were a second time founder.

[775] Yes, but only because founders were a core target market for who we were going after.

[776] Because I had experienced the pain that we were trying to solve when I was running my last company, I very clearly could see, oh, we haven't solved that pain, not yet.

[777] And I could feel ourselves getting closer every single day.

[778] But I had to find a way to explain this to the team.

[779] You know, these are hyperambitious, super -intelligent, engineers and designers and people of all disciplines who'd poured their hearts and souls into the product.

[780] They needed a way to understand not only that we weren't ready, but how not ready we were or how close we were and the precise steps that we could do in order to get there.

[781] So I went out and about, I read everything I could find and I started searching for definitions of product market fit.

[782] And there's quite a few out there.

[783] So for example, Paul Graham would say, it's when you made something people want.

[784] And I think that's a pretty good definition.

[785] But I wanted something more actionable.

[786] And I think Sam Altman had a slightly different take, which is it's when users love your product so much that they spontaneously tell other people to start using it without you even asking them to do that.

[787] And that's a different take on it.

[788] So PG's take is around desire.

[789] Sam's take is around distribution or sort of net promotion.

[790] But perhaps the best definition I found, or the most interesting at least, was Mark Andresens.

[791] And he had the most vivid definition.

[792] So he would say, and I have it right here because it's quite lengthy and detailed, number one, you can always feel it when products market fit is not happening.

[793] Customers aren't quite getting value.

[794] Users are not growing quite that fast.

[795] Word of mouth is not spreading.

[796] Press of views are kind of blah.

[797] And the sales cycle takes too damn long.

[798] But you can always feel it when products market fit is happening.

[799] Customers are buying as fast as you can add servers.

[800] You're hiring sales and support as fast as you can.

[801] Reporters are constantly calling you about your hot new thing.

[802] Money is piling up in your checking accounts.

[803] Investors are staking out your house and you start winning Company of the Year awards from Harvard Business School.

[804] My favorite is the part about staking out the house.

[805] I know, yeah.

[806] Does actually happen.

[807] Can confirm.

[808] wild so i can tell just by your reaction whilst this is a vivid and accurate definition there is a challenge to using this in running the business which is that it is a post hoc definition by the time investors are staking out your house or blowing up your phone you probably already have your last one is achieving product market fit at that point you're no longer interested in quantifying it.

[809] Yeah, right.

[810] So I remember staring at this definition through tears in the summer of 2017 thinking, oh, boy, we don't have this and we are so, so far away from having this.

[811] But how do I explain that?

[812] Did you have a board at this point?

[813] Did we have a board at this point?

[814] David, why is that relevant?

[815] Well, I, you know, when you're a hammer, everything looks like a nail.

[816] But you obviously had investors, was there a group of people to whom you felt beholden to explain this current state of the business to?

[817] That's a good question.

[818] So as I cast my mind back, the answer is, yes, of course, we did have a board.

[819] We never did any board meetings, which is why I had to think about it.

[820] So our board formerly at the time was Bill Trenchard from first round, who's been incredible to us.

[821] And informally, I would speak basically every two or three days with Ed Sim from Both Starts.

[822] There were New York -based funds that does really great enterprise investments.

[823] And they led your seed round, right?

[824] Yes, they actually wrote the first check in.

[825] Yeah, that first 750 was from them.

[826] Got it.

[827] And they wanted to write a million dollar check.

[828] I was like, no. I'll take 250 at this cap.

[829] And then I went to went away and made some progress and I came back.

[830] Like, I'll have another 250 now, but it's had a more expensive price.

[831] And then the next 250 It was at an even more expensive class.

[832] Hashtag second time founder.

[833] Just play the game.

[834] Play it nicely.

[835] And everyone will enjoy themselves.

[836] Um, so yes, we did have a board.

[837] But it wasn't really a thing that I was turning to them for help on.

[838] So the tiers to you guys were like yourself.

[839] Like not just like less so like yourself and like, oh shoot, now I got to go explain to everybody where we are.

[840] Oh, oh, sure.

[841] Like explaining it to the board was the very least.

[842] of my concerns.

[843] Yeah, yeah.

[844] Because, you know, these are folks, Ed, I made money for in the past, a report of Bill is a long -term investor.

[845] He just fundamentally believes in what we're doing.

[846] All of our other investors fundamentally believe in what we're doing.

[847] If I went to them and I said, hey, this is the direction I think we should go.

[848] They would always be like, good, we believe in you.

[849] This is why we invested in you.

[850] It was the team who are working on this day in, day out.

[851] I wanted to give them a path, an engine that could work.

[852] And so I found a piece of work by Sean Ellis, who's famous for coining the term growth guy.

[853] Exactly.

[854] He came up with that.

[855] And he ran early growth at Dropbox, LogMe in, Eventbrite.

[856] And during his days of doing growth consultancy to startups, he found a benchmarked, predictive way to measure product market fit.

[857] You simply ask your users, how would you feel if you could no longer use the product and you let them answer, either I would be very disappointed, I would be somewhat disappointed, or I would be not disappointed.

[858] And you measure the percentage that say very disappointed.

[859] And what he found is that the companies, that struggled to grow almost always had less than 40 % very disappointed and the companies that grew the most easily almost always had more than 40 % very disappointed in other words if more than 40 % of your users would be very disappointed without your product guess what you have initial product market fit threaten to take it away and see what they say exactly it's a stroke of genius I'm not going to claim to invest it He did.

[860] It's more predictive of success than Net Promoter Score.

[861] It's benchmarked across hundreds of venture -backed companies.

[862] It's a really phenomenal metric.

[863] And you know the most exciting thing about this metric and the thing that we did at Superhuman is that you can use it to build your very own product market fit engine.

[864] You can use it to come up with a systematic methodology to numerically optimize product market fit, which sounds crazy, but it's true.

[865] You can actually build this thing.

[866] It's fascinating.

[867] So that is the measuring stick by which you can determine if the changes that you're making in the product are bringing you closer to product market fit.

[868] What then is the other side of that equation to actually govern how you should change the product to hopefully get you closer when you measure that?

[869] Like how do you figure out what the inputs need to be in your product changes.

[870] So we have a whole very lengthy article about this.

[871] I'll give you the...

[872] We'll put it in the show notes.

[873] Yeah.

[874] I'll give you the quick summary, but I would very much recommend reading the article because there's a ton of subtlety around how to do this correctly.

[875] So it begins fundamentally with surveying your users.

[876] For every user who comes into your product and who then experiences the core benefit of your product.

[877] That usually means they've done the thing, whatever it might be, two or three times.

[878] They've probably been there for about two weeks.

[879] You send them a survey.

[880] And in that survey, you ask a number of questions.

[881] You ask four questions.

[882] Number one, how would you feel if you could no longer use, I'll take superhuman as an example.

[883] How would you feel if you can no longer use superhuman with the answers that I outlined?

[884] Number two, what type of people do you think would most benefit from superhuman?

[885] Number three, what is the main benefit that you get from superhuman?

[886] And number four, how can we improve superhuman for you?

[887] Free text or drop downs?

[888] So the first one is a tri -state, like I described, and the other three, yes, free state.

[889] Free text.

[890] And type form is what we use.

[891] It's probably the easiest way to get this done.

[892] Nice keyboard shortcuts.

[893] Great key.

[894] That's actually why we chose it.

[895] Me too.

[896] That's like, that's our primary at Pioneer Square Labs.

[897] That's like all we use for validation now.

[898] I wish everything had keyboard shortcuts.

[899] So just make everybody's lives so much better and faster.

[900] How do you then use those four questions to guide you toward what features should we build or change?

[901] So we then have a four -step engine to systematically generate your roadmap and increase product market fit.

[902] And the four steps that you go through are number one segment, number two, analyze, number three, build, and number four, repeat.

[903] And it just occurs to me that this creates a nice acronym, which is Sabre.

[904] Segment, analyze, build, and repeat.

[905] So you've got to sabre your users.

[906] That sounds quite violent, actually.

[907] So it's interesting because, like, you're an artisan.

[908] Like, you are someone who, I mean, you spent three, four weeks writing copy on a landing page.

[909] Like, you're an artisan.

[910] And yet, what you're describing here.

[911] it's an algorithm to start a product market fit startup.

[912] It sort of begs the question like if you have the right sort of team who are capable of doing all of these functions, writing that survey, analyzing the results, you know, doing Sabre, will every startup idea end up at an end state of product market fit if you apply the correct algorithm to it?

[913] I think that this greatly increases your chances.

[914] But the sad and realistic answer to your question, I think is obviously No. Why?

[915] Well, let me give you three big reasons.

[916] Number one, many startups will run out of money before they finish this process.

[917] Number two, many co -founding teams will have disagreements and fall apart.

[918] And number three, many teams will just get tired and go, you know what?

[919] I can't do this anymore.

[920] And those are the three fundamental reasons that people will fail even given the Sabre products market fit engine.

[921] too, if you start with a kernel of an idea that is sufficiently bad for a sufficiently incorrect market, it could just take too long to ever iterate your way toward whatever that ultimate correct end state is.

[922] Yes, I do have some rules of thumb around that.

[923] So the first step of this engine is to segment.

[924] And if you like, we can get into the details of how you might do that.

[925] But if after that first segmentation step, your very disappointed score, your product's market fits score is in the region of 5 to 15%.

[926] My considered advice to you would be to suggest not doing that product.

[927] And I mean, like, in all, you know, totally, yeah.

[928] Realistically, we all have only so many years on this earth.

[929] Take the capital you've raised.

[930] Take the team that you have and do a brainstorm and try something else.

[931] And I'm sure your board will be supportive if you have the data to show that it's not really working.

[932] Yep.

[933] But if you're in the 15 to 25 % mark, which is where we were after that original segmentation, then I do believe you can actually iterate your way to success.

[934] And the challenge then becomes, raise enough money and keep morale high enough for long enough so that you actually have the time to make it work.

[935] Hence the job of the CEO, the momentum creator.

[936] Well, it also strikes me that I'm curious if you'd say this has to be the case.

[937] But in your case, certainly is the case.

[938] you have this engine, and this is a mixing metaphor.

[939] The engine is the like transmission of the startup.

[940] But the true engine, the startup is like your passion.

[941] Like this is your destiny, right?

[942] Like you were through that nine month process.

[943] Like there was no other company that you would start.

[944] And I would imagine that is, you know, in many ways, given you the perseverance, the drive to look at your 15 to 25 %, you know, score on that, on that rubric and say, okay, we're going to make that better, you know, versus like, ugh.

[945] I think so.

[946] I suspect I may just be on the far end of persistence compared to most people.

[947] We had a very interesting debate as an executive team over the last year about redefining our company values.

[948] And this idea of persistence kept coming up over and over again.

[949] I was like, you know what, maybe we should have persistence as a value.

[950] Ultimately, it didn't end up becoming a company value.

[951] But I do believe that even if it's not a company value, every single founder needs to exhibit unnatural levels of persistence.

[952] I think, again, to quote Paul Graham, he talks about grimly determined founders and how during the days when he was operating YC, he would see these people come out to college and they're like, they're super nice and bubbly.

[953] And then like a year or two later, they're just these sort of grimly persistent people who will stop at nothing, and they've got the battle scars from running through brick walls over and over and over again.

[954] And I do genuinely believe that if you're a co -founder, if you're a founder, especially if you're a CEO, this is your job.

[955] You have to run through the brick walls over and over and over and over again.

[956] And when it's time that other people might be thinking of giving up or backing out, you have to be the person to say, nope, we're going to keep on going.

[957] Absolutely.

[958] Yeah, also resonates so much.

[959] So we're going to loop back to a previous question that we sort of talked about to end this segment here.

[960] I'm going to read it from my Google Doc here, which has written much more eloquently than I phrased it earlier.

[961] So when you're building for a narrow segment of users who love you at the start, how do you think about building for them without overfitting the product to them such that you can't serve the broader market later?

[962] So I'm going to read the answer from my equivalently formatted Google Doc.

[963] It's not even my answer, but this is just something I believe so strongly because it seems so self -evidently true to me. And again, it's going to be a Paul Graham quote.

[964] Oh, is it about local maxima?

[965] It is, yes.

[966] I'm going to quote two different of his essays.

[967] Ooh.

[968] DJ Rahul.

[969] So number one is going to be from startup ideas.

[970] where he talks about how you find startup ideas and some good startup ideas.

[971] Incidentally and tangentially to this answer, one of them is just build Gmail but fast.

[972] And that was public on the web for about 10 years before we started superhuman.

[973] So the idea was out there.

[974] That was one of PD's startup ideas?

[975] I'm pretty sure it's in the essay startup ideas.

[976] He says, and I'm going to try and quote this from memory, he's like, just build Gmail but fast.

[977] It's become so slow.

[978] There are sufficiently many people like me, and he had some insane price, that would spend, and $1 ,000 a month on Gmail, because it's literally all we do.

[979] Yeah.

[980] I mean, he should have started superhuman.

[981] He wasn't grimly determined.

[982] He was not grimly determined.

[983] Okay, so startup ideas.

[984] He says, when a startup launches, there have to be at least some users who really need what they're making, not just people who could see themselves using it one day, but who wants it urgently.

[985] Usually, this initial group of users is small for the simple.

[986] reason that if there were something that large numbers of people urgently needed and that could be built with the amount of efforts that a startup usually puts into version one, it would probably already exist, which means you have to compromise on one dimension.

[987] You can either build something that a large number of people want a small amount or something that a small number of people want a large amount.

[988] Choose the latter.

[989] Not all ideas of that type are good startup ideas, but nearly all good start -up ideas are of that type.

[990] In other words, what he's saying is don't worry too much about building for a narrow segment of users and therefore overfitting.

[991] It's precisely what he's advising that you do.

[992] And then you might say, well, doesn't that give you the problem of being boxed into a particular niche or a particular segment of the market?

[993] And then to quote from a different essay, one that we've already referenced, startup equals growth, he says, in theory, this sort of hill climbing could get a startup into trouble.

[994] They could end up on a local maximum.

[995] But in practice, that never happens.

[996] The maxima in the space of startup ideas are not spiky and isolated.

[997] Most fairly good ideas are adjacent to even better ones.

[998] And to this, I'll give two very classic examples.

[999] One, of course, is Airbnb, where the idea of couch surfing is extremely adjacent to the idea of houses being hotels.

[1000] And the other very timely is Uber, where the idea of a luxury car that comes to your house with a chauffeur is adjacent to peer -to -peer driving.

[1001] It's amazing.

[1002] I mean, literally every single one of the, you know, quote -unquote A -plus companies that we're going to cover on this season of the IPOs so that Airbnb, Pinterest, Lyft, Uber, Slack, Stripe fits this definition.

[1003] Even Stripes.

[1004] I mean, I'm thinking about Stripe now, too.

[1005] The original market was startups that need to get their merchant accounts faster and implement them quickly.

[1006] And it turns out everybody that needs better merchant accounts.

[1007] So it makes sense.

[1008] Well, to put words in your mouth for email, like, yeah, who the business people and executives who spend three hours a day on email, They need like, they really desperately care about faster email, but everybody cares about really faster email, right?

[1009] Absolutely.

[1010] And the good thing for us, it turns out that even that particular markets will lead to a multi -billion dollar company.

[1011] And so there is this potential to create a enduring franchise, a company that could last for over 100 years.

[1012] And that's certainly our goal here.

[1013] All right.

[1014] Well, we very much look forward to covering the superhuman IPO on the main show next.

[1015] What's the next acronym?

[1016] I'm going to be...

[1017] I don't know.

[1018] Who else is in your cohort that's going to be all IPOing around the same time?

[1019] I'd love to see all the great productivity companies right now.

[1020] Notion, air table.

[1021] We're in a total renaissance.

[1022] We are.

[1023] We really are.

[1024] That's so cool.

[1025] Well, before we break, Rahul, where can our LPs find you on the internet?

[1026] And two, what is the best way for them to get access to superhuman?

[1027] Okay, so I am on Twitter at Rahul V -O -H -R -A.

[1028] That's my name, R -A -H -U -L -V -O -H -R -A.

[1029] And of course, at email at rahul at superhuman .com.

[1030] And to get access, by far, the best way is to get a referral from an existing user.

[1031] I would just recommend going to search .com and typing in superhuman.

[1032] and there is a high volume of tweets there's a lot of very helpful superhuman users out there you can see which ones the most helpful users are just by who's jumping in on which threads giving out invites if you don't feel inclined to do that level of work then you can sign up on the website but that will be a fair bit slower all right what about um what are you hiring for I'm sure there are lots of listeners who would love to come work here well you mentioned that just before we started your your primary audience is actually product managers right now.

[1033] And it turns out that I'm hiring for our very first product manager.

[1034] Whoa.

[1035] So this is a super exciting role.

[1036] You get to work with me for better for worse all day, every day on building the fastest email experience of all time.

[1037] And I'm really thrilled to be hiring for this role.

[1038] I've carried product in the company for a number of years.

[1039] And it's a really fantastic opportunity for the right person.

[1040] Terrible boss, but like great.

[1041] I don't know.

[1042] I don't know.

[1043] I I think I rate okay.

[1044] I think I rate okay.

[1045] But yes, really great product.

[1046] Really great product.

[1047] And in addition to that, engineers of all types, lead back -end engineer, front -end engineer.

[1048] If you're a phenomenal developer, we'd really love to speak with you.

[1049] Awesome.

[1050] Well, we rarely do LP shows, I think, with early -stage companies that are still early -stage in quotes here.

[1051] But I think we very intentionally and selectively reached out.

[1052] And I think we think incredibly highly of superhuman.

[1053] So LPs, if you do feel so inclined that that may be interesting.

[1054] for you.

[1055] Please don't hesitate to reach out.

[1056] Thank you.

[1057] Awesome.

[1058] Our sponsor for this episode is a brand new one for us.

[1059] Statsig.

[1060] So many of you reached out to them after hearing their CEO, Vijay, on ACQ2, that we are partnering with them as a sponsor of Acquired.

[1061] Yeah.

[1062] For those of you who haven't listened, Vijay's story is amazing.

[1063] Before founding Statsig, Vijay spent 10 years at Facebook where he led the development of their mobile app ad product, which, as you all know, went on to become a huge part of their business.

[1064] He also had a front row seat to all of the incredible product engineering tools that let Facebook continuously experiment and roll out product features to billions of users around the world.

[1065] Yep.

[1066] So now Statsig is the modern version of that promise and available to all companies building great products.

[1067] Statsig is a feature management and experimentation platform that helps product teams ship faster, automate A -B testing, and see the impact every feature is having on the core business metrics.

[1068] The tool gives visualizations backed by a powerful stats engine unlocking real -time product observability.

[1069] So what does that actually mean?

[1070] It lets you tie a new feature that you just shipped to a core metric in your business and then instantly know if it made a difference or not in how your customers use your product.

[1071] It's super cool.

[1072] StatSig lets you make actual data -driven decisions about product changes.

[1073] Test them with different user groups around the world and get statistically accurate reporting on the impact.

[1074] Customers include Notion, Brex, OpenAI, FlipCart, Figma, Microsoft, and Cruise Automation.

[1075] There are like so many more that we could name.

[1076] I mean, I'm looking at the list, Plex and Versel, friends of the show at Rec Room, Vanta.

[1077] They, like, literally have hundreds of customers now.

[1078] Also, Statsig is a great platform for rolling out and testing AI product features.

[1079] So for anyone who's used Notion's awesome, generative AI features and watched how fast that product has evolved, all of that was managed with Statsig.

[1080] Yep.

[1081] If you're experimenting with new AI features for your product and you want to know if it's really making a difference for your KPI's stat sig is awesome for that.

[1082] They can now ingest data from data warehouses.

[1083] So it works with your company's data wherever it's stored.

[1084] So you can quickly get started no matter how your feature flagging is set up today.

[1085] You don't even have to migrate.

[1086] from any current solution you might have.

[1087] We're pumped to be working with them.

[1088] You can click the link in the show notes or go on over to stat sig .com to get started.

[1089] And when you do, just tell them that you heard about them from Ben and David here on Acquired.

[1090] All right, well, listeners, if you aren't subscribed and you like what you hear, you totally should.

[1091] And also, if you were way too excited about this episode earlier to pause and fill out the season four survey, now is literally the perfect time.

[1092] You should totally click the link link in the show notes, or you should go to acquired .fm slash survey.

[1093] You should take the survey, and you could win a pair of second generation AirPods or one of 10 acquired LP subscriptions.

[1094] Thank you so much for doing that.

[1095] We really appreciate it.

[1096] And we will see you next time.

[1097] Thank you, everyone.

[1098] Later, David.