20VC: Superhuman's Rahul Vohra on How To Measure Product Market Fit, How To Construct A Process To Increase It & How To Implement A Strong Feedback and Reporting Cycle To Sustain It

Rahul Vohra is the Founder and CEO @ Superhuman, the fastest email experience in the world. Fun fact, users get through their inbox twice as fast — and many see Inbox Zero for the first time in years! To date, they have raised funds from our friends at Boldstart, First Round, John Collison, Sam Altman, Wayne Chang, Mike Ghaffery and Yes VC just to name a few. Previously, Rahul founded Rapportive, the first Gmail plugin to scale to millions of users. Rapportive was ultimately acquired by LinkedIn. In Today’s Episode You Will Learn: 1.) How did Rahul make his way into the world of startups with the founding of Rapportive and how did that transition to changing the world of email with Superhuman? 2.) What does Rahul mean when he says, "you can reverse engineer a process to get to product market fit"? What does Rahul believe is the defining metric which determines your "product market fit score"? What is Julie Supan's framework? How did Dropbox and Airbnb use it to increase their product market fit? How can founders implement it into their process? 3.) What can founders do to expand the customer base to include users that currently are "somewhat disappointed"? What are the right questions to ask? What do we do with this feedback? How do we further segment the user base? Why should we "disregard the users whereby the primary benefit of the product does not resonate"? 4.) How does Rahul approach product roadmap and prioritisation? How can founders ensure that continuous tracking and user feedback is engrained within the organisation? What tools does Rahul do to monitor and capture this? What are some of Rahul's biggest lessons from going through this painstaking process stage by stage? 5.) Finally on fundraising, what does Rahul mean when he says, "always be raising but never be actively raising"? What are the benefits of this? How can founders transition catch up coffee into fundraising subtly? How does Rahul feel about party rounds? What are the pros? What are the downsides? How does Rahul advise founders here? Items Mentioned In Today’s Show: Rahul’s Fave Book: The Art of Game Design As always you can follow Harry, The Twenty Minute VC and Rahul on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  We are back and what a Founders Friday I have in store for you today with me, Harry Stebbings, at H Stebbings 1996 on Instagram with two Bs. Now, I should not say this, but there are some episodes I look forward to and I'm more excited about than others maybe, and this one today is absolutely the case there. I've been so excited about this one for so long. The product is incredible and has taken much of our world by storm. And so I'm thrilled to introduce Rahul Vohra, founder and CEO at Superhuman, the fastest email experience in the world. Fun fact, users get through their inbox twice as fast and many see inbox zero for the first time in years. To date, they've raised from friends at Bold Start, Wayne Chang, Mike Ghaffery, and Yes VC, just to name a few. And previously Rahul founded Reportive, the first Gmail plugin to scale to millions of users.

• 0:44Harry Stebbings?

  Reportive was ultimately acquired by LinkedIn. I do also have to say a huge thank you both to Ed and Elliot at Bold Start and to Wayne Chang for some fantastic question suggestions today. I really do so appreciate that. And we mentioned some incredible companies in the intro there and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Yes, pretty incredible, I know. And you can sign up for Brex today and get card fees waived by entering the code HARRY during signup. Honestly, it really is such a special service.

• 1:25Harry Stebbings?

  And speaking of special, did you know that there are five job openings for every one developer in the US? No wonder hiring great engineers is impossible, and that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up, and support these teams. From little things like managing office logistics to big things like benefits, legal, and community. And they've developed this proprietary and comprehensive remote team solution based on decades of experience building remote teams across multiple continents. So they really know what works, but don't take my word for it. Take the words of Eventbrite, former 20 VC guest, Hymn, Dialpad, and more, all customers and lovers of Terminal. And you can find out more today.

• 2:10Harry Stebbings?

  Terminal.io and finally, I've always been a big history man. And so I want to talk about Cooley, the global law firm built around startups and venture capsule. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world with more than 50 years working with VCs. They help VCs form and manage funds, make investments and handle the myriad of issues that can arise throughout a fund's life cycle. So to learn more about the number one most active law firm representing VC backed companies going public, head over to Cooley.com and also go to Cooleygo.com. But you've heard quite enough from me. And so now I'm so excited to hand over to Rahul Vohra, founder and CEO at Superhuman.

• 2:54Speaker 01

  You have now arrived at your destination.

• 2:57Harry Stebbings?

  Rahul, it is such a pleasure to have you on the show today. Having heard so many great things from Wayne Chang, from Ed and Elliot at Boltsart to David Cancel. So thank you so much for joining me today, Rahul.

• 3:07Speaker 02

  Oh, very welcome. Thank you for having me on the show.

• 3:09Harry Stebbings?

  Not at all. I'm very excited, but I do want to start today with a little bit on you. So tell me, how did you make your way into what I call the wonderful world of startups and really come to found the game changer of email that is Superhuman?

• 3:21Speaker 02

  Well, I've actually been doing startups for quite a while. I knew from the age of 15 that what I wanted to be was an entrepreneur and all the way since then, everything that I've done has been towards that goal. Now I've started any number of companies. I think this is attempt number seven or eight with only one prior success called Reportive. And really to get to Superhuman, which I started a few years ago, you have to wind the clock back to the previous company. So in 2010, I'd started that company, Reportive, and we built the first Gmail plugin to scale to millions of users. Essentially, when people emailed you, we showed you what they looked like, where they worked, their recent tweets and links to their social profiles. We grew really rapidly and roughly two years later, we were acquired by LinkedIn. And during those years, I developed a very intimate

• 4:06Speaker 02

  perspective of email at LinkedIn. I was running all of our email integrations and just began to understand how professionals do email in really quite a deep way. And I could see Gmail getting worse every single year, becoming more cluttered, using more memory. Consuming more CPU, slowing down your machine, still not working properly offline. And now on top of this, people were installing plugins, reportive, of course, our own, and Boomerang and Mixmax and later on things like Clearbit. And each plugin took those problems, clutter, memory, CPU performance offline, and made them dramatically worse. So we figured at that point that it was time for change. We know what would Gmail look like if you were to rebuild it from scratch, but with today's technology? We imagined an email experience that is blazingly fast,

• 4:50Speaker 02

  where searches are instantaneous, where every interaction happens in a hundred milliseconds or less. You know, one where you never had to touch the mouse. You could do everything from a keyboard. You could fly through your inbox. An email experience that just worked offline, so you could be productive from anywhere. And an email experience, of course, that had the best Gmail plugins built in natively and yet somehow was still subtle, minimal and visually gorgeous. And so that became the thesis for Superhuman.

• 5:16Harry Stebbings?

  And visually gorgeous it is. I do want to touch on one element before we dive into the real meat of the show, which is the reportive experience. Can I ask, how did that experience with reportive maybe shape your operating mentality today with Superhuman?

• 5:28Speaker 02

  You know, that's a, it's an interesting question because in many ways, what we're doing at Superhuman is the opposite of how we did it at Reportive. And that's because when you've started, scaled and sold a company, you get to do things the other way around. I liken the job of a founder to making a flywheel, a really, really heavy flywheel, spin faster and faster and faster. Early in one's career, when you don't necessarily have capital or connections, you have to figure out a way to spin that flywheel. And the normal way is to, of course, build a great prototype and get beta users and show that they love it. And that was the reportive story. I single-handedly got that product to tens of thousands of users and then used that traction to attract co-founders, to get into Y Combinator, to raise a seed round, and then we were off to the races.

• 6:13Speaker 02

  And then when coming out at the second time, you can actually do things in the reverse order. So the very first thing I did for Superhuman was, was raise some seed money. And actually, our good friends Ed and Elliot over at Bolt Start, you mentioned them earlier in the show, they wrote the first check into Superhuman. And they were trying to write a very big check. Was sort of limiting the amount that they could invest at that time. But I did that off the basis of one slide that had one word on it and was just a screenshot of Gmail with the parts that I didn't like inked out in red. So, you know, no team, no prototype, no traction, just a concept and one slide of PowerPoint to raise that money. I then used that money to do some other things like invest in IP, get the domain superhuman.com and start really serious conversations with potential co-founders.

• 6:58Speaker 02

  You know, it's one thing having a co-founder conversation when you don't have any traction or any money. It's another when you have a million dollars sitting in the back and you're like, hey, I'm ready to go right now. And so the second time round, it was actually the opposite. You could do things in a completely different order.

• 7:11Harry Stebbings?

  I absolutely love that. And I didn't actually know about Ed and Elliot writing the very first chat. That's fantastic to hear. But I do want to start to stay on a theme that really kind of pervades the majority of pre-seed and seed founders mindsets, which is kind of finding that product market fit. And you've said before on your quest to reverse engineer a process to getting to product market fit. So if we take it from the very top and before we dive into the granular, can you kind of unpack what you said being the first step as anchoring amount around a metric? What did you really mean here and what was that revealing moment for you?

• 7:42Speaker 02

  Sure. So if you go back to that LinkedIn experience, that was around 2014. The weird initial fundraising, I had a traction, et cetera. That was towards the end of 2014. And it was really the start of 2015 when we began to get that core team together. So in the summer of 2015, we set up our office and we started to write code. And in the summer of 2016, we were still coding. And in the summer of 2017, team much bigger at this point, we were still coding. And I felt this intense pressure to launch, both from the team and also from within myself. Because after all, Repulsive had launched, scaled and been acquired in less time. Yet here we were, two years in, and we still had not passed go. But I knew as a product founder with some wisdom and some experience

• 8:25Speaker 02

  that no matter how intense the pressure, a launch would go really badly. I did not believe we had product market fit. But I couldn't just tell the team how I felt, you know, these are super ambitious, hyper intelligent engineers. They poured their hearts and souls into the product. It's not what They wanted to hear. And so like many founders, I turned to some of the more classical definitions of products market fit. You know, really anywhere I could look, the people that over my career I'd looked up to. So I started with Paul Graham. You know, what would Paul Graham have to say about something like this? He would say, well, you have products market fit when you made something that people want. And I looked around again. It's like, who else can I look to? Sam Altman has a good characterization. He would say it's when users spontaneously tell other people to use your product.

• 9:09Speaker 02

  And so immediately, that's two different things, right? You have Paul Graham saying, people really want the thing you've made. And you have Sam saying it's when people are word of mouth spreading your product. But perhaps the most vivid definition I found was Marc Andreessen's when he said, and you know, this one's a little bit lengthy, so bear with me here. He said, you can always almost feel it when products market fit is not happening. Customers aren't quite getting value, word of mouth is not spreading, usage is not growing that fast, press views are kind of blah. The sales cycle takes too long and lots of deals never close. But you can almost always feel like when products market fit is happening. Customers are buying just as fast as you can make it, usage is growing just as fast as you can add more servers. Money is piling up in your checking account, you're hiring sales and support as fast as you can. Reporters are calling about your hot new thing because they want to talk to you about it.

• 9:54Speaker 02

  You start winning entrepreneur of the year awards and investment bankers are staking out your house. Now that, it sounds incredible, right?

• 10:01Harry Stebbings?

  It, it does.

• 10:03Speaker 02

  Here's the thing with Marc Andreessen's definition, it's, it's a post hoc definition. He's describing what the world is like when you've already got there and it's unactionable. And here I was, the summer of 2017, we've been coding away for about two years at that point. We're running a big team, we spent large amounts of money, I'd, I'd kept on raising money all the way through that process. And I know you want to come back and talk about fundraising later. And I was asking, you know, what do you do if you don't have products market fit? And I was staring at that Marc Andreessen definition through tears. So I started to wonder, can you measure products market fit? Because if you could measure products market fit, then maybe you could optimize products market fit. And maybe you could systematically increase products market fit.

• 10:46Speaker 02

  And as it turns out, you can actually do all of those things.

• 10:49Harry Stebbings?

  Yeah. I mean, once you've kind of come to that realisation that there is a defining metric or there is a way to measure it, what was the next step in that guidance towards finding it for you?

• 10:59Speaker 02

  Well, the key thing for me was, can I find a metric to measure this? Because if you have a metric, and this applies to any part of your business, if you have a metric, you can optimise it, you can increase it. So I read everything that I could find, I spoke with all the experts, and I found this incredible entrepreneur, Sean Ellis. He ran growth in the early days at Dropbox, at LogMeIn, at Eventbrite, and he was actually the guy to later on coin the term growth hacker. So Marc Andreessen's definition of product market fit is super vivid, it's very compelling, but it's a lagging indicator. And what Sean found is a leading indicator, one that is benchmark and predictive. He says, just ask your users this, how would you feel if you could no longer use the product? And measure the percent who answer very disappointed.

• 11:44Speaker 02

  And after benchmarking a hundred startups, Sean found that the companies that struggle to grow almost always get less than forty percent very disappointed, whereas companies that grow easily almost always get more than forty percent very disappointed. And so what he's saying is that if forty percent or more of your users would be very disappointed without your product, then you have initial product market fit. And that was how I lasered in on that metric to begin with.

• 12:09Harry Stebbings?

  So once you have that kind of metric now, foundationally, that guides your thinking, how does one look to segment the user base? How does one look to really move from the next step of how many people would be truly disappointed if it wasn't there? To how can I maybe cross the chasm and get those that are disappointed, but kind of on the verge to being one of those that would be truly disappointed?

• 12:30Speaker 02

  Well, the first thing one has to do is understand who these users are, why they love the product. So we have a survey that we send out to our user base. It has four really critical questions in it. How would you feel if you could no longer use Superhuman? And we let people answer in one of three responses, very disappointed, somewhat disappointed, not disappointed. And the other three questions are, what type of people do you think would most benefit from Superhuman? And the third one is, what is the main benefit you receive from Superhuman? And the fourth one is, how can We improve superhuman for you. And all of these questions play a critical role in figuring out what your product market fit is. So you send out the survey, you get the responses back. If you're like almost all companies or products ever, in your initial iterations,

• 13:14Speaker 02

  you won't have forty percent of your user base or more being very disappointed without your product. You'll have something like fifteen or twenty percent. For the early superhuman days, our number was actually twenty two percent very disappointed, with a whopping fifty two percent of people somewhat disappointed without the product. So let's think about that for a second. That means just over half our users were kind of meh. They were like, okay, this is good, but you know, if you took it away, I'd only be somewhat disappointed. So here's what you do. You have to really understand first who the people are who love your product. And we used a framework called the high expectation customer framework. And this was created by Julie Supan, who led early marketing at Dropbox, Airbnb, Thumbtack, and lots of other great companies.

• 13:58Harry Stebbings?

  Talk to me, what is that framework? I've never had that revealed on the show. How did that framework guide your thinking as to the next step to really uncover what people loved about your product?

• 14:08Speaker 02

  So the framework itself is pretty simple. You can describe it in about three lines. The highest expectation customer is the most discerning person within your target demographic. They will enjoy your product for its greatest benefit. They'll spread the word and others will aspire to emulate them because they seem clever, judicious and insightful. So I'm an inductive learner. I like to learn through patterns that I think most people do. I'll give you two examples here, one on Dropbox, one on Airbnb, and then I can share the superhuman HXC. So the Dropbox HXC wants to simplify their life. They're trusting, they're technically savvy, they want to save time. And at the end of the day, they just want to know that their life's work, whether it's school or their professional career, is safe. And I'm a perfect example of the Dropbox HXC.

• 14:53Speaker 02

  I think I've been paying an annual subscription for Dropbox since they had them. And it's, you know, a key part of how I run my life. The Airbnb example is a bit different, of course. The Airbnb HXC does not simply want to visit new places. They want to belong. They're cost conscious, they want to live like a local. No, they want To go to Paris and experience Paris as if they really live there. And that's not me, for example, you know, I'm I'm quite happy with bougie trips to a seaside resort, which I am completely aware is utterly fabricated. So Four Seasons is my style, but I'm really totally. Exactly, yeah, Four Seasons, great shade. You and I would not be Airbnb HXs, but there are plenty of people who are. And Airbnb actually had its meteoric growth by hyper focusing,

• 15:38Speaker 02

  at least in the early days, on those highest expectation customers because other people want to be like them and they enjoy the product for its greatest benefits. And crucially, they spread the word. So we took the survey results for Superhuman, the people who said they'd be very disappointed without the product. And we constructed our own highest expectation customer based on their responses. And so there's a bit of a cool trick question here. So the second question that we ask people is what type of people do you think would most benefit from Superhuman? So it's a really cool question because it turns out that the people who love your products the most actually end up describing themselves in the answer to that question, but using their own words. And so not only does it tell you who loves your products,

• 16:22Speaker 02

  it also gives you words of the user to describe themselves. It essentially writes your marketing copy and your landing page for you. And so what did you uncover from yours then? Well, so we gave our highest expectation customer a name. She's Nicole. Now Nicole is a hardworking professional. She deals with many people. She might be an executive, a founder, a manager or in business development. She works really quite long hours and often into the weekend. She considers herself very busy and wishes she had more time. She does feel she's productive and she's self-aware enough to realize she could do better. And she'll occasionally investigate ways to improve. And she spends a lot of her day in her inbox, of course. On a typical day, she'll read up to 200 emails, she'll send 50. On a very busy day, she might send as much as 100.

• 17:04Speaker 02

  And critically, she considers it part of her job to be responsive. And she prides herself on being so because she knows that if she's unresponsive, she might block her team, damage her reputation or cause missed opportunities. Generally, she has a growth mindset. She's open. Minded about new products, she keeps up to date with technology, but she may have a fixed mindset about email. Whilst she's open to new email clients and experiences, she is sceptical that one could make her go faster.

• 17:32Harry Stebbings?

  How does one go from there? What's that subsequent next step? So you have that now and you have the existing base of would be very disappointed. How do you translate that into the next step, both kind of a product roadmap, but also of increasing that kind of very disappointed segment?

• 17:46Speaker 02

  For sure. So yeah, the whole goal here, of course, is to increase the percentage of people who'd be very disappointed without the product. And so the next part is a bit of a survey ninjutsu. You essentially take every single response to your survey and you assign a persona to each one. And you know, for our very disappointed cohorts, there's a lot of founders, a lot of managers, a lot of executives. For our not disappointed cohorts, let's simplify this example. You might imagine there's perhaps a lot of engineering, people who don't necessarily do a lot of email for work. So you take the users who most love your product, you turn those into an HXC and then you use those to narrow the market. And what I mean by that is deliberately ignore the responses from customers

• 18:31Speaker 02

  who don't fit that archetype of people who love your product. So in our case, we focused on founders, on managers, on executives, on BD. And again, I'm just simplifying here, we deliberately ignored sales, customer success, engineers, data scientists, people who don't do email for work. And you just take them out of the survey entirely. Now, what that will do is it will change the percentage results of each part of the survey. And so for us, just by segmenting, our product market fit score jumped by 10% from 22% to 32%. It's a five or a 10 minute exercise and you know, in our case, it didn't quite get us past 40%. But it's a really simple first step that you can do to A, figure out who loves your product

• 19:15Speaker 02

  and B, to start focusing in on those people. Now, in our case, even with that focus, we only had a 32% product market fit score. That means there's still a large contingent of that set of people who are only so Not disappointed or not disappointed without our products. So the next step is trying to figure out what you can do with the product in order to make more people fall in love with it.

• 19:40Harry Stebbings?

  So in terms of this, because this is where I get super interested when it comes to kind of feature prioritization and product roadmap and how kind of customer feedback integrates into that. How do you think about customer feedback integrating into product roadmap and kind of the product loop, so to speak, and which segments you ignore, ingest? And how you kind of embrace those different segment responses?

• 20:00Speaker 02

  For sure. I mean, at Superhuman, we are intense rabid fans of customer feedback. And I think we've actually implemented one of the more sophisticated feedback triage systems that I've seen. We actually happen to use Airtable at this point. We've triaged many tens of thousands of individual pieces of customer feedback. And it's all logged against the feature, the person, who they are, what they're asking for, and of course, what their response to the survey was. So the key thing here is is not just to do what might be one's first intuition, which is just to go and build the things that people are asking for. Because if you do that, you'll end up with a very muddied product that may not be particularly coherent.

• 20:41Speaker 02

  And your users, because they're going to be disparate users, could pull you in the wrong direction or confusing, conflicting directions. So the two key questions to understand are, number one, why do people love the product? And number two, what holds people back from loving the product? So we can take each one in turn. Why do people love the product? So this is question three on the survey. What is the main benefit you receive from the product? And so some examples from Superhuman are processing email is much faster. I get through my inbox in half the time. Or speed, the app is crazy fast and the UX and keyboard shortcuts make me an actual superhuman. So you get your responses like that. And what I like to do is just chuck them all into a word cloud.

• 21:22Speaker 02

  And ideally, you have at the very least forty or fifty responses, if not many hundreds of responses. And when you throw them all into the into a word cloud and obviously remove filler words like if and to. And the the reason why people love your product will be staring you loud and clear in the face. For Superhuman, it was really obvious. People love Superhuman for its speed, for its focus, and for its keyboard shortcuts. So that's the first question. That is the answer to the question, why do people love the product? And then secondly, you have to come back to the next question, which is, what holds people back from loving the product? Now, this is where it gets tricky, and you have to only focus on a specific set of people. So as painful as it is, you should politely disregard the not disappointed users.

• 22:04Speaker 02

  They are so far from loving the product that they are essentially a lost cause. And this is hard, because they will probably be very vocal. They will likely ask for distracting features. And as counterintuitive as it may seem, you should just not act on their feedback. So that leaves the set of somewhat disappointed users. Maybe you can help them fall in love with the product. And as it turns out, you most certainly can, but once again, you should not act directly on their feedback. Many of them will remain somewhat disappointed, no matter what you do for them. So the question is, how do you decide who to listen to? And the answer, of course, is you segment. So what we do here, this is a really cool trick. You take the main benefit that we just calculated of the very disappointed users, and you use that to segment the somewhat disappointed users.

• 22:46Speaker 02

  So if you recall, the main benefit for Superhuman is speed, is keyboard shortcuts. But the reason why people like keyboard shortcuts is essentially speed, so it's speed. And you then now have two subsegments of the somewhat disappointed users. You have the somewhat disappointed users for whom speed was not the main benefit, and you have the somewhat disappointed users for whom speed was the main benefit. And again, as hard as it is to do, and it's not easy, we should politely disregard the somewhat disappointed users for whom speed was not the main benefit. Because our main benefit just does not resonate with them. And even if we built everything that they asked for, they are super unlikely to fall in love with the product. So that leaves the other group, the somewhat disappointed users for whom speed was the main benefit.

• 23:28Speaker 02

  And we pay super special attention to those, because our product does resonate, and something, probably something small, is holding them back. Well, so first, with the somewhat disappointed group, you split it up into two, right? So you have the people for whom the main benefit does resonate, the people for whom the main benefit does not resonate. So we're taking the people for whom the main benefit does resonate. And then you have to look at the fourth and final question. In the survey, which is how can we improve superhuman for you? And again, I do exactly the same process. I take them any hundreds of answers, if not more, and I chuck them into a word cloud, removing filler words. And when you do that, I'm pretty convinced that the results will be staring you loud and clear in the face. And so for us, the the head of the tail, I I think for every company will always be pretty obvious.

• 24:10Speaker 02

  At the time, it was the lack of a mobile app, which we, of course, since addressed. But then it got less obvious and more interesting. Things like integrations, attachment handling, calendaring, unified inbox, better search, read receipts, and and so on into the long tail. So to increase our product market fit score, all we had to do was build those things. And that would convert users who were on the fence into fanatics who love the product. But again, there is, of course, a trick here, which is my advice would be to spend half your time doubling down on what users love. Those are the users who'd be very disappointed without your product. For us, those are the people who value speed, shortcuts, efficiency and beauty above everything else. And just as importantly, spend the other half of your time systematically addressing what holds users back.

• 24:55Speaker 02

  In our case, that meant releasing our mobile app and working on those long-tail features. Here's why. If you only double down on what users love, your product market fit score will not increase. And if you only address what holds users back, your competition will likely overtake you. It's really, really important that you do both of these things. So what we do at the start of every quarter is we give ourselves 50% R and D budget for doubling down on the very disappointed users, the things that people love. And 50% R and D budget, addressing what holds users back, converting those somewhat disappointed users into people who love the product.

• 25:31Harry Stebbings?

  Can I ask Rahul, having been through such a painstaking and long journey with the team itself, what were the biggest takeaways for you? Actually, first question is where did the very disappointed score end and is at today? That's the first question. But then secondly is kind of what are those cool takeaways for you, having been through this painstaking process that you'd advise founders maybe and investors pondering the same journey?

• 25:54Speaker 02

  My advice to those two different groups would be very different. My suggestion to the investment community, especially the Investment community that advises early stage teams would be to stop pushing for premature growth, especially premature growth at a product market fit. I think as an industry, we all already know that this ends in disaster. I see this with my friends in my peer group, that the pressure for premature growth is still all too common. It is much more rational in the medium and the long term, I think, to iterate using a process like the one I've just described to find product market fits and then launch in the right way. And then, on the other hand, for founders, I would say, once you're in this iterative process, know when to flip the switch.

• 26:36Speaker 02

  So when you're past the 40% threshold and that number is sustaining even as you're adding more users, the metric isn't going down, that's when you want to push pedal to metal. That's when you want to grow as fast as you can. As an entrepreneur who's just passed this threshold myself over the course of the last year, I can say it's not particularly easy, especially if you've spent years in the wilderness, conserving capital, hiring slowly, iterating, constantly optimizing. It is a huge mindset shift to suddenly say, okay, we're now going to deploy all the capital, we're going to raise all the capital, we're going to hire all the people we can, and it's go, go, go time.

• 27:13Harry Stebbings?

  Can I ask, why is that so challenging? Having been so starved of resources to then have the availability, both in terms of headcount, both in terms of team, both in terms of capital, why is it such a challenge?

• 27:25Speaker 02

  It's muscle memory. We were never starved of resources. We always raised around ahead of traction. So we had our seed when you should normally have nothing. We had our A when you should normally have your seed, and so on. We just forced ourselves to have that tremendous amount of fiscal responsibility over the capital that we were managing. And so it becomes muscle memory, and it becomes thought process and habits, especially after you do it for years to operate a certain way. And you have to unwind all of those habits and rewind new habits once you're past product market fit and you're scaling.

• 27:55Harry Stebbings?

  I love that description of kind of your fundraising journey. You said to me before, actually, that you'd always be raising, but never raise actively. Can I ask Rahul, what did you mean by this? I didn't dive into it with you at the time, but I'm too intrigued now.

• 28:10Speaker 02

  Sort of an allergic response to my experience at Reportive as well as a response to what I see happen with my friends here in Silicon Valley. Now, a lot of people can spend way too much time fundraising, even for good to great companies. These things don't just necessarily fall into place. You know, you sometimes hear of rounds completing in a week, pitching a few firms. Those are the exceptions, not the rules, generally speaking. So I have seen, and I myself did this in my last company, many, many founders waste a tremendous amount of time on fundraising. And that's because they're running an active process. They are going out to markets with a story and trying to close that in a, hopefully a short amount of time and then get back to work.

• 28:53Speaker 02

  I have found for Superhuman, and we've been executing it this way, that it is actually, if you can pull it off, much, much, much more efficient to not do that and to let the market come to you. So to be always sufficiently well capitalized ahead of your needs so that at the right time, the right seed investor will come to you, the right series A investor will come to you, the right series B investor will come to you, and they'll preempt your next round. So always be open to that idea. And I'm always open to it both from lead investors as well as from individual angel investors. And never be out actively trying to chase capital. That's really what I meant by that.

• 29:31Harry Stebbings?

  No, I absolutely love that subtlety to it. I do want to ask, if one looks at the list of investors, which is a phenomenal list of investors for Superhuman, it's also a lengthy list, Rahul. There's always mixed feelings around the kind of party round, so to speak. And obviously this is slightly different because it's not such a round and more kind of a continuous financing perspective. But how did you think about having maybe quite a large cap table? And what are the pros and cons? And what advice would you maybe have for founders who are contemplating that traditional lead investor with a second fund versus the much larger cap table?

• 30:02Speaker 02

  We've actually done a hybrid approach. I wouldn't characterize it as a party round. When that phrase first came about and it started getting really popular around sort of 2010, 2011, when there were a very large number of new angels minted and people. That's really when startup valuations, if I recall. Shot up from, you know, the typical YC company was raising like five or six the year before and was raising at 12 to 14 the year after. And party runs were a big cause of why that happened. The main criticism was that there was no one big investor in any round. And therefore, there was no accountability. There was no one to ask the hard questions. And especially for first time founders who don't necessarily have a lot of self discipline in how to run companies. And they don't know what to look for. And

• 30:46Speaker 02

  they might vacillate on particularly hard decisions, like maybe laying people off, or maybe taking around a dilution, or pivoting, or, you know, whatever, really hard decision it is that they have to make. These companies often just sort of drifted off into the middle of the ocean, and then inevitably sank when they didn't have the resources to find land. And so that's why the idea of a party round had this negative connotation to it. And I agree with that, you know, without oversight and stewardship, companies can go adrift. And even the best CEOs and the best founding teams need some slightly external accountability. And that's the purpose of a board, of course. So what we've done is a hybrid. We have an incredible pre-seed investor, Bold Start. They are rapidly making a name for themselves

• 31:27Speaker 02

  as the preeminent first check enterprise SaaS investor. We had first round capital, lead off seed round. We have a very well known family office who are themselves extremely savvy professional investors. They are LPs in NEA, Mayfield, USVP, Benchmark, and so on. And occasionally, they do direct deals. So they led Lyft Series C, for example. They led our Series A, and so on. And alongside that, we have about 120 different angels. Everyone from, you know, Sam Altman from YC, through to John Collison, from Stripe, through to Nat Friedman, the CEO of GitHub, just like incredible folks of that caliber involved. And so we actually get the benefit of both of us.

• 32:05Harry Stebbings?

  No, I love that. And I mean, what an incredible list, truly. Before we move into the quickfire, I do have one final element to ask you about. And it was one actually that is not on schedule, but one that I spoke to the Bold Start guys about just before the show, which is why it's not on schedule. And it's your approach to onboarding. It's a very unique and different approach. What is your approach to onboarding? And why do you think it's beneficial to have this approach?

• 32:27Speaker 02

  So our approach to onboarding, and this is considered To be crazy by most people who know about it is actually to spend half an hour to an hour with each new user. We typically do this over a Zoom call. Now, there are some constraints around that. The constraints are the user has to take a welcome survey, and that pre qualifies them. That lets us know whether or not they're likely to be a happy user of Superhuman. They have to pre authorize a credit card to show that, you know, they really do mean business, and they have an email problem, and they're willing to pay for a great solution to that problem. And then we get on that half an hour to one hour Zoom call with them. Now, on that Zoom call, you're paired with an email expert. We have a team of wonderful onboarding specialists. They they know email

• 33:11Speaker 02

  better than anybody else in the world. They know our product extremely well, of course. And we're able to ask you what your current habits are and consult on how to do your email faster. And most of our users actually end up getting through their email about twice as fast as in comparison to Gmail. And many of them see inbox zero for the first time in years. And that's kind of the magic with the onboarding. You know, we, on the one hand, filter out the people who either didn't have an email problem or weren't serious about solving it. And on the other hand, we can really focus on delivering the best possible service and personalized insights to each new user.

• 33:42Harry Stebbings?

  Can I ask, is that truly scalable? Picture a year out when there's 10,000 people a day.

• 33:47Speaker 02

  If there's 10,000 people a day, then we'll be a billion dollar company in a matter of months. Because each new user pays us hundreds of dollars a year. I I think it's scalable, yes, for sure. I can see us getting to anywhere between 10 and 20 million dollars of ARR on this basis.

• 34:01Harry Stebbings?

  Got you. No, absolutely. Sorry, I had to ask that. But I do want to move into my favorite being the quickfire round now, Rahul. So I say a short statement, and you give me your immediate thoughts. About 60 seconds per one. Are you ready?

• 34:12Speaker 02

  For sure.

• 34:12Harry Stebbings?

  So I'm on a flight to the West Coast. What book should I be reading and why?

• 34:16Speaker 02

  The Art of Game Design by Jesse Shaw.

• 34:19Harry Stebbings?

  Why?

• 34:19Speaker 02

  I think I was previously a game designer. I worked on RuneScape, which was the world's largest free online role playing game.

• 34:26Harry Stebbings?

  I love RuneScape. Yeah.

• 34:27Speaker 02

  Did you ever play Monkey Madness? That was the biggest quest that I threw together.

• 34:32Harry Stebbings?

  Of course I did. I was probably one of the biggest users. This was a while ago.

• 34:35Speaker 02

  Fantastic. I think that the bar for product design

• 34:40Speaker 02

  Whether it's consumer or enterprise has risen to such a degree that it has essentially become game design. Game design is one of the hardest types of products to create. And I would strongly suggest that that any product designer study game design in in significant detail. I I know that for both reportive and for superhuman, having had that background, and it remains an area of ongoing study for me, but sort of being passionate about this area gives us a significant advantage.

• 35:06Harry Stebbings?

  What do you know now Rahul that you wish you'd known at the beginning?

• 35:09Speaker 02

  That it's a marathon and to take care of both body and mind. In reportive, I worked so hard and let myself get so stressed that I actually ended up hospitalising myself. My body just gave up on me. I couldn't eat, move, walk. This thing that was carrying my mind around just basically said, all right, I'm done, I'm out. And I was actually in hospital for a week and took me two weeks of recovery afterwards. It was a pretty serious outage. And at the start of superhuman, I started taking much better care of my body, but I wasn't taking care of my mind. And that resulted in some breakdowns as well. And so now I I take good care of both. I exercise regularly and I also work on my mental wellbeing. I see both therapists as well as two executive coaches. And so there's this team of people

• 35:51Speaker 02

  that work with me to keep me in tip top condition. And I wish I'd known that at the beginning.

• 35:55Harry Stebbings?

  No, I completely agree. And I think it's a massively unspoken element. So I couldn't agree more. And I'm thrilled to hear you say that. Tell me, you've mentioned before about kind of seeing friends of yours in the valley, kind of their growth expectations. What would you most like to change about Silicon Valley today?

• 36:09Speaker 02

  I would like to see a more heterogeneous economy, one that that doesn't just rely on startups as the main driver of the economy, number one. And number two, I'd like to see faster housing policy. So as I'm no doubt sure that that you know that San Francisco is an extremely expensive place to live. It is in fact the most costly city in America now. Salaries are skyrocketing every single year. House prices are skyrocketing still, depending on the the segments of the housing market that you look at. And I don't think that it does us any favours if what we as an industry in Silicon Valley are trying to do is build world changing companies. Because now it turns

• 36:50Speaker 02

  What the rational thing to do is is headquarter here, be here, raise money here because capital is relatively abundant and valuations are high. It's a very founder friendly place to be, but it isn't rational to spend money here. The rational thing to do is to go and spend the money elsewhere, perhaps in Seattle where there's less taxation. Or perhaps in Canada where there's R and D credits, the government will literally give you money back to set up an R and D office there. Or perhaps even in London where you are, so one can arbitrage the currencies. And as someone who lives here, I wish that wasn't the case. I wish we could build organizations right here. But it's becoming increasingly less rational to do so.

• 37:27Harry Stebbings?

  No, I completely agree with you. Tell me, we spoke about kind of the abundance of capital there. The investors themselves, if an investor could provide one value to you other than the money itself, what would it be, Rahul?

• 37:37Speaker 02

  It goes back to that conversation we were having around the value of a board and it's seeing round corners. So we at Superhuman are now at the phase of company, which is new to me. You know, I have not scaled a company to this point. A report of was used by many millions of users, but we made 14 cents of revenue in our entire history as an organization. So that's very different to Superhuman. And I think what a board can do, what investors can do is say, okay, for this scale of growth, you're going to have the following problems. These are the classic errors and these are the things that we need to achieve in order to get to the next level. That is the main value that an investor can provide us other than capital.

• 38:15Harry Stebbings?

  But I do want to finish today, Rahul, with the next five years for you and for Superhuman, what's that super exciting vision ahead?

• 38:21Speaker 02

  Lots and lots of things. So number one, I think will become a multi-product company. For us, email is just the starting point and you know, we potentially want to take on all the things that professionals do. That isn't sort of the direct meat of their work, whether it's tasks, calendaring, scheduling. There's also incredible things that we can pull together. Number two, in the next five years, I'd love to see us grow to become a billion dollar organization. And I think we have a really great shot at doing that. And I'd love to become the kind of CEO that can facilitate and lead that kind of growth.

• 38:56Harry Stebbings?

  Rahul, I have no doubt you will be. I'm just sad I'm not an investor in Superhuman. But I do want to say a huge thank you for coming on today. As I said, I had so many great things and this has been so much fun. So thank you so much.

• 39:07Speaker 02

  Thank you so much, Harry, for having me. You're so very welcome.

• 39:12Harry Stebbings?

  I mean, my word, what a guest. And I want to say, I really do think Rahul is one of the most special founders we've had on the show. I always so enjoy our chats. I want to say a huge thank you to Ed and Elliot at Bold Start, and I cannot wait for the very exciting years ahead with Superhuman. If you'd like to see more from us, you can find us on Instagram @HStubbings1996 with two Bs. Likewise, you can find Rahul on Twitter, @RahulVora. However, before we leave you today, and we mentioned some incredible companies in the intro there, and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Yes, pretty incredible, I know. And

• 39:57Harry Stebbings?

  you can sign up for Brex today and get card fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of special, did you know that there are five job openings for every one developer in the US? No wonder hiring great engineers is impossible, and that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up, and support these teams. From little things like managing office logistics, to big things like benefits, legal, and community. And they've developed this proprietary and comprehensive remote team solution, based on decades of experience building remote teams across multiple continents. So they

• 40:39Harry Stebbings?

  really know what works. But don't take my word for it. Take the words of Eventbrite, former 20 VC guest Hymns, DialPad, and more, all customers and lovers of Terminal. And you can find out more today at Terminal.io. And finally, I've always been a big history man, and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world. With more than 50 years working with VCs, they help VCs form and manage funds, make investments, and handle the myriad of issues that can arise throughout a fund's lifecycle. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com, and also go to CooleyGo.com. As always, I cannot thank

• 41:22Harry Stebbings?

  you enough for tuning in, and I'm very excited to bring you another set of special episodes next week.