Pablo Srugo (00:00:00):
So last week, I held a panel on the main stage of Web Summit Vancouver with Kyle, the founder of Huntress, and Arvind, the founder of Glean. Both of them have been on the Product Market Fit Show. That's actually how I met them. And so we held this panel called "What It Really Takes to Create a Unicorn." Where they both shared the early days of Glean and the early days of Huntress and what they had to do to get to a few million ARR. It's two very different stories. One was like a distinguished engineer at Google that raised $15 million out of the gate but had no revenue for the first two years. And another, who had to prove himself like every single step of the way, got rejected by 60 VCs, slept in his car for 50 weeks. Did all the grind stuff. And now both of them are at a hundred million ARR.

Previous Guests (00:00:38):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is Product Market Fit.

Pablo Srugo (00:00:50):
Do you think the Product Market Fit show has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders, and it lets us get better guests. Thank you. Web Summit Vancouver! How you guys doing? That's not bad. That's not bad.

Kyle Hanslovan (00:01:09):
After lunch, it's okay.

Pablo Srugo (00:01:12):
That's pretty good. Well, you know. Quick little story before I jump in. I was actually, I really was trying to figure out how to subtly plug in my podcast into here, right, into this thing, the Product Fit Show. And I was going through the schedule, and I saw that the headliners today that started it off from Artisan and from Graphite both were on the Product Market Fit Show. Then we have Jack Noon, who's earlier here. He was on the Product Market Fit Show. And then I saw Immad from Mercury. He's on the Product Market Fit Show. And of course, these two guys were on the Product Market Fit Show. And I decided I wasn't going to be subtle at all. And I was just going to tell you shamelessly, cringeworthy, like borderline cringeworthy, to download the Product Market Fit Show on Spotify, on Apple. Because that's where you get the full hour of these two guys talking.

Kyle Hanslovan (00:01:59):
It sounds like we all have really bad decision-making to hang out with Pablo.

Pablo Srugo (00:02:03):
That's right. That's what it is. That's what it is. Well, with that said, welcome to Web Summit, guys.

Kyle Hanslovan (00:02:07):
Thank you.

Pablo Srugo (00:02:07):
So Arvind, your background is he's a distinguished engineer. Which is like the peak of engineering at Google. You leave. You start Rubrik, which is now a $20 billion public company. And three years in, you guys are a unicorn. Five years in, you're worth, like, $3 billion. You raise a couple hundred million. And then at the absolute peak. Where everything that you wanted to happen was happening, you leave. Why would you do that?

Arvind Jain (00:02:35):
Well, so that was 2019. And I left Rubrik to start Glean. And in fact, at Rubrik, we were very fortunate. We were growing fast as a company. And with that growth, we also realized that we were not productive anymore. There was a year when we went from 500 to 1,500 employees in one year. And that's three times as many employees. But when we looked at our lines of code, it was actually flat. We couldn't produce more with all the new people. And it turned out that in a company, as you get larger. The communication overhead and people knowing how to do work. How to figure things out. Who are the experts that can go and get help from? All of these things become difficult. And we had this one big problem. Everybody in the company was complaining. About not being able to find any information inside our company. And I'm a search engineer, as you said, by training. Before Rubrik, I was at Google for many years. And when people said that they can't find things, I said, "Yeah, I also can't find anything because we have 300 different SaaS systems." Our knowledge is spread all over the place. So we should go and buy a product. Connect all of those things together. As we tried to buy that product, we realized there's nothing to buy. And that's when I got excited about building this new product. Initially as part of a Rubrik. But then I thought, that doesn't make sense, and we have to do it separately. So that's the reason why I left and to start Glean.

Pablo Strugo (00:04:00):
And then, because of your track record, you raised $15 million out of the gate. But when you start a startup. You guys have been through it. The thing you want the most is revenue. You want this thing to start working. You went two years with zero revenue. What was that phase like?

Arvind Jain (00:04:14):
Yeah, so search is a very hard product to build in an enterprise. It takes a lot of effort to build all these integrations into different enterprise systems. Build deep technology that can understand your business, your people. And we knew going in that it's going to take us time, time to build this product. And so the company was designed in that particular way. So that's why we first raised a good amount of capital that would actually let us go and build this product, take, you know, the 18 months. 24 months it's going to take us without having to go to investors because you don't want to go to investors again. You know, after two years and not having even, you know, a dollar in revenue. So it was by design, you know, we wanted to build it that way. The journey was fine, like, you know, we just have to convince people along the way that, yes, we are on the right path. You know, we have to make sure that people believe in the vision because, just like investors, even the employees get worried. You know, if you're not making money in a short amount of time.

Pablo Srugo (00:05:09):
And then Kyle, you had a very different kind of story. You were like a rock star hacker. You're at the NSA. You're literally like fighting terrorists. What made you leave that to start Huntress?

Kyle Hanslovan (00:05:19):
Well, clearly I did it all wrong because I heard I need to become a distinguished Google engineer. 

Pablo Srugo (00:05:23):
There you go.

Kyle Hanslovan (00:05:23):
Build a $5 billion company, then everything else happens. I didn't do it that way. Part of the best part of working at NSA was like we actually had a mission. And I knew firsthand that, look, there's a lot of businesses in the world that fall below the Fortune 500. Even so much, I looked at it as a poverty line. And so for me, even though there was a whole lot I could do on the offensive mission. Hacking in, gathering intelligence. Creating exploits and implants. That was cool. But I realized that there was a lot of the market that was never going to have access to my talent. So how could I distill my talent into a product for kind of all the businesses that fall below that 1% Fortune 500. And thankfully it was enough. I guess, even though I had satisfaction, I felt really good at NSA. I also, it wasn't enough. And I imagine that's part of what you hit. There was diminishing returns. And maybe I. I think I just hit that. I recognized, like, I could keep doing this. But it was, on to the next major problem.

Pablo Srugo (00:06:18):
And then one of the things you told me on the podcast was, about a year in. You still don't have any revenue. And there's kind of this like make or break moment. What was that story?

Kyle Hanslovan (00:06:29):
Alright. I thought we were going to not talk about the terrible, embarrassing parts.

Pablo Srugo (00:06:33):
We are going to do all, the, only the terrible parts.

Kyle Hanslovan (00:06:33):
But it turns out you have to have revenue, right, if you want to get paid. And especially me as a dad, like my kids were 5, 9, and 11 when I started Huntress. So it's not like we were in the basement. And I realized, OK, we had a pretty good idea. We were going to go after these from small businesses all the way to small enterprises. But again, if I couldn't show traction, it didn't matter. And I definitely wasn't going to get investment. So we did. We scratched up all of our last cash. We drove from. We were a Baltimore-based company, down to this main show for people who provided outsourced IT. And we realized these outsourced IT providers might have anywhere between 20 to 200 businesses for each one. And we put it all on the line, literally maxed. The credit cards were already done at this point. We slept in the car going down. This is a little bit of a theme. And all the way down to the point. But what was nice is that year and a half of us learning all the hard ways made it so even though this was our last dime. We kind of had a good idea by that time what problems people were gonna ask us about, and it turns out we killed it at that show. I'm not saying celebrate grind culture. But I'm saying if you do the research the right way, you can take that level of risk, and for us. It was just the right show at the right time with the right maturity and right hurdles, and thankfully. That was our big moment that produced our first handful of customers that turned out it the flywheel never stopped at that point forward.

Pablo Srugo (00:07:57):
And then what was the. Because his fundraising was, you know, track record-based, $15 million out of the gate. What was your fundraising?

Kyle Hanslovan (00:08:03):
It turns out nobody cares if you're an NSA hacker. And when you say, like, many of you are probably going maybe B2C, or maybe you're going B to enterprise. I will tell you in 2015, the right answer was not to go B to the very smallest B that you can't quote a single one of your logos. Because nobody knows who they are. And that, for me, dude, no one believed. I mean, you name a Silicon Valley investor. They have told me politely and very directly at times. I think it was like, "Go fuck yourself." There was that level of being that bold.

Pablo Srugo (00:08:36):
How many did you pitch?

Kyle Hanslovan (00:08:37):
At least 60 nos that I counted. And what's neat is most of them have come back with term sheets. But when you have to prove a new market. And I wanted to bring humans in the loop, but all they heard is "services." I didn't know how bad I was at pitching, like that I should be pitching a SaaS product and all they heard was 60% gross margins, even though we're not. The things that I'm telling you is you might not know as a technical entrepreneur. Even though it's solved in your brain, some of your biggest hurdles might actually be how you sell your own story. And I wish I had a little bit more of that product. I'm sure at Google you learned a little bit of, like, a product has to deliver revenue. And I know for a fact at Rubrik you learned that. I did it the hard way. It was not beautiful.

Pablo Srugo (00:09:19):
One of the things that really struck me about your story is, you know, everybody these days knows the lean startup, Eric Ries, and kind of validating and stuff like that. You took a bit of a different path. In fact, one of your quotes was like, "I chose not to talk to too many people." I don't know if you remember saying that, but why did you structure it that way at the beginning? Why didn't you really follow the kind of the lean startup methodology?

Arvind Jain (00:09:38):
I think both parts are actually fine. For us, we felt that it was the right moment for us to go and build this product as fast as we can and go big. And we didn't want to be constrained by resources. By, you know, lack of, for example, funding. Because, you know, if you sort of aren't in that mode, then you have to, like, you know, be more careful. You have to be conservative. You have to. You cannot go and build a large team, you know, at the get-go. And for us, you know, LandGrab was actually important because we were alone in the market. We were the first product in AI, in enterprise-gen AI. And we knew that this was going to take over the world in a big way. And before others come into the market, we wanted to be there. 

Kyle Hanslovan (00:10:34):
Was that confidence you got from just your previous places you worked? Like, I didn't have that confidence till probably the last couple years, but you guys just went down. You think that, like. Built over time from past success?

Arvind Jain (00:10:43):
Yeah, I think we had a similar path that we took at Rubrik. Which was also to actually go big and go all in. I guess part of it is, what motivates you? What's your reason behind starting a company? And for us, it was actually to make a huge, big impact. And it's OK if you fail and miserably crash. Like, you know, we either go big, or we.

Pablo Srugo (00:11:13):
Did you do, like, a TAM analysis, ROI analysis, like, all that stuff? 

Arvind Jain (00:11:17):
No, I don't. And actually, it's an interesting thing. You know, you were talking about track record. And for me, yes, I had actually built a good, successful company before. So, like, as such, it was actually easy for me to go and convince somebody that, yes, I can actually go and build a product again and raise some money. But nobody actually wanted to invest in this idea that I had. Which is search, inside the company, because in that space, there was no success in the industry. There were many attempts.

Pablo Srugo (00:11:50):
A lot have tried. Right? Like a lot have tried?

Arvind Jain (00:11:51):
Yeah, a lot of, like, yeah, many, many, many companies tried and failed. And, you know, I had investors actually come and tell me that, look, I know you can build a great company. Here's a blank check. Tell me how much money you want to raise, but don't do enterprise search. Do something else. And so for me, I think it was. I guess part of how I think about a startup is you don't have to actually do deep TAM or market analysis. I think first you have to start with fundamentals. And if you see a problem that you believe a large number of people have, that's enough. I don't need to actually go and quantify that with dollars. And that was the case in our idea. Every single person in my company, every single friend of mine who worked at other companies. They would all talk about how hard it was to find things inside their own companies. And so I was fully convinced that if you solve the problem, then we're going to have a large market.

Kyle Hanslovan (00:12:49):
Many aspiring entrepreneurs I meet also get that wrong of, like, they search for perfection instead of good enough. Hey, the market is big enough. Move on. You don't have to perfectly quantify.

Pablo Srugo (00:12:59):
When did you know it was kind of ready to launch then? What line in the sand did you draw?

Arvind Jain (00:13:05):
Yeah. Well, in Glean's case. Since it's a product that actually, you know, it's like ChatGPT. You come and ask questions, and Glean answers all of those questions using all of your internal company's data knowledge context. And so, which means that we could actually test it ourselves. We were a team of 50 people, and we used the product every day ourselves. And initially, it was bad. It was not answering those questions. And so we knew we couldn't launch. But at some point, it became capable of actually answering questions really well. And we could see that our employees, now as new people were joining. They were onboarding on the tool. They were benefiting from it. They were actually raving that, hey, this is the first time I've been to a company where I was able to onboard myself. And so we had the proof from our own team, which actually made us confident. There was that time when, yes, now we're ready to go big and build our go-to-market motion.

Pablo Srugo (00:14:03):
Kyle, one of the things I wanted to ask you is you mentioned you had three kids when you started. You also told me you slept like 16 weeks in a car at one point as part of an accelerator. So my question to you is, like, how did you justify the sacrifices as you went through it? Those first couple of years?

Kyle Hanslovan (00:14:18):
I think what I've just learned is I never sit on stage next to Arvind anymore. That makes me sound homeless.

Pablo Srugo (00:14:22):
That makes everybody, that humbles everybody. That's not just you, man. That's not just you.

Kyle Hanslovan (00:14:25):
The point I want to get to the audience. Right, there is a real misnomer, I think, out there with hustle culture. If you just grind infinitely hard and work harder and sacrifice yourself. You'll have success. I actually think that is a huge misnomer. But what was important to me is I always kept very close awareness of my trade-offs. So when I did my first and only startup accelerator. I was a tech founder, a hardcore kernel developer in Windows. I didn't know how to run a business, so I had to have the 16 weeks of curriculum. And when they gave me 50K in exchange for a couple of points on my cap table, the companies weren't nothing, so that trade-off was okay. But all the other entrepreneurs who businesses aren't in business anymore. I'm not saying that this happened because they didn't sleep in their car. They just invested their cash instead of on what was going to help them go to market or prove out eating your own dog food. Actually getting out there in the wild. They put it into a hotel room and a handful of other things. And to be honest, I slept kind of comfortably in the trunk of that Ford Focus. I'm not saying celebrate it, but the ultimate point for me. I had a very clear, that my runway was going to run out. And if I had to choose, I mean, I still had a gym there that was in the building. I was still showering. I didn't see the kids for a little while, but it was finite. And I think that's a really important part for the audience to take away, that it's not just about infinite grind. You need to actually have some level of basic ROI analysis for just about everything for me. So that's how I go back, in hindsight at least, justifying the time away from the kiddos. Again, grinding mentality in the back of a Ford Focus.

Arvind Jain (00:15:59):
I would just say you sort of are not emphasizing it. It's actually important to have that. It's important to actually work really hard. To be very, very careful about your capital. Because you're also setting a culture and an example for the company as it grows. So I actually don't know of any success where hard work was not part of it.

Kyle Hanslovan (00:16:24):
Yeah, I agree. And like you said, the example you're providing is culturally. As well, you know, they're going to look at you, especially as a founder.

Pablo Srugo (00:16:32):
So I'll ask the same question to both of you. Kyle, when was the moment? Moving away now from the grind when you felt like you had true product market fit?

Kyle Hanslovan (00:16:38):
I didn't believe it because of the bootstrapping. I didn't believe it till well after we had it. And what I mean by that is I would just got so paranoid from years of bootstrapping, being told no, etc. That I developed a little bit of, like, even just. I had to over-rotate because of so many misses. I almost couldn't believe my own success. So even though I think product market fit happened probably a year and a half. Two years into the business of actually having transactions, and they were predictable. Meaning this week I could see X number of deals, and next week it would be plus two. Then the following week it'd be plus four. I don't think that I actually fully respected that. And as a founder, it took another founder telling me I had that probably three years earlier before. Then I believed it. So that's my way of saying even when I had it, I didn't know.

Arvind Jain (00:17:22):
Same here, actually. I still feel that we're still looking for it. And part of it is we are in this space with AI where things change fundamentally so fast. And in fact, how all of us are going to be working in the future is going to change. And we're all about helping people with how they work. And so I don't think we get to actually be in this space where we can say that, yes, we have this product market fit. Now this is our product, and now go and scale. You have to continuously iterate and keep learning how people's work habits change and keep evolving your product based on that.

Pablo Srugo (00:18:01):
10-second answer each. What's one piece of advice you would give an early-stage founder?

Arvind Jain (00:18:06):
Well, work hard and actually believe in your idea. Don't give up.

Kyle Hanslovan (00:18:10):
You can ship much earlier than you believe. Even if it's busted. Broken, if it's delivering value, it's probably good enough. And value is measured by people giving you $1 or a nickel or whatever.

Pablo Srugo (00:18:21):
Boom. Give it up for these fine gentlemen, please.

Kyle Hanslovan (00:18:25):
Thank you.

Kyle Hanslovan (00:18:26):
85% of people who listen to the show just started listening to it this year. You're probably one of those people. In fact, the odds are 85%. Guess what? You need to go back because there are over 100 other episodes that you need to check out that are just as good, if not better, than this one. Don't miss out.