Her VCs said she killed the company. 6 years later, it's worth $1.3B. | Jennifer Smith, Founder of Scribe

Jennifer Smith (00:00:00):
All these people show up to work every day and their fingers on keyboard like they're trying to create value. And I see the inputs, I see the outputs, by the way, they're really variable. Those two teams in Kansas and Ohio, they're supposed to do the same thing. One of them is way better than the other. Like why? I have no idea, but I have no way to observe or understand the actual transformation of work. What do people do here every day? What are the workflows that power my company? That's knowledge that walks out the door every day at 5 p.m. and I have to hope that it comes back. You basically sit down with someone who's, walked the journey you're about to try to go do and I would basically be like, okay, what advice do you have for me? Tell me your scars and what you find is, I don't know, seventy-five percent to ninety percent of the time. The person's like, oh my God, I'm so glad you asked me. OK, here are my three takeaways, mistakes you should not make that I made. We had investors who were like, you just killed the company, you know, yeah, this is over. I don't know why you did this and I had to be like, respectfully, I have more information than you do about our customers. I'm going to do it anyway and I'm right.

Previous Guests (00:01:02):
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 (00:01:14):
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. Jennifer, welcome to the show.

Jennifer Smith (00:01:31):
Thanks so much for having me.

Pablo Srugo (00:01:32):
We interview two types of founders. We have early stage founders, maybe just raised to Series A, and then late stage founders like yourself. Maybe a billion dollar plus or so on. But typically, there's a lag from the time they raise a round until they come on the show. At least, you'll tell me but on CrunchBase. I have you raising this round $75 million last week.

Jennifer Smith (00:01:49):
Yeah, we announced it last week. Which means it closed the week before.

Pablo Srugo (00:01:54):
So you might, I mean you might be second record in terms of how fast from announcing around to coming on the show. So anyways, excited to kind of chat about, you know, really the early stages and maybe as a first question. When did you start Scribe? Like 2019, is that right? 

Jennifer Smith (00:02:08):
Mhm yep.

Pablo Srugo (00:02:09):
So take me back to before 2019, 2015 to 2019 period. What were you doing around there? Maybe the high level of your background but a little deeper on just what was happening right before you started Scribe.

Jennifer Smith (00:02:21):
Yeah, okay, so I’ll start with my background, and it’ll be the least interesting part of our conversation. But it’s very relevant to why we do what we do at Scribe. So, I spent a bunch of years at McKinsey in the Org and Ops practice. So that’s a fancy way of saying two hundred to two hundred and fifty days a year on a plane, going to places like Kansas and Ohio into these really big operation centers and trying to figure out how to make them more efficient. And my trick was I’d just find the best person and I would pull them aside, and I’d be like, why are you better than everybody else? And they would pull out these thick binders of laminated pages with step-by-step guides. And they’d be like, okay, I was told to just memorize this and do this. I don’t do that though. I found a bunch of better ways, and so we’d pull up a chair, look over their shoulder, and basically create a new guide with their best ways of working. And we charged like a million dollars a month for that. And I thought it was crazy that that was the state of the art at the time. I mean, this was, you know, 2015 or something like that. Clearly it should be better, and I was like, someone will clearly make this better. This cannot be the way that the world works in the future, and I kind of moved on with my life. And then I found myself living out here in Silicon Valley. I was working in venture at the time, and I think here we talk a lot about how to sell software, right? But I was really curious, why are people buying software? And I spent a lot of time with enterprise buyers like CIOs, CTOs. I interviewed over 1,200 of them while I was at venture.

Pablo Srugo (00:03:45):
What firm are you at, by the way? And, what stage?

Jennifer Smith (00:03:47):
I was at Greylock on the enterprise software side. Unsurprisingly, I would just ask them. And, like, they want to talk to VCs, so I had the benefit of being in a chair where people wanted to come talk to us and understand what we were thinking. And I would always flip the question back to them and be like, well, what do you wish we were thinking about? What do you wish that Silicon Valley was building and investing in? What keeps you up at night? And I kept hearing this theme come up over and over again, which was my company kind of runs on institutional know-how. All these people show up to work every day and their fingers on keyboard, they’re trying to create value, and I see the inputs, I see the outputs. By the way, they’re really variable. Those two teams in Kansas and Ohio, they’re supposed to do the same thing. One of them is way better than the other. Why? I have no idea, but I have no way to observe or understand the actual transformation of work. What do people do here every day? What are the workflows that power my company? That’s knowledge that walks out the door every day at 5 p.m., and I have to hope that it comes back. And if I want to capture it, I have two options. I either tell someone, take time away from your job and write down what you know how to do, or I hire basically like Jennifer the consultant with a Lenovo ThinkPad to look behind somebody and capture it for them.

Pablo Srugo (00:04:57):
And these were conversations with what? C-level VP there? Pretty high level in a big enterprise. I would assume?

Jennifer Smith (00:05:02):
Yeah, yeah, exactly. It was a lot of, and again, it's a function of who's interested in talking to VCs also. So it tends to be a lot of CIOs, VPs of IT, CTOs, chief digital officers.

Pablo Srugo (00:05:15):
But they're also very removed from the day-to-day work that, you know, many levels below are being done.

Jennifer Smith (00:05:20):
Yeah, I mean, this is where I have real empathy for these leaders because they’re like, okay, I want to transform my organization. I want to make it better, and you’re like, okay, how do you do that? You’re like, well, I don’t. How am I supposed to know what people are actually doing? I had this conversation actually with a Fortune 500 COO last week, and he was like, I’ve been told to pull out a hundred million dollars in cost and I’m supposed to use AI to do it everywhere that I can. I was like, that sounds hard.

Pablo Srugo (00:05:49):
Classic.

Jennifer Smith (00:05:50):
Great.

Pablo Srugo (00:05:51):
But that's a classic thing these days.

Jennifer Smith (00:05:52):
Yeah, OK. How are you going to do that? And I give him a ton of credit because he was pretty vulnerable. I’ve known him for many years, and he’s like, I don’t know. How am I supposed to know what those people, you know, five states away from me or two countries away from me, if they’re doing the right set of things for the business and if it could be done in a better way? That’s a really hard thing for any leader to get their hands around. Literally, unless you’re walking around and looking over everybody’s shoulder the whole time, doing what I did at scale, you don’t know. You have no way of knowing, and so these people try to drive transformation. Back when I was in consulting, a lot of digital transformation, there was the cloud transformation, there was a different flavor. Now they’re trying to drive AI transformation. They’ve never had the data to be able to actually do it.

Pablo Srugo (00:06:41):
It’s interesting on the data point because in terms of business intelligence and numbers and dashboards, that thing has happened so many times over, and so they have all these KPIs. But it’s almost like when it comes down to what people are actually doing to drive those KPIs, to workflows, that’s where there’s just no visibility still.

Jennifer Smith (00:06:57):
Yeah, exactly. You can see the inputs, like you see the salaries that you pay people, you see the software you buy them, whatever, and that is your point. You see the outputs, you see the KPIs, but you have no way of actually observing the transformation of work. It is like having a soccer game and you are like, okay, I know all the players who are going to participate in the game and I see the final score at the end, but I cannot observe any of the play. You know, the feed just blacks out for the two hours that the players are playing. Now coach those soccer players on how to be better, go.

Pablo Srugo (00:07:30):
That is pretty crazy. That is actually a good analogy. Because even if you see the assists and you see a lot of the data, you still, if you do not see the actual thing happening, it is going to be hard. I mean, you might know who your best player is and your worst player, but then everything in the team is going to be impossible.

Jennifer Smith (00:07:43):
But why? Why is that best player so good?

Pablo Srugo (00:07:46):
Right.

Jennifer Smith (00:07:46):
What do they know how to do that I can coach my new up and coming players to be more like?

Pablo Srugo (00:07:51):
How long were you a VC and how long did you like those 1200 conversations? That's over how long of a timeline?

Jennifer Smith (00:07:57):
Three years, three or four years.

Pablo Srugo (00:07:59):
And you're talking to these people through that whole three year period?

Jennifer Smith (00:08:02):
Yeah, again, a lot of them are very interested in Silicon Valley and I was really interested in them. And so a lot of them would come visit the Valley. They would visit Google, whomever they had a bunch of relationships with, and then we would say like, oh, come stop by, chat with us, meet some of our companies, whatever. You know, just cold outreach to a bunch of people, and when you say you’re from, I don’t know, you tell me, but when you say you’re from a VC firm, they’re more interested in meeting with you than if you’re some average person on the street.

Pablo Srugo (00:08:28):
I think that’s true. I think it’s more the time, like it’s more your time that you, you know, at that point, if you’re going to do it. I mean, that’s four hundred a year. That’s where it’s like, okay, you’re investing a lot of time into doing this and obviously it informs your investment decisions. But then ultimately it sounds like it informed what you build with Scribe.

Jennifer Smith (00:08:43):
Yeah, that wasn’t the plan at the time. It’s not like I knew I was going to go start a company afterwards. I’m doing customer research, right? It was just because I was really curious about, maybe it was the former consultant in me. I don’t know, these people were my clients. I said, I just kind of feel like I get them and I feel for them. And they’re trying to do the best that they can, and their jobs are really hard. And so it was fun for me to chat with them, you know? It was just a nice perspective, very different than, you know, the founders that we would be talking to. Just a very different conversation.

Pablo Srugo (00:09:14):
When did you decide that you were going to leave and start Scribe? What was the catalyst?

Jennifer Smith (00:09:19):
Yeah, so I had maybe like a bit of a crisis of purpose professionally. I was in my 30s at this point. I was about to get married and so I was like, okay, you know what? I’m going to take a few months off from work and plan my wedding, or at least say I’m going to plan my wedding. I have no interest in actually planning a wedding. I did very little of it, but I was like, all right, I’m ostensibly going to plan a wedding and I’m going to think a little bit more about my life and what I realized.

Pablo Srugo (00:09:48):
Did you quit or did you literally. They just let you take like, go two months off, kind of figure it out?

Jennifer Smith (00:09:53):
No, I was like, I’m leaving, this was a wonderful tour of duty. The thing that I knew at the time was, I call VC like an intellectual candy land. There’s always really interesting people who walk through the door and their founders were so passionate about their thing. Even if I don’t care about distributed storage, they do so much. It’s infectious, you know? And I just, I got a ton of energy from that. I was really inspired by that. But I kind of likened it to, you know, you go to a really fancy party and you’re really hungry, and you’re like, great, I’m going to eat here. And they have all these passed hors d’oeuvres, and they’re tiny and each one’s really amazing. You just eat a bunch of them and then at the end, you’re like, I kind of feel like crap and I’m still hungry. But I technically had all of this fancy, shiny food and I was like, I want a steak. I think I want something that is just hearty and substantial, a single thing that I can really sink my teeth into, and so I knew it wasn’t going to be VC. I wasn’t sure what it was going to be. I had always been kind of attracted to the building side but didn’t really know, to be honest. Just knew, okay, I don’t think it’s going to be this. It’s going to be some other, more operating chapter.

Pablo Srugo (00:11:02):
You know, it’s true. VC is, you get your hands in a bunch of different things, but unless you specifically like the art of investing and creating portfolios as the be all end all of what you’re going to do, if you want to build companies, you’re always going to feel like, yeah, you’re still angry at the end, because you really are not building these companies.

Jennifer Smith (00:11:18):
Yeah, it's surprising to me how people go between venture and operating. Because there's completely different skill sets and. 

Pablo Srugo (00:11:24):
Yes.

Jennifer Smith (00:11:25):
Completely different dispositions about what makes you happy in life and so, when I meet people who go back and forth between the two. I'm like, how do you do that? Why? What? How do both of them scratch an itch for you? I meet a lot of people looking from VC to come into operating, right? It's for an associate looking to transition and I'm always really pushing them. Are you sure you want to operate? It's super different.

Pablo Srugo (00:11:48):
Yeah, I think both transitions are hard. But I think especially the classic, I have been a VC and I am going to be an operator, is especially hard. Just because, I mean, the founder life, zero to one, you know this, you have been through it, but it is unforgiving. And as a VC, there are so many luxuries you just do not even realize that you have.

Jennifer Smith (00:12:06):
Yeah, so I knew I wanted something different. I didn’t know what that was, and I realized that I had never actually asked myself a very important question, which is, what do I want? Sounds simple, I don’t know. I realized that the question I’d always been implicitly answering for myself is, what do I think I should do? What do people like me do? What’s prestigious? I don’t know, what’s a hard job to get? All these kind of bullshit questions that I wasn’t consciously doing, but I realized that’s what had been subconsciously driving me. And so I took a journal to my local park every day and I freaking journaled about, I don’t know. I didn’t have a journaling practice before, this was like a new thing for me. What do I actually want? What’s important to me? What do I care about? What are my values? I mean, it sounds corny, but I wouldn’t be doing Scribe today if I hadn’t done this.

Pablo Srugo (00:12:57):
Do you read a bunch of books about this? Start, you know, finding your why, whatever, or are we just like kind of blank slate? I'm just gonna figure it out.

Jennifer Smith (00:13:03):
You know what, I didn’t. Maybe that would have been faster. I strongly believe in first principle things. So just from first principles it was like, okay, let me get to the core of what is going to make me proud. That was the thing I really wanted to understand. What is going to make me feel proud at the end of my career? Because all of the things that I had done previously, I realized I was proud of the effort I put into it, but I wasn’t proud of what I ultimately did. Did it make any real difference in the world? I don’t think I could look myself in the mirror and say with a straight face, like, wow, I feel the world was really different because I did something. And so to me that meant I needed to go build, and I did not care whether it’s my thing or somebody else’s thing. But I wanted something that didn’t exist before. It now exists in the world, has my fingerprints on it, that I did with a group of humans who I really like and respect, and hopefully it endures beyond us if we’re successful.

Pablo Srugo (00:13:55):
Because even consulting, to be clear, was not enough.

Jennifer Smith (00:13:58):
For me personally, yeah. I mean, I remember a moment from consulting. We had been busting our butts working for this tech company and it was a really tough situation for the tech company. The markets were beating them up. We were meeting with the CEO every Saturday, kind of around that. I was working until 2 a.m. most nights. We were just really intense, all hands on deck, trying to turn around this tech company, and I was in the elevator when they announced their quarterly earnings report. And usually those little TVs that they have in the elevator said, shares rose on news that revenue was only five percent lower than they had thought it would be due to improved sales and marketing efforts that we had been working on. And I was like, this is my fucking legacy. I worked on my birthday at 3 a.m. for that. I don’t know. I mean, we worked hard. We did good work. I was really proud of the people and they did the right set of things. But I don’t know, history is not going to remember us in any way. I’m not going to be on my deathbed saying, by golly, I created a tiny bit of shareholder value for a brief period of time where I staved off the inevitable decline of this company that ended up getting seriously beaten up later and is no longer public. It just wasn’t my, I don’t know, that wasn’t going to be my legacy.

Pablo Srugo (00:15:15):
And so what, when you sat down in that park and you're journaling, what comes out of that? What are the big realizations that come out of that?

Jennifer Smith (00:15:21):
I realized I wanted to build something. I realized I actually cared about pride in work, not in effort but in impact and what actually showed up in the world. I realized that a lot of my internal operating system for how I made decisions and thought about things had come from people and institutions I’d been part of rather than something that was true to me and what I actually thought and what I actually felt. I had just kind of absorbed it from the places that I had been at. And so I started questioning all of that and instead was like, okay, if I just take away what the world has told me that I should be doing and I look inward only, what do I want to do? What do I think is important? What feels like the right expression of me? And that untraining was really hard, and I had to be really intentional about it. So I didn’t do that much reading. That would have been a good point. I instead thought a lot about who I spend time with, and I purposely spent a lot less time with friends of mine for at least that period where I was trying to reshape my cognition. I spent less time with friends of mine who, I think, had a lot of that old thinking I did, of, okay, you shall follow the linear path, you shall do the sets of things, this is what makes you a good professional, and instead spent a bunch of time with people who had really architected different lives for themselves, had just very different value systems and operating principles for themselves.

Pablo Srugo (00:16:49):
Mainly founders?

Jennifer Smith (00:16:50):
Yeah, founders, artists, freelancers, digital nomads, I don’t know. Just any time I met, and there’s a lot of these kinds of people in San Francisco, so I was very lucky to stumble on them on the street, you know what I mean? And so I met someone who was interesting like that and just spent more time with them. I’d get to know their friends and then I’d just be in rooms of people who had different ways of thinking about their lives and relationship to risk in particular, which was kind of a big one for me to rewire. And so I kind of slowly rewired my brain on what I wanted and came to a very different conclusion about how I should spend my time than I otherwise would have.

Pablo Srugo (00:17:29):
When was this by the way? What year?

Jennifer Smith (00:17:31):
We started the company in 2019. So this was 2018 into 2019.

Pablo Srugo (00:17:34):
And then what falls from that? Because you want to build. So were there any problem sets that you particularly, cared about that just resonated with you? Or what's the next step after you decide you want to be an operator?

Jennifer Smith (00:17:45):
Yeah, very deeply. I had a professor once who said, find the thing about yourself you are always apologizing for and find a way to make money off of it. And I am deeply upset by inefficiency, like deeply. It just really bothers me when I see an inefficient allocation of some kind of resource. I almost became an economist in another life. I just really like economics, and so I think it kind of came from that. And the way that nine to five knowledge work is structured is one of the biggest freaking wastes in the world, in my opinion. And so this problem that we are solving with Scribe now, frankly, is one that has just really bothered me for a long time and I was like, it just cannot persist this way. There is no way, you know what I mean? I was like, someone will make this way better. It just cannot be this way. And so when I was like, okay, I want to build something. I was like, great, I want to build something in service of this problem. Who is doing this? Who can I go work with, who I think will make it not suck the way that it does right now? I just did not find anybody doing it the way that I thought it should be done. And the stars aligned in so many improbable ways that, I do not even know how, looking back. We just decided to start something and then kind of did not look back once we did.

Pablo Srugo (00:18:54):
What was it that? The way that it should be done? What were some high level ideas that you had even back then. About the way things should be done versus the way they're being done right now?

Jennifer Smith (00:19:02):
Yeah, so back at that time. It was like 2018, 2019, RPA was having a real moment. UiPath was, I think, not quite public yet. But, you know, kind of on its meteoric rise.

Pablo Srugo (00:19:15):
Just to be clear, that's automating workflows, right? That's find a workflow, find a way to just like put it in code and then, just click a button and it just happens.

Jennifer Smith (00:19:21):
Yep, that’s right. It’s this idea of, let’s take manual repetitive work that humans are doing and let’s have, they used to call them bots, I think, let’s have a bot basically replace that work. And the fundamental story behind that I find very alluring, right? Which is, okay, let’s watch what people do, let’s find the parts they shouldn’t be doing. That’s just not a good use of human talent and human time. Nobody wants to be doing that shit, and let’s just have software take care of it. And I thought that was really magical. But then I looked at how it was being done, and there’s anyone who’s followed it would say there’s a ton of flaws that were less evident to everybody at the time, but I think are very evident now. And if you’ve spent more than a minute looking at it at the time, you could have kind of seen the tea leaves. And so I was like, okay, I love the idea, I love the promise of this, I don’t love the execution of this. I think there’s a different way to approach this problem. And so I kind of went from, someone else should fix this, to, okay, well, I guess nobody’s doing it the way that I think it should be done, let me try fixing it the way I think it should be.

Pablo Srugo (00:20:25):
What's your first step? I mean, you talked to a lot of enterprises the last three years. Do you go talk to more of those? Do you go like build a team? Do you raise money?

Jennifer Smith (00:20:32):
Yeah, so we started with trying to build really basic. I mean, the answer is you do all three in parallel, right? Because one of the things that I saw working in VC is we would have really smart, especially technical founders who would go disappear into a basement for, you know, nine months or something, and they would build something super cool and whiz bang. And then they would come out and be like, here, we built this amazing whiz bang thing, we’re done, all right, please sell it for us. I don’t know, find some people we can sell this to. And I would be like, have you talked to a customer? What did they say about this? And they would be like, no, I don’t know, that is your job or the salesperson’s job when we hire them. And so I think, based on my background but also everything I have seen, you have to be building product alongside customers the entire time and trying to get feedback as early and fast as possible. We did not talk to investors immediately.

Pablo Srugo (00:21:22):
By the way, you're saying we, is it, I mean, you had a co-founder like right away?

Jennifer Smith (00:21:26):
Pretty early, yeah. So I knew this was a problem I wanted to solve and then I spent a bunch of time trying to meet folks who I could work on it with, like technical folks. But there was like a co-founder kind of early play, whatever, didn’t really matter. And I got introduced to my co-founder Aaron through the guy who had recruited me at Greylock, actually, just like really plugged in and talented in the Valley. And I kept a spreadsheet. I met over 80 people before I met Aaron. I stopped at 80 people keeping track. I was just like, this is a lot now. I don’t know, I’m just going to start meeting people and we’ll see. And I knew within the first, I don’t know, 10 or 15 minutes, I still remember that first meeting with Aaron where I was like, this is a special freaking dude.

Pablo Srugo (00:22:07):
What was it about Aaron?

Jennifer Smith (00:22:08):
You know, like people have asked me this and I’ll give you my rational answer that my brain tries to fill in later. But the truth is, it’s like a gut feel. I mean, I still interview almost everybody we hire at Scribe. I probably spend 75% of my time on recruiting right now. And I’m just always looking for this gut feel of specialness in somebody. And it’s someone you look at and you’re like, I just believe that you will run through a wall to figure this out, and you’ve got the horsepower and the grit to do it.

Pablo Srugo (00:22:38):
The gut feel, by the way, is key. But one of the things that's really important, which you mentioned, is you met 80 people. And obviously, before, you're meeting a lot of founders before. So you have to build that gut feel over time.

Jennifer Smith (00:22:48):
Yeah, I do the same thing now, by the way, when we’re hiring, especially in the earlier days before we would hire for a new role that I had never hired for before, especially a leadership role. If I knew I was going to be hiring for that, like two or three quarters down the line, I would spend the previous two or three quarters trying to meet people who were examples of excellent, like a couple clicks ahead of where we wanted to be as a company.

Pablo Srugo (00:23:10):
By the way, total tangent, but how do you make time for that? Because it’s one of those obvious things that I’ve said to founders to do because I’ve heard other people do it, and it always gets deprioritized. How do you make sure that that thing that is going to matter in three quarters, or meeting people who are excellent today, how in your mind do you make sure that that still gets done?

Jennifer Smith (00:23:26):
I love it. So for me it was never a matter of forcing myself to do it or trying to make time for it. It’s actually one of the most fun parts for me of being a founder, looking around the corner and trying to get really smart on what functional excellence looks like at the next stage of growth. And I just really love excellence. I really love people who are excellent at what they do and are super thoughtful about their craft. And I would learn so much from it because you basically sit down with someone who has walked the journey you’re about to try to go do. And I would basically be like, okay, what advice do you have for me? Tell me your scars. And what you find is, I don’t know, seventy-five to ninety percent of the time, the person is like, oh my God, I’m so glad you asked me. Okay, here are my three takeaways, mistakes you should not make that I made. And I learned content from it and I took really detailed notes every time. This is before Granola and whatever. I’d take super detailed notes every time, I’d share it with my team, we’d have deep conversations about what we could learn from it. But it also taught me how that person thinks. And so I could then build a mental model in my head of what excellence looks like. Like, okay, I’m hiring a VPE and you’re like, what would excellence look like in a VPE? Okay, there are many different flavors of VPEs, but here are the common threads among the folks that I liked, or important tensions. You learn so much. It’s like a free education. And you just meet really interesting people along the way. And I think when people realize you like doing it, they also intro you to more people. It’s very easy to meet these people once you start doing it because investors and other folks in our network are like, oh, Jennifer really likes these sorts of things, I’m just going to keep sending them to her.

Pablo Srugo (00:25:12):
Before product market fit, team is obviously very important, but in a different way. But post product market fit, it really is all about the people you’re getting on the bus to keep executing. And I always compare that like, you know, take soccer, right? You don’t know what a great striker is until you’ve seen true world. Like you might be in your playground, you’re like, wow, Johnny’s such a great striker, and then you go play a level up and like, oh my God, wait a second, he’s actually barely good enough. And then there’s levels and levels and levels. And it’s the same thing with business. There are so many levels of what excellent is for any given role and stage. Obviously, you have to factor that in.

Jennifer Smith (00:25:46):
Stage is really important, actually.

Pablo Srugo (00:25:48):
Yeah, there’s the stage fit, of course. But I mean, if you’re a first-time founder, let’s say, and you just haven’t gone there and you haven’t worked in those organizations, how can you be expected to hire a great? It’s no wonder how many mishires happen if you just think about it from that perspective.

Jennifer Smith (00:26:01):
Yeah, and the stage appropriate is super important too, right? So, like, if you are in preschool soccer right now or something, and you’re watching the FIFA, and you’re like, oh, I want somebody like that. And we have now tapped the end of my soccer knowledge. I can’t name a famous soccer player.

Pablo Srugo (00:26:15):
It's FIFA, by the way.

Jennifer Smith (00:26:16):
FIFA?

Pablo Srugo (00:26:18):
Yes.

Jennifer Smith (00:26:19):
See, I gave myself away. I don't know. Cristiano Ronaldo. I heard that name. That's a soccer player, right?

Pablo Srugo (00:26:23):
There you go. There you go. Messi is the more important one, but yes. Yes.

Jennifer Smith (00:26:26):
I know nothing about sports, but I’ve faked it so far with my sports analogy. You know, that person is not going to help you get to kindergarten soccer. You know what I mean? You drop them in a kindergarten or your first grade, like the next stage of whatever it is from where you’re at, and they’re going to have no idea how to operate. They’re going to be like, what do you mean I don’t have another world-class player next to me right now? And what do you mean I don’t have this amazing coach, million-dollar-a-year trainer person, whatever it is that they require? They’re just not going to do well in that environment. So one of the mistakes that I see first-time early-stage founders make is they’re like, I’m going to go hire the person from Cisco or something, I don’t know, like the big leagues, and I’m going to bring them into here. And they have no idea what to do and how to operate in this kind of environment. What you really need to understand is who are the people who have gone where you’re trying to go, a few clicks ahead. That’s what you’re trying to solve for right now.

Pablo Srugo (00:27:20):
So I took you in a huge tangent, but we were back to Aaron and what the rational part is for why you decided that he was the right co-founder.

Jennifer Smith (00:27:26):
Yeah. I mean, I can rationalize it now. Like now knowing everything they do about him, like he’s really incredible. I consider meeting him to be one of the best strokes of luck of my life. At the time, it was just like a gut feeling. It was a sense of impatience. He was at Google. He had just sold his last company to Google and he basically lasted a year there. He’s like, I have to get back to building. I can’t handle this, which was a good sign, right? It sort of tells you, I mean, he’s an incredible builder. I wouldn’t have known that at the time, that he’s the fastest builder I’ve ever seen. And he’s like a bit of a polymath, and I think that’s really helpful and valuable in the early stages in particular. But honestly, at even our stage, it helps quite a bit because anytime we’re building anything new, Aaron is the one building it and he has the product sense, the soul of the customer, understanding the business cases. He obviously can do product. He can build it himself. He’s an engineer. He can do the design. Having somebody who can take the soul and intention of what you’re trying to do and express that into product is super, super rare, and that’s what he has. And so I wish I could tell you like, ah, this is how I knew. You know, he said these three things in our interview, but I just looked at it and I was like, I bet on you. I think that was my feeling afterwards. I was like, I would bet on you. I would just bet on you doing something great. I think you deserve to do something great. And that’s kind of the litmus test that I apply when I am hiring people as well. I sort of end it and I’m like, gut feel, do I want to give you a problem after this? Am I like, oh, I wish this person were here right now and I could just hand this problem and they could run with it and go? And if I do, that’s a really good sign. You know, I just hired my chief of staff for the first time. I had been dragging my feet on hiring for a while and I met this really incredible woman, and we gave her an example of a business problem that we were facing at the time as part of a case study exercise for us to test what it would be like to work together, you know? And she just did such an amazing job at it. At the end of it I was like, do you want to come here and work on that? Like, I just, I’m going to give that to you. And literally after that meeting, in our internal sessions, I just started putting her name against the problem. When we were diagramming it internally, I was like, this is a solved problem now because she’s going to solve it and we’re good and we’re going to move on. I think you’re looking for that kind of feeling, you know? And you can rationalize in your mind what the tells were that the person gave you along the way, but once you’ve interviewed enough people, you become really calibrated. I’ve interviewed thousands of people at this point, and so I have my biases, but I’m very well calibrated against my own biases.

Pablo Srugo (00:29:54):
We have tens of thousands of people who have followed the show. Are you one of those people? You want to be part of the group. You want to be a part of those tens of thousands of followers, so hit the follow button. So tell me about what was the MVP, what was the first thing you and Aaron decided, this is the thing that we are going to build and this is that exact piece. Because the problem is big when you think about inefficiency, right? What was the first thing you decided to go after?

Jennifer Smith (00:30:18):
Yeah, we were like, okay, we want to watch people do work. We want to automatically capture what they’re doing so we know what the universe of stuff is that we’re even talking about. And then we want to automatically build an automation that replicates what we saw them do. And so that was the MVP version. We would basically watch you do work. It’s like a recorder. You know, okay, we record you doing work.

Pablo Srugo (00:30:42):
Like manually watching or like videotape and then watch sort of thing, but like a human watching.

Jennifer Smith (00:30:47):
NStarted with a desktop application and we said, well, why should you work? We’re automatically going to generate documentation about what that process was, and then we’re going to build automations that replicate what we saw in that documentation. And the automation building at first was manual. It was like, okay, we’re just going to start kind of building these automations. They’re super clunky. If you ever spend any time building automations, it’s super painful for engineers to do, it really sucks. But we were like, okay, we’re just going to do a bunch of these and we’re going to learn along the way how we can make these better.

Pablo Srugo (00:31:21):
Just to add context to who your first customer was and what the first roles were. Like, what type of work were they doing that you were automating?

Jennifer Smith (00:31:30):
Yeah, so we started off very early MVPs. I just went to folks I knew. So founders, I knew some big companies as well. And I would just be like, tell me about your painful repetitive processes. I’m like, everybody’s got them. The challenge we learned is a lot of people don’t know where they are. They know they’ve got them, but they don’t know where. So that was a big problem in and of itself. And so I had to do a lot of most professional services work to help them figure out where it was.

Pablo Srugo (00:31:59):
That makes sense to me because probably the lowest level employees would be the ones that would most know what they're doing that's highly repetitive.

Jennifer Smith (00:32:07):
It’s totally divorced. The people that I’m talking to are not the people who are in the weeds of the day to day work, and they have no idea what those people are doing. So they have to do a whole up the chain, down the chain, asking a bunch of questions to try to identify.

Pablo Srugo (00:32:19):
But did you care whether it was an HR workflow or marketing or a sales or an engineer workflow?

Jennifer Smith (00:32:25):
No, we just said, like, give us your shit.

Pablo Srugo (00:32:26):
And that was by design to kind of figure out where the need was or was it always just supposed to be super broad on purpose?

Jennifer Smith (00:32:32):
Our view was that we wanted to be horizontal. Because from a software perspective, I shouldn’t particularly care whether you’re doing quarterly reporting or whether you’re doing manual key provisioning for new tenants. In some ways, it doesn’t matter. It’s people in software clicking buttons and typing information to execute some kind of process. We should be able to watch that, turn it into something readable by humans and machines, and then automate it. We learned a few things from doing this. One, it’s really hard for leaders to know where the repetitive work that can be automated actually is. By the way, huge parallels with AI today. It seems obvious, but we just released a product on this that helps leaders understand where people are actually doing work, where there are inefficiencies, and where they could apply AI agents or even basic process improvements to drive value. Nobody has ever had that visibility before. So, I had to manually run around and do that. I was like, this is going to be really hard for us to do. It’s not scalable. Two was that building automations really sucks, and RPA is a terrible way to automate because you’re doing it at the UI level. There are a bunch of reasons why, but a big one is that it’s very fragile. You talk to anybody who’s ever done RPA, and they’re like, it breaks all the time.

Pablo Srugo (00:33:55):
Maybe give me an example of like something you try to automate and then realize like the edge case is like one little thing different and it breaks.

Jennifer Smith (00:34:01):
I’ll tell you a painful one I remembered, which was that when I realized this, we were a small startup, but even I was sort of divorced from the true pain that our engineers were going through. I happened to go on one of our engineer’s calendars and I saw he had a recurring 9 a.m., 10-minute update. It was called “update automation,” I think. And I was like, Thomas, what is this? And he was like, oh, yeah, the automation is super fragile. It breaks all the time. So I actually just go in every day and do the process. And I was like, fuck me. We can’t keep doing this. This is terrible.

Pablo Srugo (00:34:34):
So he was the automation.

Jennifer Smith (00:34:35):
He was mechanical turkey, like you know, like very skilled San Francisco engineer, mechanical turkey a basic process. And the third one, and I think this is the one that ultimately led us to the company that we’re at today, was we had customers say to us like, automation is interesting, but that’s not the most valuable thing that you’re providing for us right now. They were like, you know, it’s by definition pretty incremental. That’s my lowest value activities that you’re talking about. But that documentation thing that you did where you watched people and you automatically created guides on what it was they were doing, that’s really interesting. Like, can you help me understand how my people are spending their time and then help them be better at where they spend their time? Like, that’s a step change improvement in our business if you can pull that off. That’s what we’re really interested in. And we had some end users who would literally use the documentation piece and be like, don’t bother building the automation. I don’t want that. I’m just going to take this piece. And so we said, OK, well, that’s actually the core of it. Like, you have to really understand how work is being done and make people better at the stuff humans are doing before you even start talking about what can I automate or whatever else.

Pablo Srugo (00:35:42):
Because what was the value of that document? Is it for it to train new employees or disseminate knowledge within the employees? Like how is it mainly used?

Jennifer Smith (00:35:48):
Yeah, so we call those documents Scribes. The primitive is a step-by-step guide with screenshots and instructions on how to do something. It’s used anytime you have to explain to somebody how to do something, which shows up in a lot of different places.

Pablo Srugo (00:36:01):
Yes.

Jennifer Smith (00:36:01):
Onboarding people for sure. Offboarding people. Brenda’s retiring. She’s been here for 20 years. We don’t know what Brenda does. A lot of new tools. We’re rolling out Workday. We have to enable everybody on how to use Workday. New processes like, hey, I’m in sales ops. You look at what a lot of sales ops people do. They spend a lot of time just trying to get salespeople to do things correctly in the CRM. And they send them emails with exclamation points, underline, bold, like please, please listen to me and do this thing differently. And so we solve any of those use cases. We’re now making that automatic.

Pablo Srugo (00:36:35):
Are these scribes live documents? Do they auto-update as the workflow changes? I’m thinking about your example of updating something in Salesforce, but then the Salesforce UI changes. So that thing changes. How does that work?

Jennifer Smith (00:36:47):
Yeah, so I talk about it as like documentation is digital exhaust. So as you’re working, it’s basically just creating the documentation. The average scribe takes a couple minutes to create and normally would otherwise take people twenty to forty minutes for a one to two minute scribe. So it’s just radically faster. And anytime something changes, you just do the new thing. The next time you go to do that process, just do it and Scribe will create an updated guide based on that. We’re trying to make it so that knowledge sharing is not a separate activity.

Pablo Srugo (00:37:22):
Yeah you're going back to this idea of that you started off with like if imagine somebody was watching you well then they would see that you're now doing something different and then they would tell everybody else hey this is the way to do things and that's effectively what Scribe is.

Jennifer Smith (00:37:33):
Yeah, because the big problem is, like, companies run on institutional know-how, okay? It just lives in people’s heads. And then we share it through… it’s mostly oral tradition, which is kind of insane, you know? It’s shoulder tapping. You look over someone’s shoulder. You send them a Slack or whatever to show them what to do. But most of it is not even shared or documented anywhere. And people will sometimes, out of the goodness of their heart or pressure from their boss or whatever, take time away from their jobs and codify what they know how to do. But that represents a single point in time. Super manual. People are spending a ton of time doing that. And then they just chuck it in a wiki or wherever they store this information. And then they forget about it. And when someone goes to find the information, they’re like, oh, that thing’s out of date. This wiki sucks. I’m never coming back to it again. And you get this terrible downward spiral. And this is just what companies have been dealing with as old as software time. This is the way that it’s been. I think we’ve just accepted it. We’re like, I don’t know, it’s really hard for humans to share information on how to do things. It’s super low bandwidth. This just is what it is. And I often talk about what we’re doing with Scribe. Solving a problem hiding in plain sight. We all accepted it, but it’s a really big problem, actually.

Pablo Srugo (00:38:45):
What year was it when you figured out, like, when you got this feedback and you realized, okay, the documentation piece is the piece that matters?

Jennifer Smith (00:38:51):
It was like 2019 to 2020.

Pablo Srugo (00:38:52):
Okay, so still at the beginning. Had you raised money at that point?

Jennifer Smith (00:38:55):
Yes.

Pablo Srugo (00:38:56):
How much was the Pre-seed?

Jennifer Smith (00:38:57):
I don't even remember now.

Pablo Srugo (00:38:58):
A million or two sort of thing? Okay, a couple million, okay.

Jennifer Smith (00:39:00):
Yeah, my philosophy behind fundraising has always been to raise the least amount of capital possible to get us to the next stage.

Pablo Srugo (00:39:07):
Did you have a bunch of design partners and you just start pushing this out or kind of how do you go to market on this new... I mean, it's not a new idea, but like this refined, I guess, product.

Jennifer Smith (00:39:17):
Yeah, so we started off doing top-down enterprise sales, and we had a few big customers. It was me. I did it myself. I love enterprise sales. I love enterprise customers. It was great. Totally my zone. But we realized really quickly, my gosh, this is an end-user product. What we’re describing here has a ton of value to the end user, and it’ll just so happen that if a bunch of end users are using it, it’s going to accrue separate value to an organization. And when you’re doing enterprise sales, you’ve got long sales cycles. Your feedback is delayed and it’s kind of schizophrenic, because you’ll get the feedback from the buyer during the sales cycle, which is more about the story and the promise and the business case. Then you have to wait a long time before it gets in the hands of users, and at an enterprise scale you’re getting it from tens or hundreds of users. It’s a smaller number that you’re actually talking to. And so we were like, we need to get this product out into the world and see if people believe in it as much as we do. Do people care the way that we care? And so we released it for free on Product Hunt, and we were like, we just want to know if people think this is important and interesting.

Pablo Srugo (00:40:26):
So is it like during COVID? Like right after COVID?

Jennifer Smith (00:40:28):
Like right at the beginning of COVID.

Pablo Srugo (00:40:30):
Right at the beginning of COVID.

Jennifer Smith (00:40:31):
Yeah, so we released it on Aaron’s 30th birthday. It was when we were in lockdowns, and we were potting at a house in Napa when we released it.

Pablo Srugo (00:40:41):
It might actually have been perfect timing in a way, because the move to remote means asking people is harder and all this stuff. Is that right? Or how did it play out on Product Hunt?

Jennifer Smith (00:40:50):
Yeah, so I don’t think COVID affected Product Hunt and that specifically because we were still pretty early in COVID. I think COVID helped us because it made the pain more visible. Previously, when people were all next to each other at the office, have you ever spent time in a big open floor plan? I would do this sometimes for fun. I would just sit and be a fly on the wall and watch people and be like, how long did it take before someone popped their head up and said, hey, can you show me how to do this thing really quickly? It happens all the time. And when it’s you talking to your friend and then you talk about Game of Thrones right afterward, you don’t really notice. You’re like, whatever, this is just kind of how work is. But now when that person’s not there and you have to send them a Slack message or schedule a Zoom meeting…

Pablo Srugo (00:41:31):
And wait, I think it’s the person asking that’s got the biggest frustration. Because they’re like, I don’t know how to do this. I know this person does. You send them a message. Should I call them? That’s kind of annoying. You message them, you’re like, I don’t know when they’re going to get back. Now I’m sitting here stuck. Versus before, you’re just like, yo, how do you do this? And then it’s solved.

Jennifer Smith (00:41:45):
And I’ll tell you, it’s actually really frustrating for the person on the other side too, because that’s probably not the first or last time that person is asking them that question. It’s the experts, and they get pinged all the time. And so these are the people we heard from in the earliest days. I get DMs from users every day, and they’ll be like, “Hey, you don’t know me, but I just want to say thank you for building Scribe.” And they use words like “this was game changing for me,” “this was life changing for me.” We’ve had a number of people say, “I cried when I saw this.” I think in part because they remember how many hours they spent manually creating documentation, and now they’re like, “Oh my God, that was wasted. I didn’t have to do that.” But it’s because the pain is super real for not just the person asking, but the person providing the answer too.

Pablo Srugo (00:42:27):
How did the launch of the free product go like besides product hunt first of all what did you do to push it and what was the adoption like?

Jennifer Smith (00:42:34):
Yeah, so Product Hunt is a funny one. We’ve now done a number of Product Hunt releases. My friend now runs Product Hunt for subsequent products. Very different than the first time that we did it. The first time we did it, we packaged up the jankiest thing you could imagine because we’d only been using it internally. Remember, we’d been using it as part of our automation engine thing, right? And so it wasn’t pretty. It was really ugly, actually. It was all built by engineers. It wasn’t connected to the web. It was super janky. But I was like, nope, we’re not going to waste another week perfecting this thing. We just have to get it out there and see if anybody cares.

Pablo Srugo (00:43:11):
How long, actually, between deciding that Scribe would be the thing to getting it out on Product Hunt?

Jennifer Smith (00:43:15):
We hadn’t even fully decided Scribe would be the thing yet. We were like, this is what customers are telling us they think is important, but let’s see. You can only talk to so many people. I think we were driving with a handful, maybe a dozen customers at that point. We were like, we have to see if the world cares about this. Will end users care about this, not just a buyer that I’m talking to, but the people who would actually have to use this every day at their work? And so we were like, we just have to get it out there and see. Launching on Product Hunt is a funny thing because it’s basically a function of how many people upvote and comment.

Pablo Srugo (00:43:47):
Like how many friends you have that'll sign up on Product Hunt for you.

Jennifer Smith (00:43:50):
Yeah, exactly. I just didn’t sleep for 24 hours and I emailed basically anybody I had ever met one on one and said, hey, we’re launching this thing on Product Hunt. We want to see if the world cares. Would you please check it out and tell me what you think? And the first few times you do that, you’re like, oh, this doesn’t feel great writing all of these emails. I literally sent thousands. And then by the end of it, you’re like, hey, this is cool. I’m hearing from all these people, someone I haven’t talked to in 10 years or something, and everyone wants to cheer you on. They’re like, that’s cool, you’re trying something new. And we ended up doing well on Product Hunt. We were not number one. I think we were number two most of the day. And then we declared victory at 7 p.m., even though it keeps going until midnight, because it was Aaron’s birthday. So we were like, we have to go celebrate his birthday. It’s a big one. It’s his 30th. And we left our computers and then slipped in the rankings.

Pablo Srugo (00:44:46):
Oh, God.

Jennifer Smith (00:44:47):
Ended top five, which I think is, you know, you just kind of need to get onto the newsletter or whatever. But we were like, okay, I don’t know. Let’s kind of see what people care about. And we set a goal for ourselves. I said, okay, in the next two months, let’s see if we can get, I don’t remember the number. I think it’s like 500 downloads, a really small number. Let’s see if we can get 500 downloads. And if we can get that, we will use this as the indication that this is the future of the company and we shall do this.

Pablo Srugo (00:45:11):
And it's a download because you have to, you actually download like a Mac app.

Jennifer Smith (00:45:14):
It wasn’t even connected to the web, okay? This is the jankiest thing you could imagine. Really basic MVP.

Pablo Srugo (00:45:20):
But it worked?

Jennifer Smith (00:45:21):
It would work, yes. Because we’d been using it internally, right? So it was something we’d built for ourselves. It worked, it just wasn’t designed to be the prettiest. And what was pretty cool was we just started getting downloads, you know? Kind of every day, we’d see more downloads come through. And then we would look in the comments of Product Hunt, or—no—users would send us emails. This was actually when I started realizing we were on to something. It wasn’t just that the downloads were growing every day. It’d be like 10 downloads, then 15 downloads, you know, starting to grow a little bit. But then some of them would send us really long essays that were like, “Hey, I have all this feedback for you.” And it was all super valid feedback. We were like, yes, you’re right, those are basic things that we should have in there. But the fact that they took the time to write that out was really telling to us.

Pablo Srugo (00:46:14):
And the MVP, by the way, did what exactly? You download a Mac app and it would watch you and then create these documents that you could share, like a PDF or something like that? Is that how it worked?

Jennifer Smith (00:46:23):
Yes. Yeah. The most basic MVP version you could imagine of what Scribe is today.

Pablo Srugo (00:46:28):
But it gets you to the value point, which for, like, these experts is... 

Jennifer Smith (00:46:32):
It got to the concept of, like, do you find a step-by-step guide to be helpful? Yes or no?

Pablo Srugo (00:46:36):
I would assume the users here are those kind of experts that keep getting pinged, you know, like, hey, finally I got this PDF, I can just share it with people and not be annoyed all day.

Jennifer Smith (00:46:43):
Exactly. And that's like those are the messages they would send to us. Wow, thank you. I used to get so many of these questions and I would have to put this together at like 7pm at night, you know, and like now I just use this thing and it was so helpful. Also, could you build these five other things that I would like expect to see in this that would make it easier for me?

Pablo Srugo (00:46:59):
Was that enough then to kind of give up enterprise and just go all in on kind of freemium PLG?

Jennifer Smith (00:47:04):
Yeah. Well, we were charging for it, right? So the two months went by. I think we released it in June. And we said, okay, by end of August, we would want to hit this number. And we didn’t hit the number.

Pablo Srugo (00:47:15):
What was the number? Do you remember?

Jennifer Smith (00:47:16):
I think he said 500 downloads.

Pablo Srugo (00:47:18):
Okay, so it was a low bar and you didn't hit it.

Jennifer Smith (00:47:21):
It was a low bar and we didn't hit it. No, we didn't put any marketing effort against it, to be clear. Like, we just released it. We wanted to assess organic interest.

Pablo Srugo (00:47:29):
It's not a Slack or a Dropbox where you're like, yeah, okay, free storage, free messaging, and it's going to spread viral. Like, it doesn't have that baked in.

Jennifer Smith (00:47:36):
It actually does now, but it didn't at the time.

Pablo Srugo (00:47:38):
Oh, interesting. Okay. But back then, I mean, you're just doing, you're getting PDFs, like, here's a PDF.

Jennifer Smith (00:47:43):
And it was actually super high friction. It was like, download this random thing you've never heard of on your computer. Like, we promise it's not spyware.

Pablo Srugo (00:47:51):
Right. Well, it actually kind of, like, it kind of watches, right, yeah.

Jennifer Smith (00:47:54):
Yeah, it’s like super high friction. You get these scary things from your OS. So, we didn’t hit the number, but I went to the team and I was just like, I still think this is the right thing to do. Look at the pull that we’ve had. Like, we were covered in blog posts in seven or eight different languages. We would just find someone who had found out about Scribe and blogged about it on their own because they thought it was super cool. Again, entirely from Product Hunt and usage. We were not doing anything, any kind of publicity otherwise. I was like, just look at it. I just feel the pull. Just look at, like, people are sending these long emails. They really care. We’ve touched on something for them. And I think there’s a clear path forward here. And it fits with our original vision. It’s just an orthogonal way of looking at solving the problem. And, I mean, to the team’s credit, they were like, okay.

Pablo Srugo (00:48:43):
How big was the team at this point?

Jennifer Smith (00:48:44):
We're still small. I mean, I don't know, like five, six people, something like that.

Pablo Srugo (00:48:48):
I mean, I say it because it was easy to get alignment. I mean, five, six people is one thing. If you had 20, it's going to be a different story to convince everyone.

Jennifer Smith (00:48:55):
Yeah.

Pablo Srugo (00:48:56):
Obviously, growth isn't what you want it to be, but the intensity of what people are saying, at least, is telling you that you're on the right path. What is the thing you decide you have to fix to kind of make things go the way you want it to go in terms of, you know, number of downloads and growth and so on?

Jennifer Smith (00:49:09):
Yeah, yeah, I mean it was a gut feel. I think market pull, you can put whatever metrics you want against it, but you feel it. Like you just feel when the market is pulling something from you, and anytime we’ve ever tried to do anything with the team, I always tell them, if you feel like you’re pushing a boulder up a hill, we’re on the fucking wrong hill. Like let’s go find some flat ground that’s got some downward slope, and that’s where we should be focusing our efforts.

Pablo Srugo (00:49:31):
That's the biggest thing as a founder that you can learn, and you almost have to learn it yourself. You need to be resilient and persistent, and sometimes I think that gets taken the wrong way, where it means you've got to push that shoulder up the hill and convince them that this is the thing. But the companies that grow really fast, they're being persistent and resilient, but just not in that way, like the thing they're selling people want.

Jennifer Smith (00:49:54):
You want to feel like you're chasing after the boulder. Okay, you want to feel like it's going already and you are like sprinting behind it and then you're kind of like pushing it from behind. But if you feel like you're knocking your head against the wall, it means that you're just like, you're not at the right wall.

Pablo Srugo (00:50:10):
And even if you figure it out, it's just going to be, it's going to be an uphill battle like for a long, long time versus getting that market pull.

Jennifer Smith (00:50:17):
Yeah, you're better served just being like, okay, not this one. What's the next one?

Pablo Srugo (00:50:20):
So back, back to this, what, what is it that you decide to fix to kind of make things really get that inflection point?

Jennifer Smith (00:50:26):
Yeah, OK. How are you going to do that? And I give him a ton of credit because he was pretty vulnerable. I’ve known him for many years and he’s like, I don’t know. How am I supposed to know what those people, you know, five states away from me or two countries away from me, if they’re doing the right set of things for the business and if it could be done in a better way? That’s a really hard thing for any leader to get their hands around. Literally unless you’re walking around and looking over everybody’s shoulder the whole time, doing what I did at scale, you don’t know. You have no way of knowing. And so these people try to drive transformation. Back when I was in consulting a lot, digital transformation, there’s the cloud transformation, there was a different flavor. Now they’re trying to drive AI transformation. They’ve never had the data to be able to actually do it.

Pablo Srugo (00:50:58):
So even enterprise sales, you were giving it for free?

Jennifer Smith (00:51:01):
Yeah, like a basic end user version, because that's how you get faster feedback. Like, otherwise I have to wait for a three-month, six-month sales cycle, and then I gotta go try to find the users within that company, and like, then my product development is gonna be skewed towards what the buyers are telling me, and it's like not actually towards the sale, not towards like post-sale success, you know?

Pablo Srugo (00:51:20):
For enterprise, sometimes people worry if you have to do it for free, then you have all these fake signals. Maybe they'll be like, yeah, sure, let's do it. And then they won't push it internally. Like, was that a worry at all?

Jennifer Smith (00:51:30):
Our enterprise customers never started on the free. Like in that very early days, they didn't start on the free plan.

Pablo Srugo (00:51:35):
Okay.

Jennifer Smith (00:51:35):
There was like enough differentiation between them that they were not looking at their free plan as the place to be. That's different today, by the way.

Pablo Srugo (00:51:42):
Okay, I see. So when you're doing enterprise back then, it wasn't free?

Jennifer Smith (00:51:44):
Correct.

Pablo Srugo (00:51:45):
Okay, okay, okay.

Jennifer Smith (00:51:46):
We had a free self-serve version of the product that was like super basic.

Pablo Srugo (00:51:50):
That makes sense.

Jennifer Smith (00:51:50):
And then we were doing enterprise sales. And then, because remember, I'm talking about dozens of free, like, it's like nothing. You know what I mean? And then there's just, that's like started to grow because there are these very nice growth loops in the product. Actually, once you get it connected to the internet and these sets of things.

Pablo Srugo (00:52:04):
Like what?

Jennifer Smith (00:52:05):
You only ever create a scribe to share it with other people. This is not like a personal note-taking application. You’re creating it to share knowledge with somebody else. And so I send you a scribe. Some percentage of those people are then like, what is this thing? Oh my gosh, I can use it too. Then I’m going to start creating. You collaborate with teammates. It’s a collaborative thing. What are our shared processes together? Let’s host all of that knowledge together. And so it’s inherently, you can be successful as a single player in the way that you specifically use Scribe, but the whole end-to-end problem you’re solving is inherently multiplayer.

Pablo Srugo (00:52:43):
How long did you keep doing enterprise and self-serve at the same time for?

Jennifer Smith (00:52:47):
The duration of the company.

Pablo Srugo (00:52:48):
You never stopped either at Go To Market Motion?

Jennifer Smith (00:52:50):
Correct. What we realized was, you know, our bottoms up started taking off. And so like the free version started taking off and we had users coming to us and saying, hey, I'm actually like you're hosting some pretty valuable stuff for our company and like we're not paying you. And that makes us pretty uncomfortable. Like, can we have some kind of contract? Like, can we pay you for this? And so we put up a Stripe link and like we started getting money coming in.

Pablo Srugo (00:53:16):
And for them it was like the security compliance kind of side that made them nervous?

Jennifer Smith (00:53:20):
Yeah, they were like, we depend on this, and there’s no kind of expectation for anything right now because you’re free. And so there’s even just an implicit contract that comes with when you exchange money for a good or service, you can expect something from that service. I think their point was just like, I don’t know, you’re some random thing on the internet, and I just started using it, and now my business kind of depends on it. So can we please have some kind of money exchange here? And so that birthed our self-serve product. We have always had, since then, a free, a self-serve, and an enterprise product that is sold through a sales team for the history since then of the company. In many ways, that’s very classic PLG. I would say the difference is we built out sales earlier than other PLG companies did for a number of reasons, including I spent a bunch of time talking to PLG companies that were several clicks ahead of us. And I think one of the very common mistakes many of them made is they waited way too long to build out sales, and they built out sales only when they needed it because their PLG business started stalling out or whatever. And that is too late. Then you end up in a very hard shift, kind of whiplash moment for the company, and that’s a very difficult thing to navigate through. So we said we’re not going to do that. We’re going to be doing those together from the beginning. Most people told me I was crazy and wrong for doing it that way.

Pablo Srugo (00:54:40):
The common thing is like you got to pick a path. You can’t do enterprise and this at the same time, but they do. The sandwich thing, I think, has gotten proven out over time that it is like the right motion. You know, you think Slack has the history line. Once you hit X number of messages, it kind of cuts you off. Dropbox is like the amount of storage. Where did you draw the line in terms of free versus, let’s say, getting to an enterprise contract? Like what were some of the reasons to upgrade?

Jennifer Smith (00:55:03):
Yeah, so we kept the free version super generous. We didn’t really even start introducing usage limits until kind of recently. And even now, it’s probably pretty generous. I certainly had users saying to us, this is really generous. You don’t even have to do, you know it’s bad when your customers are telling you you’re under monetizing.

Pablo Srugo (00:55:21):
Charge me more, yeah.

Jennifer Smith (00:55:22):
Yeah, and I was like, you know, I don’t care. What I’m trying to do is create value for the world right now. And you know what? If you use Scribes for free, you never pay me a dime. You’re still valuable to me because you are creating Scribes and putting them out there in the world. And we’re becoming the standard by which people are documenting processes. We’re documenting more workflows. We’re getting smarter at how we do this. And you’re doing user acquisition for us. So it was always valuable to us, you know, even if no one had any chance of ever paying us a dime for it. And, you know, we said, like, we’re just going to have these along the way. And we did feature gates. We did feature limits. So, like, what were some of the things that folks were asking for that were maybe a little more complicated, a little more pro features. And so we put that in our pro plan. And then enterprise would be, you know, all the things that are required. We worked with pretty big financial services firms pretty early on, and so we actually built a lot to be enterprise grade pretty early on the security side, on the compliance side, on the enterprise admin side. Like, we built that much earlier than I think folks would think that company would given what we were doing. And so there’s actually pretty clear differentiation between them. We still to this day do not do very much to try to drive upsell for people across those plans. Like, it was, like, let’s just create value for the world and we can figure out how to capture it later.

Pablo Srugo (00:56:37):
How long did it take you to hit like a million ARR?

Jennifer Smith (00:56:39):
A while and then pretty quickly.

Pablo Srugo (00:56:42):
Maybe tell me about like, you know, seed series A, like what, what kind of revenue trajectory were you on back then? I know it might be hard to remember, but.

Jennifer Smith (00:56:49):
Yeah.

Pablo Srugo (00:56:50):
Just give me a sense.

Jennifer Smith (00:56:52):
I mean, our seed, we were like practically no revenue.

Pablo Srugo (00:56:55):
Okay.

Pablo Srugo (00:56:55):
That was the 8 million, 2021?

Jennifer Smith (00:56:57):
Yeah. And then our A was a preemptive round done six months later.

Pablo Srugo (00:57:01):
Okay.

Jennifer Smith (00:57:02):
And so I think we started getting some good, interesting traction on the usage side and interesting enterprise pipeline and whatnot. But it was, you know, six months later. Revenue was probably still not at a million or around a million. It was similar, under a few million. And that was a bet on where the company was going to go.

Pablo Srugo (00:57:19):
At what revenue stage do you think you really hit an inflection point?

Jennifer Smith (00:57:22):
Once we got to a couple million. It also depends on where the revenue is coming from, right? So I’m trying to disaggregate enterprise versus self-serve. And I think it was much more about when we hit the repeatability and predictability on the self-serve side. And it’s because we spent a lot of those early months really deeply understanding the value to end users and the growth loops in the product. If you joined any all-hands in the first few years of the company, all you ever heard me talk about was end-user love. So we really tried to understand end-user love. We’re in the top 1 percent of NPS for all software. We really tried to maniacally understand end-user love and then how you get these growth loops growing, both in the product and also through word of mouth. It’s really big for us. And because we touched on this nerve for people, they went and shared it with their teams and their colleagues and whatever.

Pablo Srugo (00:58:11):
Do you measure word of mouth? Like do you have a sense of how much of your new usage comes from word of mouth?

Jennifer Smith (00:58:16):
It's a really hard thing to do.

Pablo Srugo (00:58:17):
I know. It's not. That's why I always ask when I can.

Jennifer Smith (00:58:20):
We now have a very sophisticated user acquisition and growth marketing team, and they measure things in terms of incrementality. And so if you’re familiar with MMM or any kind of lift testing, it’ll basically capture any organic word of mouth that comes from it. So let’s say we pay to acquire one user, but they bring three friends along with them. It would basically say we acquired four people, but I can’t attribute it where.

Pablo Srugo (00:58:46):
Yeah, attribution is the age-old marketing problem, yes.

Jennifer Smith (00:58:49):
We attribute it to dollar spending because that’s a really important thing to do. And if you’re not doing that, then you are wasting money and throwing money out, right? But it’s a really hard thing for us to actually attribute. I’ve gone through a team so many times. I’m like, for every one person I get, how many people do I get organically? And it was like, it’s really hard for us to actually disentangle.

Pablo Srugo (00:59:08):
One of the things I want to ask on, because I know we're going to run out of time and I got to get the last three questions in the standard ones, but just maybe my last question is just because founders, one of the things they care more about, most about is like the go to market tactics. Like when you think about that zero to $2 million period, what are some of the key things that really worked for you on the go to market side?

Jennifer Smith (00:59:28):
So I think the answer is different depending on whether you're doing a like B2C or like, you know, PLG.

Pablo Srugo (00:59:35):
But for you, I mean, in your case with your business model of that PLG enterprise mix.

Jennifer Smith (00:59:39):
I mean, we were doing both, which is super weird, and everybody told me I couldn’t do it. By the way, everyone told me I couldn’t build a horizontal product either, and we’re incredibly horizontal. We’re used by 95 percent of the Fortune 500 in most departments. So we did it. But I spent a lot of sleepless nights at the time being like, okay, a lot of really smart people are telling me that what I’m doing right now is a really bad idea. Should I be reconsidering? And it would cause me to pause. But at the end of the day, I just look at the first principles of it. I’m close to our customers. I see this. I understand what we’re doing here. I actually have a logical argument for why we aren’t the typical construct for how people would think about this. Look, it’s about getting it in the hands of as many people as fast as possible to tell you if they care and what they think about it. That’s the thing you should be doing as fast as possible if you’re building any kind of bottoms-up product. And on the enterprise side, it’s similar but different, which is you want to be getting feedback from enterprises, but this is where you can waste a lot of well-intentioned time. If you go ask them, they’ll be like, oh, this is interesting, and let’s schedule a call in two weeks and I’ll syndicate this with somebody else. You can waste a lot of time getting happy ears and thinking they’re saying they have buying intentions when they don’t, or they’re not really giving you full feedback because they want to say something nice. You have to figure out how to make a forcing function to see if they’re going to put money against this or not as fast as possible. It’s a hard thing to do, but you can structure it pretty quickly. You can be like, okay, let’s do a pilot. You’re going to pay for a pilot. We can start a pilot next week. This is what it would take. How do you make it as fast as possible to get to a true yes or a really fast no? A long maybe will kill you. And we had a bunch of long maybes, some of which were some of the biggest banks in the world, logos you’d be so excited to get. And I had to tell our salespeople I’m not wasting our time on this. I’m sorry. I know it seems juicy. I know they just asked for pricing for 10,000 seats. I think one of them asked us for 100,000 seats, a multimillion-dollar contract. I know they asked that. It’s going to take them too long. We can’t bark up that tree right now. We’ve got to go get smaller ones because I want repeatability, not a big whale hunt. I want to get to repeatability. Let me prove a few sample customers where I know there are thousands more out there that look like them.

Pablo Srugo (01:02:08):
Perfect. Let me stop it there and ask the last three questions we always end on. When did you feel like you had found true product market fit?

Jennifer Smith (01:02:14):
It was when I saw those downloads coming into my inbox, even when I kind of forgot about it. Because again, we launched this thing and we’re like, oh, I don’t know. We did number five on Product Hunt. I don’t know. People liked it. Seems good. We kind of still had our day jobs and our day customers. And so I just had a separate folder in my email for the downloads and I’d check it every few days. I remember turning to my husband within even the first few days, maybe first couple of weeks, and saying, these keep coming in and there are actually more of them every day. It’s accelerating. And I remember him saying, you should pay attention to that. I was like, I think so too. And so I started leaning into the feedback more and talking to some of those people who sent us those long essays with feedback and understanding it. And like I said, it was a gut feel. The numbers didn’t represent it, but I just felt the pull.

Pablo Srugo (01:03:05):
And then on the flip side, was there ever a time where you felt like things might not work out and Scribe might just completely fail?

Jennifer Smith (01:03:12):
So other people, yes. At the time I said, I’m going to focus on Scribe. We had investors who were like, you just killed the company. This is over. I don’t know why you did this. I had to be like, respectfully, I have more information than you do about our customers. I’m going to do it anyway and I’m right. This is probably a really unpopular thing to say, but no, because I believe you should imagine the outcomes you want. I have a very strong manifesting practice. I have never spent a minute thinking about Scribe not working out. I don’t have a backup plan. I go to dinners with founders and they’ll be like, oh man, I can’t wait till I can exit this company so that I can do whatever their XYZ shiny thing is, and I’m like, this is what I want to be doing. I don’t want to be doing anything else. I’m not planning for my own failure. I don’t spend any time thinking about that. You get what you focus on, so I’m going to focus on what I want to have happen.

Pablo Srugo (01:04:06):
And then last question, what would be your top advice for an early stage founder that's trying to find product market fit?

Jennifer Smith (01:04:11):
Get feedback, get feedback, get feedback as fast as possible from the right people, your customers and your users. Don’t listen to what investors say. They’re not close to the customers and the users. They don’t actually know. They could maybe be a proxy at best, but they’re a pretty noisy proxy. The people you are ultimately selling to, get feedback from them and don’t get happy ears when you listen to the feedback. Find a way to make it more objective, not just them telling you they think something’s good, but where they have to put something on the line. At a minimum, their time using the product.

Pablo Srugo (01:04:39):
Perfect. Well, Jennifer, thanks so much for jumping on the show. It's been awesome to have you here.

Jennifer Smith (01:04:43):
Yeah. Thanks so much, Pablo. I appreciate it.

Pablo Srugo (01:04:45):
Wow. What an episode. You’re probably in awe. You’re in absolute shock. You’re like, that helped me so much. So guess what? Now it’s your turn to help someone else. Share the episode in the WhatsApp group you have with founders. Share it in that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.