At 21 he made his first million. At 23, he grew his startup to $8M ARR in 6 months. | Matt Espinoza, Founder of Clover

Pablo Srugo (00:00:00) :
In two months, it went from zero to?

Matt Espinoza (00:00:02) :
Zero to $210k.

Pablo Srugo (00:00:03) :
A month? So it's on like a $2.5 million run rate two months in.

Matt Espinoza (00:00:07) :
Yes, that's right. What I have seen in the last thirty to forty-five days is that true product market fit is purely based off referrals. If people love their product, to the degree they say they do. They'll refer other customers to that product. Right now, thirty percent of our new top line revenue per month is coming from referrals.

Pablo Srugo (00:00:25) :
I mean, I must say. I'm like, dude, where do I sign? You know what I mean? I think I'm your new customer.

Previous Guests (00:00:30) :
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 (00:00:43) :
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. Yo, Matt, welcome to the show, man. Excited to have you here.

Matt Espinoza (00:00:59) :
Thank you so much.

Pablo Srugo (00:01:00) :
Dude, so you have a pretty crazy story. You started your first company at nineteen, sold it by twenty-one, made a cool million dollars. When everybody else was not able to afford coffee in the morning. That's really where I was at. At 21, and then now you started another company. And you've grown from zero to $8 million a year in six months. Which is just insane by any standards. I'm so excited to kind of dive into all that. Maybe let's start with this real quick, because I'm sure one thing feeds into the other. What was the first company that you did and who did you sell it to?

Matt Espinoza (00:01:31) :
Yeah, I mean for context, I'm running a company called Clover as you mentioned. We've scaled incredibly quickly. The team has gone from me and my co-founder Ryan to now thirty people full-time. The goal was to build a company that if done well, I would never have to build another company using any other growth mechanism except my own. So Clover's entire goal was how do you solve distribution? How do you generate millions of views on autopilot, all directing traffic to your product? How do you get crazy website visitors? And I realized if you can solve that issue. If you can have millions of people knowing about what you do. It doesn't matter what project you're incubating. It could be e-commerce, it could be SaaS, even like a PDF guide, and so that was the entire thesis around Clover. When I first started this and the whole software side of things. I built the company when I was nineteen. I was a crypto exchange platform. We allow people to incubate their own social tokens and then be able to trade between each other for profit. And we sold that company about a year after incubating to a company called Talent. And then that company has since created its own ecosystem and took our existing two hundred and fifty thousand users we had from that first company to their own multi-million dollar a year company as well. Which has been really cool to see.

Pablo Srugo (00:02:38) :
When did that exit happen? How long ago is that?

Matt Espinoza (00:02:39) :
I'm twenty-three right now, and so that happened about four years ago.

Pablo Srugo (00:02:42) :
Okay, you started four years ago but you sold it like two years in. So two years ago you exited it?

Matt Espinoza (00:02:46) :
No, I sold it a year in.

Pablo Srugo  (00:02:47) :
Oh, you sold it a year. So you were twenty when you sold it.

Matt Espinoza (00:02:49) :
That's right, exactly.

Pablo Srugo (00:02:50) :
So walk me through that. Like, hey, you sell this company. What's next? Right away you want to build what you're building now? Or, what happens between then and Clover?

Matt Espinoza (00:02:58) :
Yeah, it was actually very interesting. Because I sold my first company in nineteen. I personally took home about $120, $130 US from that exit. Had a couple other co-founders as well, that were involved in that. I, for a long time, people were kind of saying like, you got lucky. Sure, you sold at nineteen, twenty-ish. You cannot do it again.

Pablo Srugo (00:03:17) :
Well, especially crypto, right? As soon as you hear crypto made a bunch of money, like, yeah. I bought some Bitcoin too. You know what I mean?

Matt Espinoza (00:03:23) :
Yeah, a hundred percent and also we sold literally two months before the crypto stock crashed.

Pablo Srugo (00:03:27) :
What year was this then? Right before '22 you sold? Like you started '21 sort of thing?

Matt Espinoza (00:03:31) :
Exactly, that's exactly right and so a couple months difference between us selling for the amount we sold and us selling for pennies on a dollar.

Pablo Srugo (00:03:37) :
Dude, we had somebody on this show. A guy I know well now, he was the founder of Wire and he went from a billion dollar acquisition announced, like you'd still find it. In June '22 to a fire sale by the end of that same year when everything. Like crazy, man. So I totally get what you're saying.

Matt Espinoza (00:03:54) :
Yeah, so it was literally. I will admit, that part of timing was incredibly lucky. I think for a long time that was the paradigm of like, cool. This guy just did well, has some money in the account. It wasn't even life-changing. I would even say, it was just a proof point. I think I've become so much more bullish on companies and founders like that. Where they have an exit. It's like enough or it's really cool, I can kind of flex the account a little bit. But not enough, where it's like you want more. If that makes sense and so I was one of the founders out of the company that got acquired. Where I'm like, I think I'm worth so much more than this. I think I could do this again and I spent about two years working on a couple of really cool companies. Understanding what it took to build a company past a million dollars a year. Essentially there's two years where I learned a lot, took a bunch of startups, tried to see what the game looked like beyond a million dollars a year and by the time it took. I built my second company. It was an image generation software and that company we built, scaled, and sold in three months. And I made more money, and obviously did a faster time rise than my first company.

Pablo Srugo (00:04:55) :
Tell me everything about that, what was that company?

Matt Espinoza (00:04:57) :
It was called Journey Plus. What we realized very early on was that mid-journey and these AI image generation software's were very limited in scope. And there wasn't a platform that allows you to cross use them, and cross use different models to kind of compare. And so we built a product that was very viral on Organic that allowed us to kind of create these viral AI images of you. Using existing models that were very difficult to use without using our platform.

Pablo Srugo (00:05:21) :
Is it like a headshot app? Because we had somebody else on here, who did like a headshot app. That also grew insanely fast. Aragon, I think it was called. I don't know if you know Aragon AI.

Matt Espinoza (00:05:28) :
Yeah, I do. Aragon's one of our investors. Yeah, they're really cool. So yeah, very similar to that premise. Except we use, for example, mid-journey. There's no open model for it. So Aragon had to build their own internal model. We just used all the popular ones, combined all of them into a single setup, and then it kind of created a platform that allowed us to switch between a bunch of them.

Pablo Srugo (00:05:45) :
And this was what year? This was post-GPT? ChatGPT, sorry, so it must be, what? '23, '24?

Matt Espinoza (00:05:49) :
Yeah, that's right.

Pablo Srugo (00:05:50) :
Okay, one thing I want to dial in with you. I mean, you're all about distribution and it's just clear in the choices you make, and even everything you're talking about with Clover, and stuff. And what you're trying to solve. That is fully in agreement, if you can solve that for so many different products, especially long tail products, consumer products and SMB type products. You're done half the battle. If you can get the attention, you'll get the sales. Because the conversion is going to be whatever the conversion is going to be and a lot of the times you mix that with a product that has no demand, and you're done. So let's walk through some of that. With this one, we'll do it a lot with Clover as well. But with this company that you flipped in three months, how do you solve distribution? What are you doing to go viral with these images? Everybody can put a few things together and create some new AI image app, but what were you doing on the distribution side that set you apart?

Matt Espinoza (00:06:37) :
Yeah, so I actually have grown my apps using very similar methods to what Clover can do automatically and so it was a mix of either SEO hacking or video and Organic, TikTok, Instagram reel hacking. And so for the AI image generation software, what we did is that we had UGCs or influencers promote. Which I found actually was not as useful. What I found more useful was having just a ton of automated posting going out, towards a bunch of different accounts and so the math here, Pablo. Is that if you want to generate a million views. You can either do the math behind influencers, see what their average posting is and then paid them for a million views average, or I realized you could engineer a million views. Because each video on Instagram or TikTok averages about a thousand views. If you think of a regular, regular account. So the math is you do a thousand videos, that has a thousand views and you will guarantee a million. And so what we did is, we literally did thousands of videos a day that generated us millions of views. It was really cool about this, is that we then had our own internal system to determine, hey, this one did not go past a thousand views. It went to ten thousand views, right? Or another one hit maybe half a million views and so even though we engineered to make a million views, we were generating more than a million views a day.

Pablo Srugo (00:07:49) :
I've never heard of somebody think about it that way. Everything in virality is about how to make a given video more viral. How to make better content, so it gets more views. Not to just, you know, Mr. Beast is all about quality. You're all about quality. It's just like, who cares if it's that good? And you'll get lucky sometimes on top of it. That's the cherry on top.

Matt Espinoza (00:08:06) :
Exactly, yeah and so then what's cool is that we end up finding out the outliers very quickly.

Pablo Srugo (00:08:10) :
Okay, just before we go there. Like, just tactically, right? Because I want to get as deep as possible on this.

Matt Espinoza (00:08:14) :
Sure.

Pablo Srugo (00:08:14) :
Because this is a big unlock. How do you do that? How do you do a thousand videos a day? Is it on a thousand accounts? Just mechanically, what's going on?

Matt Espinoza (00:08:22) :
Yeah, so the math behind it here is that per video or per account, you can do about three videos. Three videos per day, I should say. 

Pablo Srugo (00:08:28) :
Gotcha.

Matt Espinoza (00:08:29) :
And so anything above that, we notice there's diminishing returns. Anything below that, you're not doing enough and so if you wanted to engineer. Again, a thousand videos, you just do a thousand videos divided by three. So about three hundred and thirty-three accounts that need to be created, all posting whatever products or video you want to promote. The secondary problem is that each video needs to be inherently unique in metadata signals and so if you post the same video twice on TikTok or Instagram. It doesn't matter if it's a brand new account, a new account, or influencer account. They will flag that video as already being posted.

Pablo Srugo (00:08:58) :
And they'll kill your views.

Matt Espinoza (00:09:00) :
Which makes it useless, right? So you cannot have the same video and do that a thousand times. Because they're going to immediately flag it.

Pablo Srugo (00:09:06) :
And first of all, you're creating three hundred and thirty accounts? You're just doing that manually? You're just going in, open new account, new name, new whatever, boom, boom, boom, boom, boom?

Matt Espinoza (00:09:12) :
Initially what we did is I just paid people overseas to warm up new accounts, have VPNs in the US and then post. Echoes does this automatically, which is the second product. We warm up new accounts using agents to automatically build, follow and like a bunch of different accounts, and then post it. Because the other half of the battle is that like, let's say you open up a brand new account, you post it, that's also useless. Because it's not target audience posting and so the ideal play. Let's say you had a fitness app, is you want to create a new account, watch all the fitness YouTubers, follow all the fitness YouTubers, have your feed be curated by fitness-related content, and then by the time you post something. It will go to that related content, but then the secondary problem is around VPNs and proxies. Which is a whole separate issue about being able to make sure that even if it is fitness-related, it's fitness related towards that country you're suppose to be in and so with my original operation. We had a bunch of people be able to do that at scale and I realized that you can then automate this with software. And so when I built Clover, I'm like, that is going to be the most immediate thing we're going to do. And then figure out the outliers of videos, and things that are working at scale.

Pablo Srugo (00:10:15) :
Okay, so back to this. So now you got three hundred accounts, they're warmed up, you've got people overseas, and VPNs, and stuff. Okay, now you talked about the uniqueness, like each video needs to be unique. How are you doing that?

Matt Espinoza (00:10:25) :
There's a couple components you can change in a video. So there's coloring, for example, some of them were black and white, some of them we flipped the videos. So we double flip, so flip once, flip twice. The other thing is metadata on the descriptions can change, hashtags can change, and then obviously general location can change. And then a couple of micro things within the video can change or adapt. For example, the first three seconds seem to be overly engineered and then you can have clips. I mean, the same way you can have clipping. You know, very popular videos pop off that are like I've shown all the time. But the thing is that those are allowed, but the pre and post of that clip needs to be different. And so the first few seconds has to be different. For example, if I. I'm sure you've seen videos where people are like, hey, let's check out this video. But it's them saying, check this out and then it shows a video, right? Or even it's a green screen, right? Someone who's hovering on top, talking about a video and it's just a little head person in that little video frame.

Pablo Srugo (00:11:16) :
Yeah, like the Twitch style thing. It's half of them is their head and then half is a viral video below. And I'm like, dude, you're wasting space but now I get why.

Matt Espinoza (00:11:22) :
Yeah, so those are all considered unique videos to Instagram or TikTok and so we had a lot of those TikTok green screen type videos. And also a combination of just small variations of the same video.

Pablo Srugo (00:11:34) :
And you're doing that internally? And just sending it to the people who then post it on your behalf?

Matt Espinoza (00:11:38) :
Exactly, that's right and so, I create all the videos and the batch. And then send it to people overseas. They will then auto post them across all the accounts and then I just wait a day, two days maximum. And then typically TikTok or Instagram picks it up over a 24 to 48 hour period. And from there, I can see what are the outliers. And let's say, for example, there's one video that performed super well. I'm like, cool, let's do more variation.

Pablo Srugo (00:11:59) :
But just on that. So the outliers, you're doing three hundred versions? Because some of the tweaks you're talking about are probably not going to make the difference. Like, you're talking about 

Matt Espinoza (00:12:05) :
Yeah.

Pablo Srugo (00:12:06) :
There's maybe five or ten video sets and each one's multiplied by thirty. Is that kind of how you did it, or?

Matt Espinoza (00:12:11) :
Yeah, exactly. That's right and I wouldn't typically do variations. The first batch is the hardest one, because we're doing almost a unique video every time and then from that unique set. You then figure out which ones are the best and then you do micro improvements on that. It's very similar to Facebook ads, I would say. Except we've done that purely organically and sense in comparison to what a typical CPM would cost on Facebook.

Pablo Srugo (00:12:33) :
Is the leverage you're getting strictly on the cost per impression or is it also on the conversion per impression? Is there anything about the fact that they're Organic that makes them better views than a Paid View or that doesn't matter? Like a million views through Paid versus a million views through this system. Are they worth the same?

Matt Espinoza (00:12:52) :
Yeah, so what I would say is typically, and I've done paid ads as well. Organic has a high level of trust because when you go and see a paid ad. It says it's a paid ad and so there's an awareness factor there. If it's an Organic video promoting a product, it's not a direct sponsorship. There's no necessarily need to say it's a paid ad per se. It's just a review or, here's something I've seen that occurred. If people share a website that they think is cool, it's not considered a paid ad.

Pablo Srugo (00:13:16) :
We had Roy from Cluely on the show, right? He's obviously big on going viral. He's all about controversy and if you look at his videos. I mean, these are highly produced videos that barely even talk about the product and to the extent that he talked about the product. They don't talk about features or anything. That is just this hyper, ultra realistic version of the product of what it could be, visionary, whatever and then. But his point is, who cares? You go viral, you go viral, some people will go to your website, then they'll figure it out. What are some examples of the videos that you were putting out?

Matt Espinoza (00:13:44) :
Yeah, so Roy's approach is different. Because again, our approach is volume negates luck and so with Roy. He has more controversy, and he pays clippers. Which I don't know if you're familiar with, that essentially would pay to cross-browse and do the same thing that we would do with V8.

Pablo Srugo (00:14:00) :
He does the UGC thing, which you kind of mentioned. But that wasn't huge for you. But he's huge on that, he has like five hundred people, a thousand people just reposting and whatever.

Matt Espinoza (00:14:08) :
Yeah, totally. So there's two parts to it. There's the UGC factor, which is a user-generated content for those who don't know. Where a person would just talk about a product or use a product in a demo case and then there is the typical clipping, which is different. So clipping is like, Roy does a huge announcement about a new product on Cluely. There's thousands of clippers he would pay to then repost it or change the way it looks, or do the same thing that I was kind of saying before. But like real people making those video edits. So you pay for the clippers, or you pay for the UGCs. In both cases, what we've realized, and the way we kind of approach it differently. Is that we have almost completely AI UGCs, and also complete clipping. And so because of that, the CPM. So pretty much cost per thousand views, is significantly cheaper than any comparison that would exist. Let's say dollar CPM, out of the dollar CPM, maybe 0.5 of that is clipping. Another 0.5 is the actual video itself for posting and so you end up paying a premium. Because you're paying a clipper. In our case, because it's fully software aspect, there's no clipping involved, even though we have the same output clipping.

Pablo Srugo (00:15:08) :
This is Clover you're talking about? This is your current product?

Matt Espinoza (00:15:10) :
Yes, that's right. 

Pablo Srugo (00:15:10) :
Right? Okay.

Matt Espinoza (00:15:11) :
Exactly, yeah.

Pablo Srugo (00:15:11) :
Okay

Matt Espinoza (00:15:12) :
There's no need to pay a clipper. Which means the margin of that is still the same result, but a lot cheaper and so when people pay for us. They've switched from either general clipping to completely our end. Which is why we've been able to generate a ton of revenue up front, with a lot of contracts of how much you're paying per month. Because people are paying on a per view basis, which means that you can scale as far as you want. On how much you're going to be paid and how much you are going to pay the platform.

Pablo Srugo (00:15:35) :
So, but then back to the AI imagery company. What's the content? Give me an example of what one of these videos might be. The ones that, again, doesn't need to be the most viral one. Because you're not really going for that. I mean, it's great if you get it, but what sort of things are you posting about?

Matt Espinoza (00:15:48) :
Yeah, one thing that went pretty popular is very similar to what Aragon did. About like, you take a photo of yourself and then it converts into a high school version of you in a yearbook, for example. So very personable assets and people can understand, oh wow, I can see myself doing that same thing. And then kind of posting about it, right? So there's aspects like that, which are very important. The other big thing is that it converted very well. It's just very, at the time, very beautiful images. There was a point where these type of images did not exist. To be able to create something so extract or so real.

Pablo Srugo (00:16:18) :
Yeah, like the unicorn in the clouds with the whatever, yeah.

Matt Espinoza (00:16:21) :
Exactly. 

Pablo Srugo (00:16:21) :
Got you.

Matt Espinoza (00:16:22) :
And so that factor was very novel at the time. Now, if I do that. It's not going to go viral or not going to have any significance. So a lot of it's very nature and environmental dependent.

Pablo Srugo (00:16:32) :
Walking through because that was like a three month. I mean, that was really quick, walking through that. Who do you end up selling that to and why do you sell it?

Matt Espinoza (00:16:37) :
Yeah, it was sold to a New York-based firm and for us, what we realized pretty early on is that. I was more interested in these growth hacks, in my opinion. Than the actual mechanism of the actual company itself and so I realized that this type of growth channel, and this type of mechanism is really, really cool. I want a company, again, that can solve distribution at scale. That can actually do all this for other companies and that to me is way more exciting than any individual company I can build. And if I do decide to build another individual company like this one. I can easily just go ahead and use my theme system to then be able to orchestrate it. And the infrastructure cost would be cheaper for me than any other person I'm charging.

Pablo Srugo (00:17:14) :
How much did you end up selling it for?

Matt Espinoza (00:17:16) :
We only sold it for about $800 000.

Pablo Srugo (00:17:18) :
But were you a solo founder? Or did you have co-founders for it?

Matt Espinoza (00:17:20) :
I was pretty much solo, I owned about eighty-six percent.

Pablo Srugo (00:17:22) :
Okay, so, you did. I mean you did very well in three months. Not a bad place to be, what's your next move after that?

Matt Espinoza (00:17:28) :
My next move after that is actually, I started a company with Ryan. He's my current co-founder at Clover. For a company called Halation and so there's this interesting model around holding companies that was super interesting to me. And so before I realised, hey, I should own the distribution layer. The next big unlock for me was, I should actually just build companies and scale them using very similar playbooks. I think for a while we were correct and so we scaled Halation to zero to $2 million a year within ten months. Fully bootstrapped, didn't take any outside capital.

Pablo Srugo (00:17:57) :
Doing what? We are buying companies and growing them?

Matt Espinoza (00:17:59) :
Exactly, so it was a mix of buying. It was a mix of incubating. So we went to a couple companies. One company was pretty big, it was called One Price. It was just a A-B testing platform for Stripe. It's currently still the number one app on the Stripe app store. So you get a lot of downloads from just being number one and organically hacking that.

Pablo Srugo (00:18:13) :
Did you buy with cash, or did you have some over kind of mechanism to acquire it?

Matt Espinoza (00:18:17) :
That one we incubated, and then we also bought a design agency. Which we actually still technically own and naturally that's the same agency I use to brand all my current products. I realized very early on that branding is a massive component of everything, and so we approached that very early on. That was actually one of our first big purchases, and that did pretty well, as well. The issue is just around cross-sell ability in LTV and so what we noticed is that I would start a new company. I'd put a founder into that company, and there's either incompetence of the founder or a mix of just problems where one company. I feel like I had eight different brain cells across every single company I was incubating, and there's no ability to cross-sell a customer, like a design agency, to A-B testing on Stripe. It was very different businesses.

Pablo Srugo (00:19:02) :
And did you find with a lot of these businesses, it was easy? Because you obviously have unlocked and I assume you used all the growth hacks for every single one of these businesses. So that initial zero to one, which for a lot of founders is hard for you, was easy. But did you find there was kind of diminishing returns? Like, okay, it was really easy to get a business to something. Whether it's a million a year or $5 million a year, $3 million, depending on the business. 

Matt Espinoza (00:19:21) :
Yeah.

Pablo Srugo (00:19:22) :
But then I can't just will it to $30 million a year. Was that something you're running into?

Matt Espinoza (00:19:26) :
Yeah, I mean it's definitely caps. I think that's also a huge reason why we sold the IM generation software. There's diminishing returns on consumers aspects. B2B is a massive different play, that I wanted to go into. But I think honestly, I was very overwhelmed running multiple companies that had no relation to each other. That I felt I couldn't actually focus on and sometimes there's clear winners. But others it's like, I still own equity, why am I not focusing on this one? There was aspects like that, that was not exciting to me. I had to kind of take a step back on how I wanted to approach a company of this magnitude.

Pablo Srugo (00:19:59) :
What year was this? Where were we at timeline-wise?

Matt Espinoza (00:20:01) :
Yeah, this is up until. Essentially it's April of last year. So 2024 to January of this year, which is 2025.

Pablo Srugo  (00:20:09) :
Which is when you decide, you don't want to do this buy and hold multiple properties anymore?

Matt Espinoza (00:20:13) :
Yes, exactly. That's right.

Pablo Srugo (00:20:14) :
What do you decide to do instead?

Matt Espinoza (00:20:16) :
I think there's about a month long break, where I'm like, I need to take a little step back. I still had equity in the companies that we incubated. But I wanted to build a company, where I knew I can like take on a bigger swing and so for the first time ever, I actually decided to raise capital. All my previous companies were fully bootstrapped. We scaled them and we sold them. And so we decided to raise only half a million dollars at a $10 million valuation. All I did is I sent the Notion page to a couple investors I respected. I'm like, I don't do pitch checks. I don't even want to pitch you. Here's my track record. Here's the amount of money I've done in Stripe before.

Pablo Srugo (00:20:47) :
Was it mainly angels or some funds? Half a million, is not a lot?

Matt Espinoza (00:20:50) :
Yeah, aneo.com was willing to invest half a million, but they only gave $250 000. Because I said I want only half a million total. Which means I want to have the other $250 000 be angels and so it was $250 000 from institutional, $250 000 from angels. And then we ended up taking some random angels here and there along the way.

Pablo Srugo (00:21:04) :
So you have the half a million. Did you have the clear idea, when you send that Notion doc?

Matt Espinoza (00:21:09) :
I think the main Notion doc I had, which is pivoted slightly. But the main thesis was, I still wanted to do the multi-company approach. I think that was one that I definitely wanted to do. But I wanted to do it where the thesis of the company was optimized towards product, LTV, and cross-selling between customers. So at that point, I'm selling to the exact customer domain each time.

Pablo Srugo (00:21:28) :
So different products, same customer. Which you felt would kind of let you focus your brain instead of having it separate across ten different places?

Matt Espinoza (00:21:35) :
Exactly, yeah and then the other big thing that was important to me is that with the old model. It was founder-centric and so, I would own sixty, maybe seventy percent of a company. I would bring an operator and have them kind of run it. There was issues at that scale, because I think I trusted myself greatly more than most people and so, I think there's conflicts that existed and paradigms that were unclear. That would not be able to work out and so with this one, I'm like, I want to own a hundred percent, or at Clover. At the end of the day itself wants to own a hundred percent of every new company we incubate. So it was not a founder-type model, it was just purely. Let's incubate a company, let's own a hundred percent of it, and let's cross-sell between products that we also own a hundred percent.

Pablo Srugo (00:22:13) :
Which means you just run it? Or you hire a GM for each company?

Matt Espinoza (00:22:17) :
We just hire leadership roles, but the leadership roles won't be thirty percent or forty percent. They'd be minimal and the leadership roles won't be on a per company basis. It actually be on a top level basis, which again is very different on how we operated before.

Pablo Srugo (00:22:29) :
Typically, the origin story is like, I'm a founder, I see this problem, I'm like, oh my God, I can't believe that's a problem, here's a solution. You're like everything backwards. I mean, it's like, okay, I'm going to solve distribution, I'm going to incubate companies, give me some money, I'll figure it out. It's almost like a SPAC of startups, you know what I mean? How do you go from this idea that, okay, I want to have multiple companies, I like that. Distribution is going to be big play, but I'm going to have the same customer. How do you figure out what customer? What product?

Matt Espinoza (00:22:57) :
Yeah, so we tried a couple different verticals. We initially started with e-commerce and then we very quickly pivoted towards distribution layer. For two reasons, one is that. What's cool about distribution and the way we approach the company building now is that a ton of companies that are not even necessarily same customer base. But massive TAM type companies is how we would attribute it. So for example, some of the biggest e-commerce companies currently use us as distribution and get a ton of views. That are cheaper than Facebook ads, all using our platform and people that are massive SaaS companies or consumer apps also use us. And so when I realized it, it wasn't like an actual customer segment is probably not the right way to put it. It was just massive TAM companies that, for example, local businesses would not work well for our products.

Pablo Srugo (00:23:41) :
Sorry, but when you said you started e-commerce. You always had a distribution product. You're just saying you started with e-commerce vertical in terms of the customer set?

Matt Espinoza (00:23:48) :
Exactly. Yeah, that's right.

Pablo Srugo (00:23:49) :
Okay, but your product was already defined then in that Notion doc. What was the first thing you were going to do?

Matt Espinoza (00:23:54) :
Yeah, the first thing was actually just going to be AI phone calls. That was very popular at the time. But at the time, we realized there's actually too many restrictions on phones and cold calling that is very legally restricted. So it was not able to scale based on just that paradigm. So we didn't end up selling that many customers and very quickly. We realized this new paradigm of outline and SEO, which is not restricted. You can do tons of blog posts or tons of Reddit attribution towards your product.

Pablo Srugo (00:24:19) :
Is it kind of a GEO? Is this where you're going with the product?

Matt Espinoza (00:24:22) :
Exactly, yeah.

Pablo Srugo (00:24:23) :
Okay, so kind of, I mean, there's a lot of. I mean, SEO, obviously search engine optimization, typically for like search engines. A lot of this stuff is now moving to the ChatGPT kind of AI apps. Okay, so then you were talking about go to market. Maybe we can go back there. So you started with e-commerce, you realize big TAM companies, that's really your ICP.

Matt Espinoza (00:24:39) :
Yeah, we started beta testing it with someone who's not e-commerce. They ended up crushing it like crazy. Their consumer app was very popular and we're like, wow, we can use the same model. It does not have to be customer-centric, which again was the initial thesis. Just one customer obsessed with this customer. Move on, but I quickly realized that it's a multi-customer approach, and the main similarity is just massive TAM company.

Pablo Srugo (00:25:01) :
We have tens of thousands of people who have followed the show. Are you one of those people? You want to be a 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 more about the product. You started with this AI calling thing, didn't really work. At the beginning, what was the first version of this new LLM SEO product? What did you do?

Matt Espinoza (00:25:22) :
The first version was simply just monitoring LLM, and it very quickly became. We'll actually post on your behalf and so we'll do blog posts, we'll do Reddit posts. We'll essentially organically hack and guarantee the number one post on Google for x amount of keywords that you want. Which is practically unheard of, I think. So we kind of operated very similar to an SEO agency, but pure software, margins are very, very good.

Pablo Srugo (00:25:46) :
How do you do it? There's the high-level stuff, like people are like, okay, build technical stuff on your website, build backlinks, and then write blog posts that have direct keywords. I mean, that's kind of the high-level stuff. 

Matt Espinoza (00:25:54) :
Yeah

Pablo Srugo (00:25:55) :
How do you take it from there, to guaranteeing a number one position. Especially in this world, where there's way more content, there's way more competition.

Matt Espinoza (00:26:02) :
Exactly, yeah.

Pablo Srugo (00:26:02) :
Because the cost of writing a blog has gone down dramatically.

Matt Espinoza (00:26:05) :
Yeah, and so the biggest unlock has just been the understanding of Reddit as a group system. Right now, if you search up any keyword that is, what is the best tool, or how do you do this, or anything like that. Reddit's currently the number one result and so the question is, the blog posts help kind of build traffic over time consistently. Reddit helped actually guarantee the top spot every time. Because the way you would approach it, is you just want to out compete the top spot and so you out compete the top spot. Based off of upvotes and comments. And so if you're like, hey, I want you all to rank for the top podcast for PMF. We'll be able to guarantee it, because we would know the top post is this amount. That's this amount of engagement, and we would out-compete that engagement.

Pablo Srugo (00:26:46) :
It's fully hacked, how do you out compete that engagement?

Matt Espinoza (00:26:48) :
It's fully hacked, yeah.

Pablo Srugo (00:26:50) :
So you just go on the thread that's, best startup podcast for startups, and you'd be like, the primary show is the best one from one account. And then a hundred other accounts like the post.

Matt Espinoza (00:26:59) :
Yeah, so it would be, what is the best? Title would be, what is the best podcast for founders? For example, and then the post itself would be, hey, I'm a twenty-two year old male trying to get into the startup game. I've been looking to a couple podcasts like X, Y, and Z.

Pablo Srugo (00:27:14) :
You would make the post? You wouldn't just hop on a thread? Your saying you would make a new post?

Matt Espinoza (00:27:18) :
No, we would make it as well. Yeah, that's right and so in the X, Y, and Z. For example, I would say, I'm starting to look into My First Million. This one and so you need two popular ones, right? That everyone already knows and then you name the third one. And then a top comment would be, I've heard these other two, what's Pablo's podcast? And it's like, oh cool, here's a link. And then underneath there's the link. So you have the attribution side of things already hacked and then that would out compete the top posts or whatever the existing thread was on Reddit.

Matt Espinoza (00:27:44) :
But you need to get a hundred accounts to just like that stuff for it to out? When you talk about outcompete, you need more activity on that than your second best startup podcast thread, right?

Matt Espinoza (00:27:54) :
Yeah, so what we've noticed is that. There's actually very little hacking that had to be done. Because most of these posts, if you post in the right subreddits, already have a ton of engagement and so if you ask a general question. There's going to be people that comment, that are genuine people that are commenting, that are looking for options or give you suggestions. So that already gives it the boost. So you don't need to overengineer the hacking. I would say the big thing you have to engineer is making sure that you yourself are mentioned as the top comment or as the general sentiment of the entire thread.

Pablo Srugo (00:28:24) :
The part I'm not fully getting yet is, well, let's keep on this example, right? There's already existing threads on Reddit for the Best Startup Podcast, and they have a lot more activity than this new thread that you just made. So if I'm on Google and I type Best Startup Podcast, probably the one they're going to serve up is the other one. Because it's been there longer, it's got more activity, whatever. Is it not true?

Matt Espinoza (00:28:44) :
No, it's not true. We've been able to outrank, as long as a post is like seven days old. It simply outranks the top one, based off engagement. So actually age has very little to do. So if you look at the posts that are currently live on Google, typically the oldest one I've seen is maybe three years.

Pablo Srugo (00:29:00) :
So you outrank because you're new? Is that what you're saying? In this case, because this is the newest post and it's got some engagement. It'll just outrank another one with way more comments on it?

Matt Espinoza (00:29:09) :
No, so you have to do more comments and more engagement in the previous one. But if it's newer, newer outranks older and so Google wants you to show the newest sentiment. For example, if you ask, what is the sentiment of Donald Trump? It's not going to show you a three year old Reddit post about it. It's going to show you the most recent sentiment, which is going to be maybe two, three weeks old.

Pablo Srugo (00:29:27) :
So a combination of a good Reddit post, some hacking and some real engagement. Gets you to out beat whatever the other one is. Also because these Reddit posts, for the most part. Unless you're on something really, like if I think about Starter Podcast. It's not that competitive. I mean on Reddit, it's not like we're talking about a hundred thousand comments or ten thousand likes and stuff like that. So I guess the numbers are just not that big.

Matt Espinoza (00:29:47) :
Right, exactly.

Pablo Srugo (00:29:47) :
Okay, got it. So back, we just went on a tangent. But I think it's important with these tactics, it's interesting, right? Just as a tangent here. I mean, this is the point of this show, right? Is to just go really deep on this stuff. So you can actually do it, actually implement it, actually copy it and especially when we talk about go to market. That is the hardest thing for anyone. So it's good to actually understand it. So that was your first products. You guarantee customers that you're gonna kind of get them the best, you know, the top rank link for whatever SEO query that they want. How do you go to market with it? Are you still doing these thousand videos at scale? How are you landing these customers?

Matt Espinoza (00:30:21) :
So the B2B growth hacking game is very different than the B2C growth hacking game. In theory, sure, you could do a million videos towards a B2B product like this. But what we found more interesting was just purely outbound and so we would send a ton of emails every single month, or we'd do a ton of LinkedIn scraping. And it kind of messaged the right people that we know would be a good fit. We have this thing also called Dream 100. Which is like, what are the top 100 customers that we know would be a super great fit, and do everything you can to actually get in front of them. And so that was another huge strategy that allowed us to get some of our biggest customers right now.

Pablo Srugo (00:30:52) :
So, I mean, let's go deep on both of those. I mean, let's start with the cold outbound, cold emailing. Were you doing anything different? Maybe, before we dive into it? Are you just using the classic lists, you send a bunch of emails, whatever?

Matt Espinoza (00:31:02) :
If it's not obvious yet, I believe truly in volume that gets luck. We send about fifteen thousand emails a day, not including weekends.

Pablo Srugo (00:31:08) :
 That's a lot, that's a lot of emails. How much do you care about the personalization of each email, the content of each email? How much time do you really put into that?

Matt Espinoza (00:31:16) :
Yeah, I mean a large part of it is just like mostly generated like AI and the personalization doesn't matter as much. The big thing is the value you have to give per email.

Pablo Srugo (00:31:26) :
What does that look like? What's a good cold email to you? What's the bar?

Matt Espinoza (00:31:29) :
Yeah, a good cold email to you would be like, hey, I heard about your podcast from a friend. I noticed that when I went to just write a thread, you guys were not mentioned. I just mentioned you guys and there's like six other threads that are relevant. That you guys should be mentioned on. Here are some of them, and then the offer is would you want me to post about them or mention you guys there? You would say, yeah, sure and then underneath you would then say, hey, we actually have a product that does this automatically. Are you interested in trying it out? And then that would be the demo call. So it's variations of that, of this is a thing you're missing out on, is an opportunity that exists and then immediately after. Here's the solution we have built to be able to achieve that.

Pablo Srugo (00:32:05) :
And you're doing this times fifteen thousand? So everything is AI automated, from the cold email, obviously to.

Matt Espinoza (00:32:11) :
Yes.

Pablo Srugo (00:32:11) :
Getting the email address to adapting the cold email, to actually posting on that Reddit thread. Everything's just been done in the background.

Matt Espinoza (00:32:17) :
Exactly, everything. Yeah, that's right.

Pablo Srugo (00:32:20) :
Fifteen thousand emails. What's conversion?

Matt Espinoza (00:32:22) :
It's about ten percent, which is above industry standard.

Pablo Srugo (00:32:24) :
Fifteen hundred people every day say, yeah, sure or fifteen hundred people every day do what?

Matt Espinoza (00:32:28) :
Yes, the funnel here is probably about ten percent. Say yes to some degree. Out of that, after the secondary thread, which obviously matters a lot. Out of that ten percent, I would say only ten percent of that ten percent actually move forward, and ten percent of that ten percent then do like, I'll book the demo.

Pablo Srugo (00:32:43) :
So fifteen thousand, a thousand five hundred are like, yeah sure, post, why not? Okay, you're like, cool, we have a product that does this. Only a hundred and fifty are like, oh, interesting, tell me more and then maybe fifteen are like, okay, let's book a demo. Is that right? More or less?

Matt Espinoza (00:32:53) :
More or less. So I would say so right now we're averaging between thirteen to about eighteen demos average per day.

Pablo Srugo (00:32:59) :
And what's the bar for these fifteen thousand? You said you want large TAM companies. Are you going only after large companies? Or it's just casting a wider net?

Matt Espinoza (00:33:09) :
Yeah, it's very wide net focused. If you look at it, majority companies that use Facebook. For example, or any platform like that, want everyone to know about them.

Pablo Srugo (00:33:17) :
Right., they don't have to be a big company. They just have to have a large potential TAM.

Matt Espinoza (00:33:20) :
Yeah, that's right.

Pablo Srugo (00:33:21) :
Okay, at this point there's truly infinite number of targets. You're not going to ever run out.

Matt Espinoza (00:33:26) :
Yeah, the only people you wouldn't want to target is, again, local businesses. Because a million views towards that is going to be not as useful, and they have a higher churn rate.

Pablo Srugo (00:33:36) :
So the cold outbound, that was one way and you mentioned a different way you were going to market. What was it?

Matt Espinoza (00:33:40) :
No, that's the main method. We just do cold, but we just do more channels and so we do like Twitter, LinkedIn. So we just do more channels on the cold.

Pablo Srugo (00:33:48) :
Oh, I see. So you just omni-channel, cold outbound messaging. Is that what you do now or is that how you did it at the beginning? When you first got in February, March?

Matt Espinoza (00:33:54) :
So we still do it, we have not added another channel since that. The biggest difference from revenue has been truly from referrals and so in the last month. Thirty percent of volume actually has come from referrals. Which I think speaks a good amount of volume on the product itself and so now we're adding about, very consistently thirty percent on top of bottom, top line revenue from just people that are recommending it to their friends.

Pablo Srugo (00:34:16) :
How do you drive referrals?

Matt Espinoza (00:34:17) :
Purely because the ticket size is pretty big. It is just like, we will give you a free month if you refer a friend and then they get a free month.

Pablo Srugo (00:34:25) :
If that friend closes? Or just if they refer a friend?

Matt Espinoza (00:34:27) :
If the friend closes, yeah.

Pablo Srugo (00:34:28) :
Okay, what's the ACV? What are you charging?

Matt Espinoza (00:34:30) :
So for the first product, we charge $10k for three months, $15k for six months, and then $25k for twelve months.

Pablo Srugo (00:34:37) :
Okay.

Matt Espinoza (00:34:38) :
So about $3.3k to $2k-ish a month average.

Pablo Srugo (00:34:42) :
What does churn look like? Or is it even, do you count it as churn? Somebody signs for three months and they don't renew. Is that churn to you? Or is it just supposed to be a three month engagement?

Matt Espinoza (00:34:48) :
That's churn to people, like they don't renew after three months. Churn right now is about six to seven percent.

Pablo Srugo (00:34:53) :
A month?

Matt Espinoza (00:34:54) :
No, per engagement. So, per month is a lot less. Because people are, again, we're six months old and so you only see churn every three months.

Pablo Srugo (00:35:00) :
Yeah, yeah, okay. So maybe churn's not the right. Maybe it's hard to understand churn right now.

Matt Espinoza (00:35:05) :
The better way we approach it, is like cohort breakdown.

Pablo Srugo (00:35:08) :
Okay.

Matt Espinoza (00:35:08) :
And so for example, our first cohort. We had about twenty percent churn. Because again, we tagged the wrong industries, like local. Essentially when you first start a company, you want to tag every single industry possible and some of them were not the best fits. For example, security companies or very like enterprise companies didn't work. Very small companies like local businesses did not work. Again, we know that now because of data and so the first cohort, is the way I look at it. Had twenty percent churn. Since then, we have had less churn. So the most recent batch, which is the one I'm referring to has six to seven percent churn.

Pablo Srugo (00:35:38) :
Yeah, you just haven't been around long enough to know really how these things are going to look. 

Matt Espinoza (00:35:41) :
Exactly.

Pablo Srugo (00:35:42) :
But what is the expected usage? If I'm a business and you rank me number one on a bunch of different important threads. Is the job not done? I mean, what's the recurring nature of the engagement?

Matt Espinoza (00:35:51) :
Yeah, the recurring nature is two-folded. One is that this is the first product and so the majority of people have almost done with MRR. Because you sold them to the next product, which is the video one and that one has an unlimited cap.

Pablo Srugo (00:36:03) :
Okay.

Matt Espinoza (00:36:03) :
And so with SEO, what we do is we do a lot of blog posts, a lot of Reddit posts, a lot of Reddit comments and so what we've noticed is that there seems to be not a cap on the post itself. Because you can attack more search queries. You can do, you know, what is the best podcast in Canada? What is the best podcast in the US, right? So there's multiple angles you can attack. So we haven't had churn from that. The biggest reasons we've had churn is either company shuts down. Because it's outside of our control, and or wrong industry, and or this feature was kind of buggy. And again, we had to resolve the feature. But it actually has not been because of results, which actually I think is an interesting statistic.

Pablo Srugo (00:36:39) :
I guess on the blog, because Reddit. I mean, yes, there's many keywords. Let's say, again, back to the startup. But there aren't ten thousand. There's just, you know, you're going to run out. But I guess with blogs, you can always. I mean, I'm doing new episodes, you can make a new blog post about every episode and maybe that drives traffic, and it's incremental, and whatever. When did you launch this video product? And what is it?

Matt Espinoza (00:36:57) :
Yeah, we launched about two months ago. It's called Echoes, and so what we did is that one of the biggest demands we had. Which is an obvious demand, is that once you solve SEO, Organic hacking, the next big thing is video hacking and so right now Echoes only works for Instagram, and half of TikTok is a little bit buggy. But it's going to solve for TikTok very soon. We then mass post and mass produce videos at scale. All promoting your product and so there's like AI AGCs AI slideshows, AI posts in general. That are just photo generated and then we do that at a very low CPM. So average CPM, it varies depending on the industry. But average CPM is about $1 CPM. Which is obviously a lot cheaper than if you were to do the same a thousand views on Facebook. So average Facebook CPM is about $8 in comparison.

Pablo Srugo (00:37:41) :
$1000 gets you a million views? That's kind of, that's what you think about it?

Matt Espinoza (00:37:44) :
That's right, it will guarantee it as well. Which is very different than majority of companies.

Pablo Srugo (00:37:48) :
And this is where you've taken, what you were doing before. Somewhat manually and just fully AI automated it in terms of these, like guaranteeing these views through three hundred accounts. You know, a thousand views per video sort of thing.

Matt Espinoza (00:38:02) :
Exactly, exactly right.

Pablo Srugo (00:38:03) :
How is that product going?

Matt Espinoza (00:38:04) :
It's crushing. It's going to be out competing the first product in the next thirty days.

Pablo Srugo (00:38:08) :
In two months, it went from zero to?

Matt Espinoza (00:38:10) :
Zero to $210k.

Pablo Srugo (00:38:12) :
A month? So it's only like a $2.5 million run rate two months in.

Matt Espinoza (00:38:15) :
Yes, that's right. Well, I mean, I try not to use run rate or ARR, but I try to do it on a per month basis, but yes.

Pablo Srugo (00:38:20) :
Yeah, that's more legit. I just, I like the hype, you know, but no. But just apples to apples. I think a lot of people think about ARR. So it helps understand the scale of it. I'm sure you're cross-selling it, you're upgrading your current customers. What about new customers? Is it just the same cold outbound email, or do you have a different approach for this product?

Matt Espinoza (00:38:38) :
Yeah, this one we haven't done any actual outbound or anything. This is like pure existing customers that want this new product.

Pablo Srugo (00:38:45) :
Oh, so this $200k is just lift on, it's all from existing customers that upgraded.

Matt Espinoza (00:38:48) :
It's all lift, yeah. Which again, has proven the thesis. Our initial thesis correct, which is, if you can have something where it solves distribution. You can then cross out between the same customer to multiple products.

Pablo Srugo (00:39:00) :
Do you think you would use the video product to promote the video product? Or does that not really make sense?

Matt Espinoza (00:39:07) :
Yeah, I think we have not tested that and again, we have not done any growth for this product at all. And it's just been purely existing customers. So we haven't tried anything. We haven't tried our cold outbound, nothing.

Pablo Srugo (00:39:18) :
And then the original product you launched in February? March? When did you launch the SEO piece?

Matt Espinoza (00:39:23) :
End of April.

Pablo Srugo (00:39:24) :
End of April. So that's the six months, and that's doing? What did you say, half a million a month or so?

Matt Espinoza (00:39:29) :
That's right.

Pablo Srugo (00:39:30) :
So like $6 million annualized if you annualize it? Okay, so that's the kind of $8 million total and to be clear. All this stuff that that first product does for SEO and Google search queries. It has the same effect in ChatGPT and Claude?

Matt Espinoza (00:39:43) :
Exactly, yeah. So that's been the biggest new feature on the product. Which is like, we already knew we were outranking on Google, and we also knew there was some LLM things. That we started to notice that between clients but we couldn't track it directly. We couldn't say, hey, this post has gone live. Two days later, it's now number one on Google but now it's the third step. Which is, it's number one on Google and now when people search up this search query. It is being indexed as this result. So your company is now being indexed. If you look at all the major competitors right now, so Profound or any of these AIGO tools. They're not doing that, everyone is just monitoring. Which in my opinion is completely useless. Why would you want to monitor? Also, if you don't know how to even change it, like I don't know how you're selling customers. But for us, it's the entire system. It is like, you want to be in this key term. I cannot guarantee you're going to be on this LLM platform or going to be on LLMs at all. But I'll guarantee you number one in Google and right now, LLMs are indexing Google. And so as a byproduct, we're then getting them on the LLM platform.

Pablo Srugo (00:40:40) :
This is maybe a stupid question, but this whole monitoring space. How can you? Like Google is easy, because incognito mode. We'll all see the same results. You know what I mean? So you'll be like, I'm number one. Whereas the LLM depends on who I am, how I'm asking, all this sort of stuff. Like what it's going to show me in any given query. How do you automate that so you can tell me, hey, like as a startup podcast, you're getting outranked on ChatGPT. Is that, is that something you're giving these information on? How do you do that?

Matt Espinoza (00:41:03) :
So the way Profound and most of these companies do it is. To do thousands of queries a day all towards ChatGPT or whatever LLM platform they want, and then they're able to get results on what people are saying. As a general sentiment and so obviously each query is going to be a little different in response. But typically indexing is very simple. So probably an 80th percentile on how indexing is being shown and so if you're indexed. You're typically indexed across every single search query, across all users.

Pablo Srugo (00:41:31) :
So it's one thing you're like, hey, you're now indexed and then I assume in some amount of days or weeks. The search queries themselves will start, like you'll be able to show that I'm actually coming up.

Matt Espinoza (00:41:40) :
Exactly, that's right.

Pablo Srugo (00:41:42) :
I mean, I must say, I'm like, dude, where do I sign? You know what I mean? I think I'm your new customer. It's interesting, man. Some of these things, talk to founders, right? And a lot of it is, do people really care? Do people really care about the thing that you're selling? Yeah, your product looks great. It's really slick, this and that. But is it really a top of mind problem? And, you know, something like this. Everybody wants more reach, everybody wants more distribution, everybody wants to rank on Google and rank in ChatGPT. And the only real question is, can you actually do it? And do you have a way to then show to everybody that you can actually do it? I mean, I think that's the distribution piece that you have. But I would argue the distribution piece, what you're doing, cold emailing. As much as I'm sure you've optimized it, is not like radically new. At least doesn't seem like it's, okay, it's just you're doing something that many people are doing.

Matt Espinoza (00:42:27) :
It's just the offer is very good.

Pablo Srugo (00:42:29) :
That's what I'm saying. Yes, exactly. The offering works and it's just really good.

Matt Espinoza (00:42:32) :
Yeah, exactly.

Pablo Srugo (00:42:33) :
How big do you think this can get? And related to that, how sustainable do you think this is? Because one of the worries is, it's just the bar has dropped so much in terms of what it takes to create a new Reddit post, a new Reddit thread, a new blog post and you have to assume some of this stuff at some point is like the black hat. You know what I mean? The keyword clouds that you used to do on websites and then all of a sudden it's not the thing that matters. How do you think about the sustainability of it all?

Matt Espinoza (00:43:01) :
Yeah, I mean the way we've approached it is price is only going to continue going up and so our current customers are paying what is arguably a lot of capital. It's not like a PLG motion. It's not like you sign up, use the product, again at that point you end up saturating the growth hack. My end goal is I want to work on the newest growth hacks across the biggest companies. Because the biggest companies are not going to focus on the biggest growth hacks. If a new Google SEO hack exists next week. We will be the first company to ever build it and the first company to distribute it across to all the big companies.

Pablo Srugo (00:43:31) :
How do you do that? How do you unlock constantly the latest hack? That seems like a hard to systematically do. Do you know what I mean?

Matt Espinoza (00:43:39) :
Yeah, totally. A large part of it is just the infrastructure we have behind it and so people say they have AI agents. We true, have legit AI agents. We have people, I don't know if you've heard of Browserbase, a very big company. They help you kind of, essentially an agent to be able to determine what is on the browser itself and so we have that built in-house. Where if I'm like, hey, let's say this is a new hack. The new hack is to refresh Google ten times and then post a link, whatever the hack may be, right? We can then do that autonomously using our own infrastructure and so that's how we're able to incubate these new growth hacks that exist. And so half the battle is knowing what the newest, and latest things are. But once we know what the hacks are, we can then easily build infrastructure and products around it. And again, sell that product to our existing customer base.

Pablo Srugo (00:44:23) :
People will always want reach and they're always going to pay for reach. That'll just never going to change, period and so as long as you can guarantee more reach. Doesn't matter how you do it, people will continue to pay. That's for sure. The question is, right now you're doing these AI videos at scale, right? Tomorrow they're like, oh, I know what's an AI video and what's not, and I'm just blocking it. Just to whatever, right? Okay, cool, now the use of that is zero. But can you come up with the new thing? Now what door's been opened? Cause that one's been shut and there's always a way to gamify it.

Matt Espinoza (00:44:48) :
Yeah.

Pablo Srugo (00:44:49) :
But I guess that's the bet. The long-term enduring, like Clover is going to be a serious company in five years, ten years. If you're consistently finding the new edge and the new way to just be one step ahead of the algorithms.

Matt Espinoza (00:45:01) :
And the goal is no one else will be able to do it at the same scale. Everyone's doing it, like build one product and continue growing that one. And we're going to continue doing that as well. But the goal is have products own a channel. So the first product solved SEO. So if we do a new growth hack in SEO, it's going to be within that product set. It's going to be a new feature. The second product then solved the video and so we're doing a short form now. Maybe the new growth hack is going to be long form. We're not that far away from doing that as well, like true long form videos and so that's going to be the next obvious channel. And so those solve the two, what I call Clover leaves. And again, the thought process is, how do you do four clover leaves that solve the entire distribution layer? And it doesn't matter what the hack is anymore. It matters what the channel is and then. So the first two is to solve Organic. The next two is to solve Paid. So like Facebook ad agent or Google ad agent PPC, that's full autonomous. We're obviously not going to get there immediately, because we're trying to focus on our existing organic products. But that's the next obvious step and the goal after that is then attribution. I think most of these attribution software's are not that good, and we have our own system that's able to determine Organic views, and know if they convert or not. It's the fifth product, which is the fifth secret leaf. Is you want to do a product that does attribution at scale. How do you know what's working? And you can then use any one of our Clover agents to then get traffic to your site. And then bring that traffic, and know it converts to whatever degree possible using the fifth Clover Leaf.

Pablo Srugo (00:46:25) :
That's great, man. I think it's very, very different, frankly, the way that you're approaching it. Than what other people are doing and I think the value prop, just being this distribution layer to a lot of companies. It's massive value to the extent that you can keep. I think that's a challenge a lot of AI companies that are growing really fast. The sustainability thing is the question. Frankly, it's the only question. If you're growing that fast, everything else is good. So the only thing you can worry about is sustainability. But it is true. You're like, if you got it so fast, is it going to leave that fast? And is it going to be a bunch of different competitors? But I think it makes sense the way you're thinking about it. Which is if you build this automation at scale, and if you're somehow able to flex that muscle to just stay ahead of it. Then that's the thing that kind of keeps you going for a long time. 

Matt Espinoza (00:47:05) :
Right.

Pablo Srugo (00:47:05) :
Let's stop it there and I'll ask the last three questions we always end on. The first one is, I'm going to ask it differently. Like the typical question is, when's the first time you felt like you had true power market fit? But let me ask a different thing. You have witnessed product market fit now across at least three, if not four products, maybe more. When do you know you have true product market fit? What is true product market fit to you?

Matt Espinoza (00:47:27) :
I would argue the first two companies I built were actually not the definition of how I'd market, true product market fit. What I have seen in the last thirty to forty-five days, is that true product market fit is purely based off referrals. If people love your product to the degree that you say they do. They will refer other customers to that product and if people can do that to say that not only you love your product. And the market thinks the product's a good idea, but also the customers themselves think it's a brilliant idea. And again, right now. Thirty percent of our new top line revenue per month is coming from referrals. It's just people that are like, this is great, this works, I'm getting results. This is cheaper than Facebook ads. It's cheaper than any other mechanism that I've ever used to get a ton of customers. Let me give this to my best friend who also has an e-commerce business. Let me give this another SaaS friend that I have.

Pablo Srugo (00:46:25) :
What's the time to value on your product?

Matt Espinoza (00:46:25) :
It depends on what product. The first one is about two weeks, it takes about fourteen days to index on Google and or SEOs. And the second product is almost immediate. If you want a million views tomorrow, we will guaranteed a million views tomorrow.

Pablo Srugo (00:48:26) :
Have you noticed the impact of that shorter time to value? In terms of referrals or something else from customers?

Matt Espinoza (00:48:32) :
Well, we have done. Which is quite interesting, is that we have switched towards even a trial model. Which is like we're so confident in being able to do what we do now. So typically, again, we sell three, six, and twelve-month packages. If we're like, hey, we'll give you two weeks free but you have to sign on for 12 months as a must and so, we'll give it to you for free. We'll do all the infra, it's going to cost us in RNS, and be in a negative for a little bit but you have to sign for twelve months.

Pablo Srugo (00:48:54) :
But you can cancel in those two weeks, if you don't like it?

Matt Espinoza (00:48:57) :
Yeah, exactly. You cancel in those two weeks. You don't get to see the results you don't want and then you can just cancel.

Pablo Srugo (00:49:01) :
Do you notice more referrals as a result of your short attempt to value?

Matt Espinoza (00:49:04) :
I wouldn't say so. I think it's more the longer term. People think actually, transparently, in the beginning it's too good to be true and it won't be sustainable. It's like, cool, I've done a million views here and there, whatever. But then when it's sustainable, it's like we're consistently doing it and also you're consistently getting value. You're consistently getting downloads to your app. Your products, your purchases to your e-commerce store. Then it's like, wow, okay, I will actually refer someone else, because I've seen consistent value. It's not like a one-off pony trick.

Pablo Srugo (00:49:30) :
And do you get as much referrals from one product as the other?

Matt Espinoza (00:49:33) :
Yes, we do. Yeah, I would say from both ends.

Pablo Srugo (00:49:35) :
And then the second question that I just want to attend to there. The second question is, was there ever a time? Actually in any of your companies, where you thought things just wouldn't work, and you might just fail completely?

Matt Espinoza (00:49:44) :
Yeah, I think it was in between me running way too many companies before starting this one. It was like, I was running eight different businesses. You know, and I just. Way too much things were kind of going on. There was no clear, clear winner and I did not see myself running a company like this for ten years. I can see Clover being the absolute endgame. I think there's variations of us winning. I think the next game worth playing is obviously more leaves like the four Clover leaves and the next game after that is building whatever company I want. And I'll compete in any company that I want to.

Pablo Srugo (00:50:14) :
Are you going to raise more for Clover?

Matt Espinoza (00:50:16) :
We've had very big chats of some of the biggest VC firms transparently, but we're open to it. I think it really depends on the goal we're trying to have. I think if people understand the vision, it's a very different model than how startups typically operate. If people can't understand that, I think they've been pretty solid on what we're looking for.

Pablo Srugo (00:50:34) :
Last question, what would be your number one piece of advice to an early stage founder that's trying to find product market fit?

Matt Espinoza (00:50:40) :
What I would say, which is something that I think a lot about in terms of what I would tell a younger version of myself. When building companies, and it is the times where things are super difficult. I'm spending a ton of hours on a project I think no one's going to be able to see. Is that over a long enough time horizon, everything actually works out. The co-founder breakups you think is going to be the end of the world, you give it a month, two months, you'll find someone new, you'll find someone better. The employees that leave and churn, and join another competitor company. You'll find other people to replace them and majority of founders. When dealing with product-market fit, is that they either do not do enough volume, or they do not do the right channel. They're working on the worst opportunities that no one wants and so it's a mix of either one of those two things. If you work long enough, over a long enough time horizon, all of that will be negligible in how you want to approach life.

Pablo Srugo (00:51:28) :
Love it. Matt, thanks so much for jumping on the show, man. It's been awesome.

Matt Espinoza (00:51:31) :
Awesome. Thank you so much.

Pablo Srugo (00:51:33) :
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 on that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.