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Automated Transcription of Audio (Thank you to Temi for the transcription.)
Chad Pytel: 00:06 This is the Giant Robot smashing other giant robots podcast where we explore the design, development and business, have great products. I’m your host Chad Pytel and with me today is Adam Marchick, CEO and co-founder at Alpine.AI. Adam, thanks for joining me. One of the things I’m curious about is what’s your day to day like now? What are you spending most of your time on?
Adam Marchick: 00:27 It’s been fun; this is startup number three for me. All three started with a partner and a one page idea and my last one’s scaled to 100 people, so I have been through a bunch of phases of being CEO. One of the things I love about being CEO is a good CEO’s job changes dramatically every six months.
So in this current phase with Alpine.AI, which we formally announced February 2018, our v1 product is ready to rock and we have our first few customer. So a lot of what I am doing is around new customer acquisition, customer support & success, and then also a little bit of recruiting.
Chad Pytel: 01:17 And you mentioned that you launched February first, publicly, but how long were you working on Alpine.AI before you launch publicly?
Adam Marchick: 01:26 Sure. So we actually started VoiceLabs.co two years ago and it was the thesis of my co-founder, Alex Linares. He was my customer at Yahoo, and an amazing product, technologists who understands consumers and he came to me saying, Hey, this Echo thing is going to be big two years ago. And so we started VoiceLabs, which by design was, hey, there’s something in this market, let’s go figure it out. We actually built a product voice analytics product for Google Assistant and Amazon Alexa.
VoiceLabs.co became the #1 analytics products in the market. That said, it was always our plan to use our understanding and analysis from the analytics to figure out the big opportunity. And so about six months ago, we started building the Alpine platform. And then February first announced we were closing our analytics business to fully focus on Alpine.
Chad Pytel: 02:22 How did you know that it was the right time to do that?
Adam Marchick: 02:25 It’s a combination of market analysis and kind of getting a feel for the market was ready for the solution that we’re going to offer and frankly being intellectually honest around how quickly you can grow a voice app analytics company.
Chad Pytel: 02:41 Were you splitting your time between multiple things or were you full time on voice labs at the time?
Adam Marchick: 02:47 Yeah, we were always full-time on VoiceLabs.co, but all of the code we wrote for VoiceLabs is now part of Alpine. But it was a bit schizophrenic when we were still supporting our analytics customers while focusing on the future.
Chad Pytel: 03:04 Logistically speaking, from a financing perspective, is it the same company? Did you have investors in voice labs that you have to carry forward and how were you communicating with investors along the way about the changes that were happening or upfront about the changes happen?
Adam Marchick: 03:21 Oh yeah. No surprises with your investors.
Chad Pytel: 03:25 Speaking of investors in starting funded companies and you mentioned you’re on your third one now, is it getting easier, harder, different?
Adam Marchick: 03:33 I think I’m more grounded in understanding how things work, but whether a specific fundraising is it easy or hard… You know, Ted Wang who’s now at Cowboy Ventures, talks about the horse and the jockey. So the horse is the company. The jockey is the team. Both of those factor greatly into how easy a fundraise is.
Chad Pytel: 03:58 Was the fundraising that you did for VoiceLabs easy or hard?
Adam Marchick: 04:10 You know, it was easy, objectively, but it was harder than it was for Kahuna. Because Kahuna, when presented, was obvious, whereas a lot of people still don’t really understand voice.
Chad Pytel: 04:14 How far along were you with what you had and what did your pitch look like?
Adam Marchick: 04:19 We had a first development customer and a very basic demo. We kind of relied on the success of our analytics product.
We were the number one analytics product for over 3,700 voice app developers on the platform. The number one analytics service recognized by both Google and Amazon. We had demonstrated an ability to execute because of our analytics business, and it was how we saw the opportunity for Alpine. So all of that data and understanding was part of the pitch.
Chad Pytel: 04:57 So how do you describe Alpine to people?
Adam Marchick: 05:03 Voice platforms are here to stay. In the past two years, the number of voice enabled devices has grown from 2M to 450 million and consumers, in addition to asking for Spotify or turn the lights on, in mid-2017 they started asking Google Assistant and Amazon Alexa for product information. Right now consumers not getting good answers, so for brands and retailers that care about digital commerce and commerce in general, they should be present on these platforms and they should be effective on these platforms. Alpine delivers them a solution to be both present and effective as a consumer goes down the Path to Purchase. That includes voice now in this new, voice-enabled world,
Chad Pytel: 05:54 If I’m a big brand or you know someone who wants, what does Alpine do? Is it a platform for building something?
Adam Marchick: 06:02 It’s a solution.
Let’s say you’re Nike and you don’t have an Alexa skill, you don’t have Google Assistant app, there’s over a billion voice searches per month and you’re not being found. You sign up with Alpine and you get a Google Assistant app, an Amazon Alexa skill, and you start getting relevant voice traffic and you have a really good experience that helps consumers purchase.
Chad Pytel: 06:33 What does discoverability look like on the voice platforms now? Do you find that when brands are coming to the platform they need to tell people about it?
Adam Marchick: 06:43 One of the fun things is it’s all evolving, so one of the other advantages you have by working with Alpine is you’ll know sooner than if you didn’t work with Alpine, since we are very steeped into this market and have good relationships and connections throughout the industry. So you know, to answer your question, Google has talked about implicit triggering, which is basically voice SEO, where you don’t have to ask for Nike. You can just ask her running shoes and perhaps an Nike gets turned. Amazon, they’ve talked a little bit about it, but I think there’s more to come.
Chad Pytel: 07:20 I imagine it feels exciting to be on the forefront of something new. Is that what you’ve sought to do?
Adam Marchick: 07:28 Yes and no. To give you a wishy-washy answer where the answer is yes. I’ll give an example where I started Kahuna in 2012, which did mobile marketing automation for Mobile apps. I started building mobile apps in 2001 and for 10 years it was too early for Kahuna and when we started Kahuna was honestly perfectly timed from a market product-market fit perspective, but without that early learning in 2001, I wouldn’t have been as well positioned similarly, you know, being at Facebook in 2008 when Chamath started, the growth group is really the first growth marketing group ever created. You know, I was early and now growth marketing and growth is a real big deal, which I love executing on. So as early they’re, you know, this time I started a company in voice fully knowing it was really early so we had to construct a company and also how we talk to our investors appropriately. Like if Nike had an amazing Amazon Alexa App, it’s not like it would suddenly become 30 percent of the revenue overnight. It’s not there yet, but the trend lines show that if they don’t get involved now they’re at risk.
Chad Pytel: 08:52 Do you find that investors are comfortable with that uncertainty or the early nature of your work?
Adam Marchick: 09:01 Some are, some are not.
Chad Pytel: 09:08 What would you have done as a founder and maybe you face this with your other ventures where you’re just getting feedback from people around you, investors that they’re just not getting it or they don’t think your idea’s going to succeed. Have you faced that?
Adam Marchick: 09:27 Everything I’ve done. How do you handle that? Joel Peterson was a professor of mine and he’s off the charts good and he said the best people digest feedback. So it’s like really writing it down verbatim, really following up to make sure you understand the meaning and not getting defensive, but instead recognizing this is really important to understand and hopefully overcome.
Chad Pytel: 09:59 I imagine for some people that that’s probably hard to not get defensive, to not just dismiss it and think, oh no, I, you know, especially I think maybe in the startup ecosystem there’s this idea of grit and determination and the product founder who has a vision regardless of what people say, they’re gonna push that vision forward. The tendency is probably there to push through that and ignore the haters, but you’re saying you really do need to learn from them, digest it.
Adam Marchick: 10:33 Well, I’m also not saying that those two sentiments are mutually exclusive. Yeah. You can have ambition, gumption, drive, run through a wall and have enough EQ to digest feedback and make your own decision on whether it’s valid or not.
Chad Pytel: 10:51 As a founder, CEO and person responsible for a startup, how do you deal with the, and I asked him point of never having personally done this myself because everything I’ve done has been bootstrapped, but how do you deal with the runway, the idea of runway and we have this much time. How does that affect your behavior or your emotion?
Adam Marchick: 11:17 Yeah, I mean companies don’t die, they run out of money. And the first thing is I have a tremendous amount of respect for the boot-strapper, you know, and the reason you take venture capital is to grow a company artificially quickly where you can make different investment decisions because you have a healthier balance sheet and you give up equity and sometimes control for that. So it’s a trade off. And so I really enjoy knowing I have like 15 months of runway and I’m OK when I got nine months of runway and I am nervous when I got six months of runway and I typically try and prevent, you know, especially from being a vc for seven years for the last thing you want is when you’re talking about weeks or runway because then you just make bad decisions. And so I’ll be frank in this company, we wanted to give ourselves more time to get conviction around our next step. So my co-founder and I took no salary for a few months and suddenly we had a ton more runway and we did that because the goal is to succeed.
Chad Pytel: 12:39 That’s a nice segway to the other thing is you’ve been on the other side of the table as an investor. How do you think that influences you now that you’re back on the other side as a ceo and someone who’s taking money and working on something new or has that changed your approach or your understanding?
Adam Marchick: 12:59 One of those things where you said like, Oh, if you’re not running through a brick wall, you know either through a brick wall or you take feedback. The answer is kind of both where you just have perspective. The more perspective you can have, the better typically your outcomes are. So I understand where a VC is coming from and I’ve had a really good conversation with my last company. The lead investor was Sequoia and the partner. There was a guy by the name of Omar Hamoi who was a sole founder of AdMob and sold them to google for a billion dollars and he understood both sides of the table and he said, hey, we’re coming up on a decision where you and I will not be a hundred percent aligned because I have a job as being the fiduciary responsible at sequoia and you have a job which is being CEO of Kahuna and there’s 90 percent overlap on this decision, but not a hundred percent. And just understanding when those situations arise and being mindful of that. I understand that, I think better than most, given the experience.
Chad Pytel: 14:12 Well, speaking of exits, in your experience, how much do you personally, when you’re starting something new or when you’re working on a day to day basis, are you thinking about the exit?
Adam Marchick: 14:24 So I would say from a strategic perspective, no matter what, 99% of my mental energy on outcome is focused on building equity value. And if you build company equity value, typically good things happen. And then like the rest of it is details. But other important details like for example, engaging and collaborating with larger companies that potentially would be acquirers or making sure you are have rock solid financials and controls. So if it’s time to go public, you’re not like, oh my goodness, I should’ve done these 50 things a year ago. So just preparing. But if you’re not growing and you’re not creating equity value, it doesn’t matter.
Chad Pytel: 15:14 When you say what does that mean?
Adam Marchick: 15:17 Yeah, it means, I mean different things to different people. I had a fraternity brother, Kevin Systrom who generated zero revenue but Instagram got bought for a billion dollars, say in theory at a billion dollars of equity value for Alpine as a SaaS software business. There are metrics where people value a company on ARR, churn and growth. So those are the rules of engagement around equity value for my company.
Chad Pytel: 15:48 and you’re doing that, you’re developing that. You’re. You’re thinking about that on a case-by-case basis for each of your companies in making the decision for this, we don’t want to generate revenue. That’s not where our equity value is going to be.
Adam Marchick: 16:03 That’s the exception, not the rule. I don’t recommend it. To your credit like there’s nothing better than getting out of jail – i.e. being profitable.
Chad Pytel: 16:13 Because then you control your own destiny and as you alluded to when we were talking about it before, that investment allows you to grow on naturally fast. And so that’s the other side of the, the bootstrap model is that nothin.e.g I’ve done has grown incredibly fast, incredibly big and the exits that we’ve had as a company have been relatively small and I’m sort of parsing out for myself now. Is that because that’s what I believe or is that just what we’ve done because it’s comfortable because I’m not inherently opposed to, you know, there are some bootstrappers you talked to. There’s a whole bootstrapping community where it’s like, you know, they fundamentally believe the VC investment culture is bad and I know that. I don’t believe that inherently.
Adam Marchick: 17:02 I think people got to do what they’re comfortable with and what makes sense for the business and whenever. Like, this is what’s so funny is I grew up in Palo Alto and the first startup I worked for had a $3B IPO in ’98, so I’ve always been relatively comfortable with the high growth company model. Whether or not it has venture capital or not. Like there is no virtue and taking venture capital. There’s virtue in growing 200% year over year. It’s really, it’s about OK, are you constrained in? What are your constraints? Like honestly right now for Alpine are constraint isn’t money. It’s A++ ML engineers. We have money. It’s the talent because great ML and NLU experts are very hard to find.
Chad Pytel: 17:55 The ones you do have. How did you attract them to begin with?
Adam Marchick: 17:58 I mean that’s a multifaceted and recruiting at an early stage company is really hard, but so are a lot of things. The first thing is, is the person excited to work on what you’re building? Because these people have multiple job offers. When I can get to, we get to like 20 people and they can do college recruiting. You know, someone took a chance on me at Oracle and you know, I had two or three other offers, but I didn’t have 10 coming out of school right now. It’s no secret that if you’re an A+ ML person, you got options.
Chad Pytel: 18:30 Yeah. They are attractive options to join big names like Amazon now. They’re hiring crazy amounts of people and for large sums of money.
Adam Marchick: 18:41 So that’s the perfect thing. So it’s like, listen, typically I’m recruiting against apples and oranges. If it’s between Alpine and then another early stage startup, I’m confident I’ll win, but then if it’s between Alpine and Amazon, it’s honestly not me selling. It’s what experience do you want.
Chad Pytel: 19:08 So given that it’s hard to hire these folks, there’s just not that many people who have this expertise who are on the market. What are the steps you’ve taken to try to bridge that gap?
Adam Marchick: 19:20 The first is hustle. If you don’t talk to someone, you can’t recruit them. So we have a pretty proactive strategy to try and find as many people who are potentially interested in well qualified as possible and once they get past the first meeting where we both are interested, then it’s much easier. It’s really that front of the funnel that’s the hardest issue. And you solve that with hustle.
Chad Pytel: 19:47 Have you thought about training people?
Adam Marchick: 19:50 Yes, but we will when we’re 30 people or so; just different phases.
Chad Pytel: 19:57 When you’re setting out to build a team, how do you think about that?
Adam Marchick: 20:01 That’s actually one of my biggest learnings is the right word in the wrong word or I’ve always known as critical. And that said, now you know, the, the more I’ve done this, the more important culture fit is to me. And once again, if you ask me the first time, I’d say culture fits number one, but if you don’t fully get it until you get it, where there have been times where 60 percent of my daily job has been managing unnecessary hr stuff and once you go through that, it’s basically like never again. And part of that is high quality bar because if someone’s not that good it causes friction, but it really goes down to like, is this person the right culture fit? And also what is your culture? You know, Bob Tinker, who is the CEO of mobile iron, what has been a mentor to me? And one of the best things he did was like month eight of Goona. He’s like, what’s your culture? And I started giving Angelina now where’s your one pager with your culture? Like define it and make decisions based on it.
Chad Pytel: 21:09 How similar would you say the culture is between the different companies that you’ve started?
Adam Marchick: 21:14 You know, I’d say relatively similar because it’s kind of set top down early stage, but then with significant evolutions based on learning.
Chad Pytel: 21:23 So what is your culture than at Alpine.AI?
Adam Marchick: 21:27 So the other thing is if you can’t describe our culture quickly, it’s a problem.
Adam Marchick: 21:34 So we are: 1. Build stuff the world has never seen before. 2. Have Fun. 3. Be intellectually honest. That’s it.
Adam Marchick: 21:42 And if you unpack all three of those, there’s, you know, 15 attributes of each. But that’s our culture.
Chad Pytel: 21:49 So what do you do to determine whether somebody is a culture fit,
Adam Marchick: 21:54 when you have an interview process that aligns with it and when you are, or when you’re deciding whether I’d hire someone you bring those three things up, what does having fun mean to you?
Adam Marchick: 22:06 They have to enjoy the work they’re doing and they also, you know, Alex Linares came from Yahoo and they actually had a great saying where we take our work, not ourselves seriously, you know, so they gotta enjoy life and enjoy coming to work.
Chad Pytel: 22:23 What I hear and, and, and maybe that’s not correct, but what I hear that is that they’re probably optimistic rather than pessimistic.
Adam Marchick: 22:32 Yeah. It’s hard to have fun when you’re pessimistic. Because the building stuff that the world has never seen before. It would be hard to do if you’re pessimistic, fun, being enjoyable, enjoying your work. If you’re negative all the time, it’s not gonna happen.
Adam Marchick: 22:50 If you combine building stuff the world’s never seen before with intellectually honest, it’s a pretty awesome combination.
Chad Pytel: 22:56 How quickly are you growing now?
Adam Marchick: 23:01 What metric matters? That’s another thing that’s fun is like, it’s great, another mentor advisor, like “gut checker,” of mine is Mark Leslie who was a professor of mine. He joined, lead and ran Veritas, you know, and right after we closed our A round with Sequoia, we’re growing revenue. I saw him and I’m like, hey, you know, we’re 40 people now. He’s like, well, that’s not a metric I care about. I don’t care about people growth, you know. So first is, what metric: is it customers? Is it revenue? Is it people? All are interesting things. So, what’s most important to you?
Chad Pytel: 23:42 I was actually thinking from a people perspective because we were talking about interviewing and hiring, but I also totally recognize that that’s not probably not the most important thing to alpine in terms of growth metric.
Adam Marchick: 24:02 Honestly people growth is our biggest challenge right now. This quarter, right? Customer grow up into the right, but it’s an important metric for you at this point in time, right? It’s unimportant. Just put bodies in seats is important because we’re looking at our architecture diagram and roadmap and we have like circles around things that need to be built, skills slash extra people needed to accomplish our roadmap. Yeah. So focusing on people than what’s your team size now? Uh, we’re six. And where do you want to be out by the end of the year? 10. OK. So you know, you’re not talking huge numbers, but percentage wise it’s a pretty big increase and hiring is hard and you have a niche that you’re hiring for that’s probably even harder than in general.
Chad Pytel: 25:03 So do you feel good about hitting that goal or are you worried about it now? I feel good. OK, this is year 15 for me. Yeah. So do you do it yourself at this stage or are you working with outside recruiters? You doing everything you possibly can. How do you approach it? First we are doing everything we possibly can. Every company is a recruiter. That’s the most leverage-able thing is to find the next great person to join here and whoever outside can help us. Great. So, uh, don’t be afraid of offending me, but you know, you said you have this chart with circles on it that needs to be done and you have these experts that you need to hire. How do you think about or don’t think about the idea of outsourcing to experts?
Adam Marchick: 25:56 So funny enough, born and raised Palo Alto, 34 years in the bay area, three years in Boston.
I am not a Silicon Valley biased person. I would love nothing more than have engineers, additional engineers elsewhere. So there’s remote office and then there’s outsourcing. I don’t believe in outsourcing Core IP and right now 90 percent of what we’re building this core Ip, so more than happy to outsource the 10 percent. But as it were, 100 person team, you know, maybe 30 percent is not core Ip. I actually lived in Bangalore and ran sales for an outsourcing company. So all for it, it’s just where does it make sense?
Chad Pytel: 26:33 Yeah. So why do you, I think I know the answer, but I’m asking it for the sake of getting it on the record. Like why don’t you believe in outsourcing core IP?
Adam Marchick: 26:45 Because core Ip is typically built by innovative individuals and if those innovative individuals are not part of your company. It’s IP that’s lacking.
Chad Pytel: 26:56 So when you graduated then you went to Oracle and then you went to get your MBA. Right?
Chad Pytel: 27:04 Actually, I did five years in five years. OK. Funny enough, you know, I was two years at Oracle. That was like, all right, it’s time to switch to business, so I’m going to go to do product and I’d learned fortunately enough at Stanford because I was involved with the startup community, that a great way to find a product job at a startup is to go to VCs and ask them what their best company was or is. And the third VC I went to Sonja Hoel at Menlo Ventures said, why don’t you join us? So I was at Menlo Ventures for three years.
Chad Pytel: 27:36 What made you decide to go get an MBA? Did you know that you were going to do that earlier?
Adam Marchick: 27:42 No, I knew I was going to start companies and thankfully enough, the first company I started was at night while I was at Menlo ventures. And it was a non-profit for first-generation college kids and then ran for 10 years and served about half a million college kids. You know, I was heavy on technical and product. I was light on finance, which is an important skill for a CEO. And I kind of look at like the best CEOs have a lot of tools in their tool kit, you know, save for like, once again, like there’s the exceptions. A lot of people like base their life on the exceptions, not the rule. Steve Jobs, Mark Zuckerberg are the exceptions to the rule.
and that well roundedness came from somewhere. It’s not like, they just woke up one day and had all the skills. So a combo was I wanted to add a few tools in my tool kit. And honestly I was a little tired. I basically had had two jobs. My day job was Menlo Ventures. My night job was the Glow Foundation for two years. I kind of wanted to take a step back and assess my next 10 years.
Chad Pytel: 29:04 So when you decided to get the MBA, I’m curious, did you like do a lot of shopping? Did you visit or did you just say, I’m doing this and here’s where I’m going and I’m starting next semester or whatever.
Adam Marchick: 29:19 I mean the application process is non trivial where you take the Gmat and then you do a relatively extensive application and then you tell them you want them and then they let you know if they want you. Then to see if there’s a match that takes about nine to 10 months.
Chad Pytel: 29:37 Is that how you typically approach decisions or did you find as a founder, as an entrepreneur, did you find that process frustrating or was it comfortable for you?
Adam Marchick: 29:48 First off, I’ve been very fortunate that the decision I had made around business school was a relatively charmed one, so it was like really fun. I’ve had a few of those experiences where it’s like, listen, there is no wrong answer and you got through the part where you want them and now they’re both, you know, or they’re willing to accept you what’s the best fit and enjoy that versus stress about it. So no, I mean that’s part of it is I’ve been fortunate enough I’ve had that in the funding process where I had a bunch of terms sheets and rather than stressing about it, it’s like, how lucky am I? And reframing and being like, all right, what’s the best thing for the company?
Chad Pytel: 30:32 So do you think that overall getting the MBA was the right thing to do?
Adam Marchick: 30:36 Yes, but the whole thing is if you approach getting an Mba from an expected value perspective, you’re never going to go. I like to approach things from a life fulfillment perspective, which you never can be. You know, you never can accurately project an experience will be life fulfilling. But if you have that approach, you typically seek things that are enjoyable and fulfilling and learning for you and I learned a lot and enjoyed it.
Chad Pytel: 31:05 I think that’s a really good advice to people who may be at that decision point or thinking about. I know as a CEO with a CS degree and not having a business background, I often think about where I could level up or where my deficiencies are and whether an emba is is right for me.
Adam Marchick: 31:25 One of the things is like Brian Halligan actually think, just wrote an article that the best MBA is being a key member of a high growth company. Like once again from a pure learning or pure financial expected value – there are other things that are more effective, you know, so by no means would I say the MBA is the best way to learn about business.
Chad Pytel: 31:46 I think if, if I had to think about the weakest area that I have, I feel, and it may not be true, but it’s the way I feel that finance is my weakest area. There’s times where I’m trying to put something together or working on a hard problem with the numbers and and have the sense that someone probably knows something about this that I don’t know.
Adam Marchick: 32:08 Well, I mean, here’s the funny story that I’ll just be open about is like, OK, so I went to Stanford and I like took the advanced finance classes because I knew I was relatively deficient. I learned some, but then like my internship was at facebook and Justin Osofsky was my boss and he was way better at finance than I was and then I left Stanford business school and I went to Bain Capital and they’re like, whoa, you got a lot of finance to learn. And to their credit they like let me take classes and also trial by fire. Like at 30 years old I was pulling three all nighters a week because it’s like, hey, you either learn this or you don’t. Bain Capital was my financial education provider, you know, period.
Chad Pytel: 32:57 Yeah. I really appreciate you sharing with us today and if people want to get in touch or follow on, where’s the best place that they could do that?
Chad Pytel: 33:12 and you mentioned you’re hiring, so I assume that’s a big push for you now.
Adam Marchick: 33:18 Full Stack engineers NLU ML people.
Chad Pytel: 33:22 Adam, thanks again. I really appreciate it was a lot of fun. It really appreciate the time. Thanks for listening. If you enjoyed this episode and I hope you did, do me a favor and tell a friend about it, it really helps you can subscribe to the show and find notes for this episode at giant robots dot [inaudible]. If you have questions or comments, email us at home, a giant robots.fm and you can find me on twitter at [inaudible]. This podcast is brought to you by [inaudible] and produced and edited by Tom of our ski. See you next time.
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