The Exchanges

Q going to pay for it, but if I could do consulting where I build software for other people, I'll be able to find the best developers, bring them in house. I'll be able to understand how to build and how to sell and how to create by watching what my clients do. That was the original idea. Before we go into how you changed it, what made sense about it?

A I think that there's, there were two macro factors in particular. Actually, let's call it three. One was a little bit more personal. Like, when, when we sold our last, you know, AI product company, I was probably 24 at that time, um, and my entire life had been either spent in academia or on that last company. You know, I had a couple internships and things like that, but I really didn't understand a lot about how the world worked, and AI Is a very, um, context dependent sort of skill in industry, right? Like you need to actually understand the workflows and the data and how people are supposed to communicate. So we realized that we had a huge gap in understanding my, my co-founders also were all around the same age. And so we knew that we didn't really understand what enterprises and mid-market businesses tended to look like and operate. And so we needed to gain that information ourselves. So that was, that was the first thing. Uh, the second thing was that, um, We also understood, just being AI practitioners ourselves, that the typical way that SaaS-type businesses, like software-style businesses, were built, scaled, and sold in the past 10 years was not going to be the same formula that was going to work in this new age because AI requires a ton more professional services, almost, to actually get the results from that application because it's not so, like, out of the box, ri…

AI assessment note: “there were two macro factors in particular. Actually, let's call it three. One was”

Q been Maserati or something. She was sitting there, and I said, why are you here? She says, I want to understand how we could include AI in our business. Um, and she didn't really know you. You just had connected at one time and she came in. That seemed typical-ish, I guess. There were definitely a group of people who were like that. How did you fill up the place?

A Um, so, I, I did it, um, the credits do with, uh, one of my friends, and also we had, like, a joint venture together, uh, Rodeo Turtle, one of my friends, Logan, he, he has a great Austin network, I have a great Austin network, we came together, and we're like, we're very particular about, again, because we're not just, like, volume people, both of us, we prefer these one-on-one things, I was like, I have probably about 40 people that I could invite, you have about 40 people, let's do that, You know, out of that, maybe 50 to 60 showed up, and we asked them to, like, bring along one person that, you know, was, uh, we thought would be a good fit, and then we probably, we did, we did some cold outreach as well. Like, we found other founders in the area, um, that, you know, we respected or had heard about and asked them to come, um, and that, that's pretty much how we did it.

AI assessment note: “I have probably about 40 people that I could invite, you have about 40”

Q Uh, how do you describe what the company does? Cause on LinkedIn you say custom AI and automation agency. I don't know if that really does it.

A You know, I've gone back and forth on the description of it many times. Most of the time when I'm talking, you know, more informally in person, I just say I run an AI engineering firm, um, which I think is, you know, I used to say consultancy, and people then thought that we were mostly doing advising work, um, and strategy work, which is actually, like, less than 10% of our business. Like, a majority of our, almost 80% of my team are engineers. And so I, I typically I'm like, we're an AI engineering firm. We specialize in generative AI apps. And, uh, if you, all the stuff that you read about on LinkedIn and Twitter, as it pertains to LLM's agents and stuff, we built that for businesses.

AI assessment note: “I just say I run an AI engineering firm... We specialize in generative AI apps”

Q I think it's interesting. I, I imagine that you're laughing to yourself saying, I don't think that this is going to be a long-term success. It has to be developed like you do from scratch for the software to really hold up. Am I right about that?

A I, you know, that's, that's my thesis that there is a class of problems and a class of businesses that are associated with those problems that require more custom solutions. But at the end of the day, who, who really cares? Like who really cares about what it's made in or if it's custom or if it's Zapier, like the thing that you're, should be buying is the outcome for the business. And if people are able to deliver that value with a Zapier automation, Great. If that's the, if that's genuinely the easiest and most efficient way of generating that business outcome, and it grows and scales, go do that. Like, I think that's, I think that's perfectly okay. Um, I know, I, yeah, I work the other way, which is like, who needs the custom stuff, right? And like, who, who can't work with, like, just a Zapier, and then that's where we fit in.

AI assessment note: “that's my thesis that there is a class of problems... that require more custom solutions”

Q I think I'm getting where this is. Do you think there's room for other people to do what you're doing now?

A Yeah, definitely. I, I think it's actually a pretty blue ocean space. I, I, I probably talk to a competitor, um, maybe once every other week, once a week, you know, once every, and you know, I think it's, I think it's really blue ocean. Like the original thing that we talked about, which is like AI transformation is true. I think that every business that exists today will have AI, um, in their business moving forward. So I actually think that the opportunity space is expanding actually over time because Today, most businesses have zero or one agent or AI integrated into their business. If that, um, in the future, I'm sure that they're going to have hundreds of agents running within their business, and that unlocks an entirely new class of problems.

AI assessment note: “Yeah, definitely. I, I think it's actually a pretty blue ocean space.”

Q Give me an example. Like, what's, what's, um, what's a way that you're able to build faster with AI, and what's an outcome that you're able to give because AI is part of it? Hmm. Be specific.

A Yeah, I mean, they're not necessarily the same, um, the same answer, so I'll break it into, like, two parts. Like, the, the latter question can be answered by, um, what are the What are the solutions that are now possible using large language models in this layer of, like, sort of generalized intelligence that these large frontier labs have created that were not possible before? Um, a good example of that could be, um, Feedback driven and like natural. So like, for example, we worked with a, a really big, one of the biggest like family law, um, offices here in Texas. And, you know, they wanted to build something similar to like a Harvey, but very specifically around their data and their sort of SME feedback, guiding a chat based system that they could use both internally as a training agent, as well as externally to help new prospects and customers answer questions. Um, or new clients, I should say, um, answer questions about their divorce proceedings, for example. Um, that's something that requires a high amount of reasoning, right? In order to provide the correct answer. And that's the type of knowledge work that was previously gated. There was no computer application system that could really help with that because the corpus, the possibility, the world of possible questions is so massive, right? Like there's no way to, to hard code all those answers out. Um, so that's someth…

AI assessment note: “we worked with a, a really big, one of the biggest like family law”

Q That's fantastic. So why don't you do more of them?

A I think we are. Yeah, we're doing, um, we, we are working on, uh, a secret sort of event project right now. I think that, um, the little teaser, or I'll just give you the title, is, like, AI World Fair, um, and we're gonna do that closer to the summer, and then we're probably gonna do sprinkling of smaller events from now till then. Um, I think when I, when I did the event, it was never, it's gonna sound weird, I know it's a big investment, too. Uh, my goal was always just, like, like, from that event was to cement ourselves as, like, a real player in the Austin space, like, get people to know myself and my team, my company's name, um, and that was really the goal. The BD stuff was, like, honestly a bonus, and, um, That continues to be it. Like, I, I don't think that Austin really has, like, a powerful AI event scene, an AI event network, almost, and, um, I don't see any reason, like, why we can't own that space, and so, I'm gonna keep doing, I, I enjoy doing those types of things, so that's, like, a more personal thing for me.

AI assessment note: “I think we are. Yeah, we're doing, um, we, we are working on”

Q You don't want to just take more of the money for yourself? You can- Hire people. You can just do it even as a one or two person operation. Can't you?

A Yeah, I, we, I mean, it definitely made it a lot easier, especially with our particular skill sets. Like, we, we, we worked really, really well together. Um, I'd say, like, I have more BD tendencies, and I think, like, my, uh, you know, area that I'm really good at is speaking to a customer and taking something really complicated technically, which, um, you know, my background in AI, computer science is there, and then actually just translating that for people and helping them get excited about it and understand it. Whereas their skills are like architecture and AI respectively. And so like just the combination of the three, I think like that, that equated to a much higher, you know, multiple than just like any, any of those some parts.

AI assessment note: “combination of the three, I think like that, that equated to a much higher”

Q How many nights a week would you say that you went out in the beginning when you were doing your early networking?

A Um, not as, not as much as many other people. I've met, I've met some serious networkers. Um, Yeah, maybe, maybe like once a week, once every other week, like not too many. I'm, I'm, I'm also a big believer in like, you go to the right spots, like you'll, you find this stuff a lot more readily, I would say. Like, I was pretty particular about where and when I was spending my time. Um, and then the other thing, the other side of that, rather than going and just trying to meet a volume, like a net volume of new people, I was really, I was, I spent a lot of time like culturing and work, like culturing my Cultivating, sorry, my, my relationships that I've already formed, right? And, um, it's really easy when those people are also very interesting, and they're working on interesting things in their business or in their industries, like, because that's how I get to learn, and that's, like, the best part, I think, about what I get to do is I'm talking to people that are experts in their own field, and I get to translate that information back, and I, I like, I, I just like to learn about all these different things, and so, um, It's easy for me to be like, yo, let's get, let's get dinner, let's get drinks, let's catch up, um, let's see what's happening, um, and, and, and that's, like, translated really well.

AI assessment note: “maybe like once a week, once every other week, like not too many.”

Q Yeah, we gotta do that again. And so for you, that's the way that you like doing things, maybe a little more low key than we did it, but essentially it's that. And then, uh, and then eventually some business comes from that. You mentioned that you did, um, an event. I went to the event. Did you get any business from it?

A Uh, yeah, yeah, definitely. Same way that it happened that we're talking about this time, which is somebody at the event knew somebody that was looking, or maybe they were an investor and had a portco, like, same type of thing. Um, what I find with those events is, like, it's, it's almost never direct in the sense that somebody comes to that event is, like, I want to hire you tomorrow, like, that, that almost never happens. Though, though, it's, it has, it's, it's mostly just increasing, uh, Tarun's surface area, like, in the world, and more, and you know, I don't, I think we are very fortunate in the sense that I actually don't think that there's very many firms that can do what we do technically, um, and with the level of specification that we've had, like, we've been in the generative AI space, like, January, 23, ChatGPT came out November twenty-th, or November 30th, twenty-twenty-two, so like, basically a month after We were in the game, and we've been in the game since then, so, like, our volume of work and our ability to speak about it and the breadth of projects that we have, um, I think just, like, placed us in a very special category, and, and so when I get to meet people, you know, I'm not just, like, another marketing agency or, you know, a PR firm or anything like that where there's a lot more competition. We've, we've definitely specialized very heavily.

AI assessment note: “Uh, yeah, yeah, definitely. Same way that it happened”

Q What do you charge for something like that?

A We have a pretty typical kind of custom software model, um, I would say, and I actually think it's a little bit broken, um, the way that consultants and the other, you know, historically these types of service businesses have built because they're usually like a price per hour type business, right? And you have like resources that are spending on it, so we still use that as estimators for effort, um, but it's a, that's actually probably one of the trickiest parts about what we do because we are constantly getting faster and better at what we do, so how do you charge? You know, more value based rather than just like raw time spent. Um, that's tough. Usually what we will try and fix is either, or we'll try and do is either sink into a fixed fee model where we just know exactly what we need to go and do. We can estimate it ourselves internally and just give a, give a fixed cost, especially if we understand how big of a problem this is for that customer or more often than not, we're like, look, we think that this problem is going to take us a month to solve. Here's one engineer. Um, and so we, we have a forward deployed engineer model where we're like, here's one engineer. It's going to take them a month, but this is a capacity plan and you're just paying for, you know, a whole dedicated engineer for as long as it takes them to go solve that problem.

AI assessment note: “we'll try and do is either sink into a fixed fee model”

Q You've told me a lot then that since this is your role to bring in customers and close them, a lot of it has been through referrals. Do you do anything to juice that up? A lot of it has been through old relationships. What's your process for turning old people into old relationships into customers?

A Yeah. Um, actually, no, I would say only like less than 10% of this business, less than, yeah, less than 10%, let's call it, let's just make it, um, be generous with it. Less than 10% came from like old relationships. I'd say 90% were people that I've met and interacted with since starting the business. Um, so you can treat that as net new, though they are all like network driven, right? Um, I think For me, like, my biggest secret is not always trying to, like, go out there and, like, hunt for sales. I just, like, naturally talk about what we're doing. I also think I want to, like, preface this entire conversation or just, like, add an asterisk on it by saying, We are in such a big tailwind space where, like, there's so much force behind the AI movement that I think, like, our lanes were always greased, and they are greased today. You know, it's easier to get, it's easier to talk to somebody about AI because everyone wants to be in it, everyone wants to be using it, and so, like, I naturally think that's, like, helped me start conversations, but from there, it's, like, how do we show the value in their business? How do we actually relate our technology and what's possible, like, show them the art of the possible, bring them along that journey along with us.

AI assessment note: “less than 10% came from like old relationships. I'd say 90% were people that I've met”