The Profitable B2B Growth Playbook and Mutiny’s Story

Ben: Hello, Acquired LPs. Today on the show, we are joined by Jaleh Rezaei. Her story is incredible. She emigrated to the United States from Iran when she was a kid. She was obsessed with math and science. She went on to study engineering at Berkeley, got her masters at Stanford, went to the Stanford GSB—alum of famous Acquired co-host, David Rosenthal—for business school. She worked at Sequoia. She went on to join Gusto early, eventually leading marketing.

This is quite the resume, David. We don’t normally start episodes like this, but I felt it was warranted. All of this is helpful context to know because since Gusto started their business with very low price points for their customers—just payroll for startups—she had to be laser-focused early on profitable growth, measuring things at a very granular level for their customers acquisition funnel at every single point throughout the funnel.

We wanted to talk with her about this idea that she had, this great tweet storm that was the playbook to profitably grow a B2B company. Something that is very useful now that capital is scarce again.

David: Indeed. This conversation was so great. I’m so glad we did this and that we get to share it with you all. I think it will be very helpful for a lot of founders and investors out there, these current weather conditions that we are in right now in 2022.

Ben: Of course, she’s become a real world expert at this because she has productized a lot of these learnings into Mutiny, a company that she started four years ago.

With that, this is non-investment advice, and on to the interview.

David: Jaleh, welcome to Acquired. We are so excited to have you here.

Jaleh. Thanks for having me. I'm super excited to be here.

David: Super cool. Mutual friends over at Sequoia introduced us. We chatted a little while ago. Your story is awesome. You've got such great insights to share from Gusto and Mutiny. We're excited to get into it.

Ben: Maybe I've had my head in the sand a little bit, but I think maybe since following you on Twitter, or maybe the last few weeks, you just blew up. You have some of the most prolific tweet storms I've ever seen. They're unbelievably helpful to founders.

Jaleh: Thank you.

Ben: I want to use that as the point to just dive right in. You wrote a B2B profitable growth playbook. This was a talk that you gave at Sequoia and at YC, then you shared this great summary of it on Twitter, which we will link to in the show notes, but I'm sure many listeners have not read that. Can you walk us through that a little bit?

Jaleh: Absolutely. If you trace back the history of marketing and growth, it starts in the 60s with what we call the ‘mad men’ era. This is when there was enough competition in products that it was like, well, we need a story, why would you grab our cereal box versus someone else's? Well, because our oats are made with love in Idaho.

Ben: Our tobacco is toasted.

Jaleh: Our tobacco is toasted, right. This started that storytelling. The main distribution for this was offline channels. TV was probably the most prolific technology that advanced this era. With the Internet, that basically shifted to online distribution. Platforms like Google and Facebook gave us a ton of data and AI to be able to find all of the right people on the Internet, be able to tell our stories, and put our messages in front of them.

The field grew pretty significantly and exponentially during the past couple of decades, but it has one really big problem. The problem is the waste attached to it. Today, 19 out of every $20 that companies spend on advertising and this type of demand spending, ends up going to waste.

David: That's even worse than the old ‘I want to meet your quota but half my dollars go to waste.’

Ben: I just don't know which half.

Jaleh: Exactly. It's a lot more than half that's wasted. Typically, what happens is that you have really good technology that gets the message in front of the right person. But then once that person ends up getting passed over the fence to the customers' website and their own properties, there isn't really a ton of technology there to make sure that they have the best experience and they end up becoming a customer. They bounce and go with it all of the money that you spend on getting them to that point.

The third phase that has started, I would say a few years ago, with the shift from a lot of companies putting growth teams on this problem has been to really focus on the entire flow and make sure that we're actually turning all of that spend into customers, revenue, and impact for the company.

Now, fast forward to the current moment, what's happening is we were in a bull market, so nobody cared what was happening to efficiency. It was like, okay, just throw more money at the problem. That'll get us more people. As long as top line numbers are growing, that's all that matters. This has been the case, I would say, post the 2007–2008 recession. With post Covid, with the big V-shape recovery was truly the YOLO years of this.

Ben: I hope that goes down in history as the way people describe it, by the way. That's a fantastic term.

Jaleh: What's happening now is investors both in public and private markets are saying the game has changed. Now the focus is back to profitability, sustainability. We're looking at things like CAC.

The message to the CEO and the executive team is you have to become more efficient. But the challenge is we have been using these ad-centric growth engines that we've been building over the past 10 years. You can't just cut expenses and all of a sudden, that problem goes away. Most companies have to completely rewrite their growth playbook in order to be able to do it efficiently.

Because we're at this really important inflection point, and most companies are scrambling to figure out how do they do that, YC, Sequoia, and a few of our other investors asked me to come and speak about how we did this at Gusto, because the unique thing about Gusto is that we sold to small businesses. When I joined, our average deal size was $500.

What that meant was that every investor wanted to make sure that we could grow and acquire small businesses cost effectively from the beginning, so that the bull market didn't really apply to our business. As a result, we had to build a very efficient engine. I talked a little bit about some of those lessons learned. That's what the Twitter post was based on.

Ben: What do you think it is about human psychology or maybe it's about organizational design, where everyone pointed so much of their energy at top of funnel growth, getting the most cost-effective traffic to the very first touchpoint that you have with the customer, but very little optimization ended up being done in conversion relative to, obviously, your discussion of efficiency on the ad platforms, let alone on pricing?

We had Patrick Campbell on the show where he pointed out that people revisit their pricing once every 2–3 years, but revisit their Facebook ads 50 times a day, despite the fact that all three acquisition, conversion, and pricing and packaging, are all gigantic levers for the business.

Jaleh: I think the first root cause of this is you're going to play whatever game you're told to play. If the game is grow as fast as possible, and when you're fundraising, nobody cares to even look at your efficiency metrics, that's what you're going to end up doing. I think the second really important piece here, though, is technology. We have a ton of technology to do advertising as effectively as we can.

David: Literally the smartest minds in the world.

Jaleh: Absolutely. People think of Google and Facebook, Google is search and Facebook is social media, Metaverse, or whatever the hell it is these days.

David: Really good at targeting.

Jaleh: Right. They make all of their revenue from marketing. They're, in a way, martech companies. They are some of the biggest companies in the world. Their entire revenue is paid through the budgets of marketing. They have done a really good job of making that type of technology accessible to everybody, such that everyone can be reasonably successful, even if they're not very analytical or technical.

I think this is a huge reason for why that has been widely adopted. The other disciplines of marketing that are also tied to demand like content, PR, SEO, all of these things have grown pretty significantly. Most marketers have a really good handle on this piece. But when it comes to conversion, they don't necessarily have a good handle on that.

For example, at Gusto, we had to solve this by building a dedicated engineering and data science team. We did that because we did have a conversion problem when we initially really expanded our marketing.

David: This was a dedicated growth engineering and data science team, right? Separate from the product engineering.

Jaleh: Exactly, completely separate from that. My background is engineering, so I tend to tackle the problem from the perspective of, what's the outcome that we're trying to achieve? And then how do we actually go about doing that? What solutions could we put in place?

I went and talked to a bunch of CMOs and I was like, okay, we have this conversion problem. Do you guys have this problem? How do you solve it? Who's the best at conversion? Because my goal was to hire the best person, put in the best technology. Then great, solved, move on to the next problem. Everybody was like, oh, this is a huge problem. We know that it exists. We can't really even quantify it because that requires analytics that we don't even have.

We have some AB testing, we have some nurture emails, we do some retargeting. This is like, maybe I would say, at best, 5% of the marketing resources went towards conversion. But there wasn't really a system with inputs and outputs that you could optimize that could solve this problem.

The best examples of this that I found were B2C companies like Airbnb, Pinterest, that had built massive engineering and data science teams to go and convert users and make sure that they were efficiently moving through their funnel.

We decided to do the same thing given that there wasn't really a good solution to it, so we built this dedicated engineering data science team. It was incredibly effective. I would say, if you looked at the overall cost of what was going into marketing versus conversion, we were probably close to 50/50 by the end.

David: Wow. You think about a typical growth team. Even a B2B company like Gusto, I suspect, 50/50 is way at the far end of the spectrum.

Ben: Wait, can I push on that for a second? Do you mean that the infrastructure investments were 50/50, or do you mean that the investments all up in conversion matched the investments who were making an acquisition, including the actual ad spend and acquisition?

Jaleh: I mean in terms of the team distribution. We were spending about 50/50 on the salaries of folks. If you factor in the ad distribution, it would probably be closer to about a third.

Ben: Okay, it makes sense. It always shocks me how much every company has to pay rent to those who have aggregated audience demand at this point. It's interesting that it's a full headcount team of cost that ends up going to whatever platform currently owns people's attention.

Jaleh: Absolutely. The types of things that we ended up doing on conversion was matching the website to the particular audience that was coming in. One problem that we had was, we originally started selling just one product—payroll—to one audience—startup founders.

Then as we grew to multiple audiences, restaurants, accountants, and lawyers, our product grew to benefits—401(k), FSA, all these other things—we needed to start customizing what different people were seeing so that it wouldn't be a bait and switch. They come in through a highly targeted ad, they land on the website, and they're like, what the hell is this?

David: This is for lawyers, yeah.

Jaleh: Exactly. What are pictures of all these people in offices? I'm a restaurant. We were doing that type of optimization. We were optimizing the signup form, the onboarding form. Lots of infrastructure is going into essentially identifying who's the customer, where do we have a blockage in the funnel from a conversion standpoint, and then we would brainstorm what do you do differently now that we know we have a problem, and then we would custom code it.

Before we custom code it, we would fight tooth and nail over what would get built, because you have a spreadsheet of 200 items, and you can only build like two or three of them that quarter. Then we would custom build it, and then measure it to make sure that it had the desired effect. We kept going through that loop over and over again.

After about three years of doing this, it became really clear that it had a huge impact on our growth. Gusto, I think over the years that I was there, grew 100X and CAC dropped from 20+ months to 10–12 months. The rapid growth and the increase in efficiency are very hand in hand. The more efficient you are, the more you can spend that money on top of funnel and bid even more aggressively. It's just one very efficient loop between demand and conversion.

Ben: That's a thing that we haven't dug into far enough on Acquired, which is how interrelated all these systems are. To your point, let's even take a super blunt example. If I have a product where my customer lifetime value is $100,000 and someone else's customer lifetime value is $50,000, I can just afford to pay more for them so I can outbid them every single time on any of these platforms.

But then once you layer in what you're talking about, where if I'm twice as efficient as actually converting the traffic that hits my site, now I can pay four times more than that other person who has half the customer lifetime value to make the numbers work.

David: Okay, 2 ½ times more and still be more profitable.

Ben: Right. That's really what you're hoping for.

Jaleh: Exactly. The returns from conversion, it's almost like on three different layers. The first one is you just convert more people so you get more customers. The second one is that because you convert more people, you get treated more favorably. Your overall unit economics actually starts to go down.

Ben: You mean algorithmically by the Facebooks and Googles of the world.

Jaleh: Exactly. It's not just the ads, it's also SEO, so all of your organic conversions start to go up. Then the third piece is that you can then take that extra money and put it back on top of the funnel. Really, what that means is it's not just that you have extra budget. It means you can bid more for the same thing that other people are bidding for, which means you can outbid your competitors.

There are essentially these three layers that start working together, which is why it's such an important area. But the part that was really frustrating for me was that everyone would look at us and say, you have a growth team, that's amazing, oh, my God. For us, it was that spreadsheet of 200 things that we wanted to do, and we could only do the top few.

It was really frustrating as a head of marketing for me to be so dependent on another department to be able to hit our goals. It's bullshit. There's no other department that operates like that.

David: The other department that you're dependent on being engineering?

Jaleh: Yeah, engineering and data science. It's very frustrating. This was actually how my co-founder and I bonded, because he was on the engineering side. He was an early engineering leader. He's like, I want to know why it is. I know we have a good marketing team, but why is it that you guys are constantly needing engineers? What is going on there?

We started talking about the problem. We started brainstorming about, how can we build a solution that essentially alleviates the need for this? That's when we came up with a no-code architecture for Mutiny that essentially becomes the world's growth team that helps everybody drive conversion, so that they don't need to build their own independent engineering team for this.

David: The marketing engineering team. I love it. Let's get into Mutiny and your story now. Before we get off your tweet thread in this topic of the profitable growth playbook, first, I have one more question I've really wanted to ask you.

You had four pillars of the playbook, and one was shifting to program-level CAC. I thought that was really important, especially for this environment, where so many people are looking to like, hey, I just need to slash my advertising expenses, I need to slash my marketing budget. Talk to us a little bit about that and why just overall, you need to disaggregate stuff.

Jaleh: I find that a lot of marketing teams, the way that they operate is they agree on a budget with finance, and then they go and spend that budget. A lot of these budget cycles are annual. During that year, obviously, they have some process. They want to make sure that they're deploying that capital effectively, but no one really looks at CAC during that process.

CAC is something that the finance team calculates, it's like a nerdy finance thing that happens. But I think it's really important that actually, the marketing team understands what the CAC is at the program level.

For really expensive programs like advertising, you actually want to have near real-time CAC. By real-time, weekly is sufficient. It has to be at a level where your team can react to it. If the program is really expensive, you want to know every week how to optimize your spending. For the programs that are less expensive, you want to calculate CAC at least at a quarterly level so that you can cut the rotten apples, essentially, from your portfolio.

Ben: Can you give some examples of the top five most common programs when you say, at a program level, so that people know what you're referring to?

Jaleh: Program for me is essentially anything that helps you acquire customers or convert more customers, so an event program. Let's say you have an idea to invite your prospects to dinners that are hosted by the sales team once a month. You think that's a really good playbook, you want to test that out. The first thing that you would do is you would create a few dinners and see what the yield of that is.

The danger that a lot of teams fall into is they want to make sure that they have a really good experience. They'll go into the basement, and they'll build this big program, and then they'll come out and they've committed to like a year of things to do. That's not really the best way if your goal is efficiency and rapid growth.

What you want to do is just start calculating what is the cost of this, how much headcount do we need, and then do the math to understand what would it be at steady state so that you have line of sight into what the economics look like if you are successful and you hit your big vision for the program when you scale it.

With that in mind, then you set a very clear goal for what you want to get out of this in the next month, two months, or maximum I would say three months, is what I would give to new programs. And then you would measure, okay, what did it actually cost us, et cetera.

Usually, CAC doesn't look great when you start a program. It really shouldn't because you're not trying to do scalable things. But what you want to make sure is happening is you want to make sure you're hitting your other impact goals. Then you can assess CAC and say, do we have line of sight to make this thing three times more efficient than what it is today? If you do, then you can continue to move through the gates and keep scaling the program. Once you're at a point where you have full confidence in the metrics and you have full confidence in efficiency, that's when you fully scale the program.

David: When you say other impact goals, how do you think about that?

Jaleh: It depends on the program. Marketing is complex. I wish it was simpler. Sales is really simple. You have STRs, that book meetings, and you have reps that close deals. It makes a lot of sense, all of the budget and the math goes into headcount.

Marketing is a little bit more complex because you have to create awareness in the market, and then you have all of this machinery that actually gets you to convert those customers. The goal that you set for the program is dependent on what the program is trying to do. Most of the programs that tend to be very expensive are tied to driving customers.

The goals that I would set, to go back to the event example, I would want to see how many opportunities were created from the dinners that we held. You have the same goals for all of their demand gen programs. You would look at off something like opportunities. Then if it's a conversion program, then you would look at conversion metrics.

Ben: It makes sense. Okay, so we're starting to talk about Mutiny a little bit, or at least you mentioned Mutiny in the context of how you came up with it at Gusto. I’m so curious how something that is a problem you observe inside a company where you're currently an executive can become its own company.

A lot of the time, there's real technology that gets transferred out. A lot of times, it's, hey, I solved this problem once in a very specific way, and now I want to build a completely new generalized solution. But if you're open to sharing, how does that happen, where you start to gain more and more conviction that, hey, I want to start a company around this?

Jaleh: I think these things are a combination of how much you believe in something, which is probably part of your DNA as a person and part how well you understand the problem. For me, my parents are both engineers. I grew up in a very special household where we were constantly experimenting. My dad would always come home with these Russian mathematical riddle books. I think it was his way of babysitting me.

David: That's a good trick. I'm going to try that.

Jaleh: Yeah, and I was really competitive. He would always say, this one is for a 12-year-old, but you're only 6, but I think you can do it.

David: I'm taking notes here. I'm parenting. This is great.

Jaleh: Yeah, that was like a seven hours of self-babysitting recipe. I would solve these problems. I distinctly still remember this one that had me puzzled for a while, which was you had six matches, and you had to create four equilateral triangles out of it. There was this moment where I realized, ah, you have to lift three of the matches up in the air.

I loved solving problems. I feel like that's something that he instilled in me. I found the process to be really, really fun, no matter how hard it was. My mom, who's also an engineer—they actually met in university in Iran—is just a trailblazer.

A memory that I have from her was when we were really young, maybe five or six years old. We had a party. Persians have a lot of parties, in general. The kids just roam around, so there is no 7:00 PM bath time and then story time. You're basically there with the adults and you're fending for yourself. It sounds bad, but it's actually really fun.

David: No, that sounds great.

Jaleh: Yeah. I remember going to the kitchen because I was looking for my mom. There were all these women there. They were cleaning and laughing. I'm like, where's my mom? They're like, your mom's in the living room. I go to the living room, and my mom is there with all of my dad, my uncles, and everyone. She's playing poker. I don't know if she had just lost or won, but she was talking smack, screaming at somebody, and laughing.

She grew up, obviously, in a country where women are very much boxed in on what they're allowed to do, including whether they can show their own hair, which is tied to a lot of the protests that we're seeing right now that's going on in Iran. But even in that environment, she was very much like, okay, what are my passions? What are my values? And then she would just go for it, and never really give up.

Once she saw this is the way to do it, then that's the only thing she could move towards. When I was young, I thought that was difficult. But now, I realize I'm quite similar in that way.

Ben: Isn't it funny how we all grew up to become our parents? I do not like that at all, and then you're like, oh, my God, I'm like that.

Jaleh: Exactly. I truly am a mix of the two. Once I saw the opportunity, it was impossible for me to not pursue it. Today, the way that marketing is done is you have this tech stack. I think, on average, a mid-market company has 91 tools that they cobble together. It's insane. You need engineers to piece those things together.

When I imagine the world where you don't have that dependency anymore, and you have AI that's telling you exactly what are the top strategies that you should be investing in, and then within a few clicks, you deploy that, and then you can see exactly what the impact is. That would be transformative for not just marketing but for the world, for every company. Their number one goal is to grow. This is something that I think that we can have a real impact on.

David: To your point earlier, on the acquisition side, this has already happened. Google and Facebook have made those tools available that you can do that with their tech without having an army of engineers, people, and experts on [...].

Ben: There's a traffic faucet that you can turn now. You can pay them money, deepen their moat, and get traffic. Wouldn't it be nice if there were faucets for dialing everything else?

Jaleh: Exactly. A really funny story is that we did YC when we first started. We met with Paul Graham. Paul Graham has this really nice way of simplifying things. We told him what Mutiny does and he goes, I get it. You are the other half of Google. Oh, this is going to be big.

David: Oh, such a BG. I love it.

Ben: Okay, give me the nuts and bolts. You're getting increasing conviction because everything you're doing at Gusto is working. How do you decide to take the leap?

Jaleh: I've always been very entrepreneurial and always at least thought that I could start something or wanted to. I enjoyed environments that were scrappy, where you had to create something from scratch. I'm not a big fan of big, political environments.

For me, I always knew I wanted to start something and be on smaller teams. I ended up going to business school, actually, of all places, because I thought I could go for two years, party, and start a company. That was the reason I went to business school.

During that time, we did a lot of brainstorming. We would sit in these conference rooms. We would think about, okay, what markets are bad, what markets are good, and what problems are unsolved? And then we would come up with ideas. Anything from group exercise to just the craziest stuff. I started a company with a friend of mine called Snailbox. I'm not even going to describe what that company does, but we had a lot of fun building something that was probably not going to be very big.

Ben: Had you worked at Sequoia already at this point? Have you been exposed to the world of entrepreneurship?

Jaleh: Great question. I ended up doing a second internship at Sequoia while I was in business school. It was during that time that I completely changed my mind about the right way to go about creating a company.

I started interviewing all of these successful Sequoia founders, Kevin Hart's from Eventbrite. They're all telling me their story. Their story was so in-depth and rich. They had such a nuanced understanding of the problem that they were trying to solve, even at the moment that they jumped into the business.

When I compared that to what I was doing in business school, I was like, oh, okay, this is different. I don't want to dedicate the next decade to any of these problems. I don't fully understand any of these problems because they're not part of me. So I decided to do the second best thing, which was to go to the smallest company that I could find which ended up being ZenPayroll, which became Gusto.

Ben: Was that their original name?

Jaleh: Yeah, it was called ZenPayroll.

Ben: Nice.

Jaleh: To go back to Ben's question around how do you know, I got to a point where I couldn't think about anything else. It wasn't even a decision. It just was like, I have to go build this. It felt so different than when I decided to build Snailbox. I just was like, I don't even care if this fails. I was like, I have to die trying. It honestly wasn't even a decision.

David: How did you decide when you left and started working on Mutiny? How did you decide to do YC? You'd been head of marketing at Gusto, you worked at Sequoia. You probably didn't need YC to go raise a seed round. What was your thought process?

Jaleh: At the time, I was a growth advisor at YC. Michael Siebel, who was the CEO of YC, asked us to come in and brainstorm with him so that we could better understand what value YC could bring to the table.

Two things that really stood out to me from the conversations with him and also in meeting with other YC folks was that YC has this ability to get you to think really clearly about the problem that you're solving and everything that you need to focus on in order to get to that.

The second piece was speed. I was doing a bunch of advising, and the YC founders that I was advising were just different. They were all so much faster than all of the other founders. As I started to talk to these folks, it became clear that there was some magic happening in YC that was creating this extreme simplicity in a really good way and focus and speed for these companies.

Every single person that went to YC, I asked them, do you regret going to YC? They're like, best decision I ever made. At some point, when the seven of the smartest people you've ever met all say it was the best decision they ever made, you're like, all right, I got to take the leap here. I agree, it was the best decision we made.

Ben: I like staying here in the early stages of Mutiny. What does the path to your first customer look like? Because I could totally see how there's still a little bit of fear and risk when you leave Gusto of, okay, this worked for Gusto, but can I actually create a solution that works for other companies?

Jaleh: Totally, because you're working with a lot of customization when it's for you. This was a big part of what Nikhil (my co-founder) and I talked through. We actually spent about 5–6 months before we wrote code thinking through the long-term architecture of Mutiny. We knew that we were building a platform, so we had to create a set of primitives that would then power playbooks, essentially.

Let's say we start with web. Ultimately, we want it to be present in email and all of these other customer touch points. We had to build the platform in a way where we could then scale really quickly across these different platforms. Once we had that, then we had a lot of discussion around, what is the right entry point into this platform?

We ultimately decided with web as the right entry point, because all the data sources ultimately flow through web. If you were to build a system of record today, web is the best place to be getting data, whether it's activity on the website, whether it's advertising data, IP data, cookies, a sign-up form, all of that data flows through the web. It puts us in a position to build the system of record, which is what we're doing under the surface with Mutiny.

Ben: Why is that true, technically? Is that because just JavaScript can execute arbitrarily and it's amazing to collect as much as you possibly can from that?

Jaleh: There's just a lot of technology that's just been built around data feeding right into the web. If you're running even as a JavaScript client on the web, you can collect a lot of those things. You can still collect them through all of the other sources as well.

If you think about a platform like Marketo, having about 10% coverage is what we see across our customers, because we activate all of these data sources through Mutiny. Mutiny, in aggregate, has over 70% coverage of a website's visitors. We're getting that by combining all of these different data sources together. You can deanonymize, which is really powerful for conversion and then use that to actually power a lot of customization that then turns into revenue, essentially.

Ben: The first customers, you've been building this architecture for the first six months. If you're open to sharing who was the first person to take the risk and say, yup, we'll pay you money for something, what did they pay you for?

Jaleh: It was either Amplitude or Brex. I can't remember, but we got like three or four customers at the same time.

David: Also, Brex was a YC company, right? Was Amplitude also?

Jaleh: Yeah, and so is Amplitude was a YC company. Now you know what our strategy was.

David: There you go. There's the value.

Jaleh: Exactly. The value with Amplitude I remember was they had started a growth engineering team. The lead growth engineer, they had their own spreadsheet, just like Gusto. They had their 200 items.

A bunch of the top ones are all around personalization and customization on the website. If I pay you money, that means that I don't have to custom-build that. I'm willing to deal with all of the gaps of the product and all the things that you haven't built yet, because it's going to be still easier than custom-building it from scratch.

Most of our early customers were design partners, where I was initially the UI, and my co-founder was the backend data. We set things up. I'm so happy that we approach things in that way because once we decided, okay, this is the architecture, this is the entry point, we started date, we incorporate it, the next day was YC, and then we wrote our first line of code, basically.

From that point, it was just go, go go, because most YC companies are actually much bigger when they enter. Most of them have revenue when they get into YC.

David: You're still in the ‘building the platform’ mode.

Jaleh: Yeah. We had a lot of ground to cover really, really fast. The way that we did it was we basically said, great, you have a problem that you're trying to solve, we will solve that problem for you. Be our design partner and help us build the right solution. That was one of the best decisions that we made because it made us really fast and really customer-centric.

I think from a DNA standpoint, those are things that are really powerful for Mutiny, but it also helped us realize all of the things that were a blocker for the customer.

For example, I remember (since you asked about Amplitude) distinctly, once we had built the first iteration of the UI, they were using Mutiny to create the personalization on their website. For different industry segments, they were personalizing the logos. I think this led to over 50% increase in conversions on the website, so we're having a lot of success in that.

Ben: Like what testimonials they were showing related to companies like you.

Jaleh: Exactly, because customer acquisition is all about trust. You interact with something, and either you immediately are drawn towards it or you're bouncing, and then that's where all the inefficiency comes from.

What they were doing when we spent a bunch of time with them, joining their meetings, and things like that, we realized that before they came into Mutiny, they would download data and they would stack rank. Okay, which segment should we start with? Which one's bigger? We have 12 industries, but which industry should we prioritize? By watching that we realize, well, this is an important paralyzation decision. Ultimately, we want to bring all of the steps and automate them in the app.

We build our segment creator, such that it now shows them exactly the size of those segments and the conversion rate, and it prioritizes it for them automatically based on what we believe to be the best starting point. That's just one little example, but that's essentially how we were able to build something that was really easy, that was historically very, very challenging to do and very manual.

David: It's like a very tangible example of the same sorts of things that Google and Facebook ad buying tools do for you. You don't have to think about prioritizing your bid strategy. Like, we'll do that for you.

Ben: We'll figure out what customer segments resonate the most. You just pay us enough money, and then that way, we'll start with a really broad audience, we'll start narrowing it down, and boom, we'll figure out where you have product/market fit on your behalf as long as you keep spending money with us.

Jaleh: Yeah. I think a lot of marketers are frustrated by how much they spend there, but the automation that they've added is definitely something to learn from.

For us, the first version of Mutiny was, okay, let's get these workflows to be no-code. Once we had enough customers and enough experience as being launched through Mutiny, then that's when we started to develop our training dataset.

Now we have a lot of AI in the product. We automatically tell them what segments they should focus on, what pages they should focus on, of what parts of the page so we can select sections of the page that we believe are going to have a higher yield based on benchmarking data that we're getting from other customers. We even write the copy for them.

David: Using AI?

Jaleh: Yeah.

David: Wow, cool.

Ben: Wait, what's that based on?

Jaleh: We built this on top of GPT-3. We have our own training data set that we layer on top, so the segment-based data. Who's the audience? What types of headlines, let's say, resonated for them? That's training data that's coming from Mutiny. And then we use GPT-3 data, which has essentially all of the text.

Ben: The Internet?

Jaleh: Yeah, exactly. We're able to boost quality by using that base dataset, and then we layer our own on top of it.

Ben: This is one of the first commercial uses I've heard of GPT-3, where it actually productize a piece of enterprise software.

Jaleh: Absolutely. We focus on B2B companies right now, companies like Notion, Snowflake, Qualtrics. We started with mid-market companies, but now, lots of public companies are using the technology.

David: That's awesome. Okay, that's an example of how far you've come today. The interim period between hanging out in the Amplitude growth engineering meetings to Snowflake and lots of other public companies using it today. Product/market fit happens somewhere in that period.

Just because amplitude was willing to pay you some money to take some of their roadmap off their hands, doesn't necessarily mean you have product/market fit. How did you think about that?

Jaleh: I actually go to YC and do a chat with each batch on product/market fit and how to think about those signals. The way that we thought about product/market fit was a combination of—and I don't know if this is the best way to do it, but this is how we did it—we looked at companies that clearly had product/market fit at their Series A. We looked at those metrics at the Series A. We looked at revenue, we looked at conversion rate from lead to close, and we looked at NPS.

David: Were you able to get some of that data just by going and asking those companies?

Jaleh: Oh, absolutely. Yeah. If someone asked me that, not on a recorded podcast, I will probably share all of that data, too.

David: Why wouldn't you help another founder like that?

Jaleh: Totally, 100%. You can absolutely get that. Actually, I'm happy to share what the benchmarks were. We were looking at a minimum $1 million in ARR, ideally $2 million, so that you could trust the rest of the data. We wanted at least a 25% conversion rate for our industry. That conversion rate was much, much lower, so that's where we triangulate it. It would make sense for us at the time.

Ben: What conversion are you measuring there at 25%?

Jaleh: Sales. From someone talking to sales and saying, I'm interested, to, does it actually close. Then NPS above 70, basically, is what we were looking for.

There is also your own gut. When I was at YC, I think it was Garry Tan who came to speak. He shared an anecdote that always stuck with me, which was, "The graph that you feel the most embarrassed of showing to your board is literally the thing that you should be showing and where you should be spending all of your time on."

I think that is probably very tied to product/market fit. What is the thing that you know is bad about your business? And then fixing that. For us, that was getting somebody to become active within the first 30 days. When we were pre-product/market fit, some people would use Mutiny and they'd be very successful because they were very motivated, and then some people would run into issues. They had other priorities that would come up.

David: In those cases, you would close a sale, but then they'd be like, ah, yeah, we got a lot going on, we just haven't started using it yet.

Jaleh: Exactly. We had this issue around activation. We would look at that of, how many experiences has the customer launched within the first 30 days? We made that the most important metric for the company. We started really focusing on that.

We started revamping our onboarding, the way that we handled CX. It was with the, probably, I don't know if it's the fifth or sixth iteration of our AI engine, where we made it easy enough for someone to just come in and then launch experiences, where they could do it in an hour. That's when the switch started to flip. We started to see a lot of success there.

It is painful to look at that because your instinct is to be like, oh, everything else is great. Let's just not look at this one thing, but Garry had it spot on. That is exactly what we needed to focus on.

Ben: If it's okay, I'd like to move in a little bit more of a personal direction. We've talked a lot about the problem you're solving with Mutiny. I love hearing the early founding story stuff about something going from an idea to a real company, to a real product, to having product/market fit. But I want to go back even before that with you.

Your whole life has been anomalous in a pretty amazing way, a pretty wonderful way the fact that you are this successful Silicon Valley startup founder coming from being an Iranian immigrant. I'm not sure when you learned English, but you mentioned it was your second language. You are literally living the American dream that we want to see a lot more of.

The question that I have for you after teeing some of that up is, what are some of the inflection points in your life, but for that amazing circumstance, you couldn't be the CEO and founder of Mutiny today?

Jaleh: My mom and dad instilled a lot of passion and ambition in me. My mom, in particular—we talked about her a little bit earlier—was very much focused on doing the right thing. Iran has a rich history of revolutions and wars. She's very passionate about standing up for what you believe in.

My mom had this friend named [...] in Iran. She lost her husband in the Iran-Iraq War, and she has three kids. For an Iranian woman, where the man generally is the economic breadwinner, that's really, really challenging. She knew how to sew, so she was using that to get by, but it was really hard.

At some point, a man had asked for her hand in marriage. She didn't really want to get married to him, but it was the only path out. Everybody was telling her, you should get married. This is the best thing for you, for your kids.

She came and talked to my mom about it and was like, okay, what do you think I should do? My mom was like, well, do you love him? She's like, no. My mom was like, well, your life's going to get a lot more miserable. You think money is your biggest problem right now. If you're living with someone that you don't want, that's going to be a lot worse, so let's go see if we can figure something else out for you.

My mom's uncle was, I guess you would call it, a fabric merchant. There are a lot of fabric merchants in Iran. It's not really a job that you see in the US, but there's a lot of movement of fabric. He was very successful. She got them introduced. They started thinking through how to turn the scale of hers into something more scalable.

Now fast forward 10–12 years later, when I went back to Iran, she had started a sewing factory that employed over 50 women. She was very successful. She had upgraded her home, and she was married to someone that she actually wanted to be married to. I grew up with that in mind. It is really important to be economically independent as a woman, but also to build something for yourself.

My sister and I, the plan for us was originally to stay in Iran. But then as things progressed, it became really clear that raising two daughters—me and my sister—was not going to work in that country, so we ended up moving to the States so that we could actually have the right education and the right opportunities. Ultimately, I think that was probably the biggest inflection point was moving to the States.

David: What brought your family to California, specifically?

Jaleh: My dad has two brothers that are here in California. As with all immigrants, you go where you have a couple of people that you know, and then you hope to build community out from there, essentially.

I remember one of the moments for me that's probably another inflection point was, I was in school. I was right at that age where I was starting to understand like, oh, boyfriends. I was growing up. Someone had asked me to the school dance.

When we came here, we didn't really have a lot of money. We didn't really speak English. I knew how to say I have a cat and I have a dog, but we didn't have a cat or a dog, so I couldn't use the two sentences that I knew. We lost everything and then had to rebuild it. Financially, that was certainly something that we had to build back up.

When I was asked to go to the school dance, I was like, well, I want to dress nice. I want to get a nice dress. But I knew that if I asked my parents, my mom would definitely get me a really nice dress to make sure that I didn't feel bad for not having it, but we couldn't really afford it, so it didn't really make sense to ask her.

I went around the mall and asked all of the stores like, okay, can I work here? I started with the really nice stores, the clothing stores, and then there was an age limit. You had to be at least 16 to work, and I was younger. There was one store—Subway—and they said, okay, you can work here and we'll pay you minimum wage, obviously.

I came back and I was really sad. I was like, man, I wish some of these other stores had worked out. Why did the sandwich store have to be the only one that I could find? I remember just thinking through that I really want the dress, so I'm going to do it. Now reflecting back on that, that was an inflection point for me because it was the first moment where I had to really choose my own values.

The way that we grew up in Iran, Iran is a very classist culture. In our family coming from two engineer parents, their daughter certainly does not go to a store and make sandwiches.

David: You can't go work in a sandwich shop.

Jaleh: Yeah. But for me, I was like, you know what? I don't care. I'm going to do it anyway. That was probably the first of many steps that started to where I was leveraging the foundation for my parents, but I was also starting to find who I am, and what was going to be unique about my approach.

Ben: Wow.

David: That's so cool. Thank you for sharing.

Ben: I have one follow up question on that then, which is, do you think you would have ended up in technology if both your parents were not engineers? How did you find your way into tech in the valley?

Jaleh: It's hard to say. I had such a passion for math and science from both of my parents being engineers. I think that had a lot to do with it. I think role models are really, really important, whatever shape or form they come in. If not them, I would have had to have other role models that would have guided me towards that.

When I came to the States, one of the benefits of having lost all of the things that we had was that there were very few things that I was actually good at. I couldn't really speak as well as everybody else. I couldn't really dress the right way. I didn't have the nice things. The one thing that I was really good at was math and physics.

I remember sitting in my classes and basically just being like, oh, my God, this is ridiculous. Are they really teaching this? Iran's school system is much further ahead in terms of mathematics and sciences. Also, that was the way my parents showed me love. They would work with me on these things.

David: Keep you entertained as a kid.

Jaleh: Exactly. Babysit me. Math was my babysitter. That was something that I really doubled down on and ended up. I remember when I found out about scholarships, I didn't know that there was such a thing. When I found out that Berkeley offered a scholarship, I was like, oh, my gosh, this is it. Because once I go to university and I become an engineer, then I've arrived.

David: Little did you know how much farther there was to go.

Jaleh: Exactly. I think getting into Berkeley and being able to do that on a scholarship—because we certainly couldn't afford to pay for that full price—was probably another big inflection point for me. Being in school, for me, there was always this part. I know my sister feels the same way, which is, our parents made a big sacrifice for us to get here, and you remember that, right? When it's like, oh, let's go party, let's go do this, I'm like, well, maybe I should study.

I was very focused in college. I wanted to have a top grade. I also loved what I was doing. My senior project was building a robot that solves a Rubik's Cube. It was me and four buddies. I was in charge of the color sensors and that is ultimately how I ended up finding my way into real technology.

Ben: That's really interesting. Thanks for sharing your story.

David: The culmination thus far for you of your journey in Silicon Valley being starting and building, Mutiny a company. Do you think any of that filters into the culture at Mutiny?

Jaleh: I think community for me has always been a really big thing. That very much comes from my childhood. You don't really have credit cards in Iran. Community is your everything. If you need salt, you ask your neighbor. If you need a loan, you ask your uncle or aunt. Community is the lifeblood that everybody relies on.

I think the way that we've approached culture at Mutiny is very focused on the people that we have and the community that we are creating together. For example, when we went remote, we lost a lot of our community. Our community before going remote was we cooked together on Wednesdays. We had all of these little things that we had developed. And then we went remote. We tried the Zoom version and everybody else quickly gave up on that.

David: The Zoom happy hours. You should have used Mystery.

Jaleh: Exactly. We actually tried to cook together on Zoom. I remember I was in Mexico at the time. It was a lot of fun, but it's fun to do once. You can't really make it an every Wednesday thing or people will kill themselves. They have to sit on Zoom for three hours after they finish work.

David: After sitting on Zoom for nine hours.

Jaleh: Exactly. We ended up redesigning our operating rhythm around off-sites. We basically were like, okay, instead of doing all of these things every day, how do we bring the whole team together every quarter and create this huge boost of energy and business context that people need to feel really energized and excited when they go back to the office? This is something that I'm starting to write a little bit about, our operating cadence, how we think about off-sites, and things like that.

David: Yet another good Twitter thread on.

Jaleh: If I had to go back to one principle, even on a more first principles level than community, for me it always comes back to people. How do we make every individual live their full life? If Mutiny is part of their journey for the next four, five, six years, how do we make this one of the most remarkable parts of their journey at Mutiny? Or how do we make this one of the most remarkable parts of their life so that they look back at that with extreme fondness? I think from that place, we tend to build almost all of our HR programs.

Ben: To underscore that point, you've taken this very seriously. You've moved to Miami. There are no more entire companies getting together on a regular basis on Wednesdays in your San Francisco office. Those days are behind you, so you have to figure out the new path forward.

Jaleh: Yeah. I made the move after we had put in a rhythm that worked. I was one of those people that very much believed you had to be in-person. I thought remote companies were so boring, lacked culture, and it was all based on ignorance. I just had never experienced that and I didn't know how to do it.

When Covid happened, we were forced to do it. I can't imagine having a company that doesn't have a community that's not cohesive and connected, so we had to just keep iterating on how we get that back. For us, we basically arrived at this concept that we call experience-based work.

The reason we wanted to invest in that was that, ultimately, what I came to learn was that remote is the right way for people. We live on this globe. There are all these amazing people, there are all these amazing countries that we can interact with. Even for myself, I was like, oh, I would love to be in Europe for a couple of months in the year and I'd love to be on the East Coast, but of course, I can't do that. Maybe after Mutiny, that's something that I can think about.

When we went remote, it started with one of our top folks. She was leading CX. She came to me a few weeks after the pandemic and she said, my boyfriend (who is now her husband) got this opportunity in Germany, and I want to go and experience that. I've always wanted to live in Germany. I would love to work East Coast hours. I think we can make it work because I want to explore Germany during the day, and then I can focus on East Coast hours for Mutiny. Is that something we can make happen?

She was so important to the company that I was like, let's try it. I want you to go have this experience. Let's just do it. Watching her thrive, have so much fun, and still be as good, if not even better, because she was doing exactly what she wanted to do, was a huge lesson. That kept happening for us.

Bringing it back to my own experience, I was like, yeah, I want to do those things too. This is something that everyone should do. Why are we making people sit in Soma? You can write code anywhere, so why not go wherever you want to go? We decided that we were going to be fully behind this remote culture and that we were going to do it in a way where we did bring people together. We called that experience-based work.

Essentially, we bring people together for these really powerful experiences that energize and refuel them, and then they go back to the place that they prefer to live in. It's so much nicer for families (obviously) as well to not have to commute to the office.

David: You do that every quarter, right?

Jaleh: We do this every quarter.

Ben: What's an example of one of those?

Jaleh: We tend to go to different cities for these. We did one in Hawaii. We did one in Salt Lake City, which was more of a ski vacation. Our last one was in Chicago. We tend to pick cities where we think we can have a cost effective off-site, but also have it be an experience that people are going to really enjoy.

The thing that I think we do differently probably is I'm really adamant about the locations that we stay in, being aligned with our values. One of our values is work should feel like play. A big part of that is that you don't have a work-self and a real-self. You bring your whole-self to work.

For me, that starts with what is the comfort that's attached to the environment? If we are in some stuffy corporate office, it feels like you're somewhere weird, foreign, and different. We make sure that we get Airbnb. We're always in houses. I feel like Airbnb should give us a huge discount because we're such consumers of Airbnb.

Ben: [...] YC.

Jaleh: Yeah.

David: I think they've experimented with this. Anyway, there should be an Airbnb corporate product because so many companies use it.

Jaleh: Totally. Their founders are investors in Mutiny. I should definitely send them an email and ask them about that.

Ben: That's cool. Thanks for sharing. Jaleh, any final words for our audience? Of course, where can they find you on the Internet? But any parting thoughts you would give folks?

Jaleh: This is so cheesy.

Ben: You can be cheesy.

Jaleh: I can be cheesy? Okay. I was going to say trusting your gut. I think when you are a founder, there are a lot of stuff that you may not know. I'm always asking different people who have maybe experienced that thing that we are about to experience and we are trying to get smarter about. There are investors. There are so many people that are inputs to you, and that input is really, really valuable. But at the end of the day, it's about trusting your gut and leaning into it.

Someone gave me this advice when I was early in my career. This is when I was at VMware. I was asking him about a decision that I was thinking about that was really controversial, and wanted to see if I should do it or not. He's like, Jaleh, at the end of the day, you're going to be a success or a failure because of your instincts and your business acumen. You might as well put it out there and start testing it and start iterating it.

David: I love that. It's like the old Benchmark quote, "Good judgment comes from experience, which comes from bad judgment," or something like that.

Jaleh: Totally.

Ben: Awesome. Where can listeners find you on the Internet?

Jaleh: On LinkedIn and on Twitter.

David: What's your Twitter handle? We'll put it in the show notes, too, so people can just pop over to the app.

Jaleh: @jalehr.

Ben: Great. Jaleh, thank you so much for spending time with us today.

Jaleh: Thank you for having me. This was fun.

Ben: Awesome. Listeners, we'll see you next time.

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