ElevenLabs: Building an AI Sales Machine & Why We Set a 20x Sales Quota

Carles Reina 0:00 We had two employees that in February had already achieved the entire full-year quota.

Harry Stebbings 0:06 I'm so excited to welcome Carles Reina. Carles is the CRO at ElevenLabs, one of the fastest-growing companies on the planet.

Carles Reina 0:12 Customer success needs to be a money generation function for the business.

Harry Stebbings 0:16 He scaled the revenue org from zero to over three hundred and fifty million in ARR.

Carles Reina 0:21 The role of a CRO is fundamentally thinking about not the revenues today, but the revenues of tomorrow. Let's do the things that no one is doing. That is what makes me passionate, and that is what a good CRO needs to be doing because we're not here to do easy stuff.

Harry Stebbings 0:33 This is a masterclass in scaling sales in an AI-first world.

Carles Reina 0:37 It's like the fastest product in terms of revenues that we've ever had.

Harry Stebbings 0:41 Wow.

Carles Reina 0:41 It's just insane.

Harry Stebbings 0:42 On top of that, Carles is also an incredible investor with his own solo GP fund, Baobab Ventures, which has backed the likes of Revolut and of course ElevenLabs in the early days.

Carles Reina 0:52 If you want to do something, budget is never going to be a problem.

Harry Stebbings 0:54 So what is the problem if you want to do something and you're not allowed to? Why would that be?

Speaker 1:00 Ready to go? [rock music]

Harry Stebbings 1:12 Carles, listen, I know a show is successful when I get friends of mine outside of tech be like, "Oh, loved the clip with Carles." [chuckles] And I'm like, "Really?" And they're like, "I never thought that quota and sales comp would be so interesting." And I'm like, "Thank you, Sarah. I had no idea you were interested in it." So it was such a successful show. I thought we had to do a round two. Thank you for joining me, man.

Carles Reina 1:38 Thank you for inviting me. This is great. I'm happy people were interested in, like, sales.

Harry Stebbings 1:42 [laughs]

Carles Reina 1:42 [laughs]

Harry Stebbings 1:43 Sales and sales comp according to that clip, which again, now it's, like, five million-plus views, which is insane. Dude, I actually wanted to start on you have now kind of led the way in a new CRO charge, I think. ElevenLabs is probably one of the most exciting companies on the planet. You as CRO there lead the way. Um, are a generation of CROs being left behind?

Carles Reina 2:05 Some of them, yes. But I think, I think it's fundamentally that, like, the market has changed. The way that we build companies today has completely evolved. We can do deals much quicker. But also, like, for me, the key item is, like, a deal can be done. You can hire teams that, like, have a ton of experience. But how do you think beyond a single deal and think about, like, distribution entirely, right? And I think that's what we're thinking, like, what we're actually missing in many ways. Like, yes, it's great to do business development. It's great to, like, think about affiliates. How do you think about much more on a strategic level, but also, like, able to execute? Um, and for me, and, and those are the key components. How do you embed AI in your entire distribution component so that, like, you are able to actually do more with less, right?

Harry Stebbings 2:47 What do you mean by that? Is that, like, simply, uh, using Artisan, Qualified, Monaco, and having, like, AI SDRs do outbound for you?

Carles Reina 2:55 No. That doesn't work.

Harry Stebbings 2:56 Good. Glad I suggested that. [laughs]

Carles Reina 2:58 [laughs] It, it doesn't work. Like, and I've tried, like, the-

Harry Stebbings 3:00 Lucky you're not hiring me, huh? I mean, dodgy start to the interview.

Carles Reina 3:03 [laughs] Nope. You're fired. [laughs]

Harry Stebbings 3:05 [laughs]

Carles Reina 3:05 No, but it, it's like I've tried a very large number of, like, AI, uh, go-to-market tools, and they don't work. And they don't work because they see everything as a transaction. Like, the problem, like, if I was building it, and hopefully, like, some people will be able to actually use this. If I was building an AI, like, um, agentic platform for sales, right, I would be like, "Okay, let's actually understand each one of the core potential leads. What do they prefer? Do they prefer to actually be reached out over email? Do they prefer to actually attend events? Do they prefer to actually, like, um, have a phone call?" And you can try to map some of those components by what people put on LinkedIn and social media, right? So, like, that is the most fundamental element. But what we're actually seeing on the AI SDR front is that the majority of these tools track everyone as if they actually want to receive a message, and people hate it. And you see, like, the response rates on outbound, uh, emails has dropped to the lowest at, of any point in time. It's, like, less than zero point zero one percent. Like, people getting message on LinkedIn is like, it's ki- has skyrocketed. And you can perceive that as actually a transactional email mass sent to everyone, or it was generated by AI. That doesn't work.

Harry Stebbings 4:13 So outbound is dead.

Carles Reina 4:15 Outbound is dead unless you do it with humans or unless you do it humanly, and that's fundamentally the key item. I can tell you, like, at ElevenLabs, I spent, uh, the past two years plus trying to convince, uh, the team to actually hire, uh, engineers to actually help me build AI agents for revenue, for sales, right? Um, and it was only last year that actually, like, they were like, "Okay, let's do it." So we end up hiring people, and we end up building AI SDR that handles inbound, super good results. I have now an AI proposals manager that, like, scans the web for RFPs and RFIs and then proposes scores and proposes things. I have, like, an AI customer success manager that fundamentally leaves in the back in an email and essentially proposes emails, looks at all of the data of a single customer, all of the pricing tiers and everything that we have in the contract, and then proactively proposes things. So when my AI customer success m- m- my customer success manager goes in the morning to check the emails, that person has a number of, like, drafts that the AI has created, and then that person can change those draft to put it out there and to send it back. We store what we actually sent and what it was originally created and what are the responses are to actually fine-tune. So each one of the customers ends up getting a slightly different message with a slightly different tone, and if they speak other languages, then it's a completely different language. That works, and that has closed deals for us already. We generate money from that AI customer success manager fundamentally because it is humanly, right? It's human. It's specific as

Carles Reina 5:46 human.

Harry Stebbings 5:47 So are we cutting the size of our team if we can do so much with these different AI agents? Are sales teams of the future gonna be dramatically less?

Carles Reina 5:55 I think that we will end up seeing the fact that, like, um, people are becoming much more efficient. I think, like, the goal for me at ElevenLabs is, like, 50% improvement in productivity.That's the one that I want to do because then it means that I can, I can hire less people, right? And that's fundamentally... I prefer to manage a smaller team that was-- gets super well compensated. Any upsells, any contracts that the AI agent ends up closing, I will pay those commissions as if like a human actually closed it, and I'm very happy with that. But also that means that like the people that we want to retain and have are gonna be extremely top talent that are performing at Eleven that no one else is performing. That has a consequence. That is instead of actually doubling my team or doing a 5X or doing whatever it is over the next like two years, I end up hiring less people, but they're very concentrated.

Harry Stebbings 6:39 Totally.

Carles Reina 6:40 That has an impact, for sure,

Carles Reina 6:41 in the industry.

Harry Stebbings 6:42 Totally get that. You, you mentioned the word commissions there.

Carles Reina 6:45 Yes.

Harry Stebbings 6:45 I'm really intrigued. Like we see like OpenAI don't have commissions. It's like, "Here's your salary, and then here's your equity." And often people say salespeople are coin operated. You said that actually, uh, last time you have a 20x-

Carles Reina 6:59 Yes

Harry Stebbings 6:59 ... um, quota, which is a lot higher than anyone else. Um, we interviewed the, the head of sales at Clay recently, and they said theirs is six to eight. Um, post 20, what is the commission structure, and how do you advise me as a founder on how to set the commission structure?

Carles Reina 7:17 I mean, I can tell you like we, uh, we like we had two employees that in February had already achieved the entire full year quota. Yes. And, uh, I, I put a message in Slack saying, "These two people have reached the Mont-Mount Olympus of, uh, sales at ElevenLabs," because in two months already like did their quota, right? And I think like-

Harry Stebbings 7:40 I mean this in the nicest way. Did you not massively miss that quota then?

Carles Reina 7:44 I don't think so. It's like I think you need to put a, a quota that is challenging but also fair. And if people miss it fundamentally because it's too high, then you need to do the right thing and then lower it or compensate them correctly, right? But also, salespeople, good salespeople, they wanna be the best ones. They wanna... Actually, they're moved by the coin. They're moved by the fact like, um, like a big challenge ahead of them. If you don't put that challenge, they're just gonna be like slacking. They're just not... You're not gonna get the best out of it, right? And I think for me, that's the key item is like we say like, "Hey, you reached your quota 100%. Fantastic." And then you start unlocking accelerators to the point that like I'm very happy. Like if we sign a million-dollar commission check, I'm the happiest person alive fundamentally because like that person did so much money for the business and for our shareholders and for the rest of the company, that it's an absolute no-brainer. Again, like for me, it's like for every $1 million in revenues that any single person signs, and I don't care if it comes from like the SDR, the account exec, the CSM, or it's an engineer that went all in and then managed to get a contract, it's like every single million has $33 million in extra valuation for the company. If you put it that way, it's a benefit for everything. Like, like some people get more equity on the engineering side. Great. They deserve it because they don't get commissions. Fantastic. They were popping up the entire value of their stock.

Harry Stebbings 9:05 When you get the accelerators, how do you advise me on how to structure the accelerators?

Carles Reina 9:10 It depends. Like, so the way we do it, and I think it's fair, is like for every single extra year, you get another 25% extra commission on top of it. Um, like we start at like 5% commission on any sal- anything that you sell, and then we have the accelerators-

Harry Stebbings 9:22 After your quota, that is.

Carles Reina 9:24 No, that is including your quota. And then after your quota, yes, ex- uh, additional like, and we have like a 1.1X, 1.2X, 1.3X, 1.5X, and so on, right? So the more you keep selling above your quota, then you, uh, hit those accelerators. But then we have like accelerators for or spiffs specifically for, for, uh, for individual products. So if we are incentivizing one product because a quarter we want to incentivize that product, then we will put an accelerator or a specific spiff for that specific, uh, product, and then people even are more motivated on that front.

Harry Stebbings 9:54 Do you find that always works?

Carles Reina 9:56 No.

Harry Stebbings 9:56 Accelerators.

Carles Reina 9:57 No, no.

Harry Stebbings 9:58 Why?

Carles Reina 9:59 I think like, like it's easy to get hooked on spiffs on or like specific incentives with... and, and lose the entire, the entire sight of what you're trying to do. If you put too many accelerators, if you put too many incentives in one place, you create the wrong behavior, which is people try to sell whatever it is to actually unlock it. For instance, like we don't pay commissions on pilots. No. Like, because why? Like, it's not adding to our valuation as a company, and because it's not adding to our valuation as a company, like the engineers, the researchers, the ops people, the people, no one is actually getting a boost in their equity, then why should we pay it? Let's do the right thing, and let's do the complex thing, which is like let's do the pilot if needed. Let's convince the customer that the metrics are there and we're doing it really well. And then on top of that, once we sign an yearly contract or a two-year contract, then we pay you the commission.

Harry Stebbings 10:48 But you pay on retention and expansion?

Carles Reina 10:50 Yes. Yes. So like first 12 months, like, um, you can close at a yearly. It doesn't really matter, $50,000 or a million dollars or $10 million, whatever you want. And then anything that you, like that gets expanded over the next 12 months, you will get, um, commissions. Great. And you can hit accelerators with that and so on. If it's a strategic account, um, and we have designation of what is a strategic account, so for instance, like the top 20 or 30 accounts in a given market, depending how big the market is, then, uh, fundamentally, then you will unlock commission for two years fundamentally. Um, and we can change it if needed, right? But, um, at a practical level, we found

Carles Reina 11:27 that that's like the fairest way.

Harry Stebbings 11:28 I will never forget one of the great CROs saying to me on the show, "You do not ever want your farmer going against someone else's hunter."

Carles Reina 11:37 [chuckles]

Harry Stebbings 11:37 Meaning your kind of cushy but super nice CS enablement, "Hey, like let's get champions in your company," kind of happy, um, against someone else's all-star hunter who is there to close your business. How do you feel about that? True? And then how do you think about then retaining the hunter on the account?

Carles Reina 11:56 The hunters are important, very important. Specifically when you think about distribution, you think about like outbound, inbound, you think about like a lot of different pieces, right? Um, but at the same time, a hunter that is not well managed will create more damage than actually like opportunities. So let's say for instance, you're trying to close a company that is, has multiple comp- multiple sub-companies. Uh, it's a big holding company.We can use any num- name you would want, right? And then you have a hunt that essentially tries to go to each one of them, but doesn't do it in a very structured way, like trying to align what are the incentives for this big account. Like then fundamentally, you end up having discrepancies on pricing, you end up having discrepancies for like what is the actual like, uh, the value for them, and then each one of them discrepancies ends up coming back to hunt you down essentially when you try to renew the contract or the other forms. So like it is important to have them, but at the same time you need to have like them in check together with the customer success. I actually am a big believer of customer success. I don't believe customer success as a satisfaction or happiness moment for customers. No, it's like customer success needs to be a money generation function for the business that incent- in- works for the customer, but also works for the business to incentivize growth, expansion, cross-sell.

Harry Stebbings 13:10 What, what, what do you mean by that then? 'Cause I had Chris Degnan on the show, who's like one of the all-time great CROs, Snowflake, you know, zero to four billion or whatever it was. And he's like, "CS is complete bullshit. Complete bullshit. You have professional services, pay for it, and we'll make you great." To what extent do you agree, or do you think customer success is-

Carles Reina 13:26 In the world where like Snowflake grew up, um, like that made sense. In the world we are in today with AI, that doesn't make any sense because fundamentally, like anyone can spin up a competitor of your product in the next two days. Anyone. So fundamentally, like your customer success, you need to actually re- like go as deep as you can as early as possible and try to close it as q- as soon as go- as possible a single contract, and then your customer success is the one that actually will help you expand it, uh, uh, quickly and retain the customer. So if it becomes a services business only where you're charging for every single penny, then you become a transaction. You're not building a community. You're not retaining, uh, of the, of the long term. You should be incentivizing them to actually like do both things, community, trust, and also like incentivize the long term. So that's why like I am, I'm in favor of charging for like services, but in not all the cases it makes sense fundamentally.

Harry Stebbings 14:16 Totally.

Carles Reina 14:17 The game has changed.

Harry Stebbings 14:18 Where else has the game changed? Where else are old school CROs out of date?

Carles Reina 14:23 In general, like y- like one single market, going one market at a time, it doesn't work. Traditional VCs, like they've, like the traditional method has been like, oh, you open one market, you go deep, you win the account, you show like the value, then you go to the next one, and then you go to the next one and so on. And that's like the bullshit advice that like VCs have been giving like for many years. And I know like now it's changing fundamentally because like, hey, like the reality is like if you're gonna have 100 competitors, um, in the next like month because you're starting to get some traction or because of whatever reason or everyone is thinking about the same problem and then going deep, then go, opening one market after the other one, after the other one instead of actually parallelizing and trying to do multiple bets at the same time, then it's just counterintuitive.

Harry Stebbings 15:06 Is that only enabled by a PLG motion though? A PLG motion allows you to do multiple markets at the same time much easier because if you have enterprise motion, you need, you need everything from SDRs to AEs to CS in that place.

Carles Reina 15:20 Why? No, not really. So for instance, like one of the... And, and I know like this is gonna be controversial, but like I think like all of the tech startups are afraid to actually hire someone that has had twenty years experience, twenty-five years experience. And the excuse that they use is like, "The person is not gonna fit the business." And I think it's bullshit. I think it's full wrong, right? Fundamentally, someone has twenty years experience in sales and has been selling for the past ten years to the same like financial services firms in the city or in the US has so much wealth, so much knowledge, they can propel the entire business. Now, the question is like not all of them are gonna fit your business, but a good portion of them, if they're still hungry and they still want to actually do something that is meaningful, they're gonna fit really well. That p- those type of profiles will shorten your s- sales cycles because they will join and be like, "Okay, now I know the product really well. I have, I know the vision. I know how to properly like pitch it. Let me call all of my friends that I've been interacting and all of my stakeholders that I've been interacting for the past ten years, twenty years. Now we just go directly to the C-level."

Harry Stebbings 16:22 Dude, is that not a massive misalignment of cultures when you think about like the super young, hungry reps, and then you're bringing in 50-year-old Simon who's been selling into the city financial services for years?

Carles Reina 16:32 The biggest example is like Google in the early days. You have like Sergey Brin and Larry Page like together with Eric Schmidt. Like that's amazing. A guy that had ton of experience, was really successful, ended up coming in and magic happened. I think fundamentally, like both parties want to make it work, it can happen. But you need to make it work, and you need to hire the right people that will have like, will be in the same brainwave as you are.

Harry Stebbings 16:56 Do you worry that people pull ElevenLabs so much out of your hand that anyone could sell it?

Carles Reina 17:01 No, I don't think so. I don't think it's that easy to sell, especially in this environment. Of course, I think if you have a big brand like an OpenAI or like an Anthropic or ElevenLabs-

Harry Stebbings 17:09 I mean, I mean, uh, yeah

Carles Reina 17:10 ... it's easier a little bit.

Harry Stebbings 17:11 And the nice thing about this being around too is I can push back more in the moment.

Carles Reina 17:14 [laughs]

Harry Stebbings 17:15 You can't have a 20X quota and say it's not easy to sell. You can't have that much better people than everyone else.

Carles Reina 17:22 I, I think you can. [laughs]

Harry Stebbings 17:24 Your people are not... I love you, dude, but your people are not 4X better, 4X than everyone else in market.

Carles Reina 17:30 I do 100% believe that our people are like 4X better, like without thinking twice. And I would take them to war. I would go with w- to war with them, every single one of them. It's because like we are tough on them, but also like they're tough on us. Like they give us the r- the, the feedback, the difficult feedback, and I get it every single day. And I'm happy that they give me the right, the, the tough feedback because what we're trying to do here, and I've always believed and grew up with the idea of like we're trying to like find the ground truth. And what the ground truth means, like today means X, tomorrow means something else, and the following day will mean something else. So if you don't have people that are constantly challenging you and constantly thinking beyond what the actually is happening today, you're not gonna be able to survive.

Harry Stebbings 18:12 Where-

Carles Reina 18:12 And those are the people that we hire.

Harry Stebbings 18:14 Where are people challenging you where you don't have an answer?

Carles Reina 18:17 Which market should we be opening? Like, how deep should we go into like some of the structure changes? Like the company's going, growing very quickly. Do we need a, uh, global accounts team? So I'm already thinking about a global accounts team. When do we implement it? How do we implement it? How do we motivate people?Um, like should it be 20X? Should it be something else? Like, um, which product should we be selling? Should we be selling to competitors? Should we be selling to resellers? So there is all of those things, like the team challenges every single day. And I love it because it's intellectually is stimulating, but also because it forces the entire business to rethink our position every single day.

Harry Stebbings 18:52 So you would advise founders today to go to as many markets as possible as soon as possible?

Carles Reina 18:57 Not as many markets as possible. I think like you need to map out and have a reasoning and a thesis of why that market, so that you can now refer to that and understand whether the market conditions have changed, and then you have to actually like, uh, evolve your, your thesis. But for me, this is like go-to-market is similar to like b- investing in, in venture capital, right? You need to test like 100 things to actually be able to find like the three, four, five, six things that actually perform and do really well. We do the same in venture, right? We invest in companies knowing and believing that all of them are gonna work and all of them can be like a billion or trillion dollar company, and then we realize like, shit, it not worked, but I still have like three or four or five that are gonna be working really well. Go-to-market is actually the same thing. Like test as many things as you can, not only in the opening markets, but also like, do you need to try like self-service? Do you need to try like working with resellers, like with partners, with a cloud ecosystem, like with a grants program, with an affiliates program? There's so many things, and opening

Carles Reina 19:52 markets is one of those ones.

Harry Stebbings 19:53 What did you test that didn't work, and what did you learn?

Carles Reina 19:56 At ElevenLabs I've tested like endless, endless amounts of things, and I absolutely love it. Like for instance, like media entertainment in the beginning did not work for us. It just didn't.

Harry Stebbings 20:04 What does media and entertainment mean?

Carles Reina 20:06 So big brands, like big, uh, entertainment studios, and the thesis was like, they're generating so much content, we should be able to actually sell to them and make a ton of money on this. And the reality was that like, yes, they do make a lot of content, but when you have like, um, a- an industry that essentially like is very heavily influenced by the public, the audience, the quality they need to produce, like, um, like events, all of that stuff, then potentially the industry might not be ready for technology that you're trying to sell. That was a big learning, and we spent months and months and months trying to break into the entertainment industry to realize that like we were not growing as fast as we wanted. So we ended up pitching, like switching and having another ICP was like, okay, let's work with media creation platforms, right? That worked really well for us. And then we end up saying like, "Hey, actually the world is moving." We had a thesis around like the more of... The world is moving towards agentic systems. How do we also bring a product to market that fits really well in the agentic world? And we had a vision on that, so we ended up working on that. And today, AI agents, it's absolutely fantastically huge for us. Fundamentally because we had the vision, we bet, we went early, we started working with partnering with like some companies, and that panned out really well.

Harry Stebbings 21:18 You said the words not growing as fast as you wanted.

Carles Reina 21:21 Yes.

Harry Stebbings 21:21 Now you're an investor on the other side of the table. You've seen how fast a company can grow with ElevenLabs. You've also seen it with Revolut, to be fair, two edge cases [laughs] um, to be fair.

Carles Reina 21:33 But you need those two edge cases. That's what we said.

Harry Stebbings 21:34 But that's all business. Like that, that is the business of venture. My favorite thing with VCs is when you get other VCs be like, "I don't know if Carles is very good because like if you actually take out ElevenLabs and Revolut, he's not that good."

Carles Reina 21:46 [laughs]

Harry Stebbings 21:46 And you're like, "Yeah."

Carles Reina 21:48 One of them four unicorns. It's fine.

Harry Stebbings 21:49 Yeah. Like, you know. [laughs] Okay, sure. Um, but, but my point is, has it changed how you think about attractiveness in company growth?

Carles Reina 21:59 I don't know. I think, I think you still need to have companies that grow from one to four or from zero to one, and it takes them like 18 months to get there. And I think that's actually not bad. It's like, this just means like you need to incentivize the portfolio to be able to actually like iterate and experiment as much as they can because we don't know what's gonna work. And I think it is us. Like us still even with new products that like I'm, I'm heading and I'm trying to get to market, I truly don't know how we're gonna price it. I truly don't know if it's gonna work out. I'm just trying to iterate. Is it gonna take us a little bit longer to get to like the first million and the first five million and the first 10 million? Fine. We have the ability, but we need to iterate, and I think it is exactly the same. At ElevenLabs we have like a business that grows extremely quickly, like we're like smashing it, all of that stuff. But at the same time we have like brand new bets, like are not generating any revenue. And that's great, but it's bets that we're doing for next year. So I think like the idea of us-

Harry Stebbings 22:52 What's the biggest bet you've got today that's not generating revenue?

Carles Reina 22:55 Um, so we, we have... We're generating a, a good amount of revenue, but like government work fundamentally just like it's a tiny portion of it. And I think that's okay because like the role of a CRO is fundamentally thinking about like not the revenues today, but the revenues of tomorrow. I'm already thinking like all of this quarter I've already been thinking like how do we put the pieces together so that the ElevenLabs next year grows even faster than this year? Because I know this year we'll smash the numbers. I have the right team. We're gonna continue hiring. We have like the motion that we set last year. It's gonna grow really well. How am I doing it for next year, being very creative, so that I can start putting the right bets? That's what been my quota this year.

Harry Stebbings 23:33 You'll hit a billion in revenue by end of year?

Carles Reina 23:36 Who knows? Who knows? I, I would love to, I would love to hit a billion dollars in revenues by the end of the year. We have some targets internally. It will be great if we can do it. If not, it will be a little bit later. That's fine. That's absolutely fine.

Harry Stebbings 23:47 Any big lessons on forecasting? It's fricking hard to do.

Carles Reina 23:51 It's impossible. It's just impossible. Like we forecast, and then we realize usually that like we've like... We, we would just like-

Harry Stebbings 23:58 But that's different. Traditional sales leaders on the show for the last three or four years, because I've done 20 something, have, have been like, "Oh, I can pretty much get there to, to 3 to 5%."

Carles Reina 24:07 Yes.

Harry Stebbings 24:07 I'm like, wow. Now-

Carles Reina 24:09 Impossible

Harry Stebbings 24:09 ... I'm fucking clear.

Carles Reina 24:10 But it's impossible if you think about it from an experimentation perspective, and I always tell my team, like I want us to test as many things as possible. I, I only need one of those ones to work really well to give me another $100 million in revenues or 200 or 300.

Harry Stebbings 24:24 And so when you say things, do you mean like channels, like affiliates, like partners, like referrals, or do you mean like products?

Carles Reina 24:30 Channels, products, ideas. Should we be pitching services? And I was like in a, in a meeting with a CEO of an airline, um-Very recently in, in a, a few days back, and we were talking about like agents and all of that stuff, and then at some point he was like, "But Carles, like everyone, it keeps pitching me. I get over 100 pitches every week of pitch, like companies doing like customer support. Like, I mean, I don't want to have another, another pitch on that." And I was like, "And you're 100% right." And I hate it. Like, actually, don't get me wrong, we do it, and we do it really fucking well, but at the same time, it's boring. Like the majority of companies will start with the bottom line optimization. And-

Harry Stebbings 25:07 Sorry, what's boring? Customer support or?

Carles Reina 25:09 Customer support optimization for me is like, yes, your, your mindset is like, "Yeah, I want to automate, increase a bunch of percentage point my profitability, so that's what I'm focusing." And that's great. Don't get me wrong. It is fantastic. What I'm actually interested is like, how do we figure out a way to partner with a company and create a labs area? So it's Company X labs, right? So that we can figure out a way for them to generate new revenue opportunities for them. That's what actually makes me passionate. But that's-- we have to prove that that is the right thing. So that is one of the experiments, and I'm spending a lot of time these days on like, how do we prove that the idea of labs for companies where we essentially are their consultants and help them build those agents that will generate top-line revenue with new ideas, new products, is actually something that we can scale and generate like hundreds of millions.

Harry Stebbings 25:56 How do you think about the trade-off between doing that, whether it's maybe a little bit more low margin, given the fact that it's quite hands-on. I'm thinking like British Airways labs-

Carles Reina 26:03 Yeah

Harry Stebbings 26:03 ... where you have amazing voice agents who call you up and are very personalized, give you tips on how to enjoy New York with your wife.

Carles Reina 26:08 Yeah.

Harry Stebbings 26:09 Great. Super nice idea. May get more money from it, boom. Versus actually we can do it avatars, and we can compete with all the avatar companies. Higher margin, very adjacent product.

Carles Reina 26:20 I don't know. I think like I would rather do things that are actually much more complex than the ones that are actually like, uh, less complex. Uh, I think we are here as like, uh, startups and, and VCs to do the difficult things. I don't believe in like doing the short path, like things that are actually like are much easier. If someone is doing it and someone is like super good, maybe we should be buying the company. Great. Or maybe we should not. We should just partner with them. Fantastic. Right? Let's do the things that no one is doing. That is what makes me passionate, and that is what a, a good CRO, I think, needs to be doing because we're not here to do easy stuff.

Harry Stebbings 26:51 I think customer support is uninvestable today, and I get so much shit on Twitter for this because everyone shits on it, but, but I'm like, Sierra and Decagon obviously two market leaders in terms of brand and how much money they've raised, and you've got sixteen providers who've raised over seventy-five million in the last eighteen months, and then you've got all the incumbents, and your Salesforce and Atlassian, and then your Intercoms and Zendesk and everyone in between. OpenAI will do a customer support product if, if, if they continue doing new products. [chuckles] Not quite sure where that product roadmap is. Uh, maybe it was gonna happen. Maybe not anymore. Do you agree it's not investable?

Carles Reina 27:28 I would not personally invest, but I also think that like the opportunity for companies that are like established and growing a lot to go into that space is good, is, is big, right?

Harry Stebbings 27:37 Why doesn't ElevenLabs do it?

Carles Reina 27:38 We do. We do customer support, and the majority of our customers starts with customer support, and we make an absolute ton of money on that. Um, and the ROI for our customers that like use us for customer support is insane, insane.

Harry Stebbings 27:50 Like what percent of your revenue is customer support? Give, give a... Twenty, thirty, forty?

Carles Reina 27:54 We don't, we, we don't share that, but I think like it, it works really well. It's like the fastest product in terms of revenues that we've ever had.

Harry Stebbings 28:01 Wow.

Carles Reina 28:01 It's just insane. Um, but also think like you look at like all of our competitors, like you mentioned Sierra, Decagon, and all of the other ones, we power all of them. So we actually make money off like literally customer support with our agents platform, but also we make money from our API foundational model layer across the board. So that's the good thing about ElevenLabs is like spread so widely.

Harry Stebbings 28:24 How do you think about empowering your competitors?

Carles Reina 28:27 I, I think like fundamentally, like we, we've been very happy to actually support the entire infrastructure layer because we believe that like the opportunity in the market was like way bigger than anyone, anyone was expecting, right? Voice and, and, and, and interactions with humans and human technology interaction, like it is the fundamental piece that was missing in the entire puzzle. Now, you end up having situation where like similar to, I don't know, like a NVIDIA that was like competing with like powering everyone, but also competing with everyone, right? Like, I think that's actually fine. Like it's, it's okay that the market is big enough for multiple companies to coexist and then try to target the same customers. I'm not gonna deny it. I think like also means that like everyone needs to be aware that that will happen. So when we launched our agents product, I called the biggest platforms, agents platform that were operating, um, in our platform, and I told them like, "Guys, FYI, like in the next couple of months, we're gonna be launching our agents product. We're gonna be competing with you, right? Just wanted to make sure that like you're okay with this. I wanted to make sure that like you understand that like we are going to this space." And the funny part was like all of the founders that I interacted with telling them this, they were like, "Yeah, welcome on board. That's okay." Right? And it's good because like if you're able to actually be transparent with that and say like, "Hey, I'm gonna be competing with you, but at the same time, I'm partnering, and in some deals you will win it, and in some deals I will win it, and in some deals we will partner together," that's when you end up creating a good ecosystem in parallel.

Harry Stebbings 29:57 So I think you have to be unwaveringly aggressive now on BD and sales, because I think you have an eighteen to twenty-four month period where CIOs-

Carles Reina 30:04 Yes

Harry Stebbings 30:05 ... CISOs are like, "AI, we have to have it. We have to have a message for it." That won't last forever. Do you agree?

Carles Reina 30:12 A hundred percent. And our team is dedicated to that. It's like everyone is like selling agents left and right. We've had the best quota ever. It's been fantastic. But people are incentivized to sell agents because we know, like we are competing with other companies. And sometimes those companies ends up complaining to us being like, "Why are you competing with me when you're also like selling me?" But the reality is like, hey, if I-- like you charge me, like or you pay me like one dollars, one dollar, and I could be charging the c- the end customer, like, or you're charging the end customer twenty dollars, then I'm like, I mean, maybe I'm doing something wrong here as well.

Harry Stebbings 30:43 I, I totally get that. One of my dear friends is Jason Lampkin, who built a game.

Carles Reina 30:47 Yeah.

Harry Stebbings 30:48 And he built a game, and he used ElevenLabs for the voice, and he was like, "It was great. Amazing. It was such a beautiful product. So amazing. So amazing."Fuck, it was expensive. And then people started using it, and it became even more expensive. And he's like, "This will be the year of substitution where you try a great product like ElevenLabs, it's amazing, and then you go, 'Oh, fuck, it's expensive,' and then you substitute for the cheaper, but 80% of it." Do you think that's true?

Carles Reina 31:14 No. I think, like, there was a lot of, like, conversation last year, and I actually, and I've ch- I, I've evolved my mind on all of these things. But, um, and of course, it will continue to evolve, right? But, um, a lot of people were talking last year about like, "Oh, open source models are gonna take over, like even on the AI voices space, like you're gonna get commoditized," and so on. And for a period of time, I kind of believed it. I was like, "Yeah, I mean, there is a point in time, like open source models will take over. Like it will be fully commoditized. Great. Like we just need to continue going deeper on the product integrations, full verticalization, distribution, all of the stuff. Great." And what I ended up realizing is like even if open source models become extremely good at the same quality level that we have, like it is the additional hassle, it is the additional components that like make it very difficult for any organization. So if you're a bank already, you might want to play with the idea of what if I use open source models? The problem is that those open source models are not built for the scale that you would want, right? You would still need to maintain them. You would still need to actually make them operational. And ElevenLabs actually takes that away from you. And ElevenLabs agent takes that away from building the entire orchestration and managing it, right? Everyone can be building anything from scratch. It's just do you have the time and do you have the resources? And if the priority in the company changes, are you gonna be able to continue adjust and making sure that you get the right funding in there? And I don't think that is true. And we're seeing it all around the world where like, yeah, we could go with open source models. Excellent. Do it. You try to operationalize it, and they've lost three months, and then they come back.

Harry Stebbings 32:48 It's interesting. ElevenLabs is almost a bit like OpenAI in the way that, or Anthropic in the way that it's like it's this foundational layer, and you can go in any strategic product direction you want from that foundational layer. Theirs is LLMs, yours is voice. And the question is will I be Claudified, so to speak? And then there's a question of will I be Ela- ElevenLabsified? You can do SDR agents with voice. How do you think about weighing that off in terms of where your product direction goes?

Carles Reina 33:17 I think it's like, it's, uh, it's an evolving, evolving question all the time. [chuckles] And I, I, it's, it's like it's, it's not that simple to decide-

Harry Stebbings 33:24 Do you have verticalized sales teams?

Carles Reina 33:26 We have verticalized sales teams right now, uh, in specific markets. Markets that are much bigger or markets that are much more mature, 100%. We'll have people that only do like BFSI or only teams that do like, uh, healthcare.

Harry Stebbings 33:38 What does it take to do vertical sales teams, and what have been your big lessons on what mistakes people make?

Carles Reina 33:44 So I, I will give you an example. In India, like I tried to implement verticalized sales team too early and essentially kind of depressed the revenues for a single quarter, and it was like an absolute disaster. And then I realized like, nope-

Harry Stebbings 33:55 What, what happened there then? You, you, you divided everyone, and then it didn't work? Like what happened?

Carles Reina 33:59 It didn't work because like, A, people were not passionate enough, B, like it was like a lot more, like it needed a long time to actually close like some of the biggest sales, and C, like I, I, I, like the team was way too small. And like if you do it like early and if you segment too early, then you fundamentally end up like screwing things up. So what I realized, like I have this placeholder in my, in my calendar every single week that is called pipeline construction. And that pipeline construction, um, it's like similar to like portfolio construction that you're familiar with. But for me, it's like pipeline construction. How do I take a VC term and put it in like in my mindset? It's like, how do I design the perfect pipeline for any given market and segment? And that, that's when you start thinking, it's like actually you need like the liquidity, but you also need the big whales.

Harry Stebbings 34:46 Right.

Carles Reina 34:47 So each one of my account execs needs to have the ability of like closing big whales, specifically on the enterprise segment, but also having like liquidity in the pipeline so that they don't lose their confidence. Because people were losing their confidence.

Harry Stebbings 34:58 So just talk to me. You have pipeline construction. What's the next subsequent step? You break out how many sellers you have in that market?

Carles Reina 35:05 Correct. Yes.

Harry Stebbings 35:06 Yeah. So how many sellers? Let's say we have 20.

Carles Reina 35:08 Let's say 20 for any given market. Doesn't really matter.

Harry Stebbings 35:10 20.

Carles Reina 35:10 I mean, we have a lot lesser than those ones.

Harry Stebbings 35:12 Sure. Let's just say, but like what do we do then? 20 average deal size?

Carles Reina 35:15 I look into the average deal size. I look into like what are the numbers companies in there?

Harry Stebbings 35:19 What's the average deal size? 100K?

Carles Reina 35:21 Depends on the market. Depends on the market.

Harry Stebbings 35:23 Let's just say 100K because it's easy for our maths. 100K, and then we're like, okay, if I need to hit at... What's the maths we're trying to get to? I'm just trying to understand.

Carles Reina 35:30 So for me, the key item is like how many companies are in that market, how many like very complex enterprise are in that market, and how do I create enough liquidity in that market to close deals every single week so that the team stays motivated and sees the challenges of closing deals.

Harry Stebbings 35:45 Have you ever had a situation where you're like, "Shit, the ramp I need to get on my sellers to get to my quota is too high?"

Carles Reina 35:53 Yes.

Harry Stebbings 35:53 "I'm not, I'm not equipped enough to hit that quota."

Carles Reina 35:56 100%. Government vertical is one of those ones where like we said, you know what? I-- Like, and it was one of the big bets that I made this year, was like, I don't care how much we make-

Harry Stebbings 36:04 Why do government, in the nicest way? Hard sales cycles, tough to get in.

Carles Reina 36:09 Yeah.

Harry Stebbings 36:10 You, you're crushing in other areas. Why do government?

Carles Reina 36:12 Um, fundamentally because one, it's very sticky. Number two is like it's a benefit that we make to society. If we can deploy agents for people to have better interactions with like the actual like government and government services, it's an absolute no-brainer, and I don't care if I don't make enough money to justify it or like I lose money. It doesn't really matter to me. And then the three is like it's a hard industry to get in, so the moment you actually get in, then it's just like you never leave that industry. So fundamentally, like when you start mapping those things out, you need to make the bets, and one of th- some of those bets will pan out really well, some of the ones will not like pan out that well. But it's like literally portfolio construction. Like how quickly can I do some of these, some of these sales so that I can spend time also like, like in the difficult ones, and my investors don't call me saying, "What the fuck are you doing? I'm gonna fire you," right? And I think that's like a fundamental of, idea of like portfolio construction. And you do it at a, like a country level, each one of the new countries that you actually want to be launching, and that is a completely different concept than what the majority of like CROs are actually thinking these days. If you tap it into like AI agents for like, uh, go-to-market and other pieces, then you have like something that is quite unique for your business.

Harry Stebbings 37:20 So what did you do in India then? You verticalized too early, segmented too early.

Carles Reina 37:23 Yeah.

Harry Stebbings 37:24 Depressed the market for a quarter.

Carles Reina 37:25 Didn't work. We went back to zero. We went back to like-

Harry Stebbings 37:27 Horizontal

Carles Reina 37:28 ... let's do horizontal. Let's peop- allow people to do like much deeper, and then we will start segmenting again when the right timing comes. And what ended up happening is like-I would then, we would then give them, like I would then give them like a, a name account list based on, um, and negotiate with them based on like fundamentally like how I was thinking about like the portfolio construction. And, and that worked really well. Like literally we lost a quarter. We end up changing all of that from the ground up. And then you could see like people starting closing deals in the first month. And it was like insane because like it was day and night. We had changed the culture in the team, in the local market by getting it wrong. Let's go back to the basics. Let's redo it from scratch, accept that we've made a mistake and then move on.

Harry Stebbings 38:09 Does brand dramatically reduce enterprise sales cycle? When you can be like, no offense, ElevenLabs in India, I'm sure like a year ago, not actually a very big brand.

Carles Reina 38:17 No. Today it's fantastic.

Harry Stebbings 38:19 Versus, versus in the UK and the US-

Carles Reina 38:21 Yeah

Harry Stebbings 38:21 ... very big-

Carles Reina 38:22 Yeah

Harry Stebbings 38:22 ... and much easier. Does brand

Harry Stebbings 38:24 reduce enterprise sales cycle?

Carles Reina 38:25 Yes. One million percent. And whoever tells you no, it's like just lying. That is a fact, right? And I think like the ideal scenario is like no one gets fired. Like the idea, like you remember like IBM, right?

Harry Stebbings 38:34 It's fine. Yeah.

Carles Reina 38:35 It's like no one got- gets fired for actually buy, buying IBM.

Harry Stebbings 38:37 Yeah.

Carles Reina 38:37 It's like that is the ideal scenario for any brand. It's like literally you become the safest asset in the block. Great. It's, it's a long way. I think like the two companies that today have been able to make it is... Well, three companies if you want. OpenAI, Anthropic, full respect for them. Cursor. The three of them I think for me are like key-

Harry Stebbings 38:58 Cursor have killed enterprise unbelievably well.

Carles Reina 39:01 Yeah. They, they've done super well. And it's fantastic. Like those are the three like brands that are like blue chip organization right now in like, in, in the procurement, like teams perspective and IT teams perspective. It's fantastic. It's great. We need to replicate that.

Harry Stebbings 39:15 No, but I read on Twitter, it's one of these really funny ones, but I read on Twitter it's like, "And no one uses them anymore. We all use Claude code. You're such idiots." And it's like, sure, but go into HSBC in Hong Kong, like, or wherever around the world, like Barclays Bank in Swansea. Like I, I promise you, they're, they're using Cursor actually in their local dev shop. Um-

Carles Reina 39:31 And it is great. Like it just means like brand will help you solidify your position, but also you need to like the bigger pro- like the bigger-

Harry Stebbings 39:38 But also the stickiness of these big enterprises. That's the also the unwavering one.

Carles Reina 39:42 And it's not that easy to get into the big enterprises anyway, right? It's not that easy. You've done it. Y- or you, you've done it with like the portfolio companies. You know how difficult it is for them. But once you start getting into the motion, then fundamentally you get there.

Harry Stebbings 39:53 As a venture capitalist, I've, I've done it, period. I have-

Carles Reina 39:56 [laughs]

Harry Stebbings 39:56 All of the companies we invest in, we basically found. You know, we, we do all the work really.

Carles Reina 40:00 [laughs]

Harry Stebbings 40:00 It's exhausting. Uh. [laughs]

Carles Reina 40:03 But you do it with LPs.

Harry Stebbings 40:04 Uh, yeah.

Carles Reina 40:04 So imagine your LP is like, it's exactly the same concept. Like your LP is like the big whales.

Harry Stebbings 40:08 Multi-year sales cycle. Multi-year sales cycle.

Carles Reina 40:09 Exactly, yes.

Harry Stebbings 40:09 I mean, seriously multi-year sales cycle. One of our biggest LPs was a six-year sales cycle.

Carles Reina 40:14 Yeah. I'm not surprised.

Harry Stebbings 40:15 Uh, absolutely.

Carles Reina 40:16 But how do you create enough FOMO? How do you create enough brand to be able to actually like reduce that six years to like a lot less?

Harry Stebbings 40:22 Yeah. Brand does that.

Carles Reina 40:23 Exactly.

Harry Stebbings 40:24 What percentage of your new sellers work out?

Carles Reina 40:28 The majority of them.

Harry Stebbings 40:29 Do they?

Carles Reina 40:30 The majority of them, yes. We're talking about like our churn rate on the sales side is actually not that big.

Harry Stebbings 40:35 Really?

Carles Reina 40:36 It's because like when I make an offer, um, I tell every single person, it's like ElevenLabs is gonna be extremely difficult, right? Extremely difficult. We are a hard company to work for because we have extremely high expectations. You're gonna work like a huge amount of hours. I expect full commitment. And, and people love it. So you end up filtering out people that actually don't want to have that type of life. And I think that's okay. And the funny part-

Harry Stebbings 41:00 Do you think it's possible to retain that at scale?

Carles Reina 41:03 Yes.

Harry Stebbings 41:03 You get these soft management people who are like, "Oh no, we need to filter down the messaging." Do you think that's possible at scale?

Carles Reina 41:09 I think it is possible. But it is possible if you try to retain like a smaller team and you implement the latest technologies to actually like become a, make everyone more efficient in general. I think like of course like the bigger the company, then I think you get softer. But you look at what Marc Andreessen was saying the other day, and like companies are overstaffed by 25% and even more, right? Like of course there is a trade-off between like overstaffing and understaffing. So like if you understaff and people have like even in sales or like revenue, they have too much pipeline, they end up not closing nothing.

Harry Stebbings 41:37 How many salespeople do you need to hire this year?

Carles Reina 41:40 We, we, we're about adding about like another 120 people more or less. So it will keep the entire sales team at around like-

Harry Stebbings 41:46 What's your sales team now?

Carles Reina 41:47 It's 130 people. So we-

Harry Stebbings 41:50 Hundred and thirty

Carles Reina 41:50 ... we'll keep it under 250.

Harry Stebbings 41:52 Okay. But you're doubling sales team.

Carles Reina 41:55 Uh, sales? Uh, doubling the sales team. Yeah. Um, and the sales is gonna grow much quicker than that. But-

Harry Stebbings 42:00 Do you worry about that?

Carles Reina 42:01 Yes.

Harry Stebbings 42:02 Like that, that's a lot to bring on board. [laughs]

Carles Reina 42:04 A lot.

Harry Stebbings 42:04 Doubling the sales team.

Carles Reina 42:06 Yes.

Harry Stebbings 42:06 What are the pitfalls that you need to avoid?

Carles Reina 42:09 I mean, one is the dilution. Like if you're not upfront about the expectation, I think you end up diluting because people come with different expectations. They essentially like behave in a specific way that is not the way that you want it. And then everyone-

Harry Stebbings 42:22 How fast can you correct it? I went to a company the other day, um, but essentially there was a sales leadership board of all the reps, and there were like seven reps, and six reps had between 5,000 and 8,000 points, and just points, just thing like that. And then the bottom one had 2,000. And the next best one had 5,000. Pretty freaking clear this person is way off. Do you just cut it there and then? Or are you like, "Oh, give them time. It's been a m- it's only been a month."

Carles Reina 42:52 Yes and no. Like I think for us, like all of the stats are publicly open to everyone, so everyone knows how much revenues we make. Everyone knows like each one of the reps.

Harry Stebbings 43:01 Do, do you have a leaderboard internally?

Carles Reina 43:03 Yes, we do.

Harry Stebbings 43:04 How does, how do you do that to create that competition?

Carles Reina 43:06 Um, so people like we post automatically. We have a bot that actually will post automatically into the sales channel every single week a summary of like what percentage of quota attainment year to date for that specific quota and all of that stuff. And the forecast-

Harry Stebbings 43:20 On a per rep basis.

Carles Reina 43:21 On a per rep basis. So anyone can see it anytime. And if you're at the bottom, then hey, you're gonna be able to see that you're on the bottom. At a practical level, for me, it's like it, it's beyond that. It's like that's one component. But if you have someone that is like building strategic accounts, then I'm not too worried. If someone is actually building, uh, like the right pipeline, I'm also not too worried, right? But they need, you need to see the action. You need to see like how many meetings they are doing. If I open a calendar and someone has a full calendar that is empty, I'm like, "Mm, what did you do this week?"

Harry Stebbings 43:50 Do you worry about-Demoralization or losing, uh, exci- I mean, dude, if I'm like [laughs] if I'm looking at the report and it's like Harry bottom, next week Harry bottom

Carles Reina 44:02 [laughs]

Harry Stebbings 44:03 I'm like, "Oh, fuck." I'm like

Carles Reina 44:06 You're out.

Harry Stebbings 44:06 [laughs] I'm out. It's, it's so mean. It's like public. You know, I was the fat kid at school, and it was horrible 'cause you had running races, and you're losing in public was so public 'cause everyone could see how far behind you were. Something nice.

Carles Reina 44:19 Sales attracts a different profile. Sales attracts the people that are much more outspoken, people that are much more extrovert, people that will actually want to do something different, right? So by definition, you don't go into sales if you're not willing to take like the harsh feedback, if you're not willing to actually stand-

Harry Stebbings 44:36 Do you not think most sales reps are softer today?

Carles Reina 44:38 I think a very large portion of them are because they don't have the environment to actually like just push harder or because they've already lost the passion and that they just want a normal job. And that's okay. Don't get me wrong. That's absolutely fantastically well. It is not what I'm hiring for.

Harry Stebbings 44:52 What's your tell for the obsessed that

Harry Stebbings 44:55 wins?

Carles Reina 44:56 For me, like you can get it very quickly, right? Like, people that have extremely high energy, that are sharp, that like are thinking quick, and also like there's other people that like will be slightly opposite, but also like they're gonna be very, very deep. And it's like it might take them a little more lo- like, more time to actually like get there, and those are like less obvious. But once they do, it's just insanely good, right? But like if people are like sharp and they're energetic and passionate and they come across as like someone that really wants to win and you can ask them like, "Hey, like pitch me ElevenLabs as if I was, I don't know, like a fish," whatever it is, like it doesn't really matter, right? Like then you get a sense of like how quickly they're thinking and how passion they have, like how much passion, how much actually, um, like they've researched the company, who are they thinking, all of that stuff. Like, you end up having in a, in a very short conversation. Like, I don't need to spend more than twenty minutes to know if, um, if I wanna hire someone or not. And I will tell you like, um, the majority of times I end up putting my feedback in, uh, in Ashby. We use Ashby internally. I end up putting my feedback in Ashby during the conversation. By the middle of the conversation, I have my feedback. And I'm one of those like crazy guys that like write a lot while I'm talking to someone. I hate when it gets recorded, um, because then people end up behaving in a very specific way versus actually like being themselves. So I write a lot when I'm, while I'm interviewing people, and then I have my summary. And in parallel, I'm writing and I'm doing my summary. And that's it. And it works really well for me. And-

Harry Stebbings 46:22 Why do you hate the recorded element? So for me, uh, all of our calls in The Launch Fund are recorded because it's important for us that we can share them-

Carles Reina 46:31 Yep

Harry Stebbings 46:31 ... and I can ramp up without being in the room.

Carles Reina 46:34 My personal take is that like interviews, like people behave differently if they think that they're being recorded versus if they think that actually they have freedom to say whatever they think is, is best. In sales, we are always like ask everyone to record it, and we have like it's mandatory for everyone.

Harry Stebbings 46:48 You use Gong?

Carles Reina 46:49 We use Gong, and it automatically fills out our s- like Salesforce, and so we try to automate as much as possible. And by the way, like Loveable has the best CRM that I've ever seen. Those guys have really smashed it. Like, shout out to them.

Harry Stebbings 47:01 Loveable CRM?

Carles Reina 47:02 Uh, yes. Like, so Loveable ended up building their own platform where like you can interact with it.

Harry Stebbings 47:05 No shit. Can you imagine if they didn't? I mean, that'd be [laughs]

Carles Reina 47:09 We should be building our own platform as well, but like we're not.

Harry Stebbings 47:11 Do you buy that? Do you buy the SaaSpocalypse of like you will customize your own software entirely in the future?

Carles Reina 47:17 For some areas, yes.

Harry Stebbings 47:18 Where will you? Where will you not?

Carles Reina 47:20 I think like for like core application, core things, yes. Um, so a CRM, I would love to customize it. I would love to actually build it, uh, myself, uh, even like it doesn't really matter. You can... You don't have to spend that much time. I mean, just like, um, a pool of data-

Harry Stebbings 47:36 But you haven't in your Salesforce.

Carles Reina 47:37 We haven't, we haven't done it. Uh, we use Salesforce. Uh, but for some other applications, like, I mean, why wouldn't you do it? If it fits better in your entire ecosystem of applications, if it's easy enough, then, then maybe you should. Would I build an entire Google Drive or a Gmail? No, I wouldn't. Like, it wouldn't make any sense. But for a, a good amount of applications, for sure. If I was like a procurement guy, I would be building a procurement software for myself.

Harry Stebbings 48:02 So you think the SaaSpocalypse is over exaggerated?

Carles Reina 48:05 I think there is a very large portion that is over exaggerated, but I think like there is a, a real fact that like people will end up building their own applications, and I think that's, that's key. I think it's, it's why not?

Harry Stebbings 48:16 What would you like to do with ElevenLabs today that you're not able to do because of lack of budget?

Carles Reina 48:23 Oh, we've never actually like put any constraints on the lack of budget. Like, you... If, if you wanna do something, budget is never gonna be a problem, and that's been since the beginning.

Harry Stebbings 48:31 So what is the problem? If you want to do something and you're not allowed to, why would that be?

Carles Reina 48:37 It's... It might well be because, um, you haven't proven with a test or experimentation that that is the right thing to do right now. Um, so for me it's like you want a, a budget. You want... What do you want? 100K? You want 50K? You want 200K to actually prove that things? Do it. Don't ask me for a million dollars. Don't ask me for like dedicate an entire team to it. Don't ask me to actually dedicate six months of your time to, for that specific thing. I'm not gonna do it. But if you do it on the side and then you prove me that like you, you can actually make it work and I start seeing some results, we'll scale it, and we'll give you all of the budget that you want.

Harry Stebbings 49:10 You're the CRO, and you said that. It's so interesting about kind of I wanna see the data before I scale it. You now do paid, uh, and you do paid, uh, you know, on an F1 car.

Carles Reina 49:20 Yes.

Harry Stebbings 49:20 Remind me of the team.

Carles Reina 49:21 Uh, oh, the Revolut F1.

Harry Stebbings 49:23 How did you weigh up the decision to do that when it's a big investment and you had no data honestly to suggest it would work?

Carles Reina 49:31 It took us a long time to actually get comfortable with the idea.

Harry Stebbings 49:33 How much does it cost?

Carles Reina 49:35 Um, we, we spend a good amount of money. Like, the budget, like, we had a budget in mind that we wanted to spend, and we went to different teams, and we ended up negotiating. We're like, "This is the budget that we, we, we have. This how much we want to be spending for year one, for year two," all of that stuff. Um, and, and what are the options? Um, and then the major- like, all of the teams that we spoke to, some of them were like, "No." Like, for this, no. Uh, and or like, for this, you don't get anything, uh, you don't even get the logo. Some of them are like, "Oh, we'll do all of this stuff." And then we end up, like, um, narrowing down to two teams, and then we end up negotiating with that two teams in parallel. And then there was one, like, which is Audi Revolut F1 that, like, we were very impressed. Um, but it took us a while to actually be comfortable with the entire concept.

Harry Stebbings 50:18 Would you rather premium branding on a worse team or secondary branding on a number one team?

Carles Reina 50:23 Premium branding on the worst team, 100%. You get more exposure, and also, like, you have a lot more creative freedom, and also you're betting. So the reason ... One of the main reasons why we ended up picking, like, Audi Revolut F1 is because, like, if you look at the past, the story of like, or, or the history of, like, uh, Audi, is, like, every single, like, sports entertainment or sports championship they've entered, they've ended up winning within five years. And, and that's fantastic. And, like, they're building the car from scratch. They build their own, like, engine. They build, like, everything from scratch. They're competing with, like, all of the big ones. And I'm a big Formula 1 fan, but they're competing with all of the big ones. And I actually feel that, like, this idea of, like, incumbents, like, very technologically driven with a, a really clear, like, mindset, drive, idea to win and so on, it is who we are as a company, ElevenLabs. But also is who, like, who Nick and the team are at Revolut. So it fits really well with your entire narrative as a company if you try to do it well.

Harry Stebbings 51:24 What was the biggest paid marketing event that you did, event/channel or /activity that you did that was a mistake, and what did you learn from that?

Carles Reina 51:32 The majority of them end up producing good returns. But, like, when I look at, like, the ones from an enterprise perspective that, like, have a better ROI for us is, like, uh, dinners. Like, when we do a dinner with, like, execs in a given city, that has the best ROI that, um, that you could have. Um, if I go to a trade show, the majority of them don't have good ROI.

Harry Stebbings 51:52 How much does a dinner cost?

Carles Reina 51:53 You could have a dinner with, like, for, like, 15 people and cost you, like, 3,000, 4,000, $5,000. Um, if you want to go bigger, then essentially you need to, like, shut the entire place and all that stuff, so you will have to spend more. Depends on the city. Not the same doing it in Mexico City or doing it in Barcelona or doing it in London, but the ROI is actually quite solid. But also dinners, the benefit of the dinners is, like, you end up ... Imagine you're inviting competitors, right? So you're inviting, like, competitors, like, different customers you're trying to, like, to, to, to, to, to close. So, like, those guys are gonna know that you are actually talking to these other guys. So there's a FOMO that ends up being created in place, and it just pans out really well, right? And because they know. They, they know, like, it's usually the same ICPs. So they know, like, who is doing procurement, who is doing, like, whatever, who's doing, like, the sales, who's being, like, the CTO, who is the chief AI officer, all of that stuff. They know each other. That always works really well. Um, the worst, like, ROI for us has always been, like, uh, conferences. It just, there's no ROI in there.

Harry Stebbings 52:50 What's the takeaway from that?

Carles Reina 52:52 We should be spending less on those things and should be building our own events more.

Harry Stebbings 52:56 You should be building your own events more.

Carles Reina 52:57 Yes. That's why we did, like, ElevenLabs.

Harry Stebbings 52:58 You did this insane ElevenLabs event-

Carles Reina 53:00 Yeah

Harry Stebbings 53:00 ... which kind of reminded me of, like, some kind of rock concert meet Steve Jobs kind of event. Do you need to see, ironically, a return on that? Or is it like-

Carles Reina 53:10 Yes.

Harry Stebbings 53:10 Oh.

Carles Reina 53:11 100%. Like, why wouldn't you? Like-

Harry Stebbings 53:13 But it's always difficult to know.

Carles Reina 53:15 No. Like, so you end up, like, having, like, a, this concept of, like, uh, influence, uh, like, revenue and then direct revenue or, like, uh, closed revenue, right? So there's a lot of, like, different variations, all of this that you can plan it. And the event that we ran in London, the ElevenLabs Summit in London, was fantastic. Like, we wanted to prove that, like, a European company can actually be running these big events with, like, um, like, so many people, um, and then, like, put up a show that actually people get passion and talk about it and also motivated and presented. We presented some ideas. We presented, like, we brought some, like, guests to talk in front of everyone else.

Harry Stebbings 53:49 What is your biggest tip for me if I ... I've been thinking about one company in particular of ours. I, I, uh ... Solve Intelligence.

Carles Reina 53:57 Yeah.

Harry Stebbings 53:57 Amazing business in London. AI for patent lawyers. They should do an incredible event for patent lawyers specifically, be an amazing close-knit community. If you were to advise, say, them on you should know this if you're going to do an event for your customers, having done it so well, what, what would you say that advice would be?

Carles Reina 54:18 Bring the right ICPs, design the content really well, and think carefully about the content that you would want.

Harry Stebbings 54:24 What's the ... What would be your advice on the content design and what would that mean?

Carles Reina 54:28 It has to be, like, not salesy. I think if ... it needs to feel natural. Like, you should do, like, a presentation about your company, like, some insights, talk about, like, the things that are coming next, your vision. But if you make it too salesy, people will walk away and never come back, and I think that's the fundamental trade-off. Like, for me, like, these big events are like, we talk a little bit about ElevenLabs, so Mati ends up doing, like, like, always the, the big speech, the big sp- the big keynote. But then after that, for me, it's all about how do we put those partners, those companies that are building in our platform or are using our technology in front of as many people as possible so that we learn about them. And I, I did my, my ... I, I did a fireside chat with, uh, three amazing companies like BCG and, and Atugiri and, and, and, and, and Conecta. For me, it was more about, like, how do we enhance their appearance? How do we, like, talk about, like, what are they building, what they're using? It's less about ElevenLabs. It's about, like, them, right? And I think that's like, you need to plan the content in a way that, like, it feels less salesy. You talk about it, but also you bring partners to validate that what you're doing is actually right.

Harry Stebbings 55:29 Totally get that. You said that partners. How do you think about partnerships as a channel at ElevenLabs?

Carles Reina 55:35 Yes.

Harry Stebbings 55:36 And what are the big misnomers that people have around partnerships?

Carles Reina 55:39 There is a concept that I really like that we've actually done fairly well, I would say, at ElevenLabs, which is like the, um, strategy partners. And that is strategy partners, like we put in that bracket is like, um, companies that have a CVC. And I know, like, this is gonna be controversial, but like I actually love CVCs, like corporate venture capitalists, because they help you navigate big brands. They are your champions internally, and their incentive is to actually make it work really well for the business.

Harry Stebbings 56:07 Ju- just for people to kind of understand, that's like Salesforce Ventures, that's-

Carles Reina 56:10 Exactly

Harry Stebbings 56:11 ... yeah.

Carles Reina 56:11 Like, uh, Deutsche Telekom Cap- uh, like T- T Capital, which is-

Harry Stebbings 56:14 Siemens I think have one.

Carles Reina 56:15 They all, all of them end up having one. Like NTT Docomo Ventures, like all of them have like a, a, one of them. But the good thing is they know their business and they were not sexy. Up until like a year and a half ago, two years ago, they were not sexy. It was like, like returns were not there as we know, right? Like CVC getting returns is like really difficult. Um, and they were just like trying to like fight to get allocation in the best companies, but like it's just not possible. Today we've proven with ElevenLabs that like we dedicated time to actually partner with like wovenCapital from Toyota, with the Deutsche Telekom guys, with the Telefónica guys, with Liberty Global that actually joined our cap table, all of those pieces. Like, that is a fantastic distribution strategy.

Harry Stebbings 56:56 And so you get them to invest a small amount, and then you distribute through them.

Carles Reina 57:00 Exactly. And you essentially ... We, we, we negotiate contracts with them, and essentially they end up like, depending on the situation, you have one side or another one.

Harry Stebbings 57:08 Do they have to bring a certain amount of pipe or promises to get a certain amount of allocation?

Carles Reina 57:13 [laughs] Uh, yes, they do. [laughs]

Harry Stebbings 57:17 [laughs]

Carles Reina 57:17 Like we, we are ElevenLabs, so nothing is free. [laughs]

Harry Stebbings 57:20 Yeah.

Carles Reina 57:20 But I think, I think I like it because like it incentivizes, like the way I organize this, this concept initially, um, and, uh, and it was so funny when I pitched it to Matt, he was like, "Really? People are gonna give us money as a contract?" And I was like, like, "Investors," and I was like, "Yeah, let's try," right? And I think like the reality was that like you end up aligning incentives. Like if their incentive is to also only invest, their, their incentive is only to invest, but your incentive is actually to close a deal. So how do you figure out something that works along the way so that like you put ... End up, end up saying, "You know what? You will invest for every million dollars that you want to invest, you need to actually like bring X amount of revenues in the next 12 months or 24 months," whatever timeframe you want, right? And there has to be some penalties and some consequences if that doesn't happen. That is the way that like from day one-

Harry Stebbings 58:04 Ah, I'm sorry, how do you actually ... If you don't bring it, like we, we strike you last? Like is that possible?

Carles Reina 58:08 We buy you out.

Harry Stebbings 58:09 Ah.

Carles Reina 58:10 Yes.

Harry Stebbings 58:11 Yeah.

Carles Reina 58:12 I think, I think it works perfectly fine. And then everyone is incentivized, and the logic, and I, I strongly believe that is the case, and that's how I pitched it to everyone was like, "We want the best. So if you invest in a million dollars in ElevenLabs and you bring a contract, you help us close a contract, then your valuation goes up, so you're making money from the VC side, but also your business is getting more efficient because it's implementing ElevenLabs. It's a win-win for everyone."

Harry Stebbings 58:36 I totally get that. Well, and I think the other thing that you also get is like a public market messaging story, which is like we're closely partnered with ElevenLabs, a pioneer in the industry. And for large telecoms providers, wherever you are around the world or whatever enterprise you are, that helps a lot.

Carles Reina 58:51 100%. But also like the, the beautiful side is like you end up building like new products specifically for them because then you get the, like the insights of the industry. So we went into like the telco industry. We had no idea about the telco industry. We've actually learned everything about the telco industry partnering with like KPN, Deutsche Telekom, Telefónica, NTT Docomo, all of that, like really amazing brands that like have been in the industry for a very long time. We work very closely with the wovenCapital guys at Toyota. We are learning a lot about the automotive industry because they're in the cap table, so everyone is motivated to it. Like and the same with like, um, like in, in, in, in, in financial services. So there's a number of things that like ... Or even going into different markets. Like there's a number of advantages of like having corporate VCs in your cap table just because you incentivize and you increase your, like opportunities

Carles Reina 59:41 of being successful.

Harry Stebbings 59:42 What are the biggest mistakes that you think people make with partner ecosystems? I think people think of them as like a, a silver bullet. Oh, we'll have a partner-

Carles Reina 59:50 Yeah

Harry Stebbings 59:50 ... and then it's done. I think you need to have people who nurture those partners incredibly well, to teach them, train them, onboard them.

Carles Reina 59:56 Yes.

Harry Stebbings 59:57 What would be some others from your perspective?

Carles Reina 59:59 It takes time. It takes fucking long time. Like, and that is a reality is like, um, if you're coming into like the distribution side with partners, uh, or you're building the entire partner ecosystem thinking that you're gonna be like making another 20% of revenues like in two quarters, you're, you're wrong. Like that doesn't happen that way. You need people dedicated to it. You need incentives for them because people lose interest, and you need your incentives for your own team. So initially start using like SQOs, uh, sales qualified opportunities, or SQLs, so sales qualified leads, to be able to actually track how much volume has been generated and what is the actual traction being generated. And then once you start having a solid like motion in there, then you start tracking and move it towards like the revenues. So each one of the SQOs needs to be generating a certain amount of revenues.

Harry Stebbings 1:00:44 Other than letting them invest, how do you incentivize your partners to push you?

Carles Reina 1:00:48 You have ... You can always ... And Salesforce has done it extremely well. For me, they are the reference in this, um, is like they built a partner ecosystem that like where they get deals from like Salesforce, but also they send deals to Salesforce, right? And in some cases, like in the markets where they cannot be billing the customer, they actually do send the deal and be like, "Oh, you're my partner. You will be billing the customer, and then, uh, I will bill you independently," right? That's a fantastic ecosystem to be building.

Harry Stebbings 1:01:14 Like how do you think about the justification of rep time across account? And what I mean by that specifically is like any company that's very large could spend a large amount of money.

Carles Reina 1:01:24 Yeah.

Harry Stebbings 1:01:25 And with PLG, everyone tends to start small, and then the hope is they expand much bigger and bigger and bigger. How do you think about what ACV is large enough for reps to spend significant time on trying to get it?

Carles Reina 1:01:38 $1,000 a month.Your brai-- When you start spending $1,000 a month, uh, as a business, your brain completely switches because you don't want to put it anymore in your credit card. And at that point, you start believing like, "Shit, I'm spending a lot of money at the, in there. With that software, I do have high expectations." At that point, if you have a motion from a sales perspective that is fast enough, then it doesn't really matter.

Harry Stebbings 1:02:04 Are you ready for a weird one? One of my favorite sayings I've heard recently is like, "Fear is a, a mile wide and an inch deep."

Carles Reina 1:02:11 Mm-hmm.

Harry Stebbings 1:02:12 A-and you need to take the step to realize it's not as scary as you think.

Carles Reina 1:02:16 Yeah.

Harry Stebbings 1:02:16 Where have you thought the thing was very scary and difficult where it actually wasn't once you did it?

Carles Reina 1:02:23 I had a very clear conviction that like AtEleven Labs launching India was gonna be extremely difficult, um, and we might fail. And what I end up realizing is like I didn't know enough the market to realize like if you do it well, you can make a ton of money and also generate a ton of buzz and generate a lot of ROI.

Harry Stebbings 1:02:40 Do you have to send OG team members to every market you open?

Carles Reina 1:02:44 No. But we do it centrally, right? We always try to like build, um, like a market, like centrally from HQ, trying to close some deals so that it is for free. For me, it's free to actually like deploy a single person on the ground.

Harry Stebbings 1:02:58 Sorry, how it's free to deploy a single person on the ground? What do you mean?

Carles Reina 1:03:00 Because like I'm already making revenues. I'm profitable. I'm making revenues in that market. I've proven that like it is a market that is getting sort of-

Harry Stebbings 1:03:06 So you only go into new markets when you've already got a lot of customers and you can see the PLG?

Carles Reina 1:03:10 No, not on the PLG. I don't even look at the PLG numbers. I don't. I don't care about those ones. I look at like what are the enterprises, what are the companies in that market? How is my portfolio construction in that market, and how can I close some of those number, how some of those companies to get to a certain level of revenues? At the moment that I get to that certain level of revenues, for me, I've nailed like a product idea that needs to grow and needs to prove that like it can scale, and it can have like product market fit, but at least I've proven that actually can start selling in there. Then that's the moment that I actually, I can get the team on the ground.

Harry Stebbings 1:03:42 What market are you not in today, geography or sector, that you would most like to be in?

Carles Reina 1:03:48 Um, we, we are everywhere these days. Like-

Harry Stebbings 1:03:51 Literally everywhere?

Carles Reina 1:03:52 Everywhere. I have teams all around the world. Some of them have been announced, some of them have not been announced, but we, we have teams all around the world, yes.

Harry Stebbings 1:03:58 Where are you weakest?

Carles Reina 1:04:01 I think like in, in general, like we've been weak in some of the languages, um, and some, and believing, and that is like entirely my fault, on believing that like you could sign contracts everywhere is in the world, everyone in the world speaking English only. And then you realize later on that it's like that's just not possible. And don't get me wrong, like I start... I opened like Japan by myself without speaking Japanese.

Harry Stebbings 1:04:26 Japan's hard.

Carles Reina 1:04:27 It's really fucking hard.

Harry Stebbings 1:04:28 Japan's hard. My friend is Daniel Dines from UiPath, and he, he told me before how hard Japan... It's a major market for them now, and it's phenomenally successful, but it's hard to spin up.

Carles Reina 1:04:38 It's really hard, and I started doing it like two years ago, going myself to Japan, like constantly and meeting companies, and we started generating motion. It was great. And then I hired my first rep, San Wong, doing a fantastic job. He's like killing it. Um, and then I hired the GM, Jim, and the rest of the team. But like that, that was a really hard market. And you could not sell like in English everywhere else in the world. But you could also like not sign contracts that are always in English. Like so if you end up having a team that is mostly, has mostly had experience in the US, their belief is that like it, you can repeat that anywhere in the world. The reality is like you look at Latin America, less than five percent of the population speak English. If you want to open France and launch in France, good luck if you're only gonna be speaking English, right?

Harry Stebbings 1:05:22 Fucking.

Carles Reina 1:05:22 Um, good luck if you don't offer like French law in your contracts. No one's gonna be signing it, right? So there is some of these learnings that we've had that are really, really tough. There's like we wanted to actually sell in France and, well, I was not speaking French. Then let's get someone that speaks French, right? So there is some of those things that we've learned by doing, um, that is my entire fault, but it's also like part of the experimentation, I think.

Harry Stebbings 1:05:45 If you think that South Korea is fucking hard.

Carles Reina 1:05:48 We are there. We have an office. Yes.

Harry Stebbings 1:05:50 [sighs]

Carles Reina 1:05:50 It's really, really, really tough. But also like the benefit of Korea, and that's why I was saying earlier, like you need to have a thesis on why you're launching in a specific market. But the thesis on Korea was they produce a ton of content, they're very innovative when they want, and they're producing products and services not for the local market, but for the international market. So in reality, yes, you need to be selling in Korean, but the majority of your usage will not be in Korean, will likely be for the international market. So how do you support and map those languages that they care about so that you can target those companies, at least for us, right?

Harry Stebbings 1:06:23 Are you happy to be powering the decline of Hollywood? And I don't mean that horribly, but like the, there, there was a brilliant article the other day on the permanent decline of Hollywood, and I think it was a Wall Street Journal article. But it essentially said about the democratization of content creation and what that's done to consumer attention, and hence the decline of Hollywood-

Carles Reina 1:06:40 Yeah

Harry Stebbings 1:06:40 ... just producing less and less content. You are in large part powering that. I can paint a very positive case for democratization, income equality, equalizing content, and also declining Hollywood. I-is that a good thing?

Carles Reina 1:06:55 I, I, I don't think that's how I would put it. I think like I don't th- I think Hollywood is declining in this model that they have today, where like very big budget productions that require a ton of people, that require a lot of different things, right? And I think they're going through a crisis. But I actually think, uh, Hollywood will come out like even stronger than this. Um, and I think at the end of the day, like it's like imagine that you get a startup and the startup tells you like, "You know what? I need $100 million, or I need $50 million pre-seed just for this idea, and then it's gonna take me five years to get it out. I don't know who's gonna buy it. I don't..." What are you gonna say? Like, "Why don't you raise a million dollars?" Right? That's gonna be your... Like, raise a million dollars, prove like some points, and then start going there. And I think that's the problem with Hollywood right now. I don't think it's like AI voices. I don't think it's AI video. I think those are like additional solutions to make sure that you're democratizing it and you're reducing your cost of launching new ideas to the market. But, um... And that is gonna be part of the solution.

Harry Stebbings 1:07:56 It's actually why I find defense so hard to invest in, which is likeIt takes five years and $200 to $250 million before you can make your first dollar of revenue on a defense product, quoting from Matt Stattman, who's the president and CBO of Anduril. So-

Carles Reina 1:08:09 Mm-hmm

Harry Stebbings 1:08:10 ... think he knows his shit.

Carles Reina 1:08:11 Yep.

Harry Stebbings 1:08:11 Um, that's just tough for me as, like, a seed venture investor to get on board with that cost curve to dollar gain.

Carles Reina 1:08:20 Dollar.

Harry Stebbings 1:08:20 Do you know what I mean?

Carles Reina 1:08:21 And, and that's the m- that's, that's what needs to change fundamentally. Like, how do we create content that is like takes less money, dollars to actually be created? You start very slowly, but also then you ramp up once you realize that actually there is product market fit in that content. And I've spoken with a lot of studios over the past, like, three years. I've spent a lot of time in, in LA, in, in the industry, and my pitch always to them is like, "Hey, let's try to create content that, like, will capture, capture people's attention across, like, the channels that they operate today. And if it works well, let's scale it." Then you have the $50 million budget, and I think, like, that's where AI can benefit a lot. But you have... And because, like, you can iterate a lot, you can create content that is personalized, you can create content that is, like, is, is engaged by people. And then we were talking yesterday about, like, this idea of, like, cost per engagement. Why don't we use exactly the same framework? How much is the cost for every single person that gets engaged in your content? And that content can essentially expand to be extremely high quality as you're proving that, like, fundamentally

Carles Reina 1:09:22 the dynamic changes, right?

Harry Stebbings 1:09:23 You, you mentioned a couple of times about also investing as well. A fantastic investor, obviously we've invested a lot together. Um, should more operators be investors at-

Carles Reina 1:09:34 Yes

Harry Stebbings 1:09:34 ... the same time?

Carles Reina 1:09:35 Yes. Yes. Yes. Yes. Yes. [chuckles] It should always.

Harry Stebbings 1:09:39 No. No. No.

Carles Reina 1:09:41 [laughs] But actually, like, my, my, my thinking here is like, it is because, like, in, founders want to be backed by other founders. They want to be backed by the best operators. They also want to be backed by the best invest- investors. So if you are, like, an operator and you are willing to deploy time, not money, time, to help a company, like, navigate and try to be successful, at some point you will end up realizing that, like, why not to actually do it from, with institutional money?

Harry Stebbings 1:10:11 Okay. Because flip side, when you take institutional money, it's a great responsibility-

Carles Reina 1:10:16 Yes

Harry Stebbings 1:10:17 ... taking on other, someone else's money, and you have already made a promise to your employer that you will devote your best efforts and all of your energy to making them successful and the company successful. If you're suddenly looking at defense companies at seed, you are not doing that job to the best of your ability.

Carles Reina 1:10:33 I don't think so. I think that you can do, like, both things in parallel and one contributes to the other one. Like, I don't think there is any conflicts in there fundamentally. Like, I think-

Harry Stebbings 1:10:42 I don't think so. I think you can-

Carles Reina 1:10:44 [laughs]

Harry Stebbings 1:10:44 ... 'cause you have reached an... I'm, I'm, I'm your friend, but you've reached an echelon that you can.

Carles Reina 1:10:49 [laughs]

Harry Stebbings 1:10:49 But I don't think otherwise. Like, honestly, if I was one of your sellers and, like, I was going home and in the bath time reading about next generation drone companies and the cost curve to launch drone companies-

Carles Reina 1:10:58 [laughs]

Harry Stebbings 1:10:58 ... you'd be like, "Dude, your motherfucking turf is France and it's media. You could route that instead." I would be saying that if I was you.

Carles Reina 1:11:05 100%. And I, I would understand it. Like if you-

Harry Stebbings 1:11:07 No, but I'm getting the best out of myself by doing that, Carles.

Carles Reina 1:11:11 [laughs] But, but you know what? But the interesting thing is, like, I think you, you put it really well in the other, in the other podcast, which is like, you are the hardest working person in the office, right? I am the same. And if you want to do both things at the same time, you need to prove every single day that you are the hardest working person in the office. Like, and I think that's when it works fundamentally. Like, you will work really hard for the company, but also you will work really hard for your investors and your LPs. And I was, when I was negotiating my, my LPA, um, with, with my LPs, I mean, we got stuck in one s- clause. You know, like always you get stuck in clauses and things like that. And, and it was like-

Harry Stebbings 1:11:47 What was the clause?

Carles Reina 1:11:47 I can't even remember. But like, and I remember, like, that clause, which was like, for me was absolutely silly, and I was like pushing back and, like, for them it was, like, core to, to them. I was like, I called my, my, my main LP, which is absolutely fantastic, like Sindana Capital, they're really amazing guys. But like, I, I remember calling them and be like, "Guys, like, we need to get over this. Like, if we are fucked, if I don't return the money and I don't do all of these things, we're all fucked. It doesn't really matter how we see it, right? It's like, it just doesn't really matter. So let's move on. Let's close this thing. Let's make sure that I start deploying the capital, um, and then we will celebrate. And if it doesn't work out, I'm fucked. I'm accountable for all of this. I lost all of this money. We'll figure it out, but I don't think I will lose your money. I think I will do like a 10X, and I'm happy with it." And we ended up, like, moving on.

Harry Stebbings 1:12:37 What fund would you be happy with? Like, what, what, you know, what do you say to investor? I would, I would be very happy with a 10X. I'd be very happy with a 6X. I'd be very happy with a...

Carles Reina 1:12:48 Um, I think like for me it's like the way I, I thought when I was raising a fund is like, I will be very happy at the moment that I actually have seven unicorns in my fund.

Harry Stebbings 1:12:57 Seven?

Carles Reina 1:12:58 It has to be seven. I'm not gonna be happy-

Harry Stebbings 1:13:00 Why seven?

Carles Reina 1:13:01 I don't know. It's a number that I had in mind.

Harry Stebbings 1:13:02 You just like David Beckham?

Carles Reina 1:13:04 [laughs] I don't watch football. Uh, but like-

Harry Stebbings 1:13:07 [laughs]

Carles Reina 1:13:07 Soccer, sorry. [laughs]

Harry Stebbings 1:13:09 O- okay. Well, he was number seven, which is why. Um-

Carles Reina 1:13:12 [laughs] No, but I, I think that's the key. Like, like, people that, like, want to achieve something that is different, have a very clear idea of like, what is the actual, like, vision that they have. Like, how can they-

Harry Stebbings 1:13:23 Do you care if you're seed only?

Carles Reina 1:13:25 I don't care.

Harry Stebbings 1:13:25 You don't care?

Carles Reina 1:13:26 I don't care.

Harry Stebbings 1:13:27 No, 'cause like you do the A of ElevenLabs with 350K, you'll make a fuck ton of money.

Carles Reina 1:13:31 Sure. I did the pre-seed.

Harry Stebbings 1:13:33 No, I, I get it.

Carles Reina 1:13:34 But I-

Harry Stebbings 1:13:34 No need to brag, mate.

Carles Reina 1:13:35 [laughs]

Harry Stebbings 1:13:36 It's okay. I got you. I got you.

Carles Reina 1:13:38 You know, like-

Harry Stebbings 1:13:39 I did the pre-pre-seed. [laughs]

Carles Reina 1:13:40 [laughs] No, but I think like at some point, like, unit economy is like al- also matters, but also like I think it's important to stay within your lane as well, right? Like, I get a lot of like As and amazing companies. I ju- it's just not my area of expertise as a fund, uh, investor, and that's not where I'm gonna have a lot of fun as a, as an investor.

Harry Stebbings 1:13:56 Is it not?

Carles Reina 1:13:57 Not, uh, not for me. I love, like, the scrappiness. I love the crazy ideas. I love the companies, like the founders are like, no one do, no one wants to back them. I like those ones. I love things that are like not, uh, not obvious. We just did a deal together.And it, it, it wasn't... I mean, for me it was very obvious. For your team it was, like, Kira and, and-

Harry Stebbings 1:14:17 It was pretty obvious, yeah

Carles Reina 1:14:17 ... and for you it was, like, pretty obvious. But I also, like, talked to a lot of other VCs, and they were like, "Uh, no." And I'm like, "How is this a no for you? I don't understand it." Those are the things that I really like. Do you get it?

Harry Stebbings 1:14:29 My favorite, though, is that when we did it, then they had like 10 people call and be like, "By the way, super interested to speak about the round." [laughs]

Carles Reina 1:14:34 Did you? That happens a lot.

Harry Stebbings 1:14:35 And I'm like, "Oh, no shit." [laughs]

Carles Reina 1:14:36 That happens a lot. Oh, wait, so you were not interested a week ago, and now that you know that 20VC and Baobab are doing it, then you're interested? Fuck you. No, thank you.

Harry Stebbings 1:14:44 Unit econ, does it matter early? You said there it does. A lot of the time with AI companies, it's slightly inverted and, like, actually if your unit econ's good, it almost means that no one's using your product. [laughs]

Carles Reina 1:14:58 Ha- I don't think it matters in the early days. I don't-- I think it's more about, like, how do you get speed? But if you're building an entire brand-new market from scratch, I think you have, like, a, a power of deciding the pricing, and that pricing will help you a lot grow quicker, or, like, will help you a lot in terms of unit economics. So the key item is, like, are you building something from scratch? And if so, then you have, like, pricing power. If you're not, and you're only looking at, like, building something that other people already have, then you're gonna get screwed, and then you will have to figure out how to actually go deeper to be able to charge more.

Harry Stebbings 1:15:26 What's your single biggest advice for me? And pretend I'm an operator at a company. I'm a head of sales, I'm a head of product, a head of growth, any of the kind of coveted people that you have on an account table. And I'm like, "Uh, I- I'm thinking about doing more investing." What would your advice to me be, having done all that you've done?

Carles Reina 1:15:42 Uh, be helpful. Like, the money that you're investing is not worth it. Like, I mean, it's just not worth anything for any company. Like, if you put, like, a 5K check or you put a 10K check or you put, like, a 50K, it's not gonna make or break the company. And you need to be very clear that, like, in your mind that that's not the case.

Harry Stebbings 1:15:57 What are the most common ways companies need your help? What's the number one way?

Carles Reina 1:16:00 Go to market. Hiring people. Like, getting hire-

Harry Stebbings 1:16:03 Getting to the sales hiring.

Carles Reina 1:16:04 Sales hiring. Uh, for me, like, I go into customer calls with my, my portfolio companies, and absolutely love it. I do intros for them. I, I, I ask them, like, to send me, like, their decks, uh, their pitch, like record themselves pitching, and I give them feedback. And I love it because then I can figure out essentially what... how potentially we can change it, how... Like, are we in the right market? Are we not? Are we getting the right traction or not? I absolutely love it. And I think that's... You can be helpful with your portfolio companies in your own way. Just forget about the money. Do small checks. It doesn't really matter. But be helpful.

Harry Stebbings 1:16:34 I always say do the same size check every time. Do not do the whole, "Oh, I think this one's great, I'll put 50. This one I'm not sure, I'll do 10." It's like, no, no, no, just do 25 every time or whatever it is.

Carles Reina 1:16:45 I think there's, like, different variations and methods. I've not done it in my life. Uh, I've... Essentially, as my wealth kept increasing, then fundamentally I started doing bigger checks, and that's okay. And you know, like, like, sometimes, like, of course, we fool ourselves saying, "This is the company." And you know how, like, the majority of times that we do it, like, you end up getting disappointed. But we get disappointed, but also, like, we would do it again.

Harry Stebbings 1:17:09 What's your biggest investing mistake?

Carles Reina 1:17:12 Um, like, I've done a, a few investment where, like, I was convinced on the market, I was convinced on the founders, but I did not check, uh, how hungry they were to actually, like, do go-to-market. And, um, I ended up finding out that, like, yes, they were very hungry to build product, to execute, but they were not hungry and actually, like, iterate on the go-to-market, iterate with customer-

Harry Stebbings 1:17:31 How do you test hunger on go-to-market specifically?

Carles Reina 1:17:34 I think it's very difficult. I think it's like, for me, it's like if, uh, in the first conversation, like, I want to understand, like, how are they thinking about go-to-market already. Um, and if they tell me, like, "Sorry, I'm just, like, I'm only thinking about, like, building research and doing all of these things," like, "Fantastic. I love your product. This is great. It's fantastic, your mindset, your ideas. It's just not for me." Because then you're gonna be fighting with them for, like, go-to-market. And I have a bunch of my portfolio companies that actually are like that, and it's great. Don't get me wrong. They're doing super well, and I, I love them, and I'm, I'm as helpful as I can. But at some point, the party ends, and if the music ends and you're stuck without having a product where you're monetizing it and you're stuck with the idea that, like, "Mm, we can always make more money later on," then you're gonna get fucked.

Harry Stebbings 1:18:16 You can invest all of your money into one company that you've backed. Which company?

Carles Reina 1:18:20 ElevenLabs for sure.

Harry Stebbings 1:18:21 Can't... Obviously it can't be. [laughs]

Carles Reina 1:18:23 Okay, it cannot be Eleven... It cannot be Revolut.

Harry Stebbings 1:18:25 Yeah. Yeah. Yeah.

Carles Reina 1:18:26 Um, I love the... There's a company in, in Spain called, uh, Teker Robotics, T-H-E-K-R. Um, they're doing, like, robotics for, like, um, like, um, the manufacturing industry and, like, uh, like, services industry and, like, oh, sorry, um, like warehouses and all of that stuff. Absolutely the most genius guys that I've seen in robotics space ever. Like, they're amazing. They're amazing, amazing. I would just dump all of my money in there.

Harry Stebbings 1:18:51 How quickly do you think you know a company is good? Like, was it obvious very quickly that Eleven and Rev-

Carles Reina 1:18:58 Yes.

Harry Stebbings 1:18:59 Yeah.

Carles Reina 1:18:59 Yes. Yes. Eleven... I mean, you... Like, I talked to Mati for 30 minutes and I committed, right?

Harry Stebbings 1:19:02 Because, like, for me, like, you know, one of my best from Fund One I think was Linear. Well, well, I, it... Yes, I knew Sequoia and it very early, and I, uh... It all looked great. But it wasn't what it is today for a couple of years, actually. It was a, it was a bit of a slow burner.

Carles Reina 1:19:18 Mm-hmm.

Harry Stebbings 1:19:18 Do you believe in slow burners anymore?

Carles Reina 1:19:20 Yes. Yes. Yeah. That's absolutely fine. Like, not everyone learns at the same pace. Not everyone, like, not everyone's market, like, grows at the same pace, and I think that's okay. Like, life is not perfect. Why would... do we want to ch- uh, have, like, perfect companies in our portfolio? No. Let, let's do the tough things always. I think, like, the reality is, like, uh, for my, my LPs, I always tell them like, "Guys, we're gonna get it right and we're gonna get it wrong." Like, and that's okay. Like, if I, if I invest in a founder that, like, it doesn't work out and the founder wants to do another company, and I believed the first time, why not to do the second time? [laughs] So, like, literally it's like you are, like, trying to fall in the same place multiple times. Yes, and I will because I believe in people, and I believe in, in, like, that they can do something, that they can do, like, learn from those mistakes and execute and move quicker and quicker and quicker.

Carles Reina 1:20:06 I think that's okay.

Harry Stebbings 1:20:07 I'd love to do a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

Carles Reina 1:20:11 Okay.

Harry Stebbings 1:20:12 The reason I look kind of dazed and confused there is I was trying to remember this brilliant quote, and it's likeWhat would you need to achieve to be happy in 2026?

Carles Reina 1:20:22 Oh, I mean, for me, like if, uh, if I get three unicorns and ElevenLabs crosses a billion dollars in revenue, so I would be very happy.

Harry Stebbings 1:20:30 Wow!

Carles Reina 1:20:31 Three unicorns for the fund, I will be very happy.

Harry Stebbings 1:20:34 What's the single hardest thing for you today?

Carles Reina 1:20:36 Time. It's like, it's really-

Harry Stebbings 1:20:39 That's not an answer.

Carles Reina 1:20:40 It is. Like it's-

Harry Stebbings 1:20:41 I love you, Dio. It's not. Uh-

Carles Reina 1:20:42 It is. Like it is... It's, I don't have the time, and I lo- and I, I love to spend-

Harry Stebbings 1:20:45 But this is like a job interview. I work too hard.

Carles Reina 1:20:47 No, no, no, no, no, no. It is not. And, uh, I, I, I think like the problem is like if you don't have enough time for certain things, then you're sacrificing like, like, uh, your partner, your like, uh, your friends, all of that stuff. And f- that's the hardest thing for me. Like it's, I choose to actually work, um, like the amount of hours that I work, and work for ElevenLabs, and work for my fund, and for my LPs, but there's a choice, and then you're choosing to do things, putting aside other things that are also equally important.

Harry Stebbings 1:21:15 What's your escape?

Carles Reina 1:21:17 Plants. Like, um, like gardening. I absolutely love it. I talk to my plants. I have so many plants at home. I talk to them all the time. I water them. I like, I take like small scissors, and I chop, chop them. Like it's so nice. I really like it. And that's when I'm really stressed, when I don't understand like how to fix a thing, then I start essentially like spending an hour or two hours like looking after my plants. I can like spend time like looking at them and not doing anything, just talking to them. That gives me back energy.

Harry Stebbings 1:21:44 Fucking weird. [laughs]

Carles Reina 1:21:46 [laughs] It's very, very strange, but it is.

Harry Stebbings 1:21:49 What... No, no, there's no such thing as strange. I think we all need to be a bit more strange.

Carles Reina 1:21:52 [laughs]

Harry Stebbings 1:21:52 Um, what is the thing that makes Mati so good?

Carles Reina 1:21:56 What makes him so good is like, I think it's his ability of listening to people, and then making a decision, um, regardless of whether he gets it right or wrong, and he will acknowledge if he got something wrong, and then change it immediately. And I think that's what I really value because like you get CEOs that will tell you like, "Most of the times I need to get it right," and then make some mistakes in there. And if, for me, the, it's actually the opposite. It's like you should be always getting it right or like 99% right in like 5% of the things that are really mega important. Like in the 99%... 95% remaining things, you should be getting it mostly wrong. And I think that's what Mati's trying to do, and he's very successful at that, like allowing people to like experiment and get it wrong, and then push back, but also run with their ideas. And if there's a thing that he believes like it is like fundamentally, like it needs to happen in a specific way, he will say it, and he will do it, and everyone gets to... needs to be aligned. And he has that ability of like combining both things in different moments in time, and it works really well. We've seen it at ElevenLabs.

Harry Stebbings 1:22:57 Final one for you. What are you most excited about when you look forward to the next 24 months?

Carles Reina 1:23:02 I am actually looking forward to the next wave of foundation model companies.

Harry Stebbings 1:23:06 Huh? What the f-

Carles Reina 1:23:07 Yes.

Harry Stebbings 1:23:07 What?

Carles Reina 1:23:08 I, I, I, I believe that like there is a, a brand new world of opportunities that we are unlocking or that is gonna be unlocked with a new wave. And-

Harry Stebbings 1:23:14 Whoa, whoa. Are you-

Carles Reina 1:23:15 When you look at-

Harry Stebbings 1:23:15 ... thinking next generation of OpenAI?

Carles Reina 1:23:17 Next generation of OpenAI. But I actually think like OpenAI Anthropic will end up, and, and Google will end up buying, and ElevenLabs will end up buying like all of the new foundation model companies that will be popping up and creating research and paying just like a few billion here, a few billion there, and like just swapping them in. Um, but I think like it's actually like-

Harry Stebbings 1:23:33 Would you rather buy OpenAI at 830 or Anthropic at 500?

Carles Reina 1:23:37 Anthropic. Um, a- and I've put it online like multiple times. I think like I, I love OpenAI, don't get me wrong. They're amazing, pushing the boundaries, but I really like how-

Harry Stebbings 1:23:47 Do you think they are? Like still?

Carles Reina 1:23:49 I think they're still like pushing it, and I think that like they're trying to do thing, like good things for the world, but they were spread too thin. Um, and I think it's the, the problem like even us at ElevenLabs we're facing and Anthro- OpenAI is facing, sorry, Anthropic is facing, everyone is facing, like then when you start being very successful, you wanna do too many things, and then you end up like getting too stretched, and then not doing anything correctly, right? It's like how do you do less and then doing it really well?

Harry Stebbings 1:24:14 But do you not think that it's been stretched too thin for too long and the Anthropic acceleration has been too great?

Carles Reina 1:24:21 Yes. They need to start from scratch. And for me, the key item is that, is like how do they start building the experimentation thinking like, "Yes, we're still number one. We make all of this money," but at the same time like, "Let's go back to the basics."

Harry Stebbings 1:24:32 What do you use?

Carles Reina 1:24:33 Anthropic. I use Claude. Yeah. And I'm, I'm very happy. Like Claude is my best friend. [laughs] Like my... It's, it's, it's actually true. I use it all the time.

Harry Stebbings 1:24:42 What do you... For personal and everything?

Carles Reina 1:24:44 Personal, like fund, ElevenLabs, everything.

Harry Stebbings 1:24:47 Biggest advice to someone who hasn't got it set up who needs to?

Carles Reina 1:24:51 Oh, probably I'm the worst one of all of them, but like, I mean, I like the Claude skills, for instance, and all of that, like it's, it's really amazing. Uh, but I see some of my like, uh, like, uh, team members and they're like, they've just nailed it. I'm just like an, an amateur. They're professionals at all of this. And I would love to actually be like, "You know what? Fuck all of this. I'm going away for an entire month and I'm gonna be a pro at all of this stuff." I would love to do it, and hopefully one day happens.

Harry Stebbings 1:25:17 Dude, I've so enjoyed this. Thank you so much for putting up with me. You've been fantastic. And I actually preferred the second time, if I can say that.

Carles Reina 1:25:25 [laughs] Really?

Harry Stebbings 1:25:26 Yeah.

Carles Reina 1:25:26 Nice. Good.