ElevenLabs CEO/Co-Founder, Mati Staniszewski:The Untold Story of Europe’s Fastest Growing AI Startup

Mati Staniszewski 0:00 So, we crossed 200 million. (cash register dings)

Harry Stebbings 0:02 Whoa. (cash register dings)

Mati Staniszewski 0:03 20 months to 100. (cash register dings) And then, uh, 10 months to 200. (cash register dings) (baby laughing)

Harry Stebbings 0:07 Today, we have one of the fastest-growing AI companies in the world, ElevenLabs. And I'm so thrilled... ... to welcome their co-founder... ... Matti, to the hot seat today.

Mati Staniszewski 0:15 (cash register dings) Pre-seed was tough. Pre-seed was hard. I think we spoke with a good amount of double-digit investors, between 30 to 50.

Harry Stebbings 0:22 How much did you raise in the pre-seed?

Mati Staniszewski 0:23 We raised $2 million.

Harry Stebbings 0:24 Do you remember the price? (cash register dings)

Mati Staniszewski 0:25 $9 million. For us, even from investor, from product perspective is like, especially now, the speed of execution, speed of investing is- is the only thing you have. Our biggest contract is around $2 million, and they are mostly in a call center, customer support, personal assistant space.

Harry Stebbings 0:40 What do you believe that most around you disbelieve?

Mati Staniszewski 0:43 That you can build a company from Europe at the global scale.

Harry Stebbings 0:45 How do you answer the question, "Why won't OpenAI just do this?"

Mati Staniszewski 0:48 They definitely will, but I think they, you know, they- they lack the... (guitar music plays)

Harry Stebbings 0:58 Ready to go? (upbeat music plays) Matti, dude, I cannot wait for this. I've wanted to do this one for a while, so thank you so much for joining me today.

Mati Staniszewski 1:10 Harry, thanks for having me. After working on a number of projects together, I'm so happy we can finally speak.

Harry Stebbings 1:14 Dude, I am so thrilled we could do this. Now, I spoke to so many people beforehand, and I have to say, Luke was phenomenal

Harry Stebbings 1:20 on your team in prepping me so much. But I do want to start a little bit with the origins pre. You grew up in Poland, and this was Luke's... How did growing up in Poland impact your mindset towards the world and company building first?

Mati Staniszewski 1:33 You know, in Poland, the... It's a, it's a very different, much smaller world. So it's, um... For- for growing up, I was in a very lucky position where I was in suburbs of Warsaw, then I went to high school in Warsaw, then kind of started seeing more of that world, which, um, which was, of course, incredible because that kind of opens your eyes of like what's possible, that there's so much world beyond what you've seen in, uh, smaller cities. And I think in a similar way as you think about building ElevenLabs now, it's- it's, uh, the scale of what- what we don't know is still ahead of us, and this is, like, what's exciting, that we know that if we climb those- those traditional hills, the other mountains, we will see increasingly more. Um, and I think the second thing was in, um... I saw the transition where in- in suburbs of Warsaw, it's in like a public school, so, uh, school where- where you would have just any- any kids that would live in the area. And then high school and where I met my co-founder, you would have, um, a- a slightly different crowd, like a- a crowd of- of people that would win competitions, uh, need to go through a few steps to get there. And- and suddenly that like kind of density of talent was the most motivating factor to like explore more, learn more and do more, which now we are trying to, of course, replicate at- at ElevenLabs where, and any other company I'm sure too, is like you try to keep that density as high as possible because at the end of the day, that's what's most motivating being part of this incredible set of people.

Harry Stebbings 2:58 I was most inspired or given hunger because my dad always said, like, when we went into Chelsea, like, "Oh, it's- it's a better life here (laughs) and like this is where people who've won live." And I didn't live there and I wanted to fucking live there, and it fed me with this like insane hunger. Where did your insane hunger come from in those early days?

Mati Staniszewski 3:19 The early days, I mean, definitely it was, you know, the combination of family, my older brother, what kind of trail blazed going abroad to study, then motivated us to like, "You need to do the same. This is really helpful." And then the second, it was really this community of people in high school. Meeting my co-founder, um, was extremely smart, meeting some of our close friends, uh, and- and like kind of going through this cycle of motivating each other. It's like, yes, we want to study at the best university. Yes, we want to go deeper and crash this exam. And- and, um, I think this was huge, huge element for- for- for all of us just- just- just- just going after it and knowing that maybe it's possible. Um, at the time, at the time everything felt distant and it's still, you know, many of the things do. But- uh, but I think without that- that kind of motivation through the people, would- would be not possible.

Harry Stebbings 4:10 Speaking of the motivation through the people, you have a very special relationship with your co-founder, Piotr?

Mati Staniszewski 4:14 Yes.

Harry Stebbings 4:14 Yeah. So I have to ask then, you come together, how does the idea for ElevenLabs come to be? Was it truly inspired by bad movie dubbing?

Mati Staniszewski 4:24 There's two things that coincided for us starting ElevenLabs. One was through the years prior, he worked at Google, I worked at Palantir. We would meet for a hack weekend project together. So we would try to explore a new technology. One was in a recommendation space, one w- during the crypto height, we built a crypto risk analyzer, which wasn't very easy and didn't work very well. And then- and then once we did the project in audio, which was the idea was, can it analyze how you speak and gives you tips on how to improve speaking? Um, and that kind of opened our eyes to what's possible in the technology space there. And then fast forward later that year, so we did the hack weekend project in early 2021. In late 2021, the moment hit from Poland, which is, wow, all movies are still dubbed where you have all the voices from the original, whether it's male or female voice narrated with one single character. So you have one voice narrating all the characters in a flat, no emotional way. So it's like a audiobook reading of a movie. It's a, as you can imagine, a terrible experience, and something that we knew combining the experience from working on audio and now knowing this is a problem that, okay, this will change. A few years from now, as you- as you- as you imagined that kind of advancement, all the voices will have original emotions, intonation, sound incredible. And that kind of kickstarted this idea and of course then it expanded to, okay, we need to fix the research layer to actually make it happen. Um, then we started with a lot of creative platform work around ElevenLabs, and then expand it to agentic platform work of how now the interaction is shifting where voice is this big interface for the technology around us. So-Well, you know, it was very dubbing-specific originally, it kind of expanded through to everything voice today.

Harry Stebbings 6:09 I mean, it must be the most boring movie experience, having one single voice for everything.

Mati Staniszewski 6:14 It's terrible. It's ter-

Harry Stebbings 6:15 So, what do you do? When you land on the idea, then, in terms of your next steps, you move into the research layer and determine whether it's possible to actually do this?

Mati Staniszewski 6:23 The way we've approached this was we, um, we first tried to, like, do two things in parallel. My co-founder was, "Okay, can we use existing technology, stitch it together, and create a dub of a movie in a better way?" And it quickly transpired that you get a good effect, but it wasn't brilliant. So, to actually fix it, let's take a step back and fix o- one of those components and make it great. At the same time, when he was doing research, my mission was, does anybody actually want a dubbing product? So, I was emailing other YouTubers, uh, uh, um, getting the, the, the emails, scraping them and trying to message them, "Hey, if we had a dubbing product to make your movies available in all languages, would you be interested in that?" And, um, there was a, not t- there was like a, a, a roughly, it was like 15% reply rate initially from the, the, the first batches that we sent. All were personalized. Um, I mean, we sent thousands of them. But the, the interest was, like, la, lack-, lackluster. All of them were just like, "Oh, I don't fully believe this is possible. Can you send us a sample? It would be great, but how will I operationalize this? YouTube doesn't support it." So, it's like, it was somewhat of an excitement, but not like a burning problem, I need to solve it. But then the second thing happened. So, we started sending the samples. Uh, we started speaking more with the, the, the YouTubers and it quickly came that what they actually want help with is much simpler. They want to post-produce and correct if somebody said something incorrectly. They, they want to understand how the script will sound before they need to produce it. They might not want to speak at all, and they want to voice over, over the movie. So, a super simple problem which didn't include anything with language changing. And, um, and of course my co-founder and us, he, he dived into the, the, the research, real- realized, and he's an incredibly smart researcher, that you can actually buil- build completely new text-to-speech model which will be a lot more emotional, intonative that, um, that will make that narration a lot better. So, let's put the dubbing problem aside, and as we see, there's this huge other problem with, with a lot of the creators. Let's solve this problem first and bring that research just on the text-to-speech layer. And then, you know, kind of, as usual, as we dive deeper-

Harry Stebbings 8:33 And that's only possible by creating your own models.

Mati Staniszewski 8:36 There was... We... Yeah. Quick answer is yes.

Harry Stebbings 8:38 Mm-hmm.

Mati Staniszewski 8:38 The, all the models at the time just, you, you could tell immediately it's like uncanny valley, not very good. You cannot replicate voices.

Harry Stebbings 8:45 Dude, how should I know as an investor to say... Again, I use this show just to get better as an investor (laughs) . How should I know as an investor whether a problem needs its own model or whether you can just leverage alternative existing models?

Mati Staniszewski 8:57 Well, the... I think the answer will definitely change now to, like, 2022. So, that was the year where nobody e- yet, like, kind of was thinking about AI. This was still kind of downfall of Metaverse, crypto days. So, you were, you were still... The attention to, to the models was w- there was, was like n- none in the public eye. You know, ChatGPT happened l- beginning of 2023. That's when it kind of all started spiking across. So, at the time, um, at the time, you didn't really have a choice. Like, you, you, you c- you could, you, you, uh, you could kind of n- ... You knew, um, as a user, as an investor that what existed out in the market just wasn't very good. Um, and then there was more of a question, will this team be able to solve and create something better? Uh-

Harry Stebbings 9:39 If you were creating ElevenLabs today, what would you do architecturally differently given the architecture that we have today?

Mati Staniszewski 9:46 I think still a current question is to what extent you, uh, you continue on that kind of single modality space, where at the time it was mostly you train a dedicated model for speech or dedicated model for image, video, et cetera, uh, over what is now more of a theme where you kind of train a more of a multimodal approach, where you combine the reasoning and speech together to create even better speech experience. So, that's n- our most recent generation is effectively that, the Eleven V3. If we, if we had that then, I think we would have probably skipped few steps and our experience would have been even, even better.

Harry Stebbings 10:21 S- so off-tangent, but I'm just concerned about bluntly the plateauing progression of models. And, you know, GPT-5 was the, the embodiment of that. You move from, like, incredible feature descriptions to a description on cost. And when you have a description on cost and efficiency, it's like, "Oh, we've, we've hit that."

Mati Staniszewski 10:37 Right.

Harry Stebbings 10:38 Do you agree? And are we in an element of incrementalism and plateauing?

Mati Staniszewski 10:42 In voice, I think the, the ... So it's, you know, there's a little bit of, like, it depends. It depends on the use case. But to make it more concrete, there are use cases like narration. In narration, we think it's plateauing. You... The, the new model generations will not make narration of an audiobook drastically different. It will still be, it will be still, um, in a similar quality. But I think in general, the point is right, where if you just do research, eventually it will commoditize and eventually that advantage you can deliver from research isn't enough. So, you really need to build product. And as you think about Eleven, we combine both together.

Harry Stebbings 11:17 Do you think we're at a stage where scaling laws no longer equal, uh, an equivalent level of progression?

Mati Staniszewski 11:23 Well, it's in a, in a, in a, in a, in a biased way, I feel like the progression is, is, is, you know, still, like, just scratching the surface where it's, it's just, just the moment of, like, still, um, seeing that kind of escape curve of, of, of AI getting adopted everywhere is just getting started, while scaling laws continue in the same way. So, I do think there are-

Harry Stebbings 11:43 But there's a difference there between adoption and development. So, I agree with you there in terms of the adoption, but actually the development progression.

Mati Staniszewski 11:52 Got it. I think, you know, it's probably different answer on LLM space and different answer in the, in the voice space. I think in voice space, you are still, you, you are still in, like, not ... Y- y- it's still not a slower rate. Um, and then there's an interesting variation of, like, as they all combine-What does m- th- that mean for the world? Like, a slightly deeper understanding of everything around you? Um, but I think in voice you still will see pretty, pretty, pretty quick curve. On the lumps, I agree, it's probably a little bit flattening to- to some extent.

Harry Stebbings 12:24 I spoke to Andrew Reid before the show. I had a great chat to him last night and he said, um, "Ask him about, like, why can't OpenAI do it?" And I remember chatting to Ciaran about this. Ciaran obviously being my partner, uh, and there were two reasons why, you know, we didn't work together. One is the small check which s- he very kindly offered, um, and the other was, like, no offense, it was super fricking early, and it was like, well, why wouldn't OpenAI do this that, no offense, two very young guys in London are doing? Like, how is this not gonna be done by them? How do you answer the question, "Well, duh, why wouldn't OpenAI just do this?"

Mati Staniszewski 12:58 They definitely will do- do something, but I think they, you know, they- they lack the- the- the genius that, uh, that- that- that- that- that I'm happy my co-founder and the team has. But I think the true- true- true longer answer is, one is focus. You really, y- I think in the early days especially, you know, when we spoke then, there was just so many different things you could do in AI space. And I think we took this bet that we want to really own and win in the voice AI research and product space. All our- our work is- is- is directly tied to- to- to- to voice. Then the second thing is, I actually think the number of researchers in the world working on voice and being exceptional is super small, probably like 50 to 100 people at, like, this top level. And, um, and- and Piotr and, um, and- and- and people around him were able... So Piotr was able to assemble one of the best teams in the space. I think we have five to ten people that are in the top- in the top 100. Like, they're... It's like a mighty team, which- which I'm kind of time and time again surprised how incredible they are, uh, and to make it specific, I mean, text-to-speech was one. They kind of have blown everything out of the water. Then speech-to-text is beating OpenAI, Gemini on benchmarks. Now music, which is again, n- something that no big company has- has yet been able to crack or do. Um, so it's a- it's a- it's incredibly mighty team. Um, and then even if, I think if OpenAI does, you know, actually do something on research, and I think they are trying, then that product layer is where- where you really need that- that big advantage of. If you are in a creative space, if you do narration, if you do voiceover, if you're Dub, you go through so many additional steps to really make it perfect. We do that well. If you're building a voice agent or conversational agent, you need to bring knowledge base, integrations, functions. You need to then deploy, test, evaluate, monitor. All of these pieces are coming together in a platform and I think OpenAI is, you know, not- not investing as much time. They could, but they, but they, but they, but they aren't. So combination of mighty research team, speed of execution, and then actually focusing on- on the use case in a- in a... I think in a deeper way.

Harry Stebbings 15:04 You mentioned that kind of the mighty team. Those people are very valuable people, and an OpenAI or an Anthropic or a Meta would pay a lot of money, it would seem, for people like that. Do you worry about the war for talent, and how do you think about retaining talent when there's hundreds of millions of dollars going across the table for them?

Mati Staniszewski 15:24 I think the talent, especially on the research side, is- is- is- is- is- is incr- the- the impact that those people can create is- is- is out of- out of this scale across any of those companies, especially in the early days. Of course, to some extent as you, as I think about Meta and others, they are of course paying for the know-how as much as they are paying for the raw talent too where getting those early people gets you, um, some insight into the models and architecture that you can then bring across and accelerate. So in early days it's- it's- it's more valuable than late. Um, but, uh, but I think in our case, the- the reason I think it's- it's still valuable is one, the upside for Eleven Labs just getting started. So I hope we'll be able to compete with any of those companies in the- in the future at- at- at- at the same scale. Two is, um, what you- you do have which- which I think is important as I think about any of those companies is, like, how close you are from developing research to actually deploying research. And at Eleven Labs, if you are actually creating new models, they get to production and are some of the most important things that our products work on almost immediately. So the gap is super quick. Um, well, and, you know, bigger companies who go through their usual corporate re- red tape to- to get any of that- that work done. And then three, um, I think we- we- we now have, like, a- a very small and mighty team that can learn from each other and- and- and move pretty quickly. I don't think there is a guarantee you'll get that in- in some of the other companies. I think they are optimizing for a lot of people, but not necessarily the right people.

Harry Stebbings 16:48 We're gonna go to team size later. I do want to stick with some chronology. I have so many questions that I want to ask you, but some chronologies. We mentioned that kind of the V1 and building to beta, and I think it was, uh, where

Harry Stebbings 17:00 was it? Uh, 2023 that you raised the pre-seed?

Mati Staniszewski 17:03 Mm-hmm.

Harry Stebbings 17:03 January '23. Um, how did the fundraise process go? You're two young guys saying, "Hey, we're gonna do this." How did the pre-seed fundraise go?

Mati Staniszewski 17:13 Pre-seed was tough. Pre-seed was hard. We... It was, you know, similar question that you asked. It's like, how will we fix research? The second question, which was very interesting, we think the market is very small for what you are solving. Which at the time was like, you know, it's like a combination of AI voice, like nobody was thinking about that. So- so that was, that was, that was surprising to us, which we were very disagreeable. And third was defensibility. Will it actually be better than what incumbents from the- the FA&G companies will actually solve or- or like how will you out-compete it on long term? So these were the three. So it was tough. I think we spoke with- with a good amount of- of double digit, um, investors and, uh...

Harry Stebbings 17:56 Double digits of investors, and they said no?

Mati Staniszewski 17:59 Yeah, there was like f- f- w- with between 30 to 50 and it was double- double- double hard at the time because we- we... Early 2022, we got an offer from one of the accelerators in US, not YC, and, uh, and we are thinking like, should we break, take it or not? And we decided no, we are rejecting. We think we can create something- something- something, um, more valuable and we don't need that help at the time.... so decided to go independent. And, uh, this triggered this more stressful time where suddenly now you need to raise money. We started sp- spending a little bit more on GPUs. We hired our first few people. It's like all of that was going from our savings from... which we are lucky to have from, from Google and Palantir. But also like, okay, now it's, now we're, it's actually getting a little bit more risky and we want to double down. We want to invest even more, so we need money. And, um, and yeah, it was, uh, it was, uh-

Harry Stebbings 18:46 How much did you-

Mati Staniszewski 18:47 ... a tough one.

Harry Stebbings 18:47 ... raise in the pre-seed?

Mati Staniszewski 18:48 We raised two million.

Harry Stebbings 18:49 Two million. Do you remember the price?

Mati Staniszewski 18:51 Nine million. It was-

Harry Stebbings 18:52 Post. Nine million post.

Mati Staniszewski 18:53 Nine million post. The end up, the amount was exactly 11% of the, the eq- the, the equity that, that, that the first investor was buying, and then the other ones were layered in.

Harry Stebbings 19:05 Oh.

Mati Staniszewski 19:06 So it was like just over a million. It was, uh, it was a, a-

Harry Stebbings 19:09 And this was 2023?

Mati Staniszewski 19:11 That was 2022.

Harry Stebbings 19:12 This was not... Yeah, but dude-

Mati Staniszewski 19:14 No, the-

Harry Stebbings 19:14 Dude, I'm so used to like stories like this on the show where it's like HubSpot and you're like, "When was it? Oh, 2006," or 2008 or '09 or whatever. But this was fucking recently.

Mati Staniszewski 19:23 Oh, yeah. I, yeah. It was only, only four years ago which, which, uh, I mean, it was so... You know, in the end we found... We had Credo Concept, co- lead co- concept here, here in UK. Credo from ZE. We had, um, one of, of friends, um, of Piotr's from Oxford, Peter Chaban, who invested, was a co-founder of, of Polkadot which is a cryptocurrency. So we had like a good set of early believers. But to get there it took us, it took us a bit, a bit, a bit longer.

Harry Stebbings 19:49 So you raised the two million then. What happens then? You start building out a team, you start investing in GPUs.

Mati Staniszewski 19:55 Exactly.

Harry Stebbings 19:55 Just take me through that.

Mati Staniszewski 19:56 The, the, the main reas- the main reason we raised was to accelerate what we would, what we want to do. First one was building a small data center, so we built one. And back then it was, I think, in Poland that we've, we've invested few, and then quickly after moved and started b- buying some in US. Uh, and then team. We started hiring, not many but it felt like a lot at the time. It was like additional two people, I think. (laughs)

Harry Stebbings 20:20 (laughs) Two people. That's quite a lot.

Mati Staniszewski 20:22 (laughs) Yeah.

Harry Stebbings 20:22 Well, don't go, don't go too far there, Matei. Um, did you... 'Cause w- you kind of did the pre-seed raise and the beta launch at the same time. Did you have product market fit on the beta launch? Were there early signs that it was working?

Mati Staniszewski 20:35 Oh, yeah. That's, uh... Okay, so got, got... The, the good, um, good timeline, uh, piece there where we actually raised the round in mid... Like a Q3 of 2022, but we announced it in Q1 of 2023. And the reason we do that, and we do that all the time, is that we don't want to announce a round just for the sake of announcing a round. Our philosophy was always the round should have another purpose which is bring the product out and, and help you get the product into the users. Um, celebrate a set of customers to show that you are arrived in a specific sector. Uh, bring a new research model into play. So, like, every round that we would do would always tie into a product announcement. So we actually hold in, hold on for announcement for a few months until we had our beta release, and then we triggered which was January 2023. Um, but your, to your question, initially when we worked on dubbing and, uh, and that first early days and we're like emailing, we didn't have product, product market fit. It was like very clear that... You know, people were slow to reply. Then we sent samples. They weren't engaging, so we, so we didn't through the 2022 period. And then when we shifted from dubbing into narration, voiceovers, then the product market signal started to hit. "Maybe it's there." We, we had a first, um... And I remember distinctly. There was three things that happened. First, we did a blog post around the first AI that can laugh, and we sent samples that got picked up by newsletters and people were like, "Wow, this is incredible." And the next day we had like thousand people on our waiting list. Then the second thing happened, we invited the first, uh, 100 or so users to, to ElevenLabs to test it out, and we had this audiobook author who, uh, who joined the platform. Our platform is like this small text box where you can type in text, tweet length, and narrate it. And he would copy-paste his entire book 500 times, download it, stitch it together, then he released it. He released it on the platform at the time AI was banned. It passed through as a human content and, um, and then it started getting reviews that it's great, and then he came back saying, "I want my other, uh, uh, uh, book author friends to do it too." So it's like, "Okay, we are onto something." And then, uh, and then we launched in January 2023 publicly. We knew... We started getting more of that signal that creators, narrators love, love the work. And to be honest, I think from that moment on- onwards we s- saw, like, a clear momentum. And then there was like, you know, more events after the media picked it up, then more creators picked it up. By the moment of release we knew that it's valuable. Uh, and then maybe last thing on that, it's like the, the product market fit concept was... You know, it's, um... Fo- for us we never like fully, I think, know what this actually means where... We, we knew users loved our product, uh, at the time but, uh, but I wouldn't call it at the time we had product market fit as we were thinking of like, "Okay, how do we make sure it's providing value for the next 5 to 10 years? Then we'll decide..." Th- this will be like something where we would call, "Okay, this is clear product market fit. We think this is like self-sustaining for as long as we, as we go into the future." So we wouldn't go by that definition. I think we are now closer to that, but we are still, like, you know, still, still know we can create so much more value.

Harry Stebbings 23:49 So many things I want to unpack there. You said about kind of the, the timing of your announcements and aligning it to actually kind of material news items. Do you have any big lessons on announcements, how to do launches that you found particularly work well that other founders should know?

Mati Staniszewski 24:06 So that's the first one. 100% like... I, I, it's like fo- for us the, the making announcement close to something big you want to announce from the product, from the user, from hiring perspective, tie it with that. Don't... I don't think celebrating the number itself is the right way. I mean, in, in a way it's like you're giving away the company, so it's, it's, it's like almost like what are you doing it for? And you want to show as much.... uh, um, uh- of that as possible. So that was the first one. Second is, I think there is very easily to optimize for the, the, the... and maybe I'll cover it upfront. Depends, of course, on the, whether you are self-serve use, and creators, developers are optimizing for enterprise and sales led. But second thing would be, you, you really want to focus on how you actually get the users rather than just the media PR, uh, uh, element. I, I don't think the latter is actually as valuable as, as it seems to a, to a first-time founder. For us, I remember when we did the beta, we were speaking and, um, with some of the bigger publications, and one rejected us, the other one accepted us, and we felt like it's a big deal. Then we did all the prep for the interview. We did the, the, the, the, the actual news, and then it was posted. We hauled it, like everything around this post that they told us the deadline for, and it had no impact. I think it... I mean, it like... probably a few more people read about us from the investor scene, but we, we, we, we didn't really care about it at the time. We were like all about users. What actually worked was working with the newsletters that were talking about AI, working with our friends from YouTube community that then posted on Discord that we are opening this up. Our Discord community was one of the most valuable. Reddit, those people picked it up quicker than anyone else. Hacker News posting there. Like, all of those were immensely more valuable. And, um, and we, since then, always spend a lot more time on any of the actual forums where our users are rather than where, where, where, where they are not.

Harry Stebbings 25:59 I think we grossly overestimate the importance of traditional press.

Mati Staniszewski 26:03 Oh, 100%.

Harry Stebbings 26:03 I remember when I was first in Tech Crunch, I was like, "I'm gonna be like viral. It's good. Everything's gonna work."

Mati Staniszewski 26:08 Yeah.

Harry Stebbings 26:08 And then it happens and you're like, you got like three followers. And this was when it was much bigger and it's like... So I completely agree with you there, the grassroots. The other element kind of tied to that is how do you think about fundraising? And this is advice to founders fundraising pre or post a launch.

Mati Staniszewski 26:24 What is frequently m- happen if the launch goes well is you will get more interest and I think you'll get in from investors, from events, from media. To a large extent, this is like the time you should really focus on getting the product and kind of all of that is dis- th- th- like a distraction to a large extent. Like, you know, the first time we launched that, that kind of happened, we started getting so much of that, and I'm sure I did the mistake then of like picking up a lot of those and doing more events than, than we should where like the best course of action would have been to, to, to just spend even more time with users and then kind of early enterprises started getting interested, so more of enterprises. But, uh, I think on the, on the investor side, I think you wanna keep... you wanna line up investors so you, you, you do, you do want to tell them like, "Okay, I'm not racing now. I'm going to reconsider whether we need more capital in Q3 or Q2," whatever is the time period of time, uh, the time period. So you wanna line them up and then, um, and then when they... when that... when, when you actually need the money, um, then is the best time to actually reengage with them. But I would not... like I, I think it's a waste of time to kind of be in this like continuous fundraising modes. Um, it's, it's, it's, it's, you know, distractive, you need to have conversation. It's not useful. Um, yeah.

Harry Stebbings 27:37 Do you choose three that you'd like to have that you engage with in between cycles? Or do you not even do that? You just say, "Hey, I'm heads down on building, I'll come to you when I'm ready?"

Mati Staniszewski 27:48 Today, less. At the time, at the time we... No, like good question in the, in the sense of we do, we do have, uh, few investors that we think would be valuable that we might not have today in the, in the kind of the, the space. I mean, I'm very happy we are, we are kind of-

Harry Stebbings 28:04 Kind of working together. (laughs)

Mati Staniszewski 28:04 ... kind of working together. (laughs) Uh, but no, that's the, that's the, the, the truth is 100% you, we, we, through the time we would have few investors that we wouldn't try to proactively reach out. But if they reached out through any of the conversations, we would, we would try to engage. But the engagement there wouldn't be like, "Hey, we might be racing." It would be much more of like, "Hey, can you help me with introduction to X? Hey, can you help me with this hiring problem?" And this has worked tremendously well through, through the, through the work where I find like the investors are, are, are genuinely keen to help if you, if you find the right person and if you have a very clear problem and you don't try to like overuse their time too. Like you come up with one, two things that are concrete, useful, and then it's... they know as well that if you are growing as a company, it's good for them to show the help too. So we've done that.

Harry Stebbings 28:53 It's also a good litmus test to see if they genuinely are interested in being there or if it's just platitudes of niceness.

Mati Staniszewski 28:59 Oh, yeah. 100%.

Harry Stebbings 29:00 Totally agree with you there.

Mati Staniszewski 29:01 Before, it's like kind of the second thing where you do get the interest, uh, from investors. I think this is the best time to actually test whether they can be helpful and before you accept any term sheet, any, any, any money, it's like, "Now can you help me with angels that you want on cap table? Do you want the introduction there?" That's the best time.

Harry Stebbings 29:20 Any advice on angel selection for founders in the early days?

Mati Staniszewski 29:23 The way we approached it is like, so we had standard, of course, the venture capital to whether it was the help of their network, with the brand, with making sure we arrived in a specific region. But, um, but on angels we would usually optimize for, um, do they have domain expertise that we don't have? That's one category. Second, can they help us validate ourselves in specific, specific circles we might not have access to? Uh, so like if you are an AI founder, it may be valuable to have set of AI founders in there. So you are part of the same events, the same, same, same, same conversations. Um, and then of course the, in our case it was can we have some of the go-to market expertise where we, where we didn't have... we had a lot of self-serve, some Palantir experience, but the sales led, how can we bring that in place as well?

Harry Stebbings 30:10 You mentioned starting with the author. Suddenly it was going well and you were seeing this great ground swell and great adoption. And this is kind of January to June '23, I believe.

Harry Stebbings 30:20 And then in June '23, you raised like $19 million from Brian Kim and Andreessen and then Nat and Daniel from, um, the... I can't remember what it's called. NDFG or something.

Mati Staniszewski 30:31 Uh, yeah, NFDG. It's, uh, Nat Friedman and Daniel Gross.

Harry Stebbings 30:34 There you go.

Mati Staniszewski 30:35 From AI

Harry Stebbings 30:35 NFDG. Wonderful. Brilliant name. Um, and...That was quite a shock because it wasn't a London fund, it wasn't an index, it wasn't Excel. How did that round come to be?

Mati Staniszewski 30:46 Yeah. The NFDG is, is now, now I feel like it's a good name, but I was pitching out on changing that to like a different name for a while. Maybe now it's not possible anymore, but, um, the, the... So it was like the interest started around kind of March 2023. We had a lot of the investors that were in close conversation in the past, like re-approached us. We effectively would, would, um, would, would, would be a little bit more in the waiting mode. Like let's see how we, we, we get through and let's optimize for the partners that we truly want. And what we truly wanted was a combination of making sure that people in globally in SF trust and know that we have arrived, like we are a company that can be trusted, is building something ambitious. Um, and then, of course, people that we would admire to, to be able to work with that created something special. And that was definitely in that, in that, in that category, in the latter category. And it was a very fun thing because he approached us. We previously-

Harry Stebbings 31:45 Does he just DM you? Like how does he just approach you?

Mati Staniszewski 31:48 He emailed us. He emailed us, but then I, I met him here in London. He flew in, and, um, it was like a weird setup where he emailed, he emailed me, but it wasn't clear whether it will happen and it happened another last time. And then I see him in London in one of the hotels where he was staying, and the first thing he was saying was, uh, which is the only investor ever to, to, to do that was, "So I tested your APIs and this thing doesn't work, this works. Voice here wasn't good. Stability wasn't very clear parameter." So he's the only person that tested our APIs, decided that it was actually valuable what we are doing, gave me feedback on like what we should change, and then told me like, "And I'm keen to invest." Uh, which, which, uh, which, of course, triggered a conversation of what's the, what's the, what's the vision, what we are after. And what's special about Nat is that you can tell him very little and he kind of has this b- beautiful ability of, of infilling all the context around it, comparing that to any of the past experiences and kind of bringing any of those experiences that then might be relevant to you. But he gets it immediately. So he was, from the first conversation, he knew kind of exactly what we are after and challenged us with the right questions from the start, and then he moved very quickly. He has very keen, um, to, to partner with us. We are keen to partner with him. We are trying not to show it too much, but, but we were. And then, at the same time, we know that Nat was, uh, Nat and Anil were, were more, more perceived as the angels while we admired them from their GitHub and Summer and days, they, th- that was like still like an angel category for many of the externals. So we knew this is our chance to bring a huge investor to actually position us as a top company, and that's, that's... We, we spoke with all the classic tier, tier one funds, and a16z was just one of the most passionate-

Harry Stebbings 33:36 So you spoke to all the funds in London?

Mati Staniszewski 33:37 We spoke with few funds in London, yes.

Harry Stebbings 33:39 And then Brian flew to London?

Mati Staniszewski 33:41 And Brian flew to London. So Brian... I mean, a16z was phenomenal. They, they, they did exactly what we spoke about, which was they've shown us that they cared before they invested. They introduced us to, to incredible people, to some celebrities to work on the voice licensing. So they were like on it for two weeks prior or like week prior, um, already to, to, to help out in any way they could. And then Brian flew to London, uh, uh, uh, and met, met with us and a- and then we signed a, a preliminary term sheet. It was interesting. He flew in, we were negotiating. Also, my phone called to, to Piotr, to co-founders like, "Hey, what about this terms? Can we accept this?" And, uh, and Piotr would, would, would give guidance on what we... where is the hard line, what we can do, and then, uh, and then on speaker we would sign together and, and, um, and finalize.

Harry Stebbings 34:30 Do you think speed really is a differentiator as an investor in winning?

Mati Staniszewski 34:34 Oh yeah. Speed is like for us, even from investor, from product perspective, it's like you need to... Especially now, the speed of execution, speed of investing is, is the only, only thing you have.

Harry Stebbings 34:43 This is what pisses me off. I'm happy in that world. I can move supremely fast and invest a lot of money. But what I find more and more with founders is they want to run a road show and they want to do a 10-day process meeting investors and then have another week to decide which term sheets they want to take. I'll- I'm willing to give you a term sheet tonight, save 17 days, but it's more and more common that founders actually want to run road shows. How do you think about that?

Mati Staniszewski 35:11 Yeah, this, this... Um, now in a lot of, a lot of great companies get built on Eleven Labs, so I get to be in the conversations now more frequently where they would raise money from our investors. Uh, like recently we had a, a company raise a series A that has built a healthcare voice bot, which would effectively help patients calm them through their conversations in a, in a, in a incredible, incredible way. Then there's like another company building for, uh, healthcare customer support. So quite a few. And now I'm in the conversations of them raising the money, which is an interesting one. And, um, and then usually it's, it's clear that, uh, so- some of, some of the people don't know fully what they are actually optimizing for, and it's good to, to, to talk through. Are they optimizing for the valuation? Are they optimizing for dilution? Are they optimizing for the right brand name to help them out? Uh, is it the network of people that this brand name has? Is it the specific partner? Is it something, something different? And I think it's like pretty distributed. So when I speak usually with founders or our investors ask me to speak with the founders, it's usually that question, like, "What is it actually that you, that you care about for the thing? What do you miss?" And then it's, then it's ............................ pretty quickly, whether, you know, they are going after just the road show. Is there to bump it up because they think the value that they- the term sheet they got is just not valuable? Or is it that they actually want someone else, but they don't want to... they want to keep the optionality of having the first one while, while running the process? Um, but you know, all the, all the traditional simple things.

Harry Stebbings 36:36 I'm a romantic. I hate this idea of a road show where it's like, "I'm gonna meet everyone and then I'm gonna compare term sheets and then I'm gonna decide." It's like, what happened to the partnership?

Mati Staniszewski 36:44 (laughs) The... Well, but it's, you know, the truth is, the other way is, is true, where a lot of the investors, um, want to give the term sheet, but that is before any show of partnership. So, how do you know that this is a good partner? How do you know whether they are giving you good terms? Especially our first-time founder, you never run this. You don't know how much you are valued. You need to have some relative comparison, and this can happen from conversations with other companies, other founders, or, um, comparing yourself to other companies in the field, or running, running some form of a process. Roadshow probably sounds pretty bad because it sounds like a lot. You probably... Like, the way we approached fundraising was always, you know, especially in the early days, like, queue few investors we really care about, and first speak with maybe one or two that maybe aren't a priority so we understand whether, like, w- we are at all kind of perceived in the, the, the, the kind of the, the messaging that we want to put across makes sense. If it does, move straight to the, the, the top ones.

Harry Stebbings 37:42 How do you feel about exploding term sheets?

Mati Staniszewski 37:46 I, I don't like them, but we got a few. We had a few who-

Harry Stebbings 37:49 Do you understand them?

Mati Staniszewski 37:50 I do. I think I do. I, at the time, I didn't, but, uh, but I do. It's like, I mean, I don't like them still, but, but we... I won't name the people, but, uh, uh, but so one example was a, let's say, a smaller fund. And they, they, they, they felt that if they get as a term sheet, we'll use that to bump other term sheets.

Harry Stebbings 38:14 Very often happens.

Mati Staniszewski 38:16 And that does happen. Um, so I got it. It was like, you know... And, and they came from the approach of like, if it goes too high, they won't be able to invest, and they didn't want to be part of that. Um, so that happened. And of course, you know, it's good pressure.

Harry Stebbings 38:28 Very often being an investor, being the first term sheet's the worst because you're used as the stalking horse where they then go, "Hi, I've got a term sheet, I've got a term sheet from a great fund." They never name the fund, and it's... And, and you get no credit for being the first, and then you're just trampled on by everyone else that comes on.

Mati Staniszewski 38:44 Oh, yeah, that's what I... That's what I... I don't like founders that are trying to do that too much, like that if they are trying to get you to... get the first-term sheet to bump the other ones, I think it's a wrong approach. I think you should... Like, it's, you know, okay if the... if it's like order of magnitude off, it's probably wrong, or it's like, you know, 5X, then yes. But if it's like plus/minus 20%, that's like a wrong optimization. There's just so much more value that the investors, partners can give than the, the money itself that I think should be optimized for.

Harry Stebbings 39:08 You've got Andreessen introducing you to celebrities, and you've got Nat and Daniel, two of the brightest minds in AI, who are querying APIs that no one else does. Are the Americans just playing a different game to the European VCs?

Mati Staniszewski 39:22 Hm. We love our partners. I mean, we have... A- Andreessen team is so, so incredible, their network. I mean, now, Sequoia with Andrew is just another, another level two, iconic team. Uh, also crazy help. Um, NEA2 is just like bringing all the time.

Harry Stebbings 39:39 But they're all US.

Mati Staniszewski 39:40 They're all US. So, I think they are (laughs) playing a different game. I think the... You know, they're... They are all, from our experience so far, a lot more keen to take the risk. Like, you know, even our conversations are always like, "How do we bet bigger rather than, like, optimize for, for, for, for, for the, the negatives?" Um, the one check I always try to do with, with Piotr for any of the partners that we bring beyond the Capital Network brand is, is always for the person you, you partner with or the person you pa- partner with, how will they behave if it's not going well? So, we usually try to get any of the back references for how, um, how did they behave when the company was, was failing. And, um, and all of the ones that we had are, are, are in a very positive. Like, they actually were, were really on the, on the side of the founder, helpful when it was not going well, even more so than when it was going well. And I was doing the same check with some of the checks with, with, with other companies, and, um, maybe this is getting used to that, like, you know, when you ask the kind of the set of companies that went up and down is so high. But in some of the investors we, we spoke in Europe, that check didn't yield the good results.

Harry Stebbings 40:48 I had one with Brian Kim that didn't go well. And I have to say, Brian was the best. He, like, he was the lead investor in the round, and he got the money back for everyone. And that's rare, and he really put in the work to do it well and to do it quickly. I was really impressed with him in that way.

Mati Staniszewski 41:03 No, exactly. It's, it's, um... Brian, yeah, Brian was one of, one, one... in our... Uh, checks c- came up strongly. Jennifer too. Uh, it's like a- all of them, it's just crazy how-

Harry Stebbings 41:14 Okay, $19 million, doosh, in the account. Most people suddenly then go on a hiring spree, and not two people hiring spree, but like a proper hiring spree.

Mati Staniszewski 41:24 (laughs)

Harry Stebbings 41:24 But you favor very small teams. You've said this to me before, but Luke said it to me. Why do you favor really small teams?

Mati Staniszewski 41:32 I think the first piece is that more people frequently doesn't fix the problem. It's like you, you, you, you, you don't need that many people to do something special. That's the first thing. Second is, you... by keeping... And as an organization today, we are... you know, we have 250 people, but really, it's more like 20 teams, uh, doing go to market of like five to ten people that are just executing on specific project, where, um, where they have higher ownership, they can move extremely quickly, they, um, they see the result and iterate with reality a lot quicker to improve that. And I think this just works in such a beautiful, beautiful way. Of course, there are other challenges with this, but it's great.

Harry Stebbings 42:08 Are those 20 teams organized by function or by project?

Mati Staniszewski 42:13 Uh, a little bit depends. The, the, the... In the product, by like a product, um, product area. So, we have a team working on our studio interface, team that will be responsible for all the core experience when you log in, team responsible for the entire voice agent suite. And within that, there's a team working on some of the more enterprise components, another team working on some of the self-serve elements. So, all of the teams will be organized there on the product area. And then, the other parts, we try to shatter pretty quickly. So, you know, and, uh, we will have a separate team for talent, uh, of course, and a, a team for people. And they will have a high degree of, of independence when, when they actually execute, which, which helps.

Harry Stebbings 42:54 You mentioned 250 there. It- it's- it's small given the size of company in many ways, but it's also still 250 people. When was the company culture the worst, and what did you learn from that?

Mati Staniszewski 43:04 You know, there was, like, moments where, where, where, where I could feel this kind of tension between the go-to-market research engineering, um... And it's like a specific story where... So, I mean, it's a super lucky position where we develop our models and bring them to the customers, which, which of course makes it very special. We frequently will show for the very first time to the world something that was n- not possible and is possible now. In 2023, late 2023, so we did a text-to-speech, we then did voices, so we could recreate a voice. Then we, um, then we create like a basic way for speech-to-text internally. So, we had all the components that we originally were speaking about to create dubbing. And we, uh, we haven't done dubbing yet, publicly, and we gave all the components to some of our customers, so they could use text-to-speech, the voices. And, um, there was, like, a lot of, you know, pressure that, like, it's a valuable technology we can give to, to our enterprise clients. And, um, one of the enterprise clients, we told them that we are planning to launch our dubbing solution combining those components later, later in that... It was, uh, it was I think September, lat- later in that, that month. And, um, and they took the components and released dubbing two weeks before we did. And that was one of, like, the low moments for me, for my co-founder, for the entire team, because dubbing was our story. We told that to everyone. We knew that this is the thing we want to solve first. We had all the components to be able to do it. We're just waiting to optimize it to make it perfect. And then suddenly, this, this, this, this, this, um, partner released it and got all the attention. So, all the, uh, all the, the media, Twitter, all the users were like, "Wow, this is the most incredible thing that has happened. How amazing that you can speak in another language and still sound the same." And you could feel the morale in the company was, was, was low. People were like w- you know, we spoke about this. We knew for, like, almost two years that this is something we want to solve, and how did it happen that the customer had this and solved this first? So, research engineering wasn't happy, like, how did they do it before with the components we gave them? The go-to-market wasn't happy because, like, how did we sell this to the customer? Now we are like all the potential clients we could have had isn't, isn't good. And of course, me and Piotr were like, "Hey, this was our idea. Like, why, why would you do any of the partnerships if all of that is, like, kind of given to, to, to, to, to another, another company?"

Harry Stebbings 45:36 Who was the partner?

Mati Staniszewski 45:38 I don't know if I can, I can mention. And to, to their cred, I don't think the time, like, that we told them it was actually a factor. I think they were just trying to do something quick and... And, like, we, we had a lot of calls with them those, those days, because we were thinking, like, "What do we do? Is the contract give us flexibility to, to not continue?" So, we spoke through with them of, like, "Hey, why did you launch?" St- I don't think it was dictated by our timeline, but the timeline was very close to each other. And they told us that they thought it's a good hack weekend idea, so they gave it to their intern, and they... The intern has built that project, and then, um, and then it exploded. But it was... It di- it did give them, like, in tens of millions of revenue over, over that period of time. So, it was significant.

Harry Stebbings 46:19 Fuckers. Uh, what's your biggest piece of advice to a founder who has a moment like that, where you just feel the air come out of the company? How do you inflate the company again after such a damaging blow?

Mati Staniszewski 46:34 Y- I don't think the first reaction should be that, like, "Hey, everything is fine." I think you should, you should, like, be authentic and tell the team what you are feeling. Like, "How has this happened?" And actually, the, the, the go through, like, "What have we done wrong?" And, you know, that, that frustration was clear. I don't think we... W- I, I, like, I think it was valuable for us to talk through, like, "We are angry at ourselves. This is wrong." And then as we moved from that stage, like, "Yes, we are angry. What are we actually going to do about this?" And, um, and moved to that second stage very quickly. Uh, but I think, you know, I, I, I think I've done a mistake sometimes of just going to the second stage, like, kind of, "It's not a problem, let's just go through and solve it." I think it's actually super valuable to, to, to, to talk through what, what has happened. Uh, but then you knew you need to, you need to go into the second thing, and then, and then in the long term, that will work out, you know? It's, it's, it's then you can... The relentless execution will prove itself out and, and, and show to the world. And the, the worst, if you repeat the mistake, then someone needs to f- feel the, you know, feel, feel the, um, repercussions. But if you've learned from that and haven't repeated the mistake, it's fine.

Harry Stebbings 47:42 Given the commoditization of a lot of technology stage, do you feel speed of execution is the core differentiator between those that will win versus those that won't? Or is it quality of research, access to GPUs? How do you think about that?

Mati Staniszewski 47:56 I think it's both. I think it's both. I think it's... You know, uh, the, the way we approached this in the company is we, we have researched product in the ecosystem that we built, um, which is a combination of distribution and brand. But research for us is a head start. We are investing in research. We'll continue investing in research. We want to be the best across the voice technologies. But all this gives to us is advantage over the competition for the next year, two, maybe three, to be able to create-

Harry Stebbings 48:23 How mu- how far ahead are you compared to the competition, do you think?

Mati Staniszewski 48:26 I think it depends on the use case, about 6 to 12 months, I would say. It's depending on the, on the, on the, on the space that we are in.

Harry Stebbings 48:32 Do you think that's a lot or not?

Mati Staniszewski 48:35 I think that's a lot. I think that gives us... So, that research piece of 6 to 12 months is enough for us to then do the second thing well, which we do in Pile from the start, is build phenomenal product experience.

Harry Stebbings 48:44 What percent of your revenue do you think you spend on compute?

Mati Staniszewski 48:47 So, we've built our own, um, data centers for, for training, and then for inference, we, we of course, um, use some of our, our great partners across, um, across the traditional kind of things.

Harry Stebbings 48:58 Why build your own data centers? Most people would just use a CoolWeave or use NVIDIA or whatever that is. Why build your own data centers?

Mati Staniszewski 49:05 So we did the, you know, we did the maths. In our case it was, if we assume we continue training the models that, the way we want to, so very continuously a lot of those models, um, then second for the data transfers and as we think about continuously bringing more data, um, we- we- we will likely on a two-year horizon break even for having our own and- and- and not renting. Um, assuming, of course, you know, you need to assume some improvement in the GPO infrastructure, but assuming that wasn't too high of an improvement, we would have, we would have been, um, successful, and we were. I think it, uh, it kind of the arrow Y made sense there. And- and now it pays dividends because we can just do more experiments quicker, and, um, you know, this can still be wrong. At some point there might be innovation that kind of breaks that equation, but for- for- for the current time it just makes more sense, more control.

Harry Stebbings 49:56 A lot of investors are talking about the poor unit economics of a lot of companies that we see today, whether it's your Replites or your LovaBulls or any of the companies like this, well, any kind of application AI companies, period, really. They generally have pretty tough unit economics, generally speaking. Um, do you think that is a fair criticism or do you think it is simply short-sighted given the changes we will likely see in the cost structure?

Mati Staniszewski 50:20 Of course, the unit economics in most of those cases that you mentioned is pretty- pretty poor, but I think their strategy is that, yes, one, the models will optimize in cost and then, two, they will be the brands that customers trust and then they can actually use a lot of the signal back. And I think to Eleven Labs' example, too, we, I think our unit economics is- is much healthier than most of those companies. We control our research, our product, and distribution, but it's still, if we had a new model that we need to release ourselves, we would optimize less for- for the cost structure so we can get that metric out quicker than other competitions even can think about creating their own model.

Harry Stebbings 50:57 But to be clear, you think the concerns around, um, margin are over expelled and not justified?

Mati Staniszewski 51:07 Well, it's a risky business b- wh- where- where, you know, like there will be a winner from some of whether it's, uh, I love what LovaBall is doing with Anton, but Replit, vZero, Bolt are all incredible companies, too, um, or products too that are doing some- some- some- some great work. I do think at least one, maybe more than one will create something special. The market is so big that all of them can create something special. Um, but yes, there will be definitely a loser in that mix too, and- and- and that company and the margins that they are carrying does just not make long term, long term sense, and probably the same for coding ops. But I think it's a cool bet. I think it's c- co- c- n- not even like cool from the sense of like it's nice, uh- uh- uh, application, but it's like it's an ambitious bet that they are trying to win with the biggest companies in the world, that- that are trying, will try, or are trying with Google, with Firebase, um, uh, so f- uh, f- I don't remember the name of their product, but they are trying and the LovaBulls of the world are winning.

Harry Stebbings 52:02 It goes to your point on brand. Neither of us can remember Google's product name. So i- I mean, it- it's just interesting.

Mati Staniszewski 52:07 Yeah. Anton is phenomenal market- mar- marketing person too. Like the founder led way he's doing is- is- is amazing.

Harry Stebbings 52:15 One thing that's also really interesting is you were very horizontal in your customer from day one, which respectfully I would advise you very much not to be. (laughs) I think Philippe was telling me he was advising you the same. Be much more targeted in your ICP and have a clear mind of who that customer and user is, and you were much more broad and horizontal. And if you're advising founders, how do you tell them when they're launching from day one whether to be horizontal versus whether to be vertically specific?

Mati Staniszewski 52:41 I think if you're launching something very new, very different, and you don't yet fully know, you know like s- subset of customer base, but you know that there is a bigger one, I think horizontal is- is completely fine. Um, if you know and you have domain expertise and this is the category you are trying to win, I think go- go vertical.

Harry Stebbings 52:59 You say go vertical a lot. Normally when you have verticals you have kind of a maturing of, uh, organization, you have titles. Titles is something that you decided to get rid of. This is very counter-traditional org structures. Why is it better to not have titles?

Mati Staniszewski 53:16 Yeah, there are- there are- there are some incredible companies that- that- that- that, of course, that's similar, Stripe being one- one example, but in our case it was especially then, super small teams. So we have team of five. A lot of people- people join, and what we wanted to- to- to optimize for is like, one, the main thing that matters is the impact. You can join and you can be the most impactful person from day- day zero in- in any of those teams. Um, so the title shouldn't define what is your level of- of decisions. Second thing, with the small teams what happens is that you have a- a lot of those small teams. Uh, so, if you start looking at who gets the title or not, it just becomes a distraction, uh, given that teams are, uh, uh, like the small units that just keep- keep- keep executing. Um, so that's the second thing, and the third thing we wanted to like also make it very clear in that mix were, and still do, if you are joining Eleven Labs today, you can transition to being a leader of any team of any function super quickly, and titles felt limiting to that. We felt like people joining in and seeing the- the kind of the wider set of organization already having set of roles defined for them would make this a little bit harder, and- and that's not... Like, you can have a lower tenure and be a manager of people with much longer tenure if you are the right- the right person. So titles we felt we- we- we- we- we're taking away from that. But at the same time we have a good structure internally within the sub-teams, like who is the current lead of that team that will make the decision if people cannot agree on what's the right path, um, but that person can... And- and- and it's not, it's not guaranteed that the person will remain a lead for- forever. And the titles in a way, you- you, when you give a title it stays- stays usually forever in any other company.

Harry Stebbings 55:02 Speaking of titles, and a common criticism of European tech and scaling is that we don't have these titled people who've seen scale significantly, your VPs of sales who've seen a billion in ARR, you name it. How did you think about broaching that?

Mati Staniszewski 55:16 People in

Narrator 55:16 (laughs)

Harry Stebbings 55:16 Do you want to get top US talent here or do you want to grow talent here?

Mati Staniszewski 55:21 We want to grow talent here. We match a lot of our current talent with the advisors from our, our network of US, um, investors, and the goal is to, to, to grow people. We love growing people. Like, our approach is almost, like, if we can, we want to take a bet on a person growing rather than, than bring them externally. But we know that to grow you need sometimes mentorship from someone that has done it, so we try to tap in into all the people that have done it and match them to people across the organization.

Harry Stebbings 55:49 Anton said on a show with me recently, from Lovable, that building in Europe is building on hard mode. Do you agree with that?

Mati Staniszewski 55:55 I think it is, uh, I think it is building on hard mode. But there is some great advantages too.

Harry Stebbings 55:59 What are the advantages?

Mati Staniszewski 56:01 I think the first one is the talent here is incredible, and I think you just... you, you, you, you, you, you just need to know how to, how to get it. And, and th- the, like-

Harry Stebbings 56:09 What do people get wrong then?

Mati Staniszewski 56:12 The, uh, like, in, in general, there is a good subset of people that really want to work hard and create something special, and they just don't have that opportunity because there's no as ambitious European companies trying to do that. Um, so the only way they can do that is work for US companies. And I think now there's, like, you mentioned Lovable, uh, uh, uh, uh, I think they are showing that ambition too, and there's, like, just so many more. Legora recently in, in, in Sweden that, that, that race around. We spoke about Synthesia. So there's quite a few companies that are ambitious. They want to show. And I think the, the, the people joining want to be part of the ambitious company that is competing on a global scale. I think the, the thing that... you know, and maybe in the early days I was, like, even worried to, to a large extent. I think you want to be able to build from Europe, but not build only for Europe, and I think those two get conflated where sometimes building from Europe meant, okay, you are building for a European ecosystem, which isn't the right thing. You still want the global aspiration. So even now, when I think about describing Eleven Labs, I think about us as a, as, as a global company. We are a global company with we want to win in US, we want to win in Europe, we want to build in Asia. We have the best team and most of the team in Europe, uh, because the talent is, is, is incredible, but-

Harry Stebbings 57:28 So you think it is wrong when our American friends say, "Hey, the Europeans just don't work as hard as we do"?

Mati Staniszewski 57:33 I think y- uh, th- no, yeah. Just that quick. I think you can find people that want to work harder. And we've, we've had actually at some point a team where we hired some people from, from, from West Coast of US and, and our, uh, uh, people where we have quite a few from Central Eastern Europe where, like, oh, yeah, they don't work actually that hard as, as, as, as we do. I mean, we have, we have, uh, such a... you know, to credit to the team, it's like the, the true missionaries that are there on the weekend, um, all the time and really care. They really care about the success of the company beyond just working hard. I think they, they, they, they, they, they, they are and they, they feel part of the company. Um, which, which, uh, which, which is true. So I do think you can find the people in Europe that are phenomenal.

Harry Stebbings 58:19 Is it bad to hire people who come because you're a glossy name?

Mati Staniszewski 58:25 Hm. It's an interesting one because we... you know, in the early days, we, we didn't have much inbound, so all of that was outbound. And it was easier in a way to find people that we felt were right because you didn't have to filter through the noise, and now we have just so much where so many people are going because the AI buzzword or, you know, we now are scaled, that makes sense. But, um, but, no, I think it's, you know, it's, it's fine. Like, not everybody is a risk-taker the same amount, so not... I'm not, not in any way discarding them.

Harry Stebbings 58:54 What's been your biggest hiring mistake, and what did you learn from it?

Mati Staniszewski 58:58 I think the... you know, this is... uh, this is probably a, a, a, a traditional one, but, uh, as I think about kind of bringing people in and growing them into the company, as like the full hiring process, I think you hire a person, you of course have very little time frequently to assess how they are, but then as they are in the company, you have a little bit more of the signal. And then, um, I would have taken some decisions quicker than I would have, uh, with separating with people. It's usually... if... ne- if you know in the first days or... and if you're not sure in the interview, but let's say you are bringing them, giving them a chance, and you are not sure in the first weeks or months, you should separate straight away rather than keep giving, giving the chance. I think that's the, the, the few times I've... I think I've done that.

Harry Stebbings 59:40 What's the hardest role to hire for?

Mati Staniszewski 59:42 Hardest... researchers. Easy.

Harry Stebbings 59:46 When should a founder no longer be involved in every hire?

Mati Staniszewski 59:50 Well, I hope we'll be with Piotr involved through... so we interview everyone, and I hope well-

Harry Stebbings 59:54 You still do now at Two Fifty?

Mati Staniszewski 59:55 Yes, we do. We hope to interview that as, as long as possible because it's a good signal of who we bring into the company. We get to meet them, but of course, we, we, we still think the company is, like, still shifting in terms of how we are approaching that. One is, like, um, now even more we are optimizing for, like, engineering technical skill set in all parts of the company than we would have probably, like, six to 12 months ago. So it's even increasing in some as- aspects. But I, I hope we'll interview to like a thousand people. The, the thing isn't so much hard, you know, when... to be involved in the interview, it's more how many people you are trying to hire within a specific period of time. So if I try to hire a thousand people in a month, it's impossible because it would be more than the time we have. But if it's-

Harry Stebbings 1:00:40 In a year, how many people will you have?

Mati Staniszewski 1:00:43 I think f- we'll have 400 by end of the year.

Harry Stebbings 1:00:46 By the end of this year?

Mati Staniszewski 1:00:47 By end of this year. And I think we're-

Harry Stebbings 1:00:49 That's a lot. You're, you're almost doubling. You're adding 40% in-

Mati Staniszewski 1:00:52 That's almost doubling.

Harry Stebbings 1:00:53 ... three to four months.

Mati Staniszewski 1:00:53 So we have 50 officers are out, out, or, like, joining, so 250 now, roughly 30 to 50 people that are already scheduled to join, and I think we'll get an additional 100.

Harry Stebbings 1:01:05 Respectfully, small and mighty, that's not 150 in three to four months.

Mati Staniszewski 1:01:10 Still small and still mighty, but the, the, the, the... you know, we, we, we have a pretty global team now where we are trying to bring a lot of our go-to-market and engineering in every location we are at. So, um, so we think we can parallelize that, building in Brazil, in Japan, in India, in Mexico. Um, so we are really going to all that local new ones too, where we are building small outposts everywhere, and I think we can make it work.

Harry Stebbings 1:01:34 Do you care about revenue per head?

Mati Staniszewski 1:01:36 In the long term, yes. Like, we want to be an efficient company.I think now we are, we have very good metric for revenue per head. But it's, it's like a, it's a, it's like a, you know, it's a good show, like, are you an efficient company? But if we, uh, if we think there is a path for us to, to, to, to get there over time, um, we would, we take easily the new hires that can help us. I mean, you, you, you, you know it extremely well as an investor, but of course the, the, the, one of the key metrics is retention or how, like, how you think about NRR for any of the clients. So, me bringing people now, helping us get the distribution before competition does, might decrease my set of, um, uh, uh, uh, revenue I get. But if the NRR keeps growing and I don't hire more people in the next five years,

Mati Staniszewski 1:02:20 that's, that, that metric of course will, will change.

Harry Stebbings 1:02:22 Can I ask what revenue is you at now?

Mati Staniszewski 1:02:25 When will this, uh, air? Or t- like, plus minus?

Harry Stebbings 1:02:27 Uh, two weeks?

Mati Staniszewski 1:02:29 Two weeks. Two weeks. Okay. So, we cross 200 million now.

Harry Stebbings 1:02:33 Whoa.

Mati Staniszewski 1:02:34 So it's a good number.

Harry Stebbings 1:02:35 That's amazing. Yeah, that is a great w- per 250, if you've got that now.

Mati Staniszewski 1:02:40 Yeah, it's pretty good.

Harry Stebbings 1:02:41 Fucking A.

Mati Staniszewski 1:02:42 Nice.

Harry Stebbings 1:02:43 What was it-

Mati Staniszewski 1:02:43 The team is crashing.

Harry Stebbings 1:02:43 What was it, end of '23?

Mati Staniszewski 1:02:47 The ... End of 2023, I think we were between 35... 35.

Harry Stebbings 1:02:52 35 million?

Mati Staniszewski 1:02:53 35 million.

Harry Stebbings 1:02:54 You went from beta launch in January.

Mati Staniszewski 1:02:57 To 35? We did, so we did 20 months to 100. And then, um ...

Harry Stebbings 1:03:03 20 months to 100 million?

Mati Staniszewski 1:03:05 Yes. I think certainly that.

Harry Stebbings 1:03:06 Fuck.

Mati Staniszewski 1:03:07 And then, um, around 10 months to 200. A bit longer.

Harry Stebbings 1:03:13 (laughs)

Mati Staniszewski 1:03:13 15 months maybe.

Harry Stebbings 1:03:14 Just crying (laughs) hearing these numbers.

Mati Staniszewski 1:03:17 (laughs)

Harry Stebbings 1:03:19 Oh, it's so depressing. (laughs)

Mati Staniszewski 1:03:21 I mean, you know, the-

Harry Stebbings 1:03:22 I'm so happy for you and I'm sad for you.

Mati Staniszewski 1:03:23 Well, the, the thing is that, of course, you know, it goes quickly, it can also go quickly down.

Harry Stebbings 1:03:28 Well, but, but can it?

Mati Staniszewski 1:03:28 So, so-

Harry Stebbings 1:03:29 Is, is your revenue not relatively sticky?

Mati Staniszewski 1:03:32 I think it's relatively sticky. I think-

Harry Stebbings 1:03:33 You've got large enterprises as the majority.

Mati Staniszewski 1:03:36 Our biggest part of the business now and we, we're obsessing is, is, is building effectively cov- conversational agent platform. Most of our, like, the biggest c- customers are building-

Harry Stebbings 1:03:45 Who, who's your biggest customer? Not name, but like, size.

Mati Staniszewski 1:03:49 Um, our biggest contract is around two million, and they are mostly in, um, call center, customer support, personal, uh, uh, assistance base. All of those companies are orchestrating combination of, um, of, of the research, so speech to text, LLM text to speech, and then bringing a lot of those integrations that we, now we create. So that's, that's like the, the, the, on the enterprise side, whether it's Cisco ... These are not the, the, the contracts there, but Cisco, Twilio, um, recently working with Epic Games. These are some of our biggest, biggest, um, uh, deployments of, of, of, of the work. And then of course on the, you know, on the, we are in lucky position that we still have a huge self-serve distribution of creators and developers building all the time.

Harry Stebbings 1:04:34 The one I really want to ask, if it's okay, is, okay, so it gets 10 months to 200 million.

Mati Staniszewski 1:04:38 Yeah.

Harry Stebbings 1:04:39 What's that to 300 million then? 'Cause you halve, you did 20 months to 100. 10 to 200.

Mati Staniszewski 1:04:45 (laughs) Well, we, we are, we are, you know, we are ambitious company, so we hope to, uh ...

Harry Stebbings 1:04:49 Can we do five months to 300?

Mati Staniszewski 1:04:51 We would love to break, break, if it's a healthy revenue and we are creating good work, we would love to break the record.

Harry Stebbings 1:04:56 What was the price of the last round? Three?

Mati Staniszewski 1:04:59 3.3.

Harry Stebbings 1:05:00 3.3?

Mati Staniszewski 1:05:01 All rounds divisible by 11.

Harry Stebbings 1:05:02 Okay. (laughs)

Mati Staniszewski 1:05:03 (laughs)

Harry Stebbings 1:05:04 3.3. And then you did that when you were at 150 million in revenue?

Mati Staniszewski 1:05:10 We, we did that when ... No, lower. We were, we were h- somewhere between 100 and 120, I think.

Harry Stebbings 1:05:17 Okay, 100 to 120. But I'm just looking at that going, you did that Jan '25?

Mati Staniszewski 1:05:21 We announced it Jan 2025. And then we did that towards end of 2024.

Harry Stebbings 1:05:25 I'm just looking at it thinking, okay, so they're doing end of year revenues for '25 at, uh, 250, 300. It's quite a cheap deal. 11, 12 x end of year revenues?

Mati Staniszewski 1:05:40 Oh, like of, of four or 12 months?

Harry Stebbings 1:05:42 Yeah.

Mati Staniszewski 1:05:43 Well, it was ... You know, I think at the, the first ... So we did the round in October of '24, so we were probably at 80 when we got the docs. And then it was signed then. So it was like-

Harry Stebbings 1:05:58 Did you need the money?

Mati Staniszewski 1:05:59 We ... So the way we approached any of the fundraisers, it's can we bring some of the bets forward? In that case, it was even more spend on models, like expand it to multi-model. Can we bring our, our work internationally? So expand into other regions. And then double down on agentic platform, so start building even more of the true enterprise, um, uh, functionality, whether it's the reliability you need, whether it's integration with Salesforce, ServiceNow, SIP trunking. So like, investing in those, those was the most important. But it, at the time, it was 30X revenue, so 30X current revenue. Um, uh, so pretty good then.

Harry Stebbings 1:06:39 How do you balance between focus and executing according to plan versus being able to do more? I understand the benefits of being able to do more, but you can probably always do more with more money. It doesn't mean it's the right thing.

Mati Staniszewski 1:06:55 I think the, the kind of the variation of this is like, can you paralyze a new effort without distracting the core work? So, and that's roughly why we are trying to approach this. Like, can we bring our, our work to a new place? Can we create a new product experience without affecting the core thing that's actually important for our users? If we can, then we'll likely invest, bring the people into it. If it's distracting, then it becomes a question of like, is it, is it worth the, the upside?

Harry Stebbings 1:07:22 When we think about kind of doing more, the question that I think we forgot earlier was, uh, what's the biggest line of business in the future-

Mati Staniszewski 1:07:29 Ah.

Harry Stebbings 1:07:29 ... that is not a very big line or non-existent today?

Mati Staniszewski 1:07:33 It's, it's in- interesting because it's on the, on the relative basis, I think the, our agents' work is, is, is already huge. But I think it's, it's just scratching the surface. I think it's going to, if we play it right, it's like a, a multi-billion dollar revenue generating business just from-... I'm just huge, of course, creating voice agents, uh, uh, and going, and going deeper. So I think this one is on like, on the relative And these would be voice agents that you sell to companies to manage their customer support. That's right.

Harry Stebbings 1:08:01 Got you.

Mati Staniszewski 1:08:02 That's right. I think... And then you can go deeper. You can, of course, expand from voice into conversational agents, and by that I mean you start building omni-channel solution with email integration, WhatsApp integration, which is kind of that, you know, more classic customer support. Something-

Harry Stebbings 1:08:16 Would you sell them to an Intercom and a Decagon?

Mati Staniszewski 1:08:20 Today, so the... we are... have a public partnership with, with Decagon, so we do. But of course, as you start going deeper, it depends a little bit where Decagon goes and where we go. Are you... Are, are they going to verticalize or they will continue horizontal and go down? Well, we verticalize more. So there might be, you know, some areas where we overlap a little bit more. But today, we're... given we are very like partner horizontal approach that, uh, that we, we, we treat all of them as good partners.

Harry Stebbings 1:08:47 Speaking of kind of good partners, right now we're doing the human plus agent. "We're so friendly and we're... we make each other better." And there's a time when human plus agent just becomes agent. Do you think we are seeing a lot of resistance from employees within companies towards agents coming in?

Mati Staniszewski 1:09:06 Uh, we do, but the, the, the way we've seen this like kind of transition happen now is where you will have more specialized humans, where the agents are taking more of the manual parts that nobody really n- wanted to do or w- was effectively very easy to, to, um, to, to... or very... didn't require the main expertise. So like a good example is like if you're taking appointment scheduling, uh, if you are doing a refund, all of those, of course assuming you have the safeguards and authentication in place, are pretty easily done with, with AI. But then suddenly if you need to help a patient navigate the outbound flow after going from hospital or understand analysis, th- that cannot be done with AI. There's too much, too much at sca- at, at s- at, at, at stake, and you need a deep domain expertise. Um, so we've seen like kind of the transition where that side of, of, of people helping in that kind of last mile is even more valuable, while of course AI can help with those easier tasks across. And I think this will continue. Of course, the percentages will shift where you will have even more, um, au- automation as it goes deeper, and then even more value assigned to the people doing that domain expertise because ultimately it will help automate the task at hand.

Harry Stebbings 1:10:21 Does taking money from Sequoia meaningfully move the needle in a way that it doesn't from other funds?

Mati Staniszewski 1:10:27 You know, like I think... So, so our first round was with a16z, and it did meaningfully move the needle for us. Like it was very clear that people, uh, have-

Harry Stebbings 1:10:36 Respected you in a way that they didn't before.

Mati Staniszewski 1:10:38 Yes.

Harry Stebbings 1:10:38 Yeah, I agree with that.

Mati Staniszewski 1:10:38 And then Sequoia came in in Series B, and that's kind of doubled down that perception, where it's like, okay, a16z and, uh, and Sequoia are part of the roun- of the, of the company. It's, it's like... it's also very rare to have both of these investors in any of the companies. So it did help like where a lot of investors, uh, oh, sorry, a lot of clients would be re- respecting that, and now Iconic on top of that is, is just incredible mix. Um, and, and FDG too.

Harry Stebbings 1:11:04 Have you-

Mati Staniszewski 1:11:04 I think FDG too is like... You know, of course clients will usually not have that perception, but, uh-

Harry Stebbings 1:11:11 Investors do.

Mati Staniszewski 1:11:12 But investors do.

Harry Stebbings 1:11:13 Who's a good investor.

Mati Staniszewski 1:11:13 And some of our engineers or users, uh, really, really admire and trust Nat, and I do too. So he's great.

Harry Stebbings 1:11:22 You're a very strategic asset when you look at what you have and what you've built. Have you had acquisition offers?

Mati Staniszewski 1:11:30 We did have acquisition offers.

Harry Stebbings 1:11:32 Did you contemplate any of them, honestly?

Mati Staniszewski 1:11:35 W- we always will do like the basic diligence and let our investors know that it's... you know, that we had this, and, um, and usually-

Harry Stebbings 1:11:42 What was the largest one?

Mati Staniszewski 1:11:44 Well, the largest one didn't have, uh, um, uh, uh, money, so... But the, the, the ones that, that we went... It was like an interesting conversation because we would frequently try to like go into, "Is it a strategic partnership?" And then they

Mati Staniszewski 1:12:00 would be like, "Oh, can we do... can we consider... are we open to M&A activity?" But it would be, um, a, a while back, and, um, um, yeah, I prefer also not to share.

Harry Stebbings 1:12:12 Was it tempting?

Mati Staniszewski 1:12:14 It, it was tiny bit tempting, but in a, in a, you know, in um, in a way where we, um... In the f- in the first one or two examples. So the first one was when, when we were doing Series A. It was going really well. And then, of course, we like... you know, were unclear how, um, how, how this will continue. It was like the very beginning of the curve. And that, that... the first one was like, "Okay, this is first time we ever are doing this. Let's understand what, what they are, what they're offering." Um, but we were more interested into, into like seeing whether... m- more about the process itself, like how it happens, rather than actually, uh, giving, giving the company, um, because all, all... n- n- n- then it was clear, "Okay,