How I Built This: 100M+ AI Startup

1. MAMatt Arbesfeld0:00

   If you wanna start a company, how do you do that? And so we're gonna be sharing 15 steps to go from nothing to building a company worth hundreds of millions of dollars.

2. AGAakash Gupta0:08

   What has been the lowest point in your journey?

3. MAMatt Arbesfeld0:13

   There's just a constant stress of starting a company, 'cause you're just bombarded with problems every single day. The hardest times are just the ongoing grind of dealing with problems.

4. AGAakash Gupta0:22

   Now I think we're into step 10, raise more money and uplevel your team. Talk to us about that.

5. MAMatt Arbesfeld0:27

   You might decide to just bootstrap, and n- nowadays I'm hearing you have, like, a one-person company that's 25 million of revenue because of all these AI tools. So you might not need to raise any money.

6. AGAakash Gupta0:37

   If you just wanna build a 1 to $2 million business, it's not venture scale to begin with. Like, venture scale, what are we talking about when we say what is venture scale?

7. MAMatt Arbesfeld0:44

   So I even wonder, if you're in a competitive market, it can be even hard to build a $2 million business because-

8. AGAakash Gupta0:52

   Really quickly, I think a crazy stat is that more than 50% of you listening are not subscribed. If you can subscribe on YouTube, follow on Apple or Spotify podcasts, my commitment to you is that we'll continue to make this content better and better. And now on to today's episode. If you wanna build an AI startup that's worth hundreds of millions of dollars, there's really no better way than learning from someone who has. Today we have Matt Arbesfeld. He created LogRocket. Welcome.

9. MAMatt Arbesfeld1:23

   Awesome. Great to be here, Aakash. Thanks for having me on.

10. AGAakash Gupta1:26

    So you and I have come up with 15 steps to creating this successful AI startup. What is step one?

11. MAMatt Arbesfeld1:34

    So step one, and a lot of people ask me, "Oh, how do you start a company? What should I do?" And I've never seen someone start a company if they haven't spent a lot of their life just working on projects on their own and trying stuff. And so my origins of starting a company probably go back to elementary school, when my now co-founder, we were building projects for classmates. We were trading food at lunch. We were, uh, kind of, uh, uh, creating trouble, uh, to try to build businesses back then, all the way until college, when, uh, another friend and I were building mobile games and, and selling those online. So I think a lot comes down to just trying stuff and building things, and, and that really helps you develop your skills as a creator and as a entrepreneur.

12. AGAakash Gupta2:25

    Are there any specific things that you guys spectacularly failed or spectacularly succeeded at? [laughs]

13. MAMatt Arbesfeld2:32

    So I, I'd say, uh, probably my most failed app, and we spent, like, a year working on this thing. This is in college, like, nights and weekends, no social life. The app was called Cluck, and the idea was I was this, like, socially awkward college kid. I didn't wanna call people, so I wanted to enter a real-time texting conversation with them instead. So instead of calling, you know, I could cluck you, Aakash, and then we would be texting in real time back and forth, and you couldn't leave the conversation. But a completely useless idea. None of my friends would even use it. We launched and we had, like, five total users, so that was, that was a complete failure. But then we, we had a mobile game in college that we reached a few million users, uh, that. So you have some wins, you have some losses. It's, it's hard to have 100% batting average.

14. AGAakash Gupta3:20

    What did you learn from building a mobile game to a million plus users? That's awesome.

15. MAMatt Arbesfeld3:25

    A, a lot. Uh, so definitely a lot of work went into building. The, you know, we were spending all summer after work working on this thing. Probably the reason we got that much traction was we spent a lot of time on distribution. So as we were launching, this was back in the day of press being a big thing, so I, I worked with all these, uh, game writers and publishers and Twitter influencers to, to share the game ahead of time, so they got excited about it. And they would publish on their, on their, uh, on their articles in the journals, and that ended up getting some initial traction. And then I think the game was just fun, so people would share it with their friends, and they liked playing it, so it went a bit viral, uh, after that kind of big launch.

16. AGAakash Gupta4:14

    That's awesome, and I think that's a really important part of the journey for people is you're not just gonna luck into building something successful. Obviously, Matt has taken a lot of sw- swings of the bat, and he even had a pretty successful product, so that's awesome. What is step two?

17. MAMatt Arbesfeld4:31

    So step two, and this is probably intermixed with step one, so maybe it's 1A and 1B, would be you need some skills, right? Like, what are you one of the best at in the world that you can bring to the world in your company? And so I spent a lot of time since middle school and, and high school writing code, but also I've, I've loved design and, and visual things, so I've spent a lot of time, um, designing 3D models and creating graphics for school projects. So, um, I think kind of those were two of my passions growing up and, and have kind of come to fruition with the company I'm building now. But, um, kind of finding something you care a lot about, going deep, being an expert in that field, and that forms the basis usually of whatever company you start.

18. AGAakash Gupta5:22

    Yeah. I think that there's a lot of people who wanna just vibe code their way [laughs] to a successful company, but without some hard skills, it sounds like for you across coding and design, right, basically the two most important parts of building software, you had developed some hard skills along the way.

19. MAMatt Arbesfeld5:41

    Yeah. Um, um, who knows? Maybe now the vibe coding will be a, a top skill. So, uh, you, if you go deep in that, you could be an expert there. But, but yeah, I think kind of having some fundamental skill that you're really good at and can, can, can excel in goes a long way.

20. AGAakash Gupta5:58

    If you were to advise somebody, let's say they're basically starting at zero in terms of coding and design, but they're smart and hardworking. Where do they start?

21. MAMatt Arbesfeld6:06

    I'd say start with one A. Find a project you care about that will help you or your family or your friends, and just work on it. And the first time you work on something, it's gonna be really painful and challenging, but you're... Fail, you have to learn how to build the thing. It won't work. It'll be really frustrating. But that, I found, is the best way to, to learn stuff, is just apply it to something you care about and, and launch and, and, and fail.

22. AGAakash Gupta6:32

    100%. I imagine, like, just the trials and tribulations of scaling a game to so many users, you're learning so quickly just based on the feedback you're getting from users, and you need to build this, so you're learning how to code this, or you need to improve the design here, and so you're learning that element of design.

23. MAMatt Arbesfeld6:49

    And I, I even remember back at MIT, you're forced to take these humanities class, 'cause they wanna culture you in things beyond just computer science. So I took a poetry class, and for the final project, most people would, like, analyze a poem, but instead I built an app that automatically could help you analyze the poem and, and, uh, annotate what's going on. I think my teacher was super frustrated that we were, like, applying computer science to a humanities problem, but just finding opportunities to build and do things I enjoyed in all walks of life, I think kind of, uh, helped me develop the skills for building and launching things.

24. AGAakash Gupta7:26

    That's a great point. You started at MIT. Spencer, the last CEO we just had on, talking about a similar story, started at MIT. There's something there that they're really encouraging you guys to work hard, do side projects, and build. What would you attribute, what did you learn from that MIT culture?

25. MAMatt Arbesfeld7:43

    Uh, for sure. I think there are a lot... Yeah. Spencer's built a great company. There are a few other. Braze was MIT Segments. So, um, definitely there's a culture of building and starting things. I think one is they definitely select for that. Actually, when you apply, you can submit a maker portfolio now, which is basically things you've built in high school and middle school. And so clearly they encourage that. And then a lot of the dorms and culture at MIT is around building things. So there's this one dorm there called East Campus where at the beginning of every school year, they build basically an amuse- an amusement park. So they build these huge contraptions, like a big swing, swinging arc thing, and these giant slides. I'm sure it's super dangerous, but-

26. AGAakash Gupta8:26

    [laughs]

27. MAMatt Arbesfeld8:26

    ... uh, they definitely encourage and support the students creating stuff and, and failing and building things. Uh, that's just kind of inherent in the culture there at MIT.

28. AGAakash Gupta8:36

    That's super cool. I think that's definitely an important part of it that maybe not everybody can work backwards from, but I think if you're in high school or something, definitely having aspirations to go to MIT and reverse engineer what it is that's required to get in there, like you said, a maker portfolio, probably a really, really high SAT score, and a good GPA, you should try to do that, actually. I think it's actually worth it, because when I'm talking to different CEOs [laughs] like Matt, there's a crazy percentage of them coming from these small amount of schools. So what's the next step?

29. MAMatt Arbesfeld9:08

    So yeah, I'd say next step is once you know how to build stuff, and maybe you failed a bunch of times or had some small successes, you probably have been exposed to a lot of different problem domains that, where you've noticed problems and you saw opportunities. So, um, in my case, I spent a lot of time at a company called Meteor that was building this front-end JavaScript framework. So I spent a lot of time in the world of front end and React and Angular, learning about this whole world and seeing all the problems that were present in front-end development and building apps. And that experience led me to see the opportunity for LogRocket and, and see that instead of just a mobile game or some poetry app, there's a huge opportunity for every developer who's building these React apps to build a better solution. And so yeah, I think it's important to, as you're going through work and life, kind of getting exposed to these problem areas and digging deep to understand them and, and find opportunities to build companies.

30. AGAakash Gupta10:09

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Episode duration: 53:44