Speaker 1: (00:00)
I have Kate Churns, the CEO and co-founder of lately.ai lately uses machine learning to learn which words will get you the most engagement in turns. Video audience texts into dozens of social media posts. Uh, Kate is going to discuss today how she came up with the idea for lately, how she funded the mvp, gained her first few customers, and went from zero to product market fit and her current a hundred thousand or 85,000, I should say. Mrr. How are you today, Kate?
Speaker 2: (00:32)
Hi, I'm, I'm, I'm making it, you know, I'm making it through Jordy, right? Like some days you wake up and you're like, yes, I'm on top. And then other days you're like, can I swear in your shirt?
Speaker 1: (00:40)
Yeah, I know. We've all been there for sure. I think we can definitely all relate. Fortunately for me, this is a good day. So, and it's also towards the end of my day, so it's good. Um, well it's great to, great to have you on the show. Um, I gave you a quick intro. Why don't you just sort of, you know, give me a spiel about yourself.
Speaker 2: (00:58)
Yeah. So I mean, the most interesting some I think thing would be that before lately I used to be a rock and roll dj and my last gig was broadcasting to 20 million listeners a day for XM Satellite radio. Yeah. It was wild. I mean, what's interesting and, and I had to have other people kind of frame this for me, which has been a constant mm-hmm. through the lately journey, which is that what I learned about turning listeners into fans or customers into evangelists mm-hmm. and infused into the bedrock of lately came from my music industry career. Mm-hmm. , right? And part of that is the neuroscience of how we listen to music. Mm-hmm. , right? So Jordy, when you listen to a new song, your brain must instantly access every other song you've ever heard in that moment. And it's pulling on nostalgia and memory and emotion, and it's trying to look for familiar touchpoints so it knows where to index that new song in the library of the memory of your brain.
Speaker 2: (02:07)
Mm-hmm. . And so you can see like how powerful music is just by that, you know, instant moment. Now those components, nostalgia, memory, emotion, they're all involved in, in trust and trust is why we buy parallel. I was also a fiction writing major in college, and of course I wrote thousands of commercials for radio. When you write copy, it's the job of, of the author to also trigger nostalgia, memory, emotion and trust, and give you familiar touch points to hang onto. So you're having that engagement there. And what you can use in parallel is sound because your voice, Jordy is like a song. There's a frequency to sound, there's a note, a musical note to your voice. Mm-hmm. . So when I read your text, your email, your social media post in my head I hear your
Speaker 1: (03:01)
Voice. Okay. I like it. See those girls? Yeah. I like that. Yeah. So, so tell me, walk me back to when um, you were a, you you're doing this dj, did you like it? I mean, why would you leave? It sounded like you liked
Speaker 2: (03:13)
It. Yeah. That's . No one asked that question. So good on you. Um, there were things I loved. It was the best ride. I mean, of course I, you know, job hazard, I dated musicians and I met my husband who's the best thing in my whole life. Um, and I was at the show, I was at the place everybody wanted to be. The pay was ship and the sexual harassment was outta sight. In fact, it was normal and celebrated. So even I participated in it cuz you were rewarded. Um, but the thing I didn't like was that it, there was a hostile work environment that was fused by the sexuality and I didn't know what that was. This wasn't part of the lexicon of the news. So this is 2000 6, 7, 8 mm-hmm. . So, so I, or before 2003 through six, so I didn't have like the language we're using right now to discuss this mm-hmm. and I just knew that I was off cuz I was kicking and I either wasn't getting credit for it or I was being on because of it.
Speaker 1: (04:19)
Yeah.
Speaker 2: (04:20)
And that was really frustrating for me. So I don't know if this happens to you, Jordy, but personally when I'm in a bad place in my life, my body starts to raise its hand and scream at me. Yeah.
Speaker 1: (04:34)
I'm super
Speaker 2: (04:37)
And I wasn't listening
Speaker 1: (04:40)
. Yeah.
Speaker 2: (04:40)
Cause I was like, I've got the best job in the world. What if I, if I leave this, who am I? If I'm not Kate on the air, I have no identity. I was terrified of that. Yeah.
Speaker 2: (04:51)
I, I had the job everybody wanted and what was happening was like, I had a rash on my torso for like six months. No one could explain it. Then I fell down the stairs and I tore li in my ankle at work. It continued to reinjure. So I was like in a boot or in a roll about, or crutches for a year and a half mm-hmm. . And, um, then I started getting epicondylitis and tendinitis, which is like not carpal tunnel cause you can actually have surgery to fix that, but it's this searing pain throughout your fingers and arms and wrists and elbows and shoulders and, um, I could no longer type.
Speaker 1: (05:29)
Oh, okay. So then, is that what it was that sort of made you leave? So it's like I can't, there's something going on, I need to take a health break or something like that?
Speaker 2: (05:39)
Yeah, I was, and it's relevant. So if, if you don't mind me, uh, just diving there a little bit. But what happened was, I, I'm resourceful so I tried everything first. I was, I was going to acupuncture and you know, every kind of eastern western thing, they stuck needles down my hands to see if it was a nerve problem, like all this kind of stuff. And meanwhile, I XM wouldn't hire an intern cuz I looked normal. They didn't believe something was wrong with me. I have hands. Right. So I paid an intern to sit down next to me and, and type for me. And I actually paid him in a ride to work and cigarettes. Yeah. Like I didn't have any money, you know, . And then, um, I learned about Dragon naturally speaking, voice activated software. Again, this is, you know, 2005 and six. This is this brain behind Siri, which we now all know mm-hmm. . Right. But back then it didn't, nobody knew it. And I learned that there were four coaches in the whole country. And one was in DC where I was, this woman who lucky me was a fan of my show. Oh
Speaker 1: (06:42)
Really? Okay.
Speaker 2: (06:43)
So I paid her in CDs. Yeah. . Oh, that's cool. And so I, I took out a credit card cause you know, I mean I made $50,000, which is not very much money. And I, I had to buy a laptop because I had to again, xms it team wouldn't buy the software for me. You know, I was a pain in the at this point. Right. I'm just trying to survive. And so I get the software, I get a laptop, I'm learning how to use it, I get out of there, I go to another music related company and it's another boys' club and it's the same. Different day. And then, so listen in folks, cuz this is the fun part. Remember I, I told you how I need the catalyst some time to kind of point things out for me. Yeah, yeah. So my dad lovingly shook me by the shoulders one day and he was like, you can't work for other people. And there's no shame in that. Yeah.
Speaker 1: (07:32)
That it's good. He knew that it was good that he waited to tell you that too. Cuz he probably knew that when you were, you know, 15 or something too.
Speaker 2: (07:40)
He probably did. Yeah. It was, it was really awakening because there's the duh, which I'm sure you're thinking like obviously Kate, you can start your own company. People do it all the time. But then the other duh was, um, the shame he hit on that. That's what I felt.
Speaker 1: (07:58)
Same of what leaving, that's why I, of leaving and losing that being the, um, the superstar dj.
Speaker 2: (08:05)
Yeah. And that I caused it too. Jordy like I thought it was my fault.
Speaker 1: (08:08)
Yeah. Right. Yeah. Yeah.
Speaker 2: (08:11)
And um, so my husband then boyfriend that same, this is all the same week, went out and got me Guy Kawasaki's Art of the Start. Mm-hmm. Mm-hmm. , you know that book? Yeah. So in like the first chapter guy says, don't make a plan, just get started. Yeah. So I was like, well why, why do I need this book? So I stopped reading it and um, the next day I had a meeting with a client who was wanted to hand deliver, uh, the product instead of mail it because they were fans of mine. They wanted to meet me. And I'm not this like amazing person who had all these fans.
Speaker 1: (08:46)
Right? No. But 20 million is a lot of fan, you know, I'm sure out of that 20 million, I'm sure you had like a pretty hardcore set there. You know,
Speaker 2: (08:54)
There was was a good grip with people. Yeah. Um, so it just happened that these two men were angels. I didn't know it. Yeah. And we went to lunch and at the end of the lunch they were like, we love you. We'd love to invest $50,000 in whatever company you wanna make. Let's do something. Yeah.
Speaker 1: (09:10)
And so was that the start of lately then? Because that sounds quite early, eh? Cuz I, I, my research was telling me like 2013, 2014.
Speaker 2: (09:20)
Yeah. So it wasn't lately it was another, it was a, it was a widget, a music widget. Okay. Where, um, we paired up two songs a day that were, was a new song and an old song. It's the same idea here, right? Yeah. And l looking to kind of do miniature radio. And as I was marketing that someone else came along and said, Hey, you're really good at marketing, why don't you consult us? We'll pay you a lot more money and you can say goodbye to the music industry forever. Mm-hmm.
Speaker 1: (09:48)
.
Speaker 2: (09:50)
And by then I was done. I said, okay. Yeah, sounds
Speaker 1: (09:54)
Good. You ready? Sounds good. So there's a marketing agency that kind of morphed into a marketing agency.
Speaker 2: (09:59)
That first client, by the way, was, uh, a little company, you know, called Walmart.
Speaker 1: (10:04)
Okay. So that was a good way to get in. Once you have that, you've got, you've got proof, you know, sort of proof of concept and you've got a nice, uh, client, um, testimonial or something you can use to get other clients.
Speaker 2: (10:18)
Yeah. Part of the, the best part of it, by the way, was, so my, my aunt was the catalyst in this case. She was brokering this project with Walmart and she saw what I didn't see. So she let me be on this account and I walked in and of course, you know, I, I'm from radio, like I don't even own a jacket, a suit jacket. And I'm not particularly polished if you can't tell already. And so I said to them like, this is a mess, whatever you guys are doing here. And I went home and I built a spreadsheet without, without asking anyone. And I spent quite some hours on it and pulled together every aspect of all of the marketing across every channel person, whatever. And I built out kind of an organizational system for them and neatened them up, you know, I Marie ConEd them mm-hmm. right in this moment. And it morphed into what lately ended up becoming. Um, but the spreadsheet system got them 130% ROI year over year for three years.
Speaker 1: (11:24)
So you used that spreadsheet for them for, for three years. This system for three years. Okay. Can, can we get, because I I love these spreadsheet problems. These are some of the best software. These are some of the best softwares. You have them. Yeah. And this is what I drool over when I, somebody tells me, yeah, we're using spreadsheets right now. I love hearing this . Um, so, so what I understand of lately is that you put a bunch of copy in or say maybe it takes all of the different context or texts that you're using for all your different social media channels and then, you know, creates more topics for you. Is that, is that essentially correct?
Speaker 2: (12:02)
Almost so. And see we're so bad at, uh, communicating what we do , right. Shoemaker has no shoes. So first lately connects to any social channel you have and we study all the analytics that, that you, we can for the last year of what you've produced. And we're building a writing model that learns your brand voice and it's studying the messaging that got you the highest engagement. And it's breaking down the words and ideas and phrases and sentence structures. Okay. So now I've got your model here. Right. And you have many opportunities to teach the bottle and, and help it
Speaker 1: (12:34)
Along. Right, right. Okay. Which is
Speaker 2: (12:35)
Important. Then you feed lately any long form content, text, audio or video. Could
Speaker 1: (12:41)
It be blog post or something?
Speaker 2: (12:42)
Yeah, it could be a blog post, it could be this video file. Okay. My Emma is gonna ask you for this file. Okay. So we can run this through lately afterwards. So you take, let's say it's the video you upload the video to lately, it automatically turns it into a transcript. It takes the model reads the transcript, it's looking for the sentences that contain what's in the model, and it clips out those sentences into social posts and clips the video up of the, of who said
Speaker 1: (13:07)
What. That's pretty cool. So you, so you could chops it up, essentially chops it up and then you can repurpose it like for a year or something like that.
Speaker 2: (13:14)
Yeah, exactly.
Speaker 1: (13:15)
That does sound pretty handy. And so, so tell me about the spreadsheet that, was it doing that? Was it, were you sort of like manually figuring out and were you doing that? Or what was the core problem that you were solving with the spreadsheet?
Speaker 2: (13:29)
Yeah, so at first we thought it was organization.
Speaker 1: (13:34)
Okay. This
Speaker 2: (13:35)
Particular project, Jordy was Walmart and all their franchises, bank of America and all of theirs at and t and all of theirs United Way worldwide and all of theirs, the irs.
Speaker 1: (13:45)
And so these are your client, you, these are your clients. These you had Bank of America stuff.
Speaker 2: (13:49)
Yeah. And they were, it was one project that they were all working on together. It was a, it was, um, they were trying to help empower the
Speaker 1: (13:55)
Port of financial. Okay. It was a single project and you were speaking with uh, okay. Project. Okay.
Speaker 2: (14:00)
So 20,000 marketers. And so here we are creating the national messaging, but the national messaging doesn't, as we all know, doesn't hit at the local level because there's a different audiences. So how could we A, write national messaging that was good and engaging and then b syndicate it out to everybody else and teach them what, what to tweak in order for it to engage on that local level. So that's the system I built and that's what lately became, we took lately and built one feature for every worksheet inside the spreadsheet.
Speaker 1: (14:34)
My god sounds, it sounds really, uh, comp is it, was it really complex? Say it was it sounds like. Yeah,
Speaker 2: (14:41)
It is. And it was. Yeah. Yeah, yeah. It was too complicated.
Speaker 1: (14:43)
So is that what it was? You sort of said it was like, oh my, you, it started pulling your hair out cuz you're like messing around with individual cells and copying, pasting and stuff in inside of Excel. Um, sounds like it was pretty obvious that we needed to turn this into a software.
Speaker 2: (14:59)
Well, so it wasn't again, I had some help. My, my, I I met this guy Steve, who was a serial entrepreneur and an investor and it had, um, several exits. Successful and not so successful. But he knew this world and I didn't know this world. And he harassed me for like a year and kept saying, listen, we just need $25,000. We're gonna automate your spreadsheets and you know, we're off to the races and, and we need to build some wire frames. And these were all words that I didn't know what they meant. Of course foreign language to me. You know, $25,000 Jordy. I was eating ramen and drinking two buck chuck. Yeah, right. It seemed crazy to me. Mm-hmm. . So Steve ended up pulling the money out of his own pocket. He's
Speaker 1: (15:45)
A co-founder and he's a co-founder with you. Okay.
Speaker 2: (15:47)
He's a co-founder. Yeah. Um, and he brought along Jason, who's another co-founder to build the wire frames. They came to my house at eight o'clock on a Sunday night Right. At Christmas. So I'm like, you know, I've got two glasses of wine and I'm on vacation and I'm like, you get outta my house. And um, afterwards Steve said that I was much nicer today.
Speaker 1: (16:08)
Yeah. Yeah. Did you get the wire frames done that night?
Speaker 2: (16:12)
Um, Jason had already built, they brought the, yeah. Yeah. So I saw it, you know,
Speaker 1: (16:18)
Um,
Speaker 2: (16:18)
Um, and I, I said by the way, like I remember saying to Steve, he's like, are you ready to do this? And I was like, well there's only one rule, which is that I have to be the boss. Yeah. And I remember him laughing and saying, no problem, .
Speaker 1: (16:32)
Cause he yeah, he knew, eh, he knew. That's good. So, so you have three co-founders and, and how's the dynamics with you guys? It's all good.
Speaker 2: (16:43)
You know, it's not great with Steve actually. We, we parted ways, um, about a year ago, but it's great with Jason and
Speaker 1: (16:48)
Brian. Okay. So, alright, perfect. So, so it sounds like for the mvp, um, uh, you had your co-founder Steve, is that right? Steve was the one that, that put the 25,000 in were what were one of the other guys a developer and did and did that 25,000. Cuz that sounds a little bit light for, uh, as complicated as a spreadsheet as this was to be able to automate this. I mean, did you cover that 25,000 in the MVP or did it run higher?
Speaker 2: (17:17)
Yeah, no, it was 25,000. I mean, Jason is both a graphic designer and, um, front end. So he was able, I mean, it was just a wire frame, right. So it wasn't that that complicated. But at the time there was, there was, we didn't even know what AI was. Jordy like,
Speaker 1: (17:35)
What time is this? It's like 2014. And was it 2014? So there was a start of, of like, uh, some machine learning was just coming out? Or was it, was it a bit, was it robust at that time? Is that, I don't know that much about ai. Really.
Speaker 2: (17:49)
It wasn't, yeah, it wasn't even, we didn't, it, I mean, so we only had an mvp, no one was using it or anything. We were literally just taking a deck around and raising money. Um, so there was, we actually didn't even have a product till, I wanna say 2017. Um, which is, there's some good stories in there and I can tell tell you, you know, we burned through CTOs left and right. Who all had like, uh, really, like one of them was putting all my money up his nose. Another one had like, didn't commit suicide, but had had suicidal depression. And it just took us a long time to find the right fit. And because I knew nothing about this, I had no visibility. Mm-hmm. . Cause I didn't understand it. Yeah. You know, how
Speaker 1: (18:35)
Were you make, how were you surviving for this three year? This sounds like the, you were took three years to develop the, the platform . So you're still running the agency, you must have still been running the agency.
Speaker 2: (18:47)
Yeah, so a coup, so a couple things happened. Jason and I went out and we raised two 50 in about five months. And we did it backwards too because Steve's network was venture capitalist. So that's who we were talking to first. So I I just got punched in the face right away. Yeah. , you know. Um, but we managed to raise the money from Angels who were mostly in my network and fans of mine from xm. I mean, it turns out that I knew some people who had money, which I didn't.
Speaker 1: (19:13)
How did you find that? How did you find that out? I mean, did, did they, did you just approach like write people on Facebook or something like that? Or what
Speaker 2: (19:22)
Yeah. Um, actually my friend Rachel had me do an interesting exercise and she asked me to look at my contact list and kind of, I group them into different groups, you know, like groups. And so I started doing that and I thought, okay, everybody I know is in the music industry. That was my first label I gave them. And then I broke the label down into, I was like, oh, wow, actually I have a lot of really intelligent, so I look friends. So I put like the brains in one group and then I put like the go-getters in another group and I started with the go-getters because I figured they had this mindset. And I mean, I'm not shy and I'd raised money and I'd been in sales, raised money for like non-profits before I've been in sales. So like I know the ask and I have no shame either. What's the worst thing gonna say? No. And I, I'm gonna ask you, I'm, I want you to say no to me like five times before I believe anyways. You know, so yeah. Facebook, email. Um, and I was just surprised the people who said yes were mostly people who I didn't actually really know.
Speaker 1: (20:23)
Really? Okay.
Speaker 2: (20:25)
Yeah. My family didn't come in till later. Um, which is interesting. Um, but like we, as we raise that two 50, we come around, we hire the cto, he's putting it all up his nose. I don't even know that I discover it at a conference that we're at in Las Vegas. Mm-hmm. , of course. Mm-hmm. Um, which I hate that town more now than ever before . But, um, and we were struggling. We had almost no money left and nothing to show. And I entered a pitch contest, there were a hundred people and I came in fourth
Speaker 1: (21:02)
In Vegas.
Speaker 2: (21:04)
Um, actually no, on a ski mountain here in the Catskills. Okay. Um, someone told me a trick here, guys, let me tell you now, if you ever go to a ski pitch conference, don't get on the lift and pitch them on the lifts, which is what they tell you to do. Stay in the lodge cuz everyone's hungover from the night before. Mm-hmm. and they're all there. Yeah. That's where the entre, that's where the venture capitalists are. So pitch them there. Great tip. Um, Brian, who became my, um, who was helping me run my agency by the way, and was a serial entrepreneur and my other co-founder now gave me that tip. Bueno. So I got some momentum and then I get into era, which is an accelerator in New York and they give us $40,000. This
Speaker 1: (21:46)
After your two 50 you spent, you spent your two 50.
Speaker 2: (21:49)
Okay. Yes. Gone.
Speaker 1: (21:50)
Okay. What did you have at this time? Like what did you, like how was the platform looking? Nothing. How did nothing It was, it's literally gone to the cto. He just burned it, uh, went to his salary and whatever his, his habits. Um,
Speaker 2: (22:07)
We had wire frames and we had taken one feature out and tried to and build wire frames separately for it alone.
Speaker 1: (22:15)
Uhhuh,
Speaker 2: (22:16)
One of the features was like clout, remember?
Speaker 1: (22:18)
Clout? Yeah. I do remember them. Yeah.
Speaker 2: (22:20)
It was like clout was for businesses, but this was clout for your friends. So you could, I, cuz one of the things I taught the Walmart crew was who to tag on Twitter strategically. Mm-hmm. that would get you the most re-shares. Yeah. Right. And so this would do the same thing. It would basically identify which of your friends had the largest audience, so, and tell you who would get you the most value. Um, which is a, a feature we built into lately. So we had like a wire frame for that. And when I, when I applied for era, I made a typo. , I forgot about this. I realized it, remember it the other day and I said we'd only raised um, $25,000, but we'd raised $250,000. Uh, and we were in the meeting with them. I'll never forget this. I walked in cuz this is something that's cha that I've learned over time.
Speaker 2: (23:10)
Like your parents teach you if you're going to a business meeting to wear a suit and be professional, you know? So that's what I was doing. , which is hilarious to me now. Although at this meeting I, I had a jacket on and I wore a t-shirt that had some, um, foreign writing on it. I didn't know what it meant, luckily. And I walked into the meeting and I went to shake the hands of the, of the guys at the accelerator, Jonathan first. And Jonathan was like, uh, I'm not shaking hands today. I don't have time for this. Let's just sit down and get going here. And I was like, wow. you. What the? Yeah. You know? Okay. So we sat down and I got my fancy T-shirt on, which just happens to be, it says the town of where the other guy Marat grew up. It's a little known town somewhere in, um, Turkish Turkey. Yeah. And I don't even know that's, and then I say by accident a couple things or one, one thing that helped our co our case, which was, um, I was a goalkeeper through high school and college Stocker and I was the MVP and , what I like about that position most is, is you actually have the most power in the field because you have the vision, you can see everything. It's like a reverse pyramid, right? Yeah,
Speaker 1: (24:30)
Yeah,
Speaker 2: (24:30)
Yeah. And I loved that control. And I also, you know, I don't have any fear. I'll dive right into your feet and kick me in the face and let's go's I'm not wearing a mouth guard. that. Right? Yeah. Um, so I remember Mara calling us, calling me. I was sick. I I I never get sick, but I was deathly ill on the couch and I could barely lift my head up and I can't understand his voice cuz he has this beautiful accent. And he called and he just said, you know, congratulations, blah, blah, blah, blah . And I was like, okay, thanks. Yeah.
Speaker 1: (25:04)
Did you know who it was?
Speaker 2: (25:06)
I knew who it was cuz I could recognize
Speaker 1: (25:08)
His foot. And you heard, you understood congratulations. So understand was like, okay. Yeah.
Speaker 2: (25:12)
. Yeah. I called Steve and I was like, I think, I think we got in. I think we did. Yeah.
Speaker 1: (25:17)
So, so, so this is a sort of reset now you're, so what time? This is like 2017 then?
Speaker 2: (25:24)
Uh, I think we're at 15 or 16 now. 15 maybe.
Speaker 1: (25:27)
15. Okay. And and how, sorry, how much did you get then?
Speaker 2: (25:29)
40 K
Speaker 1: (25:30)
40. Okay. So, which
Speaker 2: (25:32)
Is gone in like the summer, you know,
Speaker 1: (25:34)
. Yeah. Yeah. Really. So, so you must have learned a lot of lessons. Oh, I wanna know what the biggest lesson is. Uh, you get two 50. What would you say your biggest lesson was? If if somebody's gone, they've done a big raise, what did you do wrong? And, and, and what were the biggest things that you learned out of that?
Speaker 2: (25:54)
Um, well, I mean, it was so weird because I didn't know it was happening because I don't know, I don't write code or understand anything about it and I still don't. Right. And you have to delegate stuff to other people who know more than you. I mean, you have to. So there's no way I could have corrected that error and nor would've I, right. Like, the thing that I learned next was Jason had a friend who he'd worked on Bank of America projects and, and Target. And we brought him in and to build up the platform and we started, we started to have some actual features that were starting to work at this, this summer. This is the summer of at the accelerator. But this guy is holding me hostage. So he is disagreeing with our choices and constantly decides to stop working.
Speaker 1: (26:46)
This is the lead developer, I guess. Right?
Speaker 2: (26:49)
So this was a big lesson is like, I don't like being held hostage. You might, I might as well go work for XM again. You know? And I just remember it feeling like this couldn't happen. You know, if, if you're not, I can't have somebody who's not loyal to me. It's not about disagreeing with me, but he was holding it over my head constantly. And so we said goodbye to Anthony and then Brian, who was man who's another one of Steve's friends. Steve had the gold here, he had all these people he's he'd collected, right? Yeah. And Brian was running my agency for me while I was at this accelerator. And so he, he came in, he's Canadian, he's the best. He's so smart. And he was an entrepreneur and you know, he knew code and he was a great manager and he got this guy, Anthony, to work for him and do whatever and take the pressure off me. So that was a great lesson I learned. Yeah. Was to, to buffer, to have somebody who's the buffer. If there's people on the team that aren't gonna be my cup of tea, but we need them anyways, you know? Right. Um, yeah.
Speaker 1: (27:58)
So to place a buffer, someone that's got the skills that says I, there's a, there's a, there's a personality conflict happening with this lead developer. I can't deal with them. I need to place you in between.
Speaker 2: (28:08)
Yeah. By the way, a great tip for your wedding too is someone gave me that tip, which is like, give, put minders on all the problem people. .
Speaker 1: (28:18)
I like that. I like it. That makes sense. . Um, so, so we're, okay, so we're in the accelerator. How was the product when you came out of the accelerator? Were you able to start getting clients? Did you have clients at this
Speaker 2: (28:35)
Time? Um, we had some people using it. It was
Speaker 1: (28:40)
Like Walmart. Was Walmart using
Speaker 2: (28:42)
It. Um, it wasn't that functional. It was barely burial operational. We had like beta, beta testers, you know. Um, yeah. And we were told to raise money from venture capitalists at that time, but it was too early. So we really struggled. I mean the, again, there was almost no momentum moving forward in the product. It was all about fundraising. So I spent another six months. I got my first angel investment from Isaac Oats, who's the CEO of Justworks, who's been a great friend. Um, and advisor. I don't know if he knows he was first , but well, after the first two 50. So he was the first like officially Angel. Yeah.
Speaker 1: (29:27)
After the accelerator. Right. Cause it sounds like the two 50 was just like, is just a burn. Right.
Speaker 2: (29:33)
In the time of the two 50, I met with venture capitalists, so I learned a lot of language. There's a lexicon, there's a vernacular of this world. Right.
Speaker 1: (29:41)
It's it's huge. Yeah.
Speaker 2: (29:43)
It's huge. And like it was fire
Speaker 1: (29:45)
Cap tables, dilution and all this kind of stuff. Yeah.
Speaker 2: (29:48)
All that stuff, you know, um, yeah. And you can't really read the books on it too, cuz it's just like, you know, it's just insane.
Speaker 1: (29:56)
And they're very good at it. They're very good at it too. The VCs. That's why you want to go to Angels first. Wow. But VCs are really like, you already need to be at revenue. They, you know, they're, they're not really that interested unless you're at 50,000 or something. Um, you know, so I think where you guys are at, it sounded like you needed to really be seed round friends, family. We
Speaker 2: (30:15)
Were in the wrong place and, and they were. Now I can tell, I know they were probably just a amused by me, , you know, who the did I think I was. But it's because I didn't know any better, you know? And which has served me well, you know, over the years. I just do it, whatever it is. And, and that Aw, shucks. I mean, I fall into it a lot. I do, but it's because I don't care. Right. I, I don't really care. Mm-hmm. if I look like an to you, you know?
Speaker 1: (30:47)
Yeah. In terms of your equity, can you tell me what your equity is at now? You've raised 3.3 0.4. Um, you're at a million arr. Where's your equity? Equity?
Speaker 2: (30:58)
Yeah, so I'm at 30%, 29.9%.
Speaker 1: (31:02)
And you have some co-founders too, right? So what are they at? So that sounds like the
Speaker 2: (31:06)
Together we're right around 45 or just under fifties. So we're
Speaker 1: (31:11)
Okay. In a good, so they have a little, they have about 10 or something each, something like that roughly. So you're okay. You're the, you're the majority. Um, and uh, how, how was that process like? I mean, when did you see most of the dilution? Was it early on or how is it, how is it, like how is it working now for you with raising money? Is it make it harder to, to raise money? Yeah.
Speaker 2: (31:36)
I mean, so here's one thing that I learned, which is, and it's a good question, right? So if people, , if people say to me in a meeting, first of all, well you don't own enough of the company, I'm concerned about you, then I'm, I instantly know it's, it's over, right? Mm-hmm. . Cause what everyone's trying to do is to cut. And it's not that there's not a a valid reason there. We'll talk about that in a second, but everyone's looking for a way to say no. And if that's your way, we're, we're done. There's way more interesting questions you can ask me, right? Because for me, so here's what's important to understand. My cap table is the way it is because number one, I'm a female entrepreneur. I only get 2.7% of all the capital out there. I have to work 98% harder for the 3.4 million. I've busted my to raise. I'm, I am amazing. I have to tell myself this cause I forget all the time, frankly. Good, good . But that, you know, that's hard. So that's, that's an important thing to keep in in mind. But the other thing is the angels on my cap table, they're almost all Harvard Business School alumni angels. Because every time we went back to raise, I joke and call them a clown car cuz 10 new white dudes get out every time. Yeah, yeah.
Speaker 1: (32:54)
You know?
Speaker 2: (32:54)
Yeah. And they're not all under the same entity, but I only have to talk to Peter. I don't have to have coffee with 60 people. You know what I mean?
Speaker 1: (33:01)
Okay, yeah.
Speaker 2: (33:03)
Yeah. So, and then Joanne Wilson is on my board, and if you guys don't know Joanne certainly Google her, but she, she is also Fred Wilson's wife and she's New York's most prolific, um, female angel. So she suffers no fools and is a wonderful person to have in your mi because she'll tell you, you know, she tells me all the time, stop babbling .
Speaker 1: (33:26)
Yeah.
Speaker 2: (33:27)
Cause
Speaker 1: (33:27)
I do. She sounds like a really good person to, uh, to call on.
Speaker 2: (33:31)
She's excellent. And so she insisted that, um, when, so she led my second round and, and so for her around, we took out, um, options for employees, but also she made a rule where if you, you had to have a hundred thousand dollars in or more to have information rights to obviously whittle down my coffee, coffee time with everybody mm-hmm. ,
Speaker 1: (33:56)
You know. Yeah. Tell me about when you first started to gain traction. Like when did you sort of hit that 25,000 MRR mark? What was, what was the platform doing? And, and like how did, like, how talk, talk to me about sort of the, the, the launching and the, the zero, you know, the product market fit.
Speaker 2: (34:17)
So what we saw or initially was that the customers were all using one feature specifically. And it was the one we've been talking about, the one that automatically turns at the time, your blog, it was a blog into dozens of social posts. That was the hot feature.
Speaker 1: (34:32)
Okay.
Speaker 2: (34:33)
So we started to reposition how we talked about the product. Right. At the time we were marketing resource management platform. What the is that? Yeah. You know, nobody, we couldn't even talk about,
Speaker 1: (34:44)
Was it still called lately?
Speaker 2: (34:46)
Um, it was, oh I meant to tell you that. So the reason I called it lately was from the clout thing and it was the marketing line was what have you done for me lately?
Speaker 1: (34:56)
Okay. Yeah. Yeah.
Speaker 2: (34:57)
And it still parallels because your marketing is only as good as what you, what you've done yesterday. Right. It's always gotta be fresh. Mm-hmm. . Um, plus I like Van Morrison. Well I did before he got all weird on with the new, with the Covid thing. But Van Morrison, um, . So, um, the platform. So we saw them using that feature specifically. We started to, we, at the time we were doing all demos, right? Cause the platform was too robust to build self-service. You needed a human for sure. Mm-hmm. and we were learning. So it was benefiting us, um, from the, you know, watching the customers using and having the conversations. Plus my team is really nice and our premier objective is make fans Right. That's what we do. Right. Not make the sound, make a fan. Because I, I knew the value of this and the value is free marketing for forever. You know, it's infinitely, um,
Speaker 1: (35:50)
Because it's viral. Is it, there's an aspect of it that's viral because it says what powered by lately or something. Talk to me about the viral aspect.
Speaker 2: (35:58)
Um, it's a combination of turning the fan, the customers into evangelists and the social proof, but also the ai. So like I said, I'm gonna ask you for this file. This is lead gen for me. I'm gonna run it through my ai, AI will augment it with some human help cuz it's a robot. Mm-hmm. publish it in all of our channels. It's so good at choosing those words and phrases that'll get you to engage again. So by the time we get to you, you're warm.
Speaker 1: (36:27)
Mm-hmm.
Speaker 2: (36:27)
really hot, hot at that point, you know? Okay.
Speaker 1: (36:30)
So you're coming like, you're coming from me, like I would be a lead then I'm like, wow, this is really cool. I want to, I want to get in on this too. That's what you're essentially saying, where the leads are coming from, from the other podcast guest or whatever,
Speaker 2: (36:44)
From when I split it up on social posts. People who see me and you talking online are gonna, you know, there's only FYI or everybody, there's only two things that can happen in social click or share. When you're small, it's very hard to get people to click because they don't trust you. So go for the share. So if you're going for the share, you wanna look for the one liner that makes somebody else look smart. So that's what the AI is doing. It's looking for the tip today more or less.
Speaker 1: (37:10)
Right. Yeah. Okay. Okay.
Speaker 2: (37:12)
That's great. A lot of the stuff you and I are talking about doesn't apply only to startup land.
Speaker 1: (37:18)
Right, of course. So thanks so much Kate, for your time. Uh, we're getting, getting ready to wrap up the hour. Um, where can people find out more, obviously lately.ai, but if people wanna reach out to you, how can they find out? Uh, reach out to you?
Speaker 2: (37:34)
Oh, I, I love that and for sure do. So I'm on Twitter at lately, AI caley, that's probably the easiest. Um, okay. And or Kate lately.ai and, and I'm, I'm mostly don't try to sell me anything cuz then I'll just
Speaker 1: (37:48)
Speaker 2: (37:49)
Yeah. Lock you out of my life. But certainly the
Speaker 1: (37:52)
Questions are okay. Right. Questions on how to approach angels and things like that. Yeah.
Speaker 2: (37:56)
Questions are okay. Don't ask me to pick my brain by the way. That's like, Hey, can I waste your time for free
Speaker 1: (38:03)
? Yeah, totally. Yeah. What about pricing? I'm curious because, you know, this, this, I'm, I'm actually manually doing this now with some of my podcasts. What's pricing? Uh, um, you know, for, for your service, for someone like me, I've got, uh, 15 employees or something like that. Let's say for example,
Speaker 2: (38:21)
So we start at 50 bucks a month for your package, you're probably gonna be in the $99 package. Um,
Speaker 1: (38:28)
And what do I get for that?
Speaker 2: (38:30)
You get full video capability with ai. Um, so it can learn, it'll learn the voice of you and your brand. Um, and you get all the video editing capabilities. So lately it lets you, um, it's not a full editing suite by any means, but it lets you take the clips that it pulls out and, and Okay.
Speaker 1: (38:49)
Is that like unlimited clips then? I can
Speaker 2: (38:51)
Unlimited, yeah. Just changed this. We just launched new pricing like yesterday, so
Speaker 1: (38:57)
. Okay. Cool. All right.
Speaker 2: (38:59)
Yeah,
Speaker 1: (39:00)
Thanks so much, Kate. It was, it was great talking to you. I'd love to have you on the show. Maybe we'll come back and revisit in a year or something like that and see, and see where you're at. But it sounds like you're, you're on your way again. So, uh, thanks so much. Congratulations on your success and uh, yeah, we'll be in touch.
