SaaStr Podcast #227: Alexandr Wang, Founder & CEO @ Scale On Why TAM In The Traditional Sense Barely Matters
Update: 2019-04-24
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This post is by Harry Stebbings from SaaStr
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Alexandr Wang is the Founder & CEO @ Scale, the startup providing high quality training and validation data for AI applications. To date, Alexandr has raised over $23m with Scale from some of the best in the business including Index, Accel, Y Combinator, Dropbox’s Drew Houston, Justin Kan, Thumbtack’s Jonathan Swanson and more. Prior to founding Scale, Alexandr was a Tech Lead at Quora, directly responsible for all speed projects and before that a software engineer at Addepar responsible for building and maintaining financial models.
In Today’s Episode We Discuss:
- How did Alex make his way into the world of SaaS and come to found Scale? What were some of his biggest takeaways from seeing the first hand scaling of Quora and Addepar?
- Why does Alex take the contrarian view that “TAM in the traditional sense barely matter”? What two characteristics of the market should founders really look examine? How does Alex approach the element of market sizing? Does he prefer top down or bottoms up and why?
- Why does Alex believe that you must invest in customer success before you think you need it? What were the benefits for Alex of investing early in customer success? Why does CS over sales ultimately drive the growth of your company? How does one know when is the right time to hire their first in customer success? What is the ideal profile of this candidate?
- How does Alex think about the integration of customer success and product teams? Why is it crucial from the product perspective that founders pick their first customers well? How can your customers drive your product decisions? How can one ensure to be customer informed and not customer driven?
- Why does Alex believe that in the early days it is not important to focus on the size of the deals you are signing? What should founders be focusing on with these early customers instead? When is the right time to flip the switch and opt for value extraction as a more primary objective? How does Alex respond to the fact that VCs often look at these first customer deals as an indication of the size of the pain point you are solving?
60 Second SaaStr:
- What does Alex know now that he wishes he had known in the beginning?
- What does Alex believe is the hardest role to hire for today?
- Who does Alex think is crushing it in the world of SaaS today?
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Jason Lemkin
Harry Stebbings
SaaStr
Alexandr Wang
Transcript:
Harry Stebbings: You are listening to the official SaaStr podcast with me, Harry Stebbings. I would love to hear your thoughts and feedback on the show and you can do that on Instagram @hstebbings1996, with two B’s. It would be so great to see you there and I really do always love to hear your thoughts and feedback.
Harry Stebbings: However, to our guest today, and I’m very excited to welcome Alexandr Wang, founder and CEO at Scale, the startup providing high quality training and validation data for AI applications. To date, Alexandr’s raised over $23 million with Scale, from some of the very best in the business, including Index, Accel, Y Combinator, Dropbox’s Drew Houston, Justin Kan, Thumbtack’s Jonathan Swanson, and many more incredible names. And prior to founding Scale, Alexandr was the tech lead at Quora, where he was directly responsible for all speed projects and before that was a software engineer at Addepar, responsible for building and maintaining financial models. I do also want to say, a huge thank you to the wonderful Jon Dishotsky and Tim Junio at Qadium for the fantastic question suggestions today. I really do so appreciate that and many mojitos on me to thank you.
Harry Stebbings: However, you’ve heard quite enough from me, so now I’m very, very excited to hand over to Alexandr Wang, founder and CEO at Scale.
Harry Stebbings: Alex, it is absolutely fantastic to have you on the show today. What can I say? I’ve heard so many good things both from John Deshotsky and from Mike Volpi so thank you so much for joining me today Alex.
Alexandr Wang: Yeah, thanks for having me.
Harry Stebbings: Not at all, but I’d love to kick off today Alex with a little bit on you. Tell me, how did you make your way into the world of startups and SaaS and really come to found Scale with that aha moment?
Alexandr Wang: Yeah, I grew up in Los Alamos, New Mexico. Both my parents are weapons physicists, actually. After high school I actually came out here to the valley to work. I worked at a couple startups, Quora and Addepar because it was, the tech industry was just the most exciting thing I could be doing. After I worked out here for a couple years, I decided to go back to school. I went back to MIT, was doing machine learning research and then I sort of got antsy. I really wanted to be building things, really wanted to be building products and so I knew I wanted to start some company. I was trying to figure out the pain points that I had as a developer and one of the big pain points was to build any machine learning, getting data was the number one hurdle or the number one barrier that you come across.
Alexandr Wang: And so, decided that that was as good idea as any. I went through YC and that was sort of the start of this journey about two and a half years ago. I went through Y Combinator, raised our series A from Accel right after that, grinding for a couple years. Raised our series B from Index and the rest is history.
Harry Stebbings: What an incredible journey it’s been, though. I do have to ask, though, Alex, you mentioned some great companies there in Quora and Addepar in your early days. I often get asked by kind of emerging grads, I’ve got three options, I could start a startup, I could join a high growth company or I could join one of the large kind of FAANG, so to speak, Facebook, Amazon, Apple, Google. So tell me, what would your advice be to this grad, given the experience that you’ve had?
Alexandr Wang: Yeah, I think your first experience should be at a high growth startup that is winning. The reason for that is a couple things. I think first, you want to see what winning looks like. Even though the FAANG companies are winning, you don’t really know what’s letting them win. You don’t really see what it looks like for them to win. And then the second thing is, at one of these emerging startups, you’ll actually have way more power and way more impact and influence than you would at a large company and that’s really important actually. Because you have so much influence and so much power, every change you make you basically get addicted to this sense of like, oh, I can actually have an impact. I can actually really influence the path of this company, and that’s really important if ultimately one day you want to start a startup because that’s the mode you have to be in. My recommendation is join a high grow
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