Akshay Kothari
speaker
120 appearances
1 recordings
1 series
first heard Sep 2024
last heard Sep 2024
Akshay Kothari’s voice in public audio — every appearance, attributed to the second.
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Appearances
So it's very, if you think about your job as like, well, there's all these different projects you need to fund and you need to resource allocate, finance becomes such a strategic partner in that. So I remember talking to, as part of like me going to hire our CFO, I talked to a lot of CFOs in the Valley as a way to learn.
And I remember one of the conversations was actually quite interesting where I asked like, what's the ideal like rule of 40? Like, you know, should it be this? Should it be that? Like, you know, and this person said like, you know, basically you should have test budgets. for everything you want to try out. And you should just look at each part of your business through that unit economic lens.
If you want to do performance marketing, give people $50,000, $100,000, doesn't matter. Tell them to test whatever they want to test. And if they can prove the unit economics for that channel, and the channel is working, then you should load up the truck. You shouldn't worry about rule of 40 at that period of that quarter or that month, because you've seen an opportunity that pays you back.
You can do the same with sales. And so one of the years we did actually spend a lot of money on billboards. It was a way for us to learn that, OK, well, this does improve your brand awareness, but doesn't actually do a lot to sign ups or, you know, deal closing sort of completion rates. Right. And so that's a theory we have right now with sort of being aggressive versus being too defensive.
Well, the budget could be pretty small. You just need enough of a budget to be able to get signals back that channel is working. And in many cases, you don't need it to be very large, right? I think maybe like sales might have a longer period before you sort of see what the paybacks are.
But I think anything you're doing with performance marketing or some partnership deals or other things, like I think those things, you know, you can do it.
So this was second half of 2021, pretty crazy time. And the reason we did this raise was because our peers, our competitors were getting very aggressive in going to market, both from the marketing lens as well as from the sales lens. And we saw an opportunity to not only raise this money, but also to sort of play the game on the field. And so we did this in October 2021.
And I think the plan was to sort of go more aggressive on go to market. Did you decide to play the game on the field and go aggressive? Yes, we did. For about a year or so before the markets turned. Was it the right decision? You have to. I mean, there is no other choice, right? I think at the end of the day, you do have to play the game that is being played on the field.
Probably nuanced. I think you don't want to like burn your company down, but I think you do want to like compete and see if you can capture more of the customers that you and your competitors are both trying to get.
That's what happened in 2022. In fact, the harder times came much faster than most had imagined. And so in many ways, the pullback happened quite a bit early in our journey.
We did do some of that. And I think the reason we were able to do some of that was because we were already cash flow positive. So we saw all the companies around us all trying to get fit, all trying to get back to cash flow positive. And we were like, we're already there. So what do we do? Through all of these things, one thing I realized, actually, there's like 99 ways you can burn money.
There's only one good way to effectively make money. There's just so many bad ideas out there. You can throw money on the billboards, you can throw money on YouTube. But I think it's actually very few ideas that actually can continue to scale well. And even when it starts to do well, you put more money in and it starts to be a bad channel.
So it's actually kind of an interesting exercise of if something works for X, how do you get to 10X and still have the same unit economics? It's pretty hard. I have a question for you.
Well, I think going back to what we discussed, right, I think in the very long term, it will be a function of the company's sort of multiple, the function of multiple of revenue. And the premium we'll get is based on us being able to grow fast or continue to grow fast and do it in an efficient way. The great thing about Notion is that we just operate in a very large market.
Well, valuation matters internally, I think, to employees. I think it matters that the stock that they did get is able to be valued that much and continue to grow in value over the years.
I think it is a challenge for a lot of companies when you can't show them a path. And I think it was a bigger challenge in 2022. I think some companies have been able to sort of like show a path or have gotten there. But I think they're probably more rare than the number of unicorns that were sort of made during that time.
When we did the COVID round in 2020, we really, really wanted Sequoia. Again, if you think about the goal for that round was to get a stamp of approval so that we could recruit and people feel like this is a safe company. And there isn't a better stamp than Sequoia's. And so we pitched them and actually we got a no that time in March 2020. Was this from Pat Grady?
I think it's from the partnership. I think the person we had talked to there was Mike Vernal then, who was an early personal investor. And I think they actually wrote a very thoughtful note for why. In many ways, it worked out in terms of us getting to know each other even more over the next 18 months. And then when you came back and said, hey, we still want you.
Next one we came back, we asked them first, and them and Kotu, because I think Kotu had put a smaller check in the $50 million round, and so they came back and did a larger one, and Sequoia was the co-investor in that.
I think, yeah, I think it is probably the best brand. Their record speaks for itself, I think.
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