Clay’s path to product-market-fit: Building vertical, creating power users, and understanding founder psychology | Kareem Amin (Co-founder and CEO)
Episode 118

Clay’s path to product-market-fit: Building vertical, creating power users, and understanding founder psychology | Kareem Amin (Co-founder and CEO)

Kareem Amin is the co-founder of Clay, a lead-generation software that uses AI to scrape 50+ databases and help companies scale their outbound campaigns.

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Kareem Amin is the co-founder of Clay, a lead-generation software that uses AI to scrape 50+ databases and help companies scale their outbound campaigns. Before Clay, Kareem was the VP of Product at The Wall Street Journal. Kareem also co-founded Frame ( which was acquired by Sailthru in 2012.

In today’s episode, we discuss:


Where to find Kareem Amin:

Where to find Todd Jackson:

Where to find First Round Capital:


(00:00) Introduction

(02:36) Clay’s origin story

(05:54) Building for a specific customer

(10:42) Knowing when to build for a broader customer-base

(12:46) The life spiral framework

(15:52) How founders can make better decisions

(18:57) Kareem’s principles for product-market-fit

(25:36) Clay’s customer journey

(30:04) Interesting tactic to find power users

(34:00) How to know you have product-market-fit

(37:11) The impact of founder psychology on the business

(39:41) Mastering commitment to sprints

(40:47) How Kareem’s own personality affected his company

(43:31) Actionable advice to understand founder psychology

(46:25) Why focus is misunderstood

(47:09) The mindset shift from a first to second-time founder

(50:28) What’s next for Clay

(52:14) The best piece of advice Kareem has actioned

Todd: [00:00:00] Kareem, welcome to the show.

So happy you're here.

Kareem: So happy to be here, Todd.

Todd: Um, so to start things off, you know, tell us what Clay is today. What does the product do and who's it for?

Kareem: so Clay is a really powerful go to market tool for growth teams. specifically we help go to market teams do outbound really well. You know, there's really only two ways to grow a company. So either people, customers come to you or you go to them. And we think of ourselves as the toolkit that businesses use to go and find their customers and message them, um, and hopefully turn those prospects into customers.

Todd: So I know when you started the company, um, your vision was a little different than that. So can you take us back about six years ago, Kareem and explain how Clay came to be? 

Kareem: The goal of Clay was really to give the power of programming to an order of magnitude more people. and so it started off as this kind of abstract desire. And it was really the belief that we're kind of moving [00:01:00] the period that we were in was, uh, on the internet was just like making all the tools more collaborative.

So you have Figma, you have Google Sheets. It's just like more collaboration between people. But, um, we were thinking about like what the next stage would look like. And it was like, how do we use all these APIs and all these SaaS tools on the internet to do work? and so there was a little bit of

exploration and kind of interest in that abstract idea. And, um, we started playing around and thinking about what all the problems that we've had in the past building, and so we played around with different metaphors. So actually, one of the first ideas that my co founder and I had was what if we

rebuilt the terminal, which is a 1970s emulator of a computer. And what makes the terminal so powerful is that it allows you to pipe data from like one software tool to another, kind of the, um, analogy for this on the internet is Zapier, obviously. and so we were kind of thinking about all these different [00:02:00] tools that software developers used and what the next version of them would look like.

But we kept running into this issue where we realized that all, if we changed the terminal, or if we built, for example, a front end, uh, builder to connect to kind of databases, we would just make developers faster. And our real kind of desire was to give the power of programming to more people to make it more accessible.

And so we started playing with the metaphor of a spreadsheet because it was the world's most popular programming environment. And we're like, well, this is a place where, you are working with data, except it's not connected to any of the data sources on the internet. And so what would it look like if we built APIs into a spreadsheet?

And we quickly kind of started to find that that was really magical and really interesting. And then I started to try to sell it. So I started doing prospecting. Um, and that's kind of how we ran into prospecting being this really complex actually, uh, process. And like, I guess I, I think you should think about [00:03:00] outbound as like outbound operations.

It's, it's not as easy as just download a list of people and send them messages. You have to kind of find out who your ICP is and, and figure out how to like nurture that and make it more specific. at some point I committed to that vision for the company. Um, and we narrowed down. Our initial idea to focus specifically on how do we give the power of programming to growth people.

and, and that's kind of how Clay emerged.

Todd: And in that first year or two, when you were just building kind of the early product, did you know who it was for at that point? And

Kareem: We didn't. We had a lot of hypotheses. And when I say we didn't, what I mean is that we didn't pick, um, we knew immediately that recruiters could use this, that salespeople could use this, but we were having this, there was a tension back and forth of whether we should make this for kind of, um, front end engineers who could use it as what I was calling at the time, a higher [00:04:00] level database.

So the same way you have higher order programming languages like Python that look more like English, where like, what if a database, uh, understood more categories than just text or number? What if it understood LinkedIn profile or um, HubSpot URL, we already had this idea of like, what if the database knew what you were putting into it and then could get more information about that.

And so we were playing with this idea of like, what if I put in any URL, let's say it's a Linear ticket, I put in the URL and it's like, hey, do you want to know who's subscribed to that? Let me add that as a column. so we were, we weren't sure and we had multiple paths. yeah. And I think this is something that I, when I talked to a lot of founders, they run into it.

So I think it's worth kind of diving into it a little bit. Um, it's not that you don't know who the customer is. It's just that you're not picking yet, or you have hypotheses and you're not committed to one over the other. And that's what creates a little bit of the confusion about what the product [00:05:00] feature set looks like and what the language that you use in the product even is.

Todd: So how long were you kind of in that mode where you're like, hey, this product does some generally useful things. And by the way, I think of products like Airtable and Notion as having a little bit of the same path where it could be used by a salesperson. It could be used by an engineer. And they sort of stayed general.

And it sounds like you did that for a while and then wanted to lean more specific. What was that kind of evolution of thought like?

Kareem: I, I think that there is a world where we could have stayed general, I can imagine kind of the future of that product, and I think the reason that we decided to go specific. Um, was, it was a, a various set of things, but it was also the market pull, and even if you think, if you think a lot about tools that allow you to do workflows, um, when you dig in, you're like, which jobs are actually being done.

A lot of them are around actually this messy part of the organization around like operations and go to market. Um, because you need a lot of [00:06:00] flexibility there. In order to kind of always be on the edge and to explore kind of new ideas. When I looked inside myself, what I really wanted to, what I wanted Clay to embody in the world was the ability to have an idea

and, uh, be able to translate that into Clay and execute it. As I, as we started to do more testing with customers, I started to hear the same things over and over again from people doing outbound. And the commitment to doing outbound was really about how do we enable something to happen right now and how do we make the product more seamless for this set of people?

Um, and I think we could only do it by using the language that they use and limiting the options. So in some ways we decided. the limited in order to do a better job for the specific set of people and to have like a clear persona. and it, because it's such a large market and allows you to go into other places.

So actually we didn't talk about the mission of Clay. But our [00:07:00] mission is creative tools to grow businesses. And so what I, what we ended up doing is, you know, we started off from this abstract thought of like how we wanted to give this power of programming to more people, but then the mission that, uh, that felt like it resonated with me is that we really wanted to build creative tools that allow people to use programming to kind of implement that, but for a particular purpose, um, and growing businesses, I mean, you only like you build the product and then you need to grow it.

So it's, it's, it's a lot of the work and so many people are doing this and spending a lot of their time doing manual labor. And to me, the purpose of giving the power of programming to them was to enable them to save time, but also to do things that they didn't think were possible. And by focusing it on this one task, I actually feel like we have more of an ability to innovate, uh, than if we stayed more broad.

Just because, you know, like having the boundaries allows you to actually, push against them in ways that I think are productive. When I looked [00:08:00] in my own self and in the team, we, we weren't kind of interested in doing project management. So why allow that to even happen in the product?

Todd: I want to dig into this idea more of general versus specific. You know, of horizontal versus vertical. And because I think that's something a lot of founders think about. So first of all, how, how many years into the journey did you make this decision to get more specific? 

Kareem: That's a very tricky 

question for us. So 

I would say. If I'm really honest about it, it was more like a spiral. And I think a lot of things in life are like that. So it wasn't like we made the decision and then it stuck. We would make the decision and then we would say, okay, we are targeting salespeople.

And then we would get sidetracked and we'd come back to the same spot and we're like, oh, this is why we made that decision and then we'd make it again. And so it took a couple of turns. So I'd say maybe three and a half years into it, we were pretty focused on salespeople, but we hadn't, we hadn't committed in a way that, um, [00:09:00] showed in the product we had committed to ourselves and like when we were prioritizing new features, but the real kind of point came right after that, when I started cutting features.

And removing, the language, changing the language on our marketing page and our documentation and making sure that nobody on the team, is thinking about us in like a general form. And really like making sure that everybody's committed to that and is okay with it. Because when you narrow the scope that way, it feels like claustrophobic.

You're like, why are, why are we doing something that's smaller when we could be doing something that's bigger? The real goal is like getting people to use the product and get value out of it. My main goal at the time was to, you know, tell the team or to show the team how by narrowing down our scope, we're actually, um, increasing our value.

General tools are really good when you have an engineering mindset and you can put the puzzle pieces together. In fact, that's why we're called Clay. But we needed to give more [00:10:00] guardrails for people to actually be creative. It was too open ended, so yeah, I, I think that spiral like decisions, and I have ways I think of, I think of them as both good and bad.

I think everything in life is a spiral. Um, you just come back to the same place, but with a different perspective and you see it differently, but we can, there were ways in which we could definitely have accelerated that in, in hindsight now.

Todd: Can you give us an example of that spiral in action?

Kareem: Yeah, I mean, there was a period in time where we, we were looking at the product and we were thinking, okay, so we, we know a lot of people want to do outbound, uh, we were talking to salespeople. So we had committed to saying, we're going to talk to salespeople, but then salespeople would tell us, well, we're also doing this inbound thing where a lot of customers are coming to us and they need enrichment, and they can use our product to do enrichment for multiple different data sources.

So again, you know, just to make it super clear to people what Clay is. We aggregate all these different data sources, so you [00:11:00] can find information about people and companies, and then we use that, and today we pass it to LLM so you can personalize messages uh, using that data, but at the time we were very focused on just the aggregation of data.

And so people would say, we need it for all these leads that are coming in and we want to enrich them. Um, and so we would think, oh, maybe we should do that. That seems like a always ongoing feature that's useful, but then people would be like, well, do you have an API? We'd rather do it as an API. We don't need the spreadsheet interface for that.

and so that was kind of a decision where we're like, Oh, should we just build an API for this? And the spreadsheet interface isn't as important, or maybe it should look like a graph. and then we would go back and forth between whether outbound was the right approach. Because, you know, one reason to do outbound is every B2B company needs outbound, but another reason not to do outbound is that it's quite complex and it's, it's like a fat long tail and it's also seemingly a saturated market.

So that, that was kind of one thing. And then what [00:12:00] emerged out of that was people started saying, well, actually we like this auto enrichment feature. Um, what if this was my CRM? And so it's like, huh, that kept coming up as like, people want like a new CRM that auto enriches, uh, with all of these different data sources.

And so there was a moment where we considered that path. And it's tricky, right? Like if you, you know, how you position the product shapes, all the product features that you build and also shapes people's, um, understanding and view of you. So, you know, like even, even though we've, we were focused on sales, there were still all these like things emerging as different possibilities.

And every once in a while, someone would say something like, well, I could use this, I'm a recruiter. And then we'd be like, oh, well, recruiting is very much just sales. So are we really not focused if we, you know, target recruiters? And it took a lot of discipline to say we are not targeting recruiters.

We're not doing inbound. [00:13:00] Um, in fact, even though there's all these possibilities and opportunities, we're going to completely ignore them and focus on one use case at a time, right? And once we do that use case really well, we earned the right to kind of do another use case., yeah, that, that took, that took a lot of discipline.

Todd: Well, and what, what gave you the conviction at that time to be like, we're going to only focus on this one thing. Like it seems like you have to have, you have to be pretty confident that thing is the, like the right direction. 


Kareem: the conviction I had wasn't so much in the direction as much as in the process. I had kind of been introspecting and thinking about, what's working and what isn't. And it became clear to me that we... we're sometimes in a loop, so we would, you know, pick, let's say sales, we would start working on it and then we would get distracted because one of our customers would say something that would seem really exciting and really doable and, um, is just slightly off of what we were doing, and we would [00:14:00] attempt to do that to get that customer. What I decided to do is to say we should only sell the same thing each time.

We should find customers who want the same thing each time. If they don't want what we have, they're just not a good customer for us right now. And if we can't find people who want the same thing, then we're not offering something that, uh, that has value across many people. So I think initially in the early days, you're trying to find product market fit and trying to throw a lot of different ideas.

And when, when someone resonates with that idea, you get excited and you're like, oh, we could build this. But for me, it was really important to have a clear way of distinguishing who we are and not make that malleable. So I think when you're an early startup team, one of your strengths is that you're malleable.

Like someone can say, oh, could you guys do this? Or are you guys this? And then you can become that and you have to know when to be malleable. Um, and I think you can be malleable when you're defining what [00:15:00] the product is and then when to harden that, which is once you've done the definition, you need to actually go out and try to get it out to market in a way

that doesn't change the value prop as you're going to market. So it's almost like these two phases, definition and then go to market. and I believed in that process because I identified that we were being too malleable. We were changing the product as we were going to market. In fact, we, we thought inbound would have been a better starting point initially because it was a repeated use case and bigger companies had that.

But we quickly realized that, everybody needs outbound and not everybody needs inbound. So actually outbound is a better and faster starting point, and that's another thing that became super important is how do we get customers as quickly as possible so that we can learn as fast as possible so that we can improve as quickly as possible.

So, you know, just to bring it back to your question, it wasn't so much that I was 100 percent sure that outbound is right. It's that [00:16:00] I realized we need to pick one thing at a time, test it out clearly, and then make sure that that thing aligns with our larger goals, which is let's get a lot of customers that can come in and self serve and then can give us feedback and we can react to that quickly.

And then we will earn the right to do a lot of other things within our mission,

Todd: If you were giving advice to founders who are just getting started. Here's the process I believe will help you find product market fit. Can you generalize that? Is there a way to do that? 

Kareem: The general kind of approach that I think of is it's definitely an art, an art that I think has certain techniques that you can use. And it, it starts off from an intuition. I think it's better to think of it as an intuition rather than a thesis. Uh, the thesis implies more information than I think people have when they start, but there's an intuition.

There's a, there's a need or, um, it could be a need. It could be also a desire [00:17:00] to approach the world in a specific way. So for us, it was kind of this abstract, I think there are many, many different ways to start companies and you have to know that the thing that's important is you have to know what, what, which of the ways are you actually following.

It could be a need that you felt yourself. It could be an idea that you have that you want a feeling to be realized in the world and then you can embody that into a product. And so first you start with the intuition and you formulate that into a set of principles. So actually for Clay, we took a bunch of ideas and said, hey, when we're doing outbound, we're going to aggregate every data source in the world, and we're going to be the most flexible tool in the world.

Those were our two principles. All the features come out directly from these principles. And, and those principles are, by the way, at odds with the way the world works right now. So most tools choose to build their own data set, um, and they're like, this is the best data set, the one [00:18:00] that we built, and they try to be as easy to use as possible because they think that the best way to go is to be the, you know, shorten the time to value.

Like you come in, you press one button, you got all your leads, you can send the messages. We said we're going to aggregate every tool in the world, and that's a little bit more complex. So we're going to be the most flexible tool in the world for power users. And we're going to allow you to do things that only the most powerful kind of outbound people do today.

And then we're going to simplify that and bring it to the world. So once you can clearly articulate your strategy in terms of like a couple of principles, I think the next thing to do is to apply this methodically. Take an idea that you have to market and really. Push it to the maximum to see if you've actually, uh, built something worthwhile.

And, and by that, I mean, pick the actual customer that you're talking to, make sure that they're the same customer, whether they have the same title or they have at least the same jobs to be [00:19:00] done, and then really try to sell it to them without manufacturing new features. There's a tendency, I think, when you're early on to be like, oh, we're just missing this one thing.

So, um, yeah, we can add it. But what we did and what worked was we found people who wanted what we have, even though it wasn't quite at the level that they needed or it was missing things. So I, I think, I really think that when the need is large enough, people will buy your product and wait for you to build the rest of the features.

And that, that is actually the main indicator that you have something worthwhile. One last thing that might be worth mentioning is that early on, we had a lot of love for the product and people would be like, this is magic. You know, they're like, um, I could do this with it. I could do that with it. What do you want me to do with it?

Well, what do you think it should, we should do with it? And so we had our customers at least excited by the possibilities that were in Clay, but, um, we needed to guide them to tell them, here's the container in which you should, [00:20:00] um, think of Clay. Like you should, you almost want to teach people that whenever they see this problem, they should think of your product.

Um, and that's how to get the product market fit. It's like whenever someone sees this problem, they should think of you and you have to commit to doing that if you can't, if you don't commit to doing that. And that's, I think the hardest part for founders because they want their product to be as big as possible,

it just takes longer, I think, um, or you have to get super lucky in some other way.

Todd: How did you choose those two principles? I found them very interesting because they expressed a trade off. So we are going to integrate with every single data source instead of creating our own data source. And we are going to make the product as powerful and flexible as possible instead of making it simple at the beginning.

Kareem: And very conscious trade offs. so, so they, they emerge, they, you know, all of these things are messy. They, they, this is the version that I'm giving you is the clean kind of version after I've, I've understood it and analyzed it. In retrospect, it seems [00:21:00] obvious to me, at the time they were hunches and intuition. So the aggregate every data provider

uh, we just realized as we talked to more customers that a lot of them were already doing that. They um, and then it seemed obvious that you should try to use as many data sources as possible because what you really want is the information, right? And, um, about a company, for example, and every data provider has, they, they don't have infinite resources and they have to make trade offs about where they want to go deep and where they're

shallower, like how broad they're going to be in terms of data points that they get. Um, and all of them have the ambition to have every data point, but also a company and a person are living things that are changing and there's many different ways to look at them. So for example, maybe there's a data point of, does this company have an office in South Asia?

Maybe that's not relevant to every company so it's not worth creating it as a data point, but it's relevant to this person who's doing prospecting. And so that was kind of one of [00:22:00] the, it's almost like an, uh, a priori way to think about the world where we realized it makes sense to use as many data sources as possible to get the information you want, and you're not committed to any data source because you just want the best data.

So that's kind of one idea. The flexible one was trickier, because, it's not that we don't want to be the easiest to use. We want to be the easiest to use but we prioritize flexibility if that conflicts with ease of use. And so, in some ways it's a priority order. And when, once we make something flexible, we then start to think, okay, what is the easiest way to use this?

But we, we have a principle at Clay. We call it, make it work, then make it simple and it's tied to another one that we call, there's always a way. And so a lot of the times when you're doing prospecting, you just need a way to get this information to send this personalized message and Clay helps you get there, even if the path there was a little [00:23:00] meandering. 

Todd: One of the things I'm noticing, Kareem, in this, in these stories is that it seems like you always had some customers who were interested in your product, were asking for things, were pulling you in certain directions. Like, did you always have that? You all, like, immediately you found some customers where the product resonated with them.

There were no periods where you're sort of like, Oh no, you know, there's no customers that seem to want this.

Kareem: No, there were, there were periods where no customers wanted this. It was, um, and it was more that, um, once we put the product out and we reached out to, yeah, you know, we were, we were, we started doing prospecting so we were dogfooding it even before we narrowed it down. We're like, let's try using it for this task.

And we would, um, message people and then we knew that outbound worked because we cold messaged people and tried to say like, hey, we wanted to take some of your time to chat about, you know, how you do sales or how you do outbound and [00:24:00] we're curious. And we also asked people kind of more general questions, like what does operations mean at your company?

We're trying to learn about this. Um, and so people were always very curious about the product. It had. It had like this essential magic, which, um, still happens in the, in, in the tool today where, you know, it's a spreadsheet and then suddenly data pops up in a cell from somewhere else on the internet. So that always, even though it's a simple idea, it felt really magical.

And so people would feel excited by the possibilities that opened. But, um, they weren't always then going back and using it the next day. So actually we had this, a lot of, wow, this is so powerful and then no usage, or inconsistent usage. And then we also had a period where, where we had varied usage.

So we were doing lots of different, we had, you know, a bunch of customers, but they were all doing very wildly different things. To give you an example, one, one company [00:25:00] actually sent me their code base and they wanted to, they're like, hey, we don't have time to do this. Can you reverse engineer this?

Here's the code base. And we want to send all our data. to NetSuite, which is an accounting tool, and they don't have an easy to use API, and no documentation, so I had to kind of experiment with it. But we basically, they sent us all this data, we transformed it in these various ways, and then sent the data to NetSuite.

It really was, not aligned with, it was in the same general sphere of like, we're doing some data transformation in like a no code way, but it had nothing, nothing to do with sales, uh, and nothing to do with the recruiting. And we just had this running in the background actually for a long time, they were paying us.

Suddenly we would see our servers go down and we're like, what's going on? And it was just this one company sending a bunch of data to us that needed to get transformed and sent to NetSuite.

And it took me [00:26:00] I think like we lived with this for a while where I was like, this is not a core use case. We don't know why we're supporting it, but we can't get, we need to like migrate them to a different solution and I don't have time to do it. So we would just live with this, you know, this, this use case that was actually bringing our product down.

We didn't need it. We didn't want to support it. And there was the wrong use case fully. So that was something where you know, we had a customer, but it was the wrong customer and we needed to actually get rid of it 

Todd: So, so what did you do? You just, you shut it down.

Kareem: Uh, I migrated them off to their own solution and then shut it down. So I, that was kind of a way of keeping our relationship, but yeah, so, so we had different types of customers, but not the same ones. And then the way to get the same type of customer was to start to apply this narrower lens. I, you know, I was thinking also about the future of the company and what kind of company I wanted to build.

I realized that by narrowing down, and verticalizing, we will [00:27:00] be able to move faster, I believe, in terms of just decision making because we have kind of the, those guardrails, and you know, the marketing page could be clearer. We can target like a specific customer and I like the idea of people coming in and knowing what they want to do, but the having enough room for people to be able to experiment and explore.

So that's why outbound is really exciting to me is because it's the same thing, but everybody does it slightly differently. 

And I think it might be worth adding that the eventually the way that we got a ton of customers was actually by cutting off all of the different ways that we supported customers.

So we basically pushed all of our customers into the same channel. So anyone that would sign up to Clay. We would say, join our Slack channel, and then we would only talk to them in Slack in public. Um, and the reason this was good is that then it created more momentum in the channel and allowed other people to ask questions and talk [00:28:00] and, uh, get support there.

And, um, before that you would email us or you would talk to us on like a web chat or intercom and I think there's something, it's kind of like going to a concert, right? And you don't see anyone there, but if you see like five or 10 people and then maybe there's a few more and then it escalates. So we needed some momentum by bringing the same type of people and letting them see that, when they come, they're seen.

They're like, Oh yeah, I recognize myself in the group that's here.

Todd: That's really interesting. So do you, how many users were in the Slack initially?

Kareem: so it started off for a while it was like 200 people. Um, I think it was at the 200 people mark that I had this kind of idea that like we need to make this our main channel and everybody on the team responds there. Everybody shows up there. Um, and then we started growing it from 200 to a thousand.

That was kind of when we started feeling like, oh, this is [00:29:00] working. And, and it was, it was also exciting because the team shipped something and then you immediately see instant feedback. So you can only do so much to motivate your team without them seeing results. And it's much more motivating to say, hey, this customer needs this thing right now.

I feel it. I'm like, oh, we need to do this versus saying, like, we need to go over here. Um, and once you have enough of that, you earn kind of the right to be able to paint a vision that's further away. so, yeah, we have maybe 4, 600 people today.

in the Slack channel and that's pretty active.

Todd: Do you think every founder should, you know, every founder who has a couple hundred customers should do this and do all of their support and community in Slack? Or was this something that just works specifically for Clay?

Kareem: I think there are many, many different approaches and actually the right approach to, in order to think about this, um, clearly you need to just make sure that your strategy is aligned with your execution and I'll make this more [00:30:00] concrete. So for us, the strategy was target growth people and operations people and like really clever SDRs who are trying all these different techniques and want to share them and talk about them.

And so we thought it makes sense to try to put them all in the same place so we can provide value for them above and beyond what the tool does itself. And that's why it made sense for us to have this community, um, because we didn't see a place in real time where people could ask questions about how to get this data, how to scrape X page, how to combine kind of the data from here to there, how to, so that's why it made sense for us.

And I think for other, let's say B2B founders, the question is, um, how do you align, your execution kind of like of your go to market and support and all that with the things that are unique about your business? So it might be that if you're a real time, you know, people need real time information that you should have this web chat and man [00:31:00] it, or just kind of be there on it all the time.

Like, do people need instant responses from you? Or do they need a more thoughtful response from you? And I think that that part of designing the experience of the customer and making sure it aligns with the product is actually the path to product market fit rather than some generalized way of like, here's how to do it every single time, that, that is how kind of we approached it,

Todd: When on this journey, Kareem, did you start to feel like we're getting product market fit? Like this is a good idea. It's starting to work. I think we might have product market fit now.

Kareem: I think product market fit is, is this really providing value to people? Are they actually using it? Are they actually using it for what you think or what you're saying they should be using it for? Um, and you, do you understand kind of how the funnel is working? How do you get people and then they use it and they stay?

So I think a lot of it is, do we understand, not just is it working, but do we understand why it's working? I think that's when you actually [00:32:00] understand the machine and then you are um, not in control of it. I mean, I tell my team, we're not necessarily engineers. We're kind of more like gardeners, right?

There's something we put some soil and, you know, some fruit and it's growing. And we're like, Oh, it's wants to grow to the left. You know, like we're going to go with it to the left. We're here to nurture it. We're not controlling it. And so, 

you know, we identified who the power users are. We saw that they were doing a lot of outbound campaigns and then we talked to them and tried to enable them even more. And, um, they were in a lot of WhatsApp, uh, channels actually giving advice to other people on how to do growth,

cause people don't talk about growth publicly as much as in kind of like private channels. Partially it's that you don't want to give away your technique of how you're finding customers, And so they started sending their friends. And once we started, I would say we started getting people who were referrals.

And then we also started seeing people leave their jobs and go to new jobs [00:33:00] and use Clay. it started being like, well, these people are coming to us. We're not even, they're continuing to use it as they change jobs. That was really powerful. And then another kind of unlock was when we started seeing people call themselves Clay experts or try to help other people get set up on Clay, you know, on the one hand, we're like, well, we should make the tool easier.

We shouldn't have people helping them get set up. And on the other hand, we talked to the people that were, um doing this help. And actually a couple of them have made more than a million dollars just implementing Clay for other customers, which is kind of wild. so, so those were two kind of anecdotal ways of seeing it grow.

The other way was, um. I think being so busy with feature requests that we couldn't, and a lot of them were things that we knew about, but some of them were new. And, you know, sometimes we would ship a bug and then a customer would immediately say, hey, this happened. and even though that's a bad thing, in some ways, it's a good thing because it means that they care and that they're [00:34:00] using it and it's worthwhile.

So once those things started to happen, it was clear that we were being pulled along and that a lot of our theses were right.

Todd: Yeah. I mean, these are all the classic signs. I know you're being modest, Kareem, but you know, customers sort of pulling the product out of your hands, telling you when there's bugs, teaching other people how to use it, picking it up when they switch jobs. To put things in perspective, I know, I mean, how, over the past 12 months, how much have you grown as a product?

Kareem: Yeah. I mean, we've grown from. Uh, maybe 120 customers at the beginning of the year to, um, we should end the year at around a thousand.

Todd: That's awesome. That's awesome. So, I want to pivot a little bit, Kareem, because I, I, to, to founder psychology, because I find you to be one of the most thoughtful people that I speak to about this. how much of founder psychology do you think impacts the success of a startup?

Kareem: Yeah, I appreciate that. I, I think, at least in my experience and in kind of talking to other people, friends [00:35:00] or people that I've been, helping more recently, I think it's, it is a, plays a major role, uh, because essentially the company is. you, at least initially, and what I mean by you is that it's, uh, it's exaggerating all of your traits in some ways because, um, you're, you're hiring the people, you're also influencing how things get done and for better and for, for worse.

So, you need to kind of be able to see, to see clearly what is going on in the organization and how your specific kind of personality is being amplified, through this process. So you might, you know, you might be super, someone who pays a lot of attention to detail, which is great, 

you're being super careful, you're producing excellent work, but you're also slowing down the team, slowing down the decision making, and you might not be aware that that's what's happening. So I think what's super important isn't necessarily that [00:36:00] you're changing things about yourself, but just being aware of

you where you're applying different techniques and whether they're useful in that moment or not. And so, you know, just back to the example that we were talking about, We were going in a loop at certain points, um, and it wasn't a complete circle. You know, we would arrive at the same place and we had more information.

Uh, the question is, could we have done that faster? And the realization for us was that we were ahead of the market. So we, we knew kind of, we, we were always ahead of the market. We knew where things should be and what they should look like in the future. And. We had a breadth of what, what could be possible.

And we were weaker in being able to say, well, what do we need right now to move the needle tomorrow? You know, the vision was overtaking the, what we needed today. And so, you know, it took me a lot of work to shift my [00:37:00] attention and perspective to say, what if I just did to realize, okay, the vision part is not the problem.

Our ambition is large. What we're missing is what are you doing today? And tomorrow, and so, the, the focus there was, I was telling people once we agree to something and it's on our sprint planning, nothing will shift it, if you're walking to work and you happen to have a new idea, throw it away. We're not like there's only one moment to think of things, and that's during our planning, and then we commit to it, and we do that unless the data changes, right? And often the data doesn't change. Your mood changes.

The information hasn't changed. You just feel differently about it. And so the way to get around that was to say we're only committing at one point and then executing and then committing again. Um, and we left, obviously, space for things that happen during the week. Right? Ad hoc things. But we always made sure that the thing we committed to gets done.

And that was kind of [00:38:00] our issue, is that we would get excited about something else in the middle of the sprint and start doing that. And we're like, well, that customer told us that this feature is going to be great. Um, so we kind of just had to, like, get that discipline.

Todd: Do you think there was something in your own personality that was in some ways causing this problem that you needed to identify and fix?

Kareem: When I think about it, it's, it was actually less, specifically my personality and more a combination of our personalities. So like me and my co founder and the team, we like building things. We're excited about things. We have a lot of things that we want to get done. And so we would get sidetracked, we would see the opportunities and we overestimated how much we could do.

So I think that was one of the things is that we were a very productive team and we thought that we could build more than we could, and we realized, you know, it's that whole thing of really understanding the total cost of ownership of something so we could build it quickly, but then who's going to sell it? Who's going to educate customers about [00:39:00] it? Who's going to iterate on that feature multiple times until it gets really great?

I think we underestimated all of that, we also needed to internalize what momentum feels like. So for me, actually, with the thing that really clicked was you get one customer, they want the next feature. We get another customer, exactly same type of customer, wants the exact same type of feature.

Now we build this feature. Now both customers are happy. And then we get. Another engineer, because now they see that we have customers and that energizes us to build more. So thinking in terms of, uh, these loops, instead of thinking in terms of what the product should look like or what features we should build.

So thinking in terms of just like this process, how do I feed the process rather than feed the product? And, and I think the other thing that was super important was commitment, I think was hard. So even though, you know, I've been doing the company for a while and I actually was looking at myself and I'm like, you know, I have a partner, a longterm partner, a lot of my friends are

you know, from like, you know, a long time [00:40:00] ago from college, I think of myself as like completely free and I, I, I, um, value that. And so there was something in my psychology that made me feel like, oh, we could do anything. You know, and that was kind of the lure of the horizontal product. We could do, this could be anything.

And the question then is like, well, whenever we narrowed it down, it almost felt like I was, claustrophobic. 

And I think that, that wasn't like a rational or obvious thing. It was really when I dug in, I was like, Oh, that's the feeling where I feel constrained. And I feel like, well, now we can't do these other things because we're doing this.

And I have to kind of teach myself just because we're not doing these other things doesn't mean that we won't get back to them. And also, giving myself the reward of people loving the product and using it. And that was worth more than kind of the constraint. 

Todd: It makes me think, Kareem, you're very good at introspecting about this, [00:41:00] about, you know, your sort of, uh, inner feelings and the personality of the team at large. Is there advice you could give to other founders on sort of how they get more in touch with themselves and how they're operating and how their own sort of psychology is impacting the business and how to think about that? 

Kareem: I think that the best way to approach that, and for me it was, um, it was hitting a wall a couple of times where I recognized, okay, we're not moving as fast as we could be, um, and we're not achieving the milestones as quickly as we as I want to be, and so it was driven through frustration, um, so I was frustrated with myself, and I felt that I can and should do better. And so that, that was kind of the first thing and, and the advice would be, you know, first see if you're finding, uh, yourself agitated or frustrated or any one of these, um, other feelings that they can manifest in other ways, you know, could be, [00:42:00] avoidance, 

so if there's some kind of repetitive thing that you're doing, and then, for me, the first step was to kind of just forgive myself for that and just be, kind to myself to, to try to dig deeper into the root cause. Um, and then I used, I mean, for me, this is interesting and, and, um, and almost fun, I would say.

So it depends. You need to know that at least about yourself, if it is interesting and fun. There's a lot of different ways to do that, everything from meditation, so you can more clearly have awareness of the thoughts that are going through your mind and feelings, to something called IFS, which I think is super interesting.

So, IFS is internal family systems, it's a form of therapy where you interact with yourself as a bunch of different parts. So there's a self with a capital S and you can think of that as the integrator of all of these parts. And that part is all loving, you know, is some, is a part that accepts all the other parts.

And so often when you're [00:43:00] having things come up, it's one part wants, for example, to be successful now. And the other part is like, let's wait and be patient. And how do you hear each part of yourself clearly and then kind of integrate them? If someone's interested about this, I do think that like therapy is a really worthwhile, way of approaching this.

Because it gives you, and it's different than coaching because it is a way to introspect deeply and to really understand what are your motivations. So for me, it was like a deep dive into my motivations and then coming back up to seeing how that affects how I go to work and what I'm trying to do. And once I was able to kind of get more insight into that, I had more clarity into, um, kind of how to, you know, operationalize that, like take decisions that are more focused, for example.

Uh, because, you know, you hear a lot about people giving the advice of focus, but what is focus? Does it mean, some people think focus is, well, in the morning you do some work and then at night you [00:44:00] do a different type of thing, for me, focus is you don't even think about anything else. That's how focused you have to be.

In fact, if you even think, uh, oh, it's okay to kind of imagine this other world, you're not focused. That's what I came to for myself. And so you have to kind of understand how you work in order to navigate the subtleties of all the decisions that you have to make every day. So I mean, those are like my two core techniques.

I think it is meditation and therapy, and I found those to be more helpful than coaching, but I do think coaching has its place.

Todd: Were there any psychological challenges that you found came with being a second time founder? Because I know Clay was your second company, that were different from the psychological challenges you went through the first time?

Kareem: There was a very similar flavor to it. I mean, as soon as we started it, I was like, oh, this again, I realized like how it feels. uh, maybe the challenge is for sure that I was like, this , this is kind of like my art project now. Like, this is the thing that I want to be [00:45:00] actualized through.

And so I was putting a lot of pressure on it to be, both, like, successful, but also, um, fulfilling. And I think that's tricky, right? Because, it's both like to, for something to be fulfilling, you have to kind of both enjoy it and also make sure that it aligns with your, ideals and goals. And so I, um, at some point I actually decided that it doesn't need to be those two things.

Like I'm committed to making it successful, actually, first and foremost. and then I, I can find meaning in my life in lots of different ways. And now I happen to also find meaning at work, but I was putting too much pressure on finding meaning through work and I think what that did was, decrease the quality of the decision making that I was, uh, doing in the beginning. Which, um, led us to, so back again to the spiral. So me and my co founder would spend a lot of time thinking, what is the biggest idea, right? Is this the biggest one? It wasn't [00:46:00] necessarily because we wanted to build the biggest thing, but we were like, what's going to give us the most opportunity to make an impact and like, that we can have the most fun and have, you know, kind of the best coworkers.

And I think there's this pressure to make it as, you know, there's so many ways to think, how do we make this the biggest thing? Is this the biggest market? But I don't think that's actually what's most valuable. Um, when I started to shift my mindset to say, well, it doesn't have to be the biggest thing.

It just has to be what I think is useful and what other people think is useful. And let's just start there, you know, without putting all that pressure on it, needing to be something other than what it is. So for me, actually, I've, I now approach the problem is with curiosity. I'm like, well, what does this want to be?

You know, and how big can it be? And so again, like back to the analogy of like gardening versus building. I'm not trying to build the biggest building. I'm like, Oh, here's a patch of land. I've been watering it and I want it to grow and let's see what it can become, right? And I want [00:47:00] to kind of feed it more as it needs more.

Um, and so removing that psychological pressure of needing to, make something that is so meaningful to me, um, has disappeared, because I, I think. everything that we're doing is meaningful. It doesn't need to be more than what it is. I, I'm saving people's, um, time that they were doing work that they didn't necessarily want to be doing.

I think it's like customers coming and saying that they were able to do something that they couldn't have done before and they're so excited. That's super meaningful. and so I've found meaning in a lot of the micro moments, and that, that actually has helped me make better decisions and not put so much pressure on the product and strategy, that I think leads you to something that's less interesting, actually.

Um, because, you know, you don't have enough information. You're kind of a priori trying to make it as big as possible.

Todd: So Kareem, what's next for Clay?

Kareem: For Clay, the core thing that we're really excited about right now is how do we use all [00:48:00] this great data in the world to, um, generate highly personalized messages, to customers. And so we're working on the messaging section of Clay. I think we're gonna create a really great interface for how to pull data, into both like a template section and as well a, you know, set of pieces of the message that are generated by LLMs.

But I think there's like super exciting things to do there as well. Like what if we connected to your CRM and, saw who your best customers are, saw who you're about to message, and then used information from how you closed your best customers or arguments to message those prospects automatically so that you don't even have to come up with the prompting.

We figure that out based on who your best customers are. So we're starting to do a lot of things that use your existing kind of history of how you've done outbound and how you've closed, um, deals to kind of do, [00:49:00] to find you new customers. And I think that's super exciting. Like we can analyze your CRM, see where your best customers are, suggest more people like them, and then message them for you.

And so it becomes more of this engine where you're tweaking it. The real goal is to be able to do experiments, so to turn outbound into a data-driven kind of experimentation platform where you're like, who exactly is my ICP? How do I know that they're my ICP? What are the companies that are there?

What are the people that we should message and what should we say and when? And be able to run this almost like a scientist. So we want to kind of like bring a little bit of the science to the art of outbound, um, and that's what we're going to be focused on for the next year.

Todd: Kareem, as a wrap up question, I'd love to ask you, um, what is the best piece of advice you've received that you've actually used?

Kareem: Um, so I, I really like this one and it is, it was kind of earlier on when we started our, uh, growth and, uh, I was on a first round retreat actually, and I talked to [00:50:00] another founder and he was asking me kind of like, what are, what are, some of your biggest problems? Um, and I was like, well, I've told everybody that now that we are growing, we need to focus on retention and like no churn, we're going to like decrease churn,

he was like, well, he was asking me kind of what the numbers are. And I told him and he was like. And that's actually pretty good. And I was like, well, it could, it could always be better. And he was saying, you should focus on what's going well. And just, he was like, if growth is going well, just push more on growth.

There are kind of like some certain natural numbers of retention at different stages of the company, depending on who you're targeting, and for different types of companies. And so don't try to kind of improve something. Let's say by 50 percent that's already okay. Take the thing that's doing well and push more gas on it,

and it really resonated with me and I think it was the right call. Um, and so instead we focused all of our attention on growth and realized that actually over time as the product's improving, we're also [00:51:00] improving retention. And that the most important thing was to just get more people using it. That gives us more feedback than gets more people excited to join the company and feed that loop.

it was simple. But really impactful. And, um, yeah, it really changed kind of my mind on that and had a tremendous kind of impact on the company.

Todd: That's terrific. Kareem, thank you so much for being here. There's, there's so much you've shared. I love the, the loops and the spirals. It seems to be a recurring theme. And so wishing you all of the best, you know, 

with the future of Clay. Thank you.

Kareem: Really appreciate having me. Thanks.