Kevin Holmes (00:00)
Welcome to Founders Network. I'm Kevin Holmes. And today I'm joined by Guy Yalif co-founder and CEO of Intellimize, which was acquired by Webflow in 2024. Guy is now Webflow's chief evangelist, former marketing leader at Twitter, Yahoo and Brightroll. And he's been part of four successful exits. And of course, like, not actually sarcastic, of course, he started out as an aerospace engineer. So very uncommon path. So we'll talk about that.

But today we're going to be focusing on what actually drives durable growth when AI makes it easier than ever to build and ship. It's not the founders. The founders who win aren't the ones who move fastest. They're the ones who listen best. So Guy, great to have you. Thanks for being here.

Guy Yalif (00:37)
Thanks for having me, Kevin. It's always fun to talk with you.

Kevin Holmes (00:39)
Feeling is mutual. let's just dive into it and let's talk about AI and defensibility. There's a narrative out there today about the solo founder, vibe coding and shipping alone. Do feel like this is a dangerous narrative?

Guy Yalif (00:52)
I feel like it depends on the individual. I think if you can be grounded in the market and you have good people with whom you can bounce things off of, for me, that was my two co-founders, that you will produce better results than most will on their own. I have intellectual curiosity to see if somebody can...

create AI thought partners that serve some of that purpose and to be the, you your foil and to come with diversity of perspectives because that'll produce better business outcomes. Individually, I definitely needed the human interaction. Like I'm not afraid of or capability wise being solo founder, but I needed the other people with whom to go on this journey with because it's so...

much emotional as it is objective. How about you? How do you feel about the solo founder of vibe coding?

Kevin Holmes (01:43)
I'm curious about it. Obviously at Founders Network, it's all about learning from other founders and peer mentorship. And I think that as long as we're in these human bodies, we need to address the fact that we're social animals. during lockdown, we all jumped on the Zoom and something was missing, right? So there is something about being part of a group in person that contributes to our health, to being

you know, with, with others. So I'm, I'm curious, I'm skeptical. I feel like there's some risks that go with it, but I, I, I feel like maybe the thing that I am curious from, from you and your perspective on is more about in this moment, ⁓ like what's actually defensible. whether you, whether you, you're, you know, a solo founder, you have a team, what do you build and what, what's the actual sort of differentiation in this AI moment?

Guy Yalif (02:32)
That is a great question and one that I think we are all trying vigorously to figure out together. To my small brain, the things that came to mind were, okay, if you're in a world where the ability to create a product is not defensible on a shorter medium term timeframe, like what can you come up with that somebody else won't be able to build in the next quarter or two? It's a different world. Okay. What is defensible then? I would argue brand.

Like I think even if you pretended we were in a world where all the foundational LLM models were the same, would OpenAI be the non-Google Microsoft winner? Arguably, yes, because of what they've done with their brand. As one example, I'm not making a comment about OpenAI specifically. Distribution. know, Webflow is fortunate to partner with a couple thousand different agencies. Those relationships are hard to go replicate.

I think switching costs is a thing as people, us mere mortal humans get used to a particular workflow or particular tool. was helping the entire marketing team create their own chiefs of staff. And I was talking about, Hey, should we use this foundational LLM? And someone I was talking to was like, well, we're all used to using that one because we've had permission for that one for longer than this one. So we should use that one. And we did, even though I thought this one would be better in that particular example.

Kevin Holmes (03:28)
Mm.

Mmm.

Guy Yalif (03:51)
The last thing that comes to mind for me is data, where if he, in the act of people using your product, are producing or there's digital exhaust of data that is unique and valuable. Those all seem defensible in a longer term timeframe. Then like when we started in telemise product IP, those were absolutely the defensible core of the company. And then we added the other things.

Kevin Holmes (04:18)
very interesting. So I got a love letter from a CDN that said I had exceeded our quota. And for better or for worse, right? Maybe it wasn't the right decision. I ripped it out and replaced it with something else over an evening. So those switching costs, like that leverage is gone. The sort of the product switching costs to your point. And it strikes me that brand and like sort of what are people used to?

You know, these are very human things, right? What has the most sort of strongest neural network in your brain, the brand for what to use, go Google it, go chat, GPT it, and then sort of changing behavior, right? So if you can get people to adopt it, that's also a very human thing. Distribution lends itself to incumbents, right? Like you have an advantage about with...

if you're an incumbent and they always say first time founders think about products, second time founders think about distribution, right?

Guy Yalif (05:07)
Totally agreed. And by the way, I think your CDN example is very true in that the switching costs in some places have dropped dramatically. In my little professional world, switching CMSs, the cost has gone down a ton because an MCP server can pull out of one and put it in another. That's never been possible before without a huge project. Okay. At the same time,

you had the mental space and the time to go say, yep, this is something I want to go do. And so I do think in, not in a smaller org, but in a larger org, ⁓ where folks are used to a particular way of doing things, that switching cost will be real, even if the technical cost has gone down. It's exactly what you said. It is the human cost of it.

Kevin Holmes (05:39)
Yeah.

Yeah. Yeah.

Yeah, had a, our first podcast was with Wade Foster at Zapier.

Guy Yalif (05:53)
I was just on a podcast with some of his colleagues. Great organization, great human.

Kevin Holmes (05:57)
Yeah.

Yeah, it is. And we were talking about like, what's going to happen to your business? Cause I can do this now. And he said, well, you're not normal. like founders are not normal. They're high agency and they don't have the, politics, I suppose that would create the switching costs and just the consensus building and stakeholder management that's required to make that same decision to swap out the CDN. Yes.

Guy Yalif (06:20)
Yes. And the level of agency you have, I think about, I'll pick a caricature market or vibe codes, a password gated calculator on their website. Great. It's up and running day three. Somebody hacks it and gets all the personal information of the people who submitted their stuff, right? As a founder, you can take that risk, fix it very quickly. Okay. That marketer probably gets fired.

It's very, very different. ⁓ Some of the structural things people are dealing with at all levels of the org.

Kevin Holmes (06:44)
Yeah. Yeah.

Yeah, and sort of what enterprise buyers want to buy is good sort of what we're talking about. We're kind of talking about opportunity selection in this moment in a way. And as a founder, how do you differentiate? How do you pick the opportunity? Some things that seem intuitive to a founder in this moment are not necessarily truthful in an enterprise environment.

Guy Yalif (07:12)
And to your point about enterprise, Wade obviously literally knows his business infinitely better than you and I do. But to me, that is one of the really defensible things he has. It takes a long time to build a thousand integrations. looked at, know, we all saw open claw Claude bot and I'm like, this is an amazing use case that could genuinely screw up your life. Like deeply irreversibly screw up your life because of the security stuff. Claude bot connected to Zapier.

That could be an amazing thing because of the value that they add as an individual business.

Kevin Holmes (07:40)
Mm.

Have you tinkered with it yet?

Guy Yalif (07:45)
I have not. I've been playing with many other things and I do a lot in Zapier today. And I find other ways to go access and cause things to run autonomously. So the use case I'm getting in other ways, but I think it was a great signal to all of us about how valuable that way of accessing something that's running regularly can be. Have you played with it?

Kevin Holmes (08:06)
Not yet, but everyone around me is. And so I feel like I'm late to the party, but I'm also kind of maybe not the innovator and I'm more of the early adopter persona.

Guy Yalif (08:15)
The concept that something could compromise root access to my hard drive or everything in my one password, I can't live with that. And so I wasn't willing to take the time to go figure out how do I lock that down? I knew I could use Zapier for the connections to other things, but the core thing, and I figure it was so compelling as evidenced by the adoption and the sort of internet craze that happened and is happening over it.

Kevin Holmes (08:22)
Yeah.

Yeah.

Guy Yalif (08:42)
that someone somewhere is gonna be like, yep, that's valuable. I'm gonna go build that in an enterprise safe way.

Kevin Holmes (08:45)
Yeah, and I've been talking about an ⁓ OS that's sort of root level, agentic OS opportunity. I know people have been buying Mac minis or hosting it in a virtual instance. have a AI ops lab at FN where everybody kind of, it's so much fun talking about what everybody's doing. It's so much fun because it's so empowering, but it's also just hard to like sift through even with FN fund as an investor.

what's going to be durable? What's going to have an advantage? And yeah, I'm curious, do you have more thoughts on that? And you know, you're a CMO marketing distribution expert, one of the probably I would say a world expert. So what would your thoughts be for founders that are early stage and building and around how to create that moat or differentiation?

Guy Yalif (09:31)
I am keenly interested how you could make investment decisions now when the probability of something being product defensible on a six month time horizon is very low compared to what we've ever been used to. But to directly answer your question, some of the things that come to mind are, OK, the things we talked about, right? Brand distribution, switching cost data, OK. Other ones that I think should figure into the calculus.

What's not in the economic self-interest of the foundation models to train deeply on? Okay, so Claude said we're going really deep on enterprise coding. Chat GPT said that was valuable. We're going to do that too. And we're going to go deep on medical because people keep coming up with that. Okay. Where are places that they are less likely to find value in going after? One, two.

where do you have unfair advantage? The, you know, investors I talk to and it aligns for me, they've obviously thought about it more as you have, but they're looking for founder problem fit, even more than the, you know, unique way to solve the problem, which resonates for me completely. And to me, that leads to ultimately what's true North, is, what are you going to do for somebody that's going to delight them enough that they're going to pay you for it?

That's the core problem. Everything else to me is rounding error as we're starting a business. They're really important rounding errors. Don't run out of money. Okay. Yes. But that's the thing we're optimizing for because all the value generation stems from that. And you're more likely to find that in places where you have unfair advantage in understanding your audience and understanding the problem space. How are you picking now in that context?

Kevin Holmes (11:02)
Yeah, I mean,

I love what you just said. And I think what it reminds me of is the dot-com bubble and the new economy and all the hype about how things are different now and they'll never be the same. And AI feels very much that way, right? And at the end of the day, there are these fundamentals. The fundamentals of entrepreneurship are finding a customer pain point and solving it. And

you have to be passionate about solving it, right? And so that's, I suppose that kind of, I don't know. think it's, I'm glad that came up because I feel like that's an important part about this moment is not losing sight of the fundamentals. But to your specific question, I agree on brand. feel like brand is, for startups has never really been a, know, a top of mind. And

Distribution though is the one that people think about. so figuring out distribution, I think about Founders Network Fund and a lot of our LPs, they timed these shifts perfectly and they caught lightning in a bottle. And they were the first on the Steam platform when gaming went to the cloud, or they were the first on Zapier when Zapier launched and they rode that wave. One of our first investments was one of the first AI note takers that became the number one Zoom app and HubSpot app.

So a lot of it is just timing, right? It's getting lucky and being right there at that moment and getting it to market, right? Call the bugger feature and get it to market.

Those are my thoughts on that, but I want to, I want to actually maybe shift into like, you know, okay. So we've talked about kind of opportunity selection in this moment. That's very hard to pick opportunities. talked about the four, um, know, brand distribution, uh, switching costs and data and those switching costs a lot of times just being what people are trained on and used to. I love that. Um, once you've picked your, your opportunity as a founder, uh, you have this thing you talk about.

the 15 questions or 15 conversations for cut the kind of customer development phase where you go validate the idea. And I love this because it kind of reminds me of something about Mary, where there's the seven minute at not six minute abs, but seven minute abs is old movie. anybody remembers it, but 15 questions kind of felt like a specific number for you in this customer development phase, you've done four startups, you'd been right four times. So tell us more about like,

that topic, I want to dive into the customer development side of it of like validating these opportunities because a lot of founders, they get stuck there and it doesn't materialize or they never get out to go do this. So let's chat about that.

Guy Yalif (13:32)
You mentioned needing luck. feel like you manufacture more serendipity without guaranteeing anything by doing all the things we've been talking about with this being one of them where it both helps validate, but also identify the problem you're going to go solve. Why 15? There isn't something specifically magical about 15, but I think broadly speaking, rule is keep going until you're not learning much anymore.

Keep going into your repetition. 15 is a reasonable rule of thumb for that to happen, in particular in B2B. In B2C, maybe it is more. But when you are trying to coalesce on, around the space you have a hypothesis, how does your work look today, dear customer prospect? What's great about that? What sucks about that? Why?

Kevin Holmes (13:57)
Mm. Mm.

Guy Yalif (14:19)
Now separate from that, how are you evaluated? How do you get promoted? What makes you happy at work? What makes you unhappy at work? And then after all those go into, okay, well based on that and what I've been hearing, here's a problem I'm thinking of solving them a solution. How do you react to that? And almost certainly at that point, they're gonna say something positive because they wanna be nice. Critically then I think it's important to say,

Thank you. You cannot hurt my feelings. I actually value not wasting time on the wrong thing more.

Would you pay, insert a number here, for this today? Like, literally, here's an order for, would you pay for this right now? Because I feel like the, most people, feel like a typical trap is to hear lots of validation in market when really it was people trying to be nice to you, especially if you're talking to your friends, rather than people your friends introduced you to that are more arm's length, and that the distance between, yeah, that could be useful, and I will pay for it right now.

That is a huge distance that is underappreciated, first time around, at least.

Kevin Holmes (15:25)
Yeah. I hear it all even from repeat founders. It's easy to fall in love with what you're doing because you're passionate about it to your point about founder problem fit. so being, I guess what we're talking about is a discipline and being very structured about your approach to customer development and not getting what salespeople call happy years and you know, great. How do you like in practice, like let's drill down on it. Can you give some concrete examples from your

experience maybe at Intellimize or, you know, like maybe a positive and a negative. Can you recall?

Guy Yalif (15:55)
I think what stuck with me, yes, I will. It stuck with me that you said the word discipline because I feel like it is. It really is just doing the work, right? You said it. We all know we should go talk to customers and prospects before we go build. And sometimes we do, sometimes we don't. Or for people that are further along, in orgs that are further along, or you think about the product manager, how often does he or she get out and talk to customers? They know they should. It's clear as But does it actually happen? Do you have the discipline to go do it? OK, some of the ways to...

Kevin Holmes (15:57)
Yeah.

Guy Yalif (16:21)
Avoid the happy years. I do think really it is important that the core dynamic is somebody trying to be nice to you and not hurt your feelings. And the more you can make it safe for them to hurt your feelings, the more you can lean into and validate the unkind, not unkind, because that implies inner personally mean, but the opportunity in validating things they say, the better. I got it too. The single best piece. It happened to be around fundraising rather around product.

But literally this, and I'm not sure he knows it, the single best piece of advice I ever got ever in, at Intellimize, we happen to be blessed to have great partners who enabled us to raise 52 million. The best piece of advice I got on that entire journey was from one founder on a Sunday afternoon who had 15 minutes and pardon my French. He was like, this is shit. This pitch is shit. Like, let me tell you all the things that are wrong with it.

It was insanely valuable. had too many friends and people that cared about me that weren't willing to say that. It was such a gift. my God, it was so much better after that. That really, I think that's the thing. Not necessarily the emotional heat, but the directness, the candor. Do everything in your power to go for that, which is hard because you want this thing to work.

Kevin Holmes (17:21)
Yeah.

Guy Yalif (17:36)
Maybe it's already graduated to being your baby, or maybe you're thinking they don't really understand, or you're going to teach them something. You want to do everything in your power to stack the deck almost against you. And if they still say yes, now you've got something because you're going to screw up so many other things in how you execute, how you go to market, all these other things. You want that core kernel of need to be so compelling that even as you're basically anti-selling them, they are saying, I want this.

Kevin Holmes (18:03)
Yeah, I remember one of the founders in the network and his one of the LPs in the fund said the customer grabbed him by the shirt and said, you better effing build this. Right. So that's so hard to find, but if you find it and, but I'm curious, like, so did you like intact tactically, did you employ like, tell me why this will fail. Tell me why this sucks. Like, and you're making such an important point. That's fuel. Like

you thrive off that feedback. It's like going to market, go to market is a dialogue. And the longer you keep it close and you don't launch, the longer you delay that dialogue and your idea is always going to change. Right. So I love that you're, you know, that you're talking about these 50s, 15 conversations, cause that starts the dialogue and, people have ego and they, and maybe it's fragile too. It is a fragile thing to start a company. Right. People are my crazy for quitting my

full-time job and my, you know, my partner is pissed. Why, you know, there's so much you deal with personally doing it. So I can understand why, you know, why it's hard, but, ⁓ this is why I think being a founder is it's a profession with discipline, certain disciplines. And this is a really important one. Does it ever go away? Like, do you find yourself every, every stage of the venture having these kinds of customer development conversations, or is it really, I mean, obviously it's most acute when you're trying to just validate the initial thing.

Guy Yalif (19:19)
a thousand percent all the time every day. think it is one of the, like, if there are a few things only a founder can do, don't run out of money, set culture, set the hiring bar. One of them is set strategy. And in my mind it is doing this all the time every day and making it safe for the people you're talking to to tell you this is crap.

in one form or another. so whether that's through cold outreach, warm intros, investor intros, networks, all the above. And to your point, it's hard. I don't know if you would identify with this, but yes, it's a business, but it's also you. And so if you went to your partner and friends and publicly committed and started down this journey and you're like, you know what? There's nothing here. I was wrong.

and now I've got zero dollars to show for it, zero dollars of income. I'm embarrassed personally. The connection between the firm failing and you failing, I have not talked to a single founder ever who had their firm not have a successful exit where they didn't take it very personally. repetition, even if they know and they've been through that journey before, it is such a personal thing. Even the people who joined your company, like,

Yes, of course they joined the company and no, we're just one person in the company. And on the other hand, you feel this directly personal responsibility for, in our case, the 75 families who had someone say, yep, I want to go on this journey with it. I felt that intensely personally without kidding yourself that like, no, they didn't join for you. They joined the company. But still you feel that personal. ⁓ It's very hard to to invite and embrace.

Kevin Holmes (20:48)
Hmm.

Yeah, yeah, yeah.

Guy Yalif (20:58)
in a way that the other person feels is genuine, tell me this sucks.

Kevin Holmes (21:02)
Yeah. I love that you're saying this, especially in an era now we're building products, the bar, you know, if you look at our careers on my first startup, we had servers in our office, we traded stock for office space and now there's WeWork and now there's, you know, AWS and, and we used to always have to have a technical co-founder and now there's Vibe coding. So the barrier in the bar is just getting so much lower, which means people can do it much more easily, which means people may abandon it.

much more easily, but this idea of like the founder is the startup and it's so personal and intimate to like who you are and your identity and you can get egg on your face, right? there's a, you can take that too far where you lose perspective that it is just a startup. And there are some things that are more important in life, but I worry that, you know, people can be a little too casual about it.

and what the impact is on the industry and investors or the whole ecosystem of this flood of new entrants that are entering. And maybe it's just a key message they need to take away is like, what is the right sort of mindset and commitment level to this journey or this kind of being a founder?

Guy Yalif (22:19)
Are you seeing a flood of, if I read into what you're saying, so I'm not trying to put words in your mouth, I'm asking you to teach me, are you seeing a bunch of folks for whom this is like a side hobby as a business that they're looking to raise money for?

Because like the side hobby as a business, one could argue that's fine as a lifestyle business. But if you're going to raise venture money, you are choosing to play a different game. And that version of the game does not abide the side hobby. That version of the game is built for somebody who's all in with every fiber of their being kind of thing.

Kevin Holmes (22:56)
Yeah. mean, think we, at Founders Network, we want to support entrepreneurship and support founders and there's capital strategy and venture is just one and revenue funding and credit cards debt, you know, personal debt is another, right? All of it's good. It's all about self-actualization and it drives the whole economy and moves us forward. But for, I, so I think my concern is more about venture capital backed and then this, and one of the conversations I have with every founder before we invest is like, how committed are you to this?

And, you know, I think it's...

Guy Yalif (23:24)
Do you get anything

but this is every fiber of my being as an answer sometimes?

Kevin Holmes (23:29)
I think you have, I think, no, the answer is no. Everybody says this is what we're doing. but sometimes with, I know a lot of the founders are repeat founders and the great pedigree. so sometimes it's hard to parse, you know, just how vested and how much they need it to work. and, and so you have to look for other signals on that, but,

I mean.

Guy Yalif (23:49)
So

feel free to tell me it's not the place you want to take the conversation. Let's say you have a repeat founder who money is, I think, a very typical way to know, hey, do they need this to work? Like they can't afford to not have this work. We're going to choose to pay ourselves as founders an amount that allows us to not lose our homes, but it's also not like there's huge opportunity cost compared to having a typical job. OK, let's say that's off the table. You talked about a repeat founder.

What signals do you look for that somebody can credibly give where the financial motivation that they're comfortable and if this fails, they're not going to be uncomfortable. What else do you look for besides the look in their eye and you know, the

Kevin Holmes (24:29)
Yeah.

Yeah,

yeah. Well, I think, you know, how much of their own money have they put in? How long have they been working on it? Who have they engaged on their team to work on it with? What do they tell you? You have to take people, the world revolts, you know, operates on trust. Some people build it, some people break it, some people, you know, build it. But you have to take people at their word. And, you know, I think

One good thing is when you see someone raise a bunch of money but didn't have a great exit and you can tell that it's personal to them to get that egg off their face and chip off their shoulder and prove that they can have a successful outcome. that's, I guess that would be my answer. But yeah, I think as far as we had planned, we've kind of cut for the conversation and we have always these conversations, not enough time, but.

I love that we've kind of covered ideation and opportunity selection and how to pick something differentiated and just distill that down to like founder problem fit. And then we talked about the customer development cycle, the 15 conversations and not getting my words, happy years, but kind of, you know, and you're in yours more about people basically asking them to tell you why it sucks. Where do you go from that point to revenue? Like.

How do you convert that? If somebody does tell you like, you know, that kernel, as you said, this is what, this is the pain point. And this is, and you feel like you've got it. You stop learning new things. You really honing in on that. You've heard it repeatedly. how do you, yeah, just broadly, like, how do you go from there to revenue and, and maybe we can touch on brand and distribution as well, since you mentioned those upfront as like something you've got to go out and.

not so much build the product, but get those achieved as well.

Guy Yalif (26:08)
By the way, happy years are totally my words as well. I'm very aligned with you on that is a good way to describe it. From insights or learnings to revenue, one humble guy's opinion, it's not formulaic, otherwise it'd be easy and everybody would be doing it. But some of the hallmarks that land for me in that portion of the journey, one is having the next set of 15 conversations and the next set and the next set at

Kevin Holmes (26:20)
Yeah.

Guy Yalif (26:32)
finer grain parts of the problem and it might be different, right? At the beginning, you're probably talking to somebody who can write you a check. Later, you're probably talking to somebody who'll use it day to day. You want to understand both perspectives. One, two.

over service your initial customers. Go be very close to them. Go have personal relationships with them so that they trust you and will tell you this is good, this is bad before they just churn if something's not going well. And tune all of that, in my opinion, not at all for revenue. Revenue is not the goal. Revenue, the goal is to optimize for speed of learning and validating this opportunity.

you're trying to de-risk, that's far more important than the revenue. The revenue is critical, not because of the revenue in and of itself, but because it's a signal that people are actually willing to pay for this. That's the value of the revenue early on. Of course, over time, you've got to prove, but if you're talking at the very beginning of like, is this a problem worth solving? I would think very much optimized for speed of learning against the biggest risks you have. At Intellimize, it was, is this a problem worth solving?

We spoke to actually like a hundred marketers before we left our secure high paying jobs. But then it was optimizing for speed of learning around the core AI ML. Like it was AI before AI was cool. And like our initial product UI, you're looking at it. Like it was logs coming out of our server from my co-founder, Brian, me, know, ⁓ Google sheeting them.

of writing Apple script to take screenshots, creating PowerPoints. Like that was the UI because the UI wasn't the risky part. The ML was. And so we would talk to our customers a lot about that. One, to your point, you said something about getting out there too late. We were fortunate to get our first check on day 90. Okay. That feels relatively early in the journey, but some balance of building and revenue.

in service of getting the real valuation. It wasn't so we could go drive a huge revenue line. Our revenue when we raised our seed, it was nice. I want to say it was 75K at the time, which was appropriate and good at that time. But we were like, that's not the thing. The thing is that people are willing to pay for it. And you talked about brand and distribution. Do they play a role early on? In my humble opinion, they do in the sense that it's ⁓

credibility. You're asking someone to give you time and money, take some risk themselves, whether it's personal in B2C or professional risk in B2B, and try this thing and anything you can do that will help build that credibility. Maybe it's founder problem fit, as you were talking about before. Ideally, it's word of mouth from other people that are using it. Perhaps it is word of mouth from other people that know you in the industry or things you've done publicly.

I think all of those play a big role in somebody being willing to take the leap that you know what you're talking about and that they're willing then to go give this a shot and hopefully then give you direct feedback so you can improve it.

I don't know if that lands for you.

Kevin Holmes (29:30)
Yeah, I'm like building a mental model of the customer development question. As you said, it's just you're drilling down deeper on each of those buckets, I suppose, of getting it to revenue. What were those buckets? What would you say, like, if you got a few initial conversations, as you mentioned, about what makes them look good at work and what are their pain points? What are they currently using?

maybe how much they're paying for it. But how did you think about it from, I mean, 90 days, I guess it's not too much of a discrete timeframe, but it strikes me that it's also similar to an accelerator and they try to get those guys out of there with revenue,

Guy Yalif (30:04)
That's interesting.

A fair point. It was also a lot about what motivates them as a person professionally, like what makes them happy, what gets them promoted, those kind of things. But then as we were building, it was...

It was often stuff that had an impact on what we would build. ⁓ we think the world works this way and therefore we're going to architect this flexibility in. If the world doesn't work that way, that will be expensive to change later, or it's expensive to do now. Those kinds of things, we would go ask people about all the time. And then, you know, no plan survives first encounter with the customer. And so we asked them all the time, like, you know, what's not working.

Kevin Holmes (30:28)
Hmm.

hehehehe

Guy Yalif (30:42)
⁓ and, and, and that would help us prioritize what we're going to go build next. And often it would add to the list of what we should go build next because we didn't think X would be a problem, but it was, it was a problem kind of thing. So it was just continuous relentless curiosity and hopefully a good enough rapport with those early customers that you're over serving and genuine relationships with them that they care enough to share with you because.

There's no bigger professional gift you can give in general than feedback. And to me, that feedback early on, it's sort of the lifeblood of the organization. Because otherwise you are too exaggerate to the extreme. You're in an ivory white tower building off on yourself and you're going to come down with the answer and see, it work? And it's exaggerated, but like, that's not the direction you want to be in.

Kevin Holmes (31:19)
Yeah. Yep.

How many of, and I imagine these are the same people you probably did the customer development with. It's just a deeper stage and how many, you know, it was at 15 that kind of you did this with, or did you drill down on a subset?

Guy Yalif (31:36)
At that point, was anyone we could. So it was all of our customers. And we did not have 15 customers by day 90 at all. But we would keep engaging. we were transparent about where we were as a business. So they knew they were betting on something super early. part of the value exchange for them was the ability to help shape some of it. It happens that

Kevin Holmes (31:39)
Hahaha

Guy Yalif (31:58)
because of previous battle scars, they were clear they would not be shaping it in terms of building one-offs, but that they would shape it in terms of things that were broadly usable, which is a whole separate set of discussions about what you do early on.

Kevin Holmes (32:10)
Hmm. Yeah. It's listening to your experience. it reminds me about how in this industry over time, concepts and terminology hit the mainstream industry. like my first startup, lived in a house together today. They would call that a hacker house. ⁓ we changed our business model, in the startup today, they would call that a pivot.

Guy Yalif (32:24)
Yeah.

Kevin Holmes (32:29)
And what you're talking about here is what I think is trending right now as a forward deployed engineer almost. you're out with the customer, high contact and deep relationship and really going deep on a subset of early adopters in person and developing product hand in hand.

Guy Yalif (32:50)
It's, hadn't thought about it that way, but it feels like wisdom. The minute you say it. Cause I'm like, yes, of course. Yes, it's that. And to build that further. Intelliminds was AI website personalization. Okay. So we were modifying web pages. Okay. Early on, we did not build a WYSIWYG editor because that was undifferentiated and not where the core risk was. So we needed to write code to modify web pages. And we were debating between the three of us, my two co-founders who had known for 20 years, they're both technical.

Kevin Holmes (32:56)
Yeah.

Guy Yalif (33:16)
I was technical a lifetime ago. I'd been in product and marketing. And one of them was like, you should go learn how to write this code because that'll have you in with the customer. You'll be able to make promises that you know are real because you're writing it. You'll have deeper conversations. It was one of the best strategic decisions we ever made as a company. I was our WYSIWYG editor. I coded.

Kevin Holmes (33:28)
Hmm hmm hmm hmm.

Guy Yalif (33:38)
several thousand of these variations over time, it made the conversations so much more effective. And to your point felt a little bit FDE ish. And as a result, I had a lot of credibility because what I said we would do, we would do what I said we couldn't do. They appreciated that. I we couldn't do X and they share a lot more. So we learned faster.

Kevin Holmes (33:48)
Mm-hmm.

Yeah. Yeah, yeah.

Yep. You learn faster and you take the execution risk off the table of the classic tension of sales and product over promising on the sales side. And then the CTS says, what did you promise? Right. then, yeah, you ship, you sell vaporware basically. So that it eliminates that risk. That's cool. Well, you you keep mentioning your co-founders. One thing I know from our prior conversations is you guys had an even equity split with the three of you.

Guy Yalif (34:10)
Whatever do you mean?

Even cash flow too, we always got paid exactly the same.

Kevin Holmes (34:23)
Peter Walker and same

cache as well. So this is like a very anomalous. Peter Walker does the data research at Carta, which analyzes 40,000 startup cap tables. And the data says that only 3 % of teams do that. ⁓ So I guess the question for you. Yeah, so curious, why did you approach it that way? Would you do it that way again?

Guy Yalif (34:29)
Yes.

I didn't know it was that little. I would have guessed 20 or 30. I had no idea it was that little.

If it happens to be with these two humans, they both happen to be men. So I'll say these two guys, it's thousand percent I would. it really like rubber hit the road repeatedly. There was a round we raised where in that round, we were far along as a business and they were like, Hey, you're past all your vesting. We'd like to give you more equity.

to keep you fully engaged. was like, I'm going to be engaged you the way. Thank you. But we're dividing it three ways. And that investor lead investor experienced person like knows their stuff cold, deeply respect them, learned a lot from them. They were like, Oh, got it. The three of you haven't had the hard conversations. And at least for the three of us, I was like, no, it's exactly because we've had the hard conversations that that works for us. We were able to, fortunately.

literally never have the normal founder of drama that so often happens. And for us, that equality was a key part of it and we defended it. We made sure in when we had the privilege of being acquired by Webflow, everything was equal all the time.

Kevin Holmes (35:38)
Yeah.

Guy Yalif (35:51)
Even though to your point, the data would say I should have made more because I was the CEO and that's not how we were going to go do it. And it was trust and credibility building. And at the same time, the three of us do not come with the same set of data and experiences or worldviews. so like that we're all on equal footing. We bring different perspectives that diversity of perspective produces. We believe better outcomes when you're good at sussing out those differences. You learn from each other. At least for the three of us, that was an excellent formula.

rooted in really deep trust. And so I remember when we raised our seed, I kind of didn't understand why the investors found it such a big deal that we'd worked together before. And years later, I was like, yep, I get it. Like, yeah, it's such a difference maker. And this was an expression of that.

Kevin Holmes (36:38)
Yeah, I think the reason that it's unusual is people usually churn out from that founding team. you guys are obviously a unique team. You've had four exits. Is it the product or the people around you? And how do you think about, I don't know, I guess you already said it. If you did it again, you would bring these guys along with you.

Guy Yalif (36:57)
Or they bring me with them a hundred percent. We still meet regularly. Our families know each other are like, these are, these are my real human friends. know, 22 years ago, I've worked with one of them, funny enough running what at the time was the world's largest web hosting company. like it all comes together.

Kevin Holmes (36:58)
for the green year with it,

Yeah. Yeah.

Hmm. Yeah.

So the tenure of relationship, the level of how personal it is, your friends. and back to some of the things we talked about earlier, right? It's, you know, you will not, your next one will not be a solo founder, vibe coding and the rel- like think about how much you're putting on the line when you have these close friends doing this with you. It's the stakes are higher, right? You don't want to get egg on your face, but also your friend ruin your friendship.

Right.

Guy Yalif (37:43)
And to have people you so deeply respect, learn from all the time, trust so deeply, where it's not arm's length at all, where you don't have a question that you're in the same, pick your metaphor, foxhole team, side of the net, whatever, like together. It wasn't me pulling them along, it was all three of us deciding to do this together. And I'm like, well, I...

passionately believe in this, if these two humans that I respect so much do too. I remember the three of us remember the conversation where we said, okay, we're committed to leaving. We all happen to work for the same company at that moment in time. We're committed to leaving this company. We're committing to this business. We're not going to interview anywhere else. We're not going to have any other conversations. We're doing this. We all remember that conversation. And that was like,

a life-changing conversation for all of us, but it was all three of us together rather than, will you guys please do this with me? And I get that that's the privilege of having known them for a long time before.

Kevin Holmes (38:36)
Yeah. Well, I guess one of things we talk about FN a lot is like, it's lonely being a founder, but when I hear your origin story with these, these close friends as co-founders, did you kind of short circuit that as well? Did you always feel like you had kind of baked in support system?

Guy Yalif (38:49)
deeply, fortunately, and it is the actual loneliness that I couldn't do as a solo founder, the logical loneliness as a CEO, that was totally there. And I had the privilege of talking with the two of them and, you know, joining peer groups and talking to peers and founder network. And like, that was absolutely life-changing as well. But the like...

I'm sitting here thinking through these super hard problems and I really can't talk to anybody about them because they're so sensitive. I had the privilege of skipping that because I got to talk to these two, again, they happen to be guys, these two guys, about literally everything and that for me was a superpower.

Kevin Holmes (39:12)
Yeah.

very cool. Yeah, it's something to look for very, it's very, I find it to be like very trite advice to give to founders, because you can't just go, you know, pick those guys off a shelf, right? This is a very natural long term relationship. but it is a pattern, absolutely a pattern.

Guy Yalif (39:42)
It is a professional marriage in almost every sense. we were our professionally married, totally. And our families are, I don't know, cousin, something, know, something like that. Try it. Yeah. Yeah. That's the, that's the better way to put it.

Kevin Holmes (39:54)
Yeah. Tribe. Yeah.

Um, want to call back something in your intro. mentioned that you started out as an aerospace engineer. Maybe I've met one other that's, that's become a successful thought. mean, I'm sure there's many, but it is, it does seem like you had a different, um, sort of focus at the start of the year, but you know, did it, do you feel like starting there kind of helped you with your career?

Guy Yalif (40:20)
deeply, not because I used it, but because, and I think where we are in the world now values these things more.

comfort, confidence, repetition and taking intractably huge problems and breaking them down into smaller problems. The systems thinking that comes so naturally to EPD orgs. Those were incredibly helpful. you know, okay, I went from aerospace engineer to product to marketing through to CMO. Like in the Mad Men era, 50, 70 years ago, there's zero chance that somebody with an engineering background would have been a CMO. Zero.

But now they're so much more valued and so much more common. I think it was a great background. you know, individually, I get to be a kid in a candy store every time I'm on a plane.

Kevin Holmes (40:56)
Yeah. Yeah.

Yeah, that's very cool. Yeah, actually, now you put it that way, engineer undergrad, MBA at Stanford, a lot of times, very common pattern as well. So the problem solving and breaking it down. We're kind of running out of time, but I want to get through a few kind of rapid fire questions or just sort of closing questions and see if we can hit on some answers for members in the group who asked these. So

One is, what's a growth myth that you would like to debunk?

Guy Yalif (41:33)
I haven't even focused a lot on showing up in LLMs now, answer engine optimization, AEO. The myth, SEO is dead. Totally not dead. It's probably 95, 97 % of your traffic and conversions, and it is the foundation for good AEO.

Kevin Holmes (41:48)
Okay, so AEO is still just a less sub 10%.

Guy Yalif (41:51)
I think for most it is sub 10%, but growing exponentially. And I think, okay, another growth myth, should stop SEO and put all your attention on ADO. That'd be ignoring the 95 % plus for most. Last summer, so this is now dated, it's only nine months ago, Webflow, 8 % of our self-serve signups came from LLM source traffic. By the way, that traffic converted really well. It converted six times better than unbranded SEO.

Kevin Holmes (42:15)
higher intent. Yeah.

Guy Yalif (42:17)
⁓

But yes, SEO is not that at all. And by the way, SEO is going to die with mobile. SEO is going to die with social. It was going to die with each of these. The reality for ⁓ marketers is that, each one of these is just a new channel to manage. And if you look at the data, Google has not gone down. Google, the search part of Google has not gone down. It's gone up just a little bit. And this is incremental minutes, incremental searches on top of that, this being LLM's.

Kevin Holmes (42:23)
Uh-huh.

What are you most curious about in this area right now?

Guy Yalif (42:47)
In LLMs? In AEO, I've got a lot of curiosity. It's pretty nuanced and detailed, but like the things that were considered black hat for SEO, some of them seem to be okay for AEO in the sense that it's not that cheating and showing one thing to one person, one thing to another, but rather the like, let me make it easy for the LLM to understand my business.

Kevin Holmes (42:48)
Hmm. AEO, SEO, LLMs, digital marketing.

Guy Yalif (43:14)
Okay, that's a detailed area. More strategically, it's changing how all of us work. It's changing how all of us live like everyone else. I feel like it's early and I'm behind, even though we're living in this little Silicon Valley bubble we're in. And I find myself falling down the rabbit hole of building stuff where I'm like, ⁓ I'm just going to build this little thing. wait, that didn't work. But the next step is clear. All let me do that. Wait, that didn't work. Let me go. And there's some frustration there. There's also like, wait,

Three hours just disappeared, but I owed some people some stuff that I didn't get them. I find that happening a lot.

Kevin Holmes (43:48)
Yeah.

I laughed. So I'll let you read into what that means. Closing thoughts, you you've done four startup, four exits. Now you're the chief evangelist at Webflow and curious, like what parting thoughts do you want to give to founders who are maybe on their first startup, maybe repeat founders? Maybe it's along the lines of if I knew then what I know now, or a non-negotiable in your...

career, your values, or how you approach work? What advice or message would you want to share with the founders?

Guy Yalif (44:17)
⁓ Two things come to mind one you said earlier the core job hasn't changed Yes, the world is changing more rapidly than any of us have ever experienced before but the core job of you're gonna do something for someone That will delight them enough that they will pay you that remains true north And the second is to be really clear what game you're playing we touched on it earlier if you're doing the lifestyle or bootstrap game the VC game the VC large fun game like those are those are

different games with stakeholders who are used to playing those games. And so if you go down a path with one set of stakeholders that are like, this is the game we're playing, and you're like, no, I should play this other one. That's a recipe for problems. So just know the game you're playing.

Kevin Holmes (44:57)
Great note to end on, Guy, thank you so much for the conversation. Always a pleasure, always fun having you.

Guy Yalif (45:02)
Kevin right back at you it's a joy to chat with you. learn from you every time we talk.

Kevin Holmes (45:06)
Right on. Talk to you soon. Bye.

Guy Yalif (45:08)
Cheers.