After raising $125m, where next for Granola?

0:00Mike Butcher:Hello, Mike Butcher with Path Founders. For the last couple of years, companies have been implementing AI co-pilots. They've been using it for writing, for coding, and also, of course, for summarizing meetings. And we all know it's just part of the story of how to optimize a company's processes. Granola, a UK startup, started out as a note-taking app for meetings, but I like great Trojan horses in the startup world. it's turning from a simple app and quickly evolving into something much bigger. And now it's just raised$125 million Series A at a$1.5 billion valuation backed by Index and Kleiner Perkins and a whole bunch of other VCs.

0:41Mike Butcher:And that's a big signal that investors believe company memory might be the next big battleground in AI. Today, I'm joined by one of the co-founders, Sam Stevenson to unpack that. Now, Sam, do you think that, do you like my analogy about granola being a Trojan horse? Yeah, nailed it. I used that one myself too. Yeah. Let's unpack that a little bit because I think it did definitely start out as a deceptively simple product. And so where do you, where's it come from? And then where do you think it's going to? Yeah, I mean, I think the The motivation for us building Granola has always been that we really want to be in the business of like making the interfaces and the experiences that let knowledge workers like people going, you know, people whose job is communicating, agreeing things, moving information around.

1:40We want to help them do their work faster, more efficiently, like easier, like take away the pain from that work. And that's always been the goal. Like notes, like notes weren't really the goal. The goal was always just to help you with the work. The thing is, though, like. In order for us to be good at doing that job, we first need to be like as a startup, we need to kind of like earn the right to be a part of your life. and plugged into the communication that you're doing, whether that's verbally like transcription, whether that's like email or Slack or anything like that. We need, like, our software needs like good input in order to go forward and be helpful.

2:26And so like, basically that meant mission one for us was like being able to transcribe the meetings that you're in day in, day out. and really great notes I think is like the it's like the most basic really useful thing we could deliver that would kind of earn us the right to be in those meetings with you. Yeah and you like people that use Granola a lot I think they you'll find that like they come for the notes but then they really stay for the the memory as you put it and like all of the things you can do with that memory.

2:54Mike Butcher:So I mean what's your sort of plan to start connecting across the the company is it sort or is it to almost connect into every aspect of company memory, shall we say? Yeah, I think it's twofold. I think one will be able to build a bunch of great experiences inside the Granola app, on top of the fact that you've got a whole company's worth of people recording meetings and putting them into a centralized place. And so I think for us that's probably the stuff most directly tied to meetings. what feedback is coming up from customers in our sales calls this week, or looking across all of the various projects that are happening around the company, like what projects are doing well, what ones are at risk of falling behind, things like that.

3:48I think we all want to be really great at those experiences, they're closest to the conversation. And then I think like every company has a kind of their own esoteric internal systems for managing like, you know, for like when this thing happens, this workflow should kick off. and I think for every company that thing's slightly different. And so I think to address those needs, we basically need to build great API experiences and great connectors so that Granola is kind of like the input device for your company's other internal systems.

4:24Mike Butcher:So presumably the fundraising is obviously going to be able to power that product. And I know that you also have competitors. You know, you've got Firefly, there's Read AI, Otter, which I actually use, by the way. So there are a lot of other companies chasing the same idea. So what do you think is going to be able to set you apart? The main one is I think we're just like incredibly fanatical about making a product that's really nice to use and that individuals will choose for themselves over others. I think we've heard that a lot of the other note takers out there, um they're often like things that are decided like your company kind of bestows it upon you that you have to use it and you kind of begrudgingly bring it along to your meetings and um uh we our strategy has always been to build for individuals and to build something really useful for you and then and then like check the boxes so that your company can feel okay about purchasing a license for the for the whole team um so i think we just like the notes i think are better the experience feels more familiar and it gives you more control.

5:30And then they kind of, behind the scenes, it does all the things that you need it to, to make it part of your whole company's general stack.

5:37Mike Butcher:Yeah, it does. The Trojan horse analogy I get from Dropbox, which started out as a product which people really wanted to use themselves instead of the company intranet. And then started to go to the business that they were in. Listen, we've got to use this. It's so much easier. But do you think that it's a winner takes all market or do you think there'll be multiple tools existing in this kind of space? There are certain categories where the vertical specific software is doing really well. I think like a medical scribes is a good example. I think it's unlikely that Grinola is going to do as good a job as a company specifically going after that domain.

6:19I do think like, I mean, a lot of the benefit that people find when a company adopts granola, a lot of the benefit is that it's used very horizontally by basically everybody in the company and having all of those transcripts and contexts kind of within one system is a lot of the power. Yeah, but I mean, like obviously we're shooting to be the kind of horizontal tool for for all kind of meeting intelligence and stuff like that. But I don't know, we'll see how it shakes out. Also, like, we're a small startup and I want to root for other small startups. And we're not going to be the only people that take, like, transcription and do something interesting with it.

7:01I could see, like, a world where we... Hopefully, Granola wins a good chunk of it, but there are all kinds of little specific tools that people are using that under the hood are, like, powered by a lot of the same technology.

7:13Mike Butcher:We have seen questions raised about the use of AI inside companies about potentially sensitive data leaking into AI models and then being able to be extracted out the other end by other companies. Is there a way that you can avoid that? I presume you've thought about this. What's your playbook on that issue? Yeah, I think it's the number one question every enterprise customer comes to us with when we start talking to them. I think our approach is basically like we, one, when you purchase an enterprise license with us, we have zero data retention contracts with all of the LLM providers. You know, they all, like an OpenAI or an Anthropoc, they all offer, they'll train on your data if you're like a consumer, but they all have ways of, you know, if you sign up for the enterprise contract you can opt out of all of that and we have those relationships in place and then our policy is like um uh we kind of i think i think there are worlds where we might use data like you might train models uh to provide a better experience but um always only in a way where the company data is siloed like and we're like i don't know we don't actually do this today but i could a world where like it's really you want like a company specific um model that's really good at understanding your company's uh weird acronyms for things and language and like uh ways of doing things and um yeah who knows if that'll actually plan out but like that's a that's a version of the future that we kind of want to kind of leave the door open for right um so you've gone from a 250 million dollar valuation to a 1.5 billion dollar valuation in quite a short period.

9:03Mike Butcher:What was the feedback for the investors that they felt that this was going to be something they wanted to double down on? Yeah, I think we've consistently since we've launched, Granola has just kept growing and growing and growing. And most of that growth is word of mouth. like we've our marketing efforts are like um uh we have we do marketing now but it's a pretty recent uh it's a pretty recent thing for us um for a long time it's just people recommending to each other and spreading from there um i think the i think the other big catalyst for the round is like our revenue has been increasing like ramping up a lot um uh we we're just getting better as a company like um uh knowing what to do with inbound sales leads and and like actually uh being able to kind of fulfill those and work with bigger and bigger customers.

9:55We signed DoorDash a couple of weeks ago, which was a great win. They're a public company, and I think the fact that we were able to get to work with them, I think is like a testament to all the work the team's done to make the product secure enough and compliant enough. So I'm really proud of them for that.

10:14Mike Butcher:And a lot of AI companies up sticks from Europe and go to Silicon Valley, but you're still famously in Shoreditch in London. Is there a reasoning behind that? Do you feel like you'll be sticking there or do you think you'll put boots on the ground in the US? Both. Both. I think we're, yeah. Headquarters, I think we're sticking here. I don't know. I really like it. We really like it. Honestly, we chose London at the beginning for life reasons. Like we have families here and love it as a place to live. We I mean, we had a lot of I think all our investors were every time we see them and not just for the first couple of years.

10:55Hey, you're going to move to Francisco soon. Like it's such a beautiful place to go be and build a company in. But I think now it's interesting, like it's definitely we didn't feel this at the beginning, like hiring engineers was hard at the beginning in London. like i mean the kind of engineers that we look for to build a product like granola but um now that we're a little bigger and we have a little more little more momentum um i think we we just get and be really well known in london for engineers that want to work on interesting product experiences um and the market for that in san francisco is just so much more crowded like this there's uh so many more companies building tools like granola uh whereas here we get to kind of stand out a bit.

11:39Yeah, but we do have, this week was like the first week for our new US sales team. So we have five of them have flown over to spend a few weeks onboarding here and then they're going to go start the office in San Francisco. We have that, it's been kitted out at the moment. So we will have like a presence there very soon.

11:57Mike Butcher:Right, I see. So that's going to help you hire. It's easier maybe for you to hire in London than it is in the competitive world of San Francisco. Finally, I mean, how far do you think we could take this? You know, you started as a note-taking app, now you're going across the whole of the enterprise. Are you going after, you know, Microsoft Teams or are you going after, you know, the big guns? I think our strategy there is like, there is a I think there's a lot of juice to be squeezed in just being the default reliable note-taking transcription tool that works across all the platforms. We don't care if you use Zoom or Google Meet or Teams.

12:48Just doing that for a lot of companies I think is already a huge business and is a big chunk of just where we want to keep pushing. But I do think that's also not enough for us to win in the long term. I think if Grinologist stays a note taker like this and doesn't really evolve, I think the lead we have right now is just going to get chipped away at by everybody else in the industry. So yeah, the big thing for us is we have to keep doing the work to reach bigger and bigger companies and become more widespread, but also evolve the product into this more proactive like a helper rather than just a passive note taker great well thanks very much

13:30Mike Butcher:for giving us some insight into your fundraising and product strategy and i'll look forward to bumping into you in london fairly shortly i'm sure sure