How a16z WON ElevenLabs Series A: Bryan Kim, Partner at A16Z

0:00Scaling Europe:Hello and welcome back to Scaling Europe show with me, Seb Johnson. We are here at the 11 Labs Summit here in London. I'm here with Bryan Kim, partner at A16Z. For those who don't know you, what's your relation to the 11 Labs team? Yeah, I've been very lucky to work with the 11 Labs team from three years ago. The team was seven people. It's very early. And two Polish friends building an audio AI company out of London. Yeah. And so you invested the Series A? Yes. At a time when it wasn't the hot thing, right? AI wasn't the hot thing. Voice AI wasn't the hot commodity. Like you said, these are two high school friends from Poland.

0:41Scaling Europe:What gave you the conviction that these two were going to build, you know, a category-defining company? It's funny. Actually, it was a little bit different where audio AI was a space that we were interested in. We'll talk about it. But, you know, it was three months after ChatGPT came out. Everyone was losing their mind. oh my god LM is going to win everything yeah we had another theory where maybe maybe however can we also maybe posit that each modality may have their own winners and I'll go from complexity audio image video 3d avatar world what if each of them had their winners and audio was always near and dear to my heart it's like one of the best way to communicate I think it carries a lot of emotion so i was already very excited about it and i already met 10 companies in audio ai space that are working on things that include murph ai play hc uber doc list goes on none of it quite hit it yeah they're like oh like i'm interested in this space but not sure not sure and then actually one of my companies that i backed that seed garav captions reached out with a text in january three years ago and said hey i'm trying to use this product it's the best best of the class best in class can you help reach out to them using your a60s email they're like oh yes i can and so i reached out and uh got got really excited about the team and product and the traction right it it's easy to forget but 11 labs also attraction story where it went from zero to six million i $7 million the first two to three months.

2:14That was rapid, all creator revenue. We were very excited about the speed at which they were developing. And while not number one yet, we could dotted line their trajectory and see in a few months that they'll take over. And so we got the conviction. And honestly, one fine Thursday or Friday, I forget which day, we hang up a call at 8.30 a.m. We wanted to work with him. We didn't get a convincing answer back. So I hopped on a 10 a.m. flight out of San Francisco to Heathrow. I was here for four hours. Worked, saw Matthew at Notting Hill for two-hour lunch. We got scribbled on a piece of paper, shook hands.

2:56And that's the story. And I feel very lucky to, you know, we all sort of make stories of like what we knew. And it was obvious.

3:06Scaling Europe:And I don't think it was. number four in the market two founders in london building cdd art ai audio model like maybe yeah but traction was very strong founder was very strong and the hero product by the way which is instant voice cloning we compared to everything else it was 10x cheaper and 10x faster than the next best thing wow that's interesting right that's a hero product that is ordered 90 better than the competitor you know what let's go amazing okay so you spoke to him that morning right you didn't feel convinced that he was going to get on board with you guys so you were on a plane within an hour and a half that's right did he know that you were coming to try i did text him i happens it turns out that i'm in london tomorrow could we grab lunch and then uh the team we all work feverishly while in transit to make a reverse presentation of why we'll be the best partner to work with and it's interesting Seb because people ask I went to the hot round the answer is Seb I don't know yeah I don't really care I don't know so he was a great founder you looked at the product the product was miles better than its competitors even though it wasn't wasn't leading the market yet but it had great traction yes and that gave you enough conviction that you were like I've got to get on that flight and I've got to win this deal yes amazing and then over time you've you've seen the journey go oh my god and you you double down triple down triple down every time you've gone further and further deeper deep in your relationship how's that been like working with them side by side for three years now i would say shocking and inspirational uh shocking in a sense that i personally don't know a lot of companies that build sort of self-serve products and b2b products excel at both and a harmonized both in a way that it's taking over the audio market ai market voice market i don't know companies that excel at research and product and deliver it to people in a way that's seamless and beautiful yeah and easy so shocking another shocking is i haven't i don't really know a lot of founders who start the journey as plg creator revenue even at series B it was mostly yeah consumer creator revenue and now Matt's he's best in the world at enterprise sales yeah that transition and being able to hold both things is extremely rare yeah I it feels like the enterprise side of the business has almost been like a startup within a startup that like if absolutely if that was carved out as a separate thing on its own it would be the most phenomenal revenue story.

5:54As I'm saying, he's one of the best enterprise go-to-market CEO raising on the AI site. That's insane. So it's been shocking. It's been really inspiring in two to three ways. One is watching the team's journey. So we backed the company when it was seven people. Now it's what, 400 plus? Yeah. I think I know individually maybe 50 plus employees and team members. of 11 every single one of them have been standard of excellence kindness but work so hard it's just like a very interesting mix anything top down yeah it has been very inspirational to watch the team build what i lovingly called the winning 11 i used to play that game growing up as a soccer game the winning 11 and it's incredible to watch the quality and the type of people who've been attracted to the company and it's just inspirational to watch a culture that they built and building a brand or like an idea that everyone wants to root for yeah and this is something i

7:04Scaling Europe:think is really interesting is that everybody i speak to about matty loves him says that he's a great guy and like like to your point really roots for him yeah the amount of we love marty matty was a bunch of red hearts that go back and forth in our slack messages yeah what kind of leader do you think he is i think he's kind like even just now at the keynote you know he ended it with i want to thank my partner of 10 years like it's hard to imagine a lot of other founders doing that actually so the humanity aspect is very strong he's genuine he's prepared he's it's a weird combination but also ruthless yeah but not in like a cold-blooded way he's just so kind and good human but also standard of excellence yeah we've got to be right yeah he yeah kind machine yeah a kind machine and i want to talk about you know okay let's go back to the series a right because i think it was so interesting the way that you and i say won that deal you you got the deal one of the things that i was speaking to nicholas enstrom from atomico this morning all right and we were talking about european vcs and we're talking about the state of the market what do you think european vcs can learn or need to learn from u.s counterparts like yourself interesting um look i i don't profess to know all the inner workings of european vt ecosystem but i can share a little bit of how we think about it yeah let's do it one is that great founders can pop up anywhere in the world truly we can name all the companies that are being built in each modality and winners in in european continent as well great founders can come from anywhere and when they do they have infinite options the era of thinking oh they'll come to me and i'll do an assessment and maybe i'll write a check that is not at all how the top one percent of founders operate and by the way mind you we operate in an outlier business yeah we're operate for that one percent right we are in a weird way i used to be a banker for a decade i i thought that it was completely useless turns out that i'm on sell side i'm selling money capital but with help to convince the top founder to choose me when you have that mentality i think a lot of things changes right no longer are you waiting no longer are you thinking about but how do i assess this you need to sell while you assess you have to do that yeah and when you get the conviction look sure you can close it on zoom sure you can like schedule coffee for two days out and try to do that just know that there are people that will fly in on a drop of a dime close it go back home in a span of 24 hours yeah and for us who are students of game and who know how competitive it is we don't treat it lightly it's an honor privilege to be working with his founders and to earn that you have to hustle it yeah and a lot of that you know i think is is sort of a sense of urgency and a sense of i need to earn the right to work with you as well and i think that's been an interesting learning for me and and i sort of take that to heart where we operate in a competitive outlier business.

10:28And for outliers, they have infinite opportunities and therefore we got to go get them.

10:32Scaling Europe:Yeah, the way you talk about it is hyper competitive. You've got to like move the fastest, do the most. And I feel like it's a sense of urgency that I don't always get from European VCs. For someone who does speak to European VCs like week in, week out, that's sort of like, I don't know, it's almost like an entrepreneurial hustle to like, we've got to be there. You've got to close it. You've got to do it. Maybe one of the things that's interesting is that, and I think this is a more recent phenomenon, Europe needs to be more general. Because if you do, I do fintech in Europe, I'm like, okay, like there are like X number of companies that you'll see.

11:06I do like infra in Europe. Okay, there are Y number of companies you'll see. So they're mostly general. But in our firm, it's the way I think about it, we're like all very hyper pre-trained models specialized in our sectors. So if something like 11Lab pops up and we think it's infra and enterprise potential, but also consumer, then the deal allocates into, oh, we should partner the two vertically trained model up together, two partners, and go get that deal. It is very unreasonable for a founder to look at that and with all the help that comes to say, oh, I don't want to work with you. But why not?

11:45Scaling Europe:Yeah, yeah. So I think that's another interesting aspect where we try to preserve the right to win. Yeah. Okay. So you have domain expertise among various partners within the firm and you're ready to moat it. And if the company demands it, which is the case for 11 labs, of course, with enterprise and B2C motion or self-serve motion, the case of function health with bio health and consumer, we very happily mix those two. partner because they now go after that. Yeah, interesting. And you've done a bunch of investments now in Europe, right? How are you thinking broadly about the European tech landscape?

12:26I've been very, very impressed by it, honestly. I think in the last, just last couple of years, you know, we talked about the modalities of like audio, image, video, and so on and so forth. Audio, winner, I would say 11 last. Image, winner, I would say Black Forest Lab, Germany. company you know Avatar Synthesia I would say as a winner UK and then you know you think about the sort of all the the biggest trend in the last 15 months at generation yeah I would say replet and lovable as winners great lovable's Swedish company so as I think about all the net new companies that are being built they're incredibly high caliber companies that are being built in Europe and frankly we're impressed and frankly we would love to work with them and frankly we're gonna to fly on a drop of a dime and we'll earn the right to work with them.

13:16Scaling Europe:Yeah. Amazing. How often do you find yourself in Europe talking to great founders? I would say it's obviously on an on-demand basis. Yeah. You know, but I think on average it ends up becoming, you know, three to four times a year. But mind you, I do three to four deals a year. Yeah. So, you know, it's not all Europe, but I would, you know, rate it very highly as a potential ecosystem, not potential, burgeoning ecosystem of talent. Amazing. Well, look, Brian, thank you so much for joining me. Thank you, Seth. It's great to chat and hear about the story. It's an amazing story of how you guys came together with 11Maps.

13:48Scaling Europe:So thank you for sharing here. Thank you. Nice.