Granola CEO: How to Build in a Crowded AI Market Without Marketing | Christopher Pedregal

0:00Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. When you finally find your thing, you want the whole world to know about that thing. So you use a thing called Canva to make it an even bigger and better thing.

0:39Whether you want to create flyers for that thing, make presentations for that thing, or design merch for that thing, you can do anything. So people can see your thing, feel your thing, love your thing. The next thing you know, it's a thing. Canva, the thing that makes anything a thing. If you believe AI is going to have a big impact, then you should try to stay close to it. Think about the core things that you are good at and figure out how you could augment those with AI. This is Chris Pedregal, CEO and co-founder of Granola, the AI notepad valued at$1.5 billion. He built it in three years and turned it into a standout product in a crowded AI market.

1:20When it comes to competing with big corporations, there's still opportunity to build something major in 2026. There are a lot of products out there. A lot of people trying to do things. It's like, can you care more than everyone else? There's so much advertising that's happening that I think that if you don't have a product that itself can like pop out and get noticed and love, it just feels like a losing proposition. If you had to start from scratch today, what would be your playbook? I would definitely build. Welcome to Silicon Valley, girl. I am so excited to be chatting with you because we've been using granola for, I think, over six months now.

1:58I know you launched earlier, but when we discovered it and started using it, it's an amazing product for our team. And what I'm going to do, I'm going to launch a task right now. So it starts recording so that at the end of the conversation, we'll be able to see how it actually works. Yeah, perfect. Back in 2024, you said it's so much easier now to build very specialized workflows for a small group of people versus earlier because now you can use AI. Your bet was that with current AI tools, we can build something for a small group of people because we don't have to use so many resources, right?

2:33Because we can Vibe code all this stuff, we can ship faster. Versus like 10 years ago, if you wanted to build something, you would need a huge team. So serving a small group of people wouldn't really make sense. Do you think it's still the case in 2026 or we moved to a world where anyone can Vibe code anything so that you don't really need to build a very specialized tool? What is your sense of the market right now? The one thing I know is that everything's changing and it's hard to predict the future. Just because people can vibe code things doesn't mean that we're only going to use vibe coded software all the time.

3:07I think vibe coding, building tools from scratch is incredibly powerful if you're building like an internal tool that your team's going to use. I still think that there are certain areas where you want to have the best possible tool and that takes tons of time and effort and care and continued investment. So I do think there will be lots of software out there that exists, but it's hard to predict exactly where the line of what will be vibe coded versus what will we pay for. Do you feel like it's much harder to build now? Because you have experience building in pre-AI era, comparing that to building Granola.

3:40Harder now? Yeah. Just because I feel like the market is so crowded. Like you see, because anyone can become an entrepreneur. If 10 years ago, in order to build something, if you were not a coder yourself, you needed to find an engineer. if you were an engineer, you needed to kind of find a product person. So you needed those resources. It feels like now there are so many solo founders and the market is really crowded. It's two sides of the same coin, right? I think it's so much easier to build now. You don't need as many people, as many resources, which means more people are trying it. It's kind of like when digital photography became common.

4:16It used to be really hard to get a camera, right? And then only a few people had cameras, they were photographers. And then digital photography made it easy for everyone to take photos, right? It doesn't mean that professional photographers aren't still needed and way better than your average person. So I think it's the same thing with starting products today. There are a lot of products out there, a lot of people trying to do things. A lot of them aren't that good, right? And I think that's what it's all about. It's like, Can you care more than everyone else? And can you create something better?

4:48What I have seen in terms of the one thing that seems to help an AI company break out from a crowded marketplace is just that the product actually works and the experience of using it is better than the alternatives. We see people are more willing to switch for slight improvements in products now. So it's like people are very, very attuned to the quality of the products that they're using. And in that sense, I think it's no different than before. It's like you still, like, it's just, you have to fight for that and you have to be really, really focused on it. I really like how you said you have to care more.

5:22I feel like that applies to any niche where you're competing, anything that you're doing, if you care more than others, then this is kind of, this helps you stand apart. Talk to me about launching a product in the AI era, because you didn't do like a public launch. You started with a few users, saw their reaction. If you had to start from scratch today, what would be your playbook? Yeah, I think the conventional startup wisdom before was launch as soon as possible, get feedback from real users, and then iterate your way to something great. And I think because of precisely what you said before, there's so many people putting out slop, like putting out crappy products, that it is actually a differentiating factor, a differentiating approach.

6:07if when you launch, when you come out into the world, your product is better. And so we didn't have this whole strategy about building an AI. We were just like our philosophy when we were building Granola was basically, we'll do whatever it takes to learn as quickly as possible what we need to do to make our product better. And for the first year, the way we learned the most was literally by sitting next to someone, watching them try to install it and use it, figure out everything that was wrong, go home, try to fix that, do it again the next day with a new person, and do that over and over and over.

6:40And we didn't need to launch publicly to learn what was wrong with the product, because every day we would see exactly what was wrong with the product by just watching one or two people use it. After about a year, it got to the point where it was actually pretty good for those folks. And we said, okay, it's now time to launch publicly, because then we'll learn at scale what's wrong with it, how we can make it better. So that was the approach we took. And I think that really, really made the difference. In a world where anybody can make software, the only thing that really matters is how good is the software that you're trying to use.

7:13So if you said if I was starting it from scratch, I would definitely build in private or close beta until I felt really, really secure that the product was meaningfully better than the competition. Yeah. And when it comes to picking out idea, was that your initial idea, smart notes, or did you have to iterate through ideas as well? Yeah, ideas are tricky, right? Because it's like, on one hand, you want to be thoughtful from a strategic standpoint. Like, if I build in this space, is it a dead end or is there a big opportunity? And that's kind of high level thinking. And then on the other hand, really, a lot of building is better not to think and it's better to just put something in front of people and learn how they react to it and kind of follow that.

7:54You know, and I think when you're, if you're trying to think about a startup idea, you want to do both of those things. You want to make sure you're building in a space where there's, you know, there's a future. Yeah, there's a future. Exactly. But then it's sometimes better not to think too deep. Like once you make that bet, it's almost better not to think at a high level and an abstract level and really just to like follow the sense in terms of what people like. And in 2022, I came across LLMs for the first time. This was about eight, nine months before ChatGPT launched. And I was immediately, I was like convinced.

8:28I was like, okay, this, I don't know what this new technology is, but it's going to, it's going to change everything. It's going to change all the tools we use for work, for productivity. I felt that very strongly. And I knew, I knew that was a space I wanted to build in and be excited about. But then when we had to figure out where to start, that's where we put some prototypes in front of users, in front of people. And they didn't care about most of them. But this idea of like a real-time notepad that would take notes for me and that I can interact with, people's eyes really lit up when we put that in front of them.

8:59Was it like a just word-by-word description of what you want to build? Or did you vibe codes? Well, vibe coding wasn't a thing like that. Yeah, vibe coding wasn't quite a thing. But it was more the vibe code. I'm a big believer in prototypes. So like cheap, basic prototypes that let people actually mess around with a thing. I feel like you're going to learn a lot from that. So my coven and I built a few different prototypes. And the notes one was just some JavaScript on an HTML page that we threw together manually. But it was enough to give you a flavor of what it would be like if it worked properly.

9:31How did you select those first people who were evaluating your idea? Friends, friends of friends. It was just people we had access to. Was there any qualification criteria? because now that I'm thinking about it, if I'm trying to build something, I also wanted to put in front of the right people, like people who are maybe paying for a lot of tools, people who are working in a big corporation so they have access to some budget because just randomly asking people. Yeah, no, that's a good point. Maybe we're a little bit more thoughtful about it than that. Like we built Granola for ourselves and by ourselves, we mean people who are like knowledge workers, tech savvy, are using different types of tools, like live in tools like Slack and Linear and Superhuman and Gmail.

10:08So the folks that we would talk to were oftentimes folks working at startups of different sizes, just because that was kind of the environment that we were in. What was your criteria of deciding whether to drop idea or continue working on it? Was it just like somebody said yes or were you tracking something? I know I was talking to Josh Woodward from Gemini and he said the way they test products at Google, they watch how eyes light up when the users start testing it. So they don't really have a metric. they're relying on this intuition that they're seeing this. Kind of surprising for a company like Google, right?

10:41Where you expect a metric after metric. Yeah, it was very, very intuition and qualitative. And in the early days, it was the opposite. It was watching a lot of people being frustrated and unable to actually use the thing the way we wanted them to. When it comes to competing with big corporations, right? Because we have Zoom, who has AI. Like every product now has AI notes. Can you walk me through your mindset, entrepreneurial mindset? Because when I'm building something and I see a large company releasing something similar, like my first thought is, oh, I'm done. But then I'm like, okay, we're going to make it through.

11:20Things are moving so quickly and companies are launching things all the time. And I think now we've all gotten a bit more used to it. But maybe a year, year and a half ago, it just felt like, oh, the world's like just like the sky is falling and the world's changing every five minutes. When we launched Granola, AI note takers had already been around, like the earliest ones had been around for like seven or eight years. So there were tons of AI note takers, the Zooms and the Googles of the world, they already had AI note takers, not as advanced as the ones they have now, but they already existed.

11:53And when we would go and we'd interview people and try to understand, like, were they using them were they being useful or whatnot, it became really clear that they were only like marginally useful. And they weren't actually kind of doing the job that people wanted from a tool like that. I guess what I'm saying is like, we kind of did it to ourselves because we entered this like crazy saturated space. And I think we were able to break out because even though Zoom or Google create notes and Granola creates notes, the way we've designed Granola, the way we think about it is is very, very different from those tools.

12:32And Granola is very much a, it is your personal tool. It's like your personal notepad that you are in control of. And you can put notes in there. I can go into Granola and I can basically chat with all my meetings from the past two years. And as the AI models get smarter, the level of like insights or the level of conversations I can have across that corpus gets smarter and smarter. Yeah, I would love to talk to you about that later in this interview, because this is like if a company is not recording their meetings, I think they're losing 50 % of what they can build later with all of these insights they're getting because this is their employees taste.

13:13This is the way they make decisions. This is the way they move. And the only way to teach AI how to mimic or enhance that is to record all. It's to give it the context. Yeah, it's just, yeah, it's the context. Exactly. All the data. I want to thank the sponsor of this video, Granola. Granola is one of the apps I use every single day. There is a rule that I made for myself. If a task repeats and it's not the work that actually makes me money, I automate it. Cleaning up meeting notes was one of the first tasks I actually automated with AI. Every call I take, strategy partnerships, team syncs, intro chats gets recorded and sorted.

13:47And because I've been doing this for a long time now, at the start of every new call with the same person, I have a clean list ready. What we agreed on last time, what I still owe them, what they still owe me. It's not a bot that joins your call. Nothing is really visible to the other side. You stay fully in the conversation and after the meeting, Granola transcribes everything and turns it into a clean summary you can work with. And of course, at the beginning of the call, you disclose that you will be recording this with Granola. So here's my real example. Last week, I was in a partnership call.

14:17We were going through financials, timelines, deliverables. There were a lot of moving pieces and my manager was not part of that call, but I really wanted to send her a follow-up email. I felt really engaged in a conversation. I could focus on the person I was talking to without having to take notes of every detail because I knew every number and every date would get captured. After the call, I opened the transcript and I just asked Granola to create that follow-up email, pull a list of deadlines. Drafting the email part took me about 25 seconds and I copied and pasted it. That's it. As if my manager was on the same call with us.

14:52My team and I have been using this for a few months. We miss fewer things, which really matters because with AI, the number of tasks we're tracking has actually gone up a lot. If you want to try it, use the code Marina and get three months free. The link is in the description. And now let's get back to a conversation with Christopher. For an entrepreneur who's starting today and thinking, okay, I really want to build this tool, but I'm afraid that a big company is going to release a similar, I don't know if you watched Google I, but they released a very similar tool to Whisperflow. Oh, did they?

15:20It looks the same. The small bar appears, but the differences, while you're talking to it, it also references all the files you have in Google Drive and Gmail. So you can say like, oh, by the way, insert a table using this data, and it's going to do it. So it's not only transcribing, it's also adding context. And I'm like, I can see how I'm still using Whisperflow because I want just the transcription, but also see how I'll be using more of that as well. Like, can you give advice to an entrepreneur who's building something, but again, constantly in this era when everyone's competing with everyone?

15:55It's a great question, right? And it's one of those things where it's, and I think if anyone had a crystal ball and could say like, okay, there's an extreme world where we are only using, like there's only one tool in the future, right? And we use it for everything. And there's a different version of the future where we use even more tools than we have today. And I think we'll end up somewhere in the middle, but it's hard to know exactly where we'll be. The way I would think about it is, so it's basically, it's a two by two matrix. It's basically how frequent is the use case that you're going after and how important is it for the user?

16:27It's like, if it's an infrequent use case, then I think it'll be really tough to compete with the larger companies or the larger tools that are more established. I think if it's an infrequent use case, people will go to the chat GPTs or the clouds most likely, right in the same way that you didn't see a lot of verticalized search engines in like the 2000s because people are just going to google and it's easier they have a habit and that's where they would go so i think you have to choose a a use case that's very common um because if it's common you have it you have an opportunity to build a habit around it and there the question is like is it a common use case that the user doesn't really matter if you do a much better job at or is it a use case that's really, really important to people, right?

17:11And I think you want to be in that corner where it's basically it's very important to people where if the product experience is even just like 10 % better, like that's reason enough for people to switch to you and use it. And if you're in that quadrant, then I think it goes back to this if you care more, and that's the one thing you can do over the big companies is like you can just care more because they have to care about a lot of things, right? Then you can build that better product and I think you can compete. Do you think we should add a niche to whatever you just said? Yeah. Because I feel like if you're just going after a frequent use case for billions of people, then it's a big corporation kind of play field.

17:46Yeah. But if it's a niche, like for your product, it's like people who are fixed on their productivity and want to record, want to be more effective with their notes. Yeah. Or you become a really big company one day. Or that. Yeah. We definitely want to have billions of people using granola at some point. And you're moving into B2B. You started as B2C company and now you moved into B2B. How has that shift? Well, yeah, it's a good point. Our strategy was to mimic Slack or Dropbox, those types of bottoms-up companies. So it's basically a product-led growth. So the idea that someone inside of a company discovers granola, they fall in love with it, they tell their colleagues, we kind of grow organically inside of the company.

18:27And then at some point, someone in a position of authority, maybe it's the founder, maybe it's the chief compliance officer, what have you, legal officer, security officer says, whoa, everyone's using the software. We should probably pay for it, have control over it, make sure we know where our data is going and all that stuff. And that was always the plan. We always knew that we would be selling to companies. But at the beginning, we were just worried, not worried, we just focused on just trying to build something people actually wanted and liked. And that worked. So Granola did spread virally, organically throughout companies.

19:02And now we have some very, very large companies who are on enterprise plans with Granola. But it all started either bottoms up where it spread through the company virally or the founder or CEO heard about it and was using it themselves and found it valuable and said, actually, everybody should be using it. I think it's a great B2B marketing plan when you start with a consumer. How did you get to those initial customers? We posted on Twitter. By yourself? Just like the founding team? Yeah, yeah. I think we posted it from my account. And I didn't really have a Twitter following at all. And I think we just, we got really lucky.

19:39It was this idea, the way Granola works is like, it looks like Apple Notes. It's a notepad. And then at the end of the meeting, it'll take whatever notes you wrote and it'll flush it out. And there's this really nice animation where you see your notes get like filled in. And we had a GIF of that. And at the time, I think a lot of the startup founders or leaders out there were really interested in new UIs or interactions around AI. And so we had a few famous, like Guillermo from Vercel retweeted my tweet. And then Nat Friedman also retweeted. So basically somehow, and I don't know, it's like the universe made this happen.

20:18Like it just caught a few people's eyes and they tweeted about us. And then we just started growing like the first day, I think we got 500 installs, you know, so it's like. That's pretty decent. It's not bad. I mean, it's more than I expected, but it's also a drop in the bucket. Right. And and then it just started growing like little by little by little because we weren't doing any marketing. We the crazy thing about granola is all all the like old school note takers, they're all super optimized for like growth hacking. Like the end of the meeting, they'll send notes to everybody who is in the meeting, whether they want it or not, whether you want it or not.

20:52And granola doesn't do anything like that. It's like granola is like our only job is to serve the user and give the user wings. The fact that granola was entering a space that was super crowded and had zero growth loops built into it, and it still grew virally organically and kind of was able to pop out and become really visible in that space, I think is a really, there's something going on there. I think it's a really strong testament that people are hungry for just better software and better software experiences. Yeah. Interesting. So basically all your marketing is based on - People loving it.

21:30Great product. Yeah. Exactly. The whole company is based on that. That's amazing. So would it be your advice for any entrepreneur building something? Don't think about marketing yet. Just think about the product and people sharing it? I think so. Because I think to your point earlier, it's so noisy out there right now. There's so many people doing so many things and there's so much investment, right? So there's so much advertising that's happening that I think that if you don't have a product that itself can like pop out and get noticed and loved, it just feels like a losing proposition. By default, I always think about very user facing products.

22:04I think it's very different if you're going after customer support there. It's, I think, all about having the right sales motion and marketing is a part of that. But generally, I think if you don't have a good product, it's the one thing that you can go and make better with a small team, right? And I think you should do that upfront rather than do that later. I have one final follow-up question here. How many initial users did you have? So how much feedback were you collecting before pushing it out? Yeah, we had about 150 active users after that. That's your friends and that's like your inner circle.

22:37Yeah, yeah, yeah. Friends of friends. What were you tracking when you gave it out? Because you couldn't see their eyes, right? But what were you tracking? The frequency of use? Yeah, so what we would do is we would set up a first call. We'd do it in person if we could. Otherwise, we'd do a video call where we would ask them to share their screen. And then we would watch them try to install Granola and try to use it without us saying anything. And then we would schedule a call in three days. Again, share their screen and walk through the meetings they use Granola for and talk about what was good or not.

23:09And that was the highest signal. That's like the super qualitative, that's where you learn the most. But then once the product started getting good enough that people would actually use it, then we'd track usage. And there's this thing, I'd never heard about it before Granola, but one of our mentors told us about it. And it's a thing called a dot plot. And a dot plot, basically, it's, think of it like a spreadsheet. And every row is a user. And every column is a day. right so the default dot plot we had would show the last 30 days and then in each cell you basically put for our case like how many meetings did they use granola for on that day and um and then you change the color of the cell so if they use it for like 10 meetings you should make it like dark green if they use it for zero you should make it white and then you can at a glance very easily see like the patterns and um and the idea is that you start with the dot plot when the product's not very good.