Inside Serval: Building the System of Intelligence for IT | Jake Stauch

13:33Jake Stauch:We ended up building the entire Genetic framework all ourselves internally. Now, the models we use, off-the-shelf models, a lot of infrastructure around that to make that really reliable. We found that the models, especially in the latest generation, just performed so well that we thought we'd need to train our own model or fine-tune an existing model. That ended up not being necessary. And we're less and less confident that's going to be an approach that we take in the future. We'll see what happens. Part of that is because the problem set is quite constrained. If you think about what we're doing versus, say, a lovable or more generic Vibe coding platform, we are building IT or enterprise service management automations.

14:12Jake Stauch:Generally, these are procedural scripts that are going and hitting a set of API endpoints with nicely documented public APIs. And so, yes, our system ingests all these public APIs. We have a good understanding of how these APIs work. We have examples of good automations that have been built. and the IT automations you want are generally do this, then do this, try this. And that kind of script or program is built very reliably by AI today. It's all just rules-based,

14:42Turner Novak:all of what's out there.

14:43Jake Stauch:It's rules-based. There's in the training set, right in the corpora that these tools are trained on, there's just a lot of examples of this kind of code. And there's a lot less ambiguity about how you build these kinds of scripts versus using a Vibe coding platform to build a SaaS application, which is challenging and has a lot of architecture considerations. Using a Vibe coding platform to take a set of actions across a few different APIs, that's very reliable. And everything we've built to make that more and more reliable over time has really improved the product.

15:18Turner Novak:Yeah, and it's kind of an interesting market or space because you might not think as an outsider, or you might be like IT software, like that can't be that big of a market. But I think there's like some publicly traded companies in the space. They're like some of the largest software companies. Like how big is the market? Do you know?

15:38Jake Stauch:The market is massive. And I had the same kind of impression outside in before we got deep in the space of, is there a big enough market for this? Because I knew from my time at Verkata how big of a problem automation and IT service management was for our customers. But I didn't really understand the breadth and depth of this market. obviously ServiceNow, one of the largest SaaS companies of all time. And this is predominantly what they do. And, you know, their stock price has taken a hit. So this is out of date. But they were a$230 billion company last year and one of the biggest publicly traded SaaS companies in history.

16:14Jake Stauch:They've taken a bit of a dive this year, maybe related to Serval, maybe now. We'll see.

16:19Turner Novak:But just a coincidence.

16:20Jake Stauch:Just a coincidence. You know, we announced our Series B, and I think they lost 40 % of their share price. but there's many things at play. Who knows?

16:27Turner Novak:Like Wall Street bets traders. These guys are going bankrupt. Exactly.

16:31Jake Stauch:They saw our video and they just...

16:33Turner Novak:The launch video. Sell, sell, sell, sell. The launch video will erase tens of hundreds of billions.

16:38Jake Stauch:So, but yeah, it's a massive space and even smaller players in the space like Jira Service Management have a great business in ITSM. Fresh Service has a great business in ITSM. And so the category is quite massive. I mean, depending on the estimates, you know, 12, 15 billion or more just in the IT service management software sector. I think what's interesting about Serval is we're not limited to the ITSM or enterprise service management space, software space. We're actually going after the labor here because yes, there are 10 billion plus, tens of billions spent on the software, but there are hundreds of billions spent on IT support and internal employee support.

17:16Jake Stauch:And that's really the space that we see us making a dent in is actually automating the work, not just building a better ITSM.

17:24Turner Novak:So then I feel like some people take that question, like, oh, you're like replacing jobs. You're like, people are losing jobs because of Serval. Is that true necessarily? We're not seeing that.

17:33Jake Stauch:We are replacing work, but not jobs. And we are not seeing actual job reduction or job loss or rifts. What we're seeing is, one, we're enabling IT to be this kind of internal automation center for the organization. We're empowering, you know, really talented, smart IT folks to go and build workflows and automations for the broader company. And that's so cool to see them actually have tools where they can show off their capabilities. If you think about like, you work in IT support, how do you show that you're amazing and you're better than the person working next to you in IT support? If most of what you do are these manual kind of click ops type work operations?

18:13Turner Novak:Yeah, but if your value is like, I reset passwords, like that's kind of It's hard to show off.

18:17Jake Stauch:It's hard to be better than your peer at resetting passwords. But if you have a tool like Serval, you become a builder. Like you're actually able to build these really creative, complex workflows for onboarding, offboarding, compliance, reporting, help desk. And so you really are enabling folks to show their value. And yes, you are replacing and eliminating a lot of the drudgery of the work. But you're also enabling higher order kinds of work and making these people more impactful and more important and vital to the organization because they become the experts on these tools and they build automations for the broader organization.

18:50Jake Stauch:So we're really excited about that trend. And it's been so cool to see our customers be elevated in their companies because they bring in a tool like Serval and they become like the hero because they fixed all these problems at the company and we're not bogged down by just a barrage of tickets.

19:05Turner Novak:Yeah, it's interesting. I think this is going to come up before I publish this episode with Gary Tan, YC, what we talk about. So firewood used to be 25 % of US GDP. Did you know this? No. That's like an insane stat. Yeah. And it was literally in like the 1700s and even I think in the 1830s, it was 26.3 % of US GDP was the sale of firewood. So it's like today, I mean, it's like, I don't even think it exists on like it's 0.1 % or whatever. But it's just so fascinating how like, The market does change. Like the economy does and will change. Yeah. And it's based on technology.

19:46Jake Stauch:Like I just add, I saw that was really interesting is there are four times more people working in IT support than in software engineering. Really? And so when you think about the impact of these, these tools for software engineers, there's four times more people working in IT support. Yeah. And that sounds crazy if you live in the kind of the tech world, but then you kind of think about, okay, think about retail and restaurants and manufacturing and healthcare. Yeah. A whole lot of IT support folks running around, not a lot of software engineers. And so it makes sense that IT support is just a much, much bigger part of the economy.

20:18Jake Stauch:And it's been growing so quickly because everyone becomes an IT worker eventually. You know, if you think about, you know, in the past, a lot of people did not interact with technology during the course of their day. Now there are very few jobs which don't interact with technology in some way, shape or form. And that's what's really created the boom in IT service management and internal IT support.

20:39Turner Novak:And it's true. It's like if you are operating in the economy and it's 2026 now, holy shit. If you're doing a job, like participating in the economy right now, like you kind of have to use a computer. No matter what the job is,

20:53Jake Stauch:you're using a computer, you're using a phone at the very least, you're interacting with technology in some way that's vital to your job.

20:58Turner Novak:Yeah, even if you're like a truck driver. So like the truck is technology, but also, yeah, you might be using a phone, GPS coordinates, syncing. Yeah, logging, syncing, drop off in the pickup. And then eventually, I was talking to my wife about this last night, she rode in a Waymo for the first time. And she kind of like the initial, her initial reaction was like, this is weird. Also kind of cool. But then also, oh man, like what happens to all the people who are drivers? Well, you're like a truck like that. You still probably have a person in the truck. They just don't have to drive it. Yeah.

21:30Turner Novak:Like that's hard. 18 hour trip across the country driving a super heavy, dangerous vehicle versus like the computer kind of does it for you, makes your job a lot easier.

21:41Jake Stauch:Yeah, there's so much work to do. I mean, I think that that's what it comes down to is that there's a backlog of jobs to be done and work to do that we're just not doing because we're stuck with all this other work. And it's true in software engineering, where we're saying like, yes, even when you bring these AI tools, turns out there's a huge backlog of demand for software engineering. Same is true in pretty much every category, where there's so much more we would be doing if we had the resources. And so even though we're automating a ton of the work, there's still a lot behind that that needs to be done.

22:11Jake Stauch:And we're enabling, and a lot of times that's more interesting work, and that's what we're enabling people to focus on.

22:15Turner Novak:Yeah, because it's like, imagine if, you know, a decent chunk of your day is just, you know, sending people a link to, you know, reset their password or sending or spending a bunch of time helping people spin up their operating environment on like the new laptop. You know, it's just, that might get kind of old. It might be fun when you first start, but if you're doing it for 20 years, it might be kind of cool to not spend as much time on that.

22:39Jake Stauch:As you said, these are people that have been interested in computers and technology a lot of times their whole lives. They got in this field because they find this stuff really fascinating, and then the actual job, the reality of the job, does not require their level of intelligence and expertise. And we like to say we unlock the most meaningful parts of the job. We unlock meaningful work instead of just focusing. There's always this gap between the idealized version of what a job is and what the job actually is. And we think a lot of the difference between those two worlds is the kind of work that AI and tools like Serval are automating away.

23:13Yeah.

23:13Turner Novak:And I think I want to talk about how you kind of came up with the idea. You were working in a company called Verkata. But even before that, you were working at, you had a startup. You were in, I think, did you go to Duke?

23:30Jake Stauch:Yeah. Yep. Okay.

23:31Turner Novak:So just tell me the story about your very first startup.

23:33Jake Stauch:Yeah, I went to Duke. I worked in a neuroscience lab doing EEG. So reading brainwaves, non-invasively, but sensors, electrodes on the surface of the scalp. And my first job in college, work-study job, was my job was to look at the screen while people were in the lab doing some kind of test on the computer and look at their brainwaves and see when they're about to fall asleep because I could see that in their brain activity. And then offer them a coffee or Coke because if they fell asleep, I ruined the experiment. That's actually pretty cool. So you can do that. Work study job as an 18 year old is like, cool, I'll watch the TV.

24:07Jake Stauch:I'll see like, oh, I see they're about to drift off. And I thought it was just so cool that I can look at the screen and I can tell whether or not this person is paying attention based on their brainwaves. Yeah. And that became initially an idea that I had around, oh, we could test advertising with this because at that time, a lot of ad testing was not done digitally. It was done in these in-person focus groups. So you're about to spend millions of dollars on an ad campaign, distribution of that. And the way you test that is bringing a collection of 20, 30 people into a room and asking them what they thought about the ad.

24:39Turner Novak:Yeah, that's crazy. That's what we did, yeah.

24:41Jake Stauch:That was kind of state of the art at the time. And the state of the art was also like, you could get a dial that could like, you could, while you're watching the ad, turn it up or down on whether or not you liked it or not. And so the initial idea was, hey, let's go and test advertising with brain scans and see when people are paying attention to the ad and what other kind of brain responses we can look at. And that might be a more interesting, more objective way of evaluating how these advertisements are doing. Started that business, did quite well, actually worked with a lot of amazing brands that were very excited about this.

25:09Jake Stauch:Very clear though, I could see the writing on the wall that this space was moving more and more towards digital ad testing. We're like, yes, we could bring these people together in a focus group and spend tens of thousands of dollars to test this single ad, or we could just launch it in a digital format and get very quick feedback on what was working and what was not. So that was becoming obvious. And I had this conversation with one of our customers that said, you know what I'd actually like to do? I actually like to take this home, put it on my kid who has ADHD and see when they're paying attention to their homework and when their attention drops off.

25:38Jake Stauch:And I think that's really interesting to me. and we took that idea and we're like, I think this actually is really interesting and what if we could give them kids feedback on when they're paying attention and when they're not, maybe even give them a game to play or the more they focused, the more, you know, the faster their dragon flew or they're further ahead in a tunnel they could see and so you tied it to Game Mechanics. So we ended up hitting the company, building this company called NeuroPlus that made brain-controlled video games for kids with ADHD and other attention problems. So brain-controlled video games to train attention skills.

26:09Jake Stauch:And it was really cool. It worked really well. We did clinical, randomized clinical trials, found it was more effective than medications and helping kids improve attention skills. Why is that? Attention is a skill. You can practice paying attention just like you can practice anything else. The problem with practicing that is you don't have feedback. You don't know when you're doing a good job. And so by giving you real-time feedback on how well you're paying attention, you can train yourself to get better and better. Now, it's, it basically is diet and exercise to the brain. So yes, it is very effective, but it also requires a commitment and a lot of hard work and a lot of, a lot of effort.

26:47Jake Stauch:And it's very hard to compete with medication in this space. We learned this the hard way. Seven years I spent building this business, you know, had great early traction, a lot of super fan customers, a lot of amazing families that we helped, but was never a rocket ship company and never had that kind of rocket ship trajectory and just kind of slowly, slowly grew very, very slowly over time and always felt like we were one step away from really unlocking something. But it never really happened, I think, fundamentally, because the product market fit was not there. Our market was, you know, we thought our market was everyone who takes Adderall, everyone who has ADHD, which is, you know, increasingly 10 to 20 percent of the population, depending on age group.

27:25And it turns out our market is actually the families that had their kids on these medications

27:30Jake Stauch:that had a really severe negative reaction. you know these medications do have a long tail of side effects that include like loss of appetite and trouble sleeping and you know in severe cases like seizures and other issues and so those families loved our product but that ended up being a very very tiny percentage of the market and most families these drugs are safer and effective they're often free or very inexpensive they take zero time and so it's hard to compete against that when you know what we were offering took a lot more time money energy effort

28:00Turner Novak:Was it like a cap that they wore?

28:02Jake Stauch:Yeah, we actually built the hardware. So we built a consumer EEG device that measured their brainwaves. And then we also built the software, which is a set of video games they could play that responded to their brain. With their brain? They were playing with their brain or with their controller? No, with their brain. So the more they focused, the more they were paying attention, the faster their dragon would fly, for example. Or we had one where it would put wind in their sails as they sailed the pirate ship.

28:26Turner Novak:So they just had to pay attention to the game and to like...

28:29Jake Stauch:Yeah, basically they had to activate the parts of their brain that are associated with the tension. So we're basically linking. There's these correlations of when your brain is active in a certain way, the brain activity looks a little bit different than if you're zoning out, if you're kind of like falling asleep, those kind of things. And so we use that. But then we also use other mechanics. So we'd also look at your muscle tension to see if you're like tense. And so we'd make sure that you were relaxing as well. And then also we tracked your body movement to make sure you're sitting still. So you basically had to relax, sit still, focus, and play this game.

29:03Jake Stauch:And I think the coolest part of the experience was, you know, I got to go to hundreds of families' homes and watch kids play this and help them get set up. And the feedback system and the game mechanics made it so that kids could be like, oh, wow, I can do this if I try. And a lot of the benefit, I think, is just convincing people that they can pay attention, they can do these things if they put in the effort. And a lot of times they didn't think that they could.

29:29Turner Novak:And so you mentioned you were doing this for seven years. You also told me earlier that there's no point in the company where you had more than three months of runway. Yeah.

29:38Jake Stauch:And this is a hardware company. A hardware company. Yeah. Yeah. So how did that go?

29:43Turner Novak:Just financing the business and making it work for seven years?

29:47Jake Stauch:It was a very hard company to fundraise for. I mean, one, I had no experience. I started in school. I started in college. I dropped out of college to run the company. So you know i did not have a track record of success and you were in north carolina i was in north carolina i was not in like a fundraising environment that was that was really frothy or right you know a great place to start a company for sure i loved it there i love durham love the triangle but not the the most lucrative funding raising environment compared to say the bay area um i was also in consumer i was also in hardware i was also in health care yeah and we were not doing like the FDA path.

30:23Jake Stauch:So it was kind of like in this no man's land of, this is just not a category that anyone was really excited about. Like there's not really a fund that those thesis is like non-FDA consumer healthcare products that require hardware and also game development. It was like, pick all the things that scare off investors. And like, that was basically what we're doing. And then of course, like we didn't have like crazy, you know, traction early on. It was like just absolute grind. And so investors, rightfully so, like we're skeptical of the business and very hard to fundraise. I did put together several rounds of funding.

30:57Jake Stauch:But the way those funding rounds often came together was they were tranched rounds where we'd raise like a little bit at a time and it'd be like unlocked with milestones. Or it was like kind of rolling closes where we couldn't put all the money together. So we'd raise 50K and then 100K and then 50K. And so what that meant in practice is for that seven year period, I really had never had more than three months of runway in the bank to pay our employees, which made it an incredibly stressful experience, but also incredible learning experience. It's basically an inoculation against future stress and panic when you just live in that world for so long.

31:34Jake Stauch:It definitely makes you more resilient to that kind of environment in the future. And luckily, I've not had to have that same experience at Serval.

31:42Turner Novak:Yeah. I mean, it probably just like trains you like, what's the one Bane quote from Batman? man, like I grew up in the pain, basically. Like nothing, nothing fazes me. Yeah, exactly. Like I've seen way worse. I've seen way worse.

31:53Jake Stauch:And there's like nothing that can really faze me and no kind of like downturn that can scare me because I've just seen, I've seen worse. And then you ended up getting a job

32:03Turner Novak:at a company called Vercata.

32:04Jake Stauch:Yeah.

32:05Turner Novak:Did you like move to San Francisco and was like, I got to figure out my life? Like it was kind of like a, you know, I was trying to figure out my life.

32:15Jake Stauch:It was very clear that I was not on a rocket ship startup. And I'd really come to terms that we did not find product market fit. And the path we were on was not getting us to product market fit. And I was wrong about the market. And that took a lot longer than I'd like to admit to realize. But eventually, I did have that realization. And so then it's like, okay, what do I want to do next? I was very lucky to have a friend from college that had joined Vercada very early running marketing. And he actually initially called my wife to see if she would join. Verkata. Did she do more marketing type stuff?

32:48Jake Stauch:He was a CEO of her own startup and had rolled off that startup. That startup got acquired. And then was at McKinsey doing some marketing stuff. And he said, I need you here at Verkata. Like, it's crazy what's happening here. You've got to come. And she said, no, but you should talk to my husband. And so, yeah, so she passed the phone over to me. And I was like, sure, I'll chat with the team. I was not really interested in security cameras. is, you know, I had this perspective of I make brain controlled video games. Like I do the coolest stuff in the world. I'm above some. Yeah, I'm not going to build like, you know, commercial security cameras like that is not interesting at all.

33:23Jake Stauch:But kind of like at the time, it's silly, but I was like, as a favor to you, you know what, I'll meet the rest of the team. I'll like hear what they have to say. Yeah. And then I end up chatting with the CEO, Philip, and just very impressed by Philip and the company they're building. I fly out to San Francisco to meet more of the team. in this process of like the first call, there may be 15 employees by the time I fly out to meet them, like 90 employees. And so I saw that I saw this growth just in real time. And I was like, wow, I've been I've been grinding away for years and years and years. These people in my mind's like basically just started the company.

34:00Jake Stauch:I think it was like two years older, a year and a half at this point. It's like, you know, they basically just started and they're just crushing. It's like, I have to see what this looks like. I have not felt this kind of product market fit before. I got more excited about the category of, you know, cameras are actually pretty interesting, especially when you think about AI and computer vision. You think about like the impact you're having on safety and security. Technology was more interesting than I thought. And I felt like I had a lot of value to add because I had been building in kind of the intersection of hardware and software for a long time.

34:30Jake Stauch:And so I came in as an early product leader, initially on the camera side, but then eventually got to run a bunch of new business units for Verkata and it's such an incredible learning experience.

34:41Turner Novak:Yeah, it's a cool product. I had Philip on the show maybe like a year ago. I'll throw a link in the description so people can check it out. But he showed me a demo where basically you have this app and you can type in, if you're a security professional, you can type in red shirt. And just any footage of someone with a red shirt, it just pops it up. You can jump in, watch it. You can type Tesla, you can type whatever you want. and able to just identify it in the footage. And there's a lot more stuff that obviously the Mercado product does. I think it has gotten into like the access systems on buildings, like not just the cameras, like all the different security tech and like building technology now.

35:17Turner Novak:It's pretty interesting how it's evolved.

35:18Jake Stauch:Yeah, and becoming more and more proactive. So you can detect things that might be problematic or might be threats before they mature and evolve and prevent crime, prevent like people getting hurt. I think that's really the promise here. And it's so exciting.

35:33Turner Novak:And so what all did you learn at Ricotta? I think you were there for like four or five years.

35:37Jake Stauch:Yeah, most of five years. Man, it's like hard to imagine. One, I saw what product market fit looks like. I saw the impact you can have when you have a product that people are just buying and that there's actually that fit between what you're selling and what the market wants. I learned how to, you know, learn a lot about B2B and enterprise sales and Ricotta is a legendary sales team and got to be a part of a lot of those conversations. and the growth of that company. I learned how to grow and build a team at a larger scale. We got to start a lot of kind of zero to one products at Ricotta. And the way Ricotta thinks about these things is they're very isolated products.

36:15Jake Stauch:We treat new products like new business units. And you're responsible for the revenue of that business unit. And you're responsible for building out that team and product and what the vision looks like. And it was cool because I got paired with this director. I was director of product. I got paired with a director of engineering counterpart. And we got to build these new businesses from zero to one within Ricotta. and one built a great relationship to just got to learn a lot about what was working and what wasn't launched a lot of things that worked incredibly well and sold incredibly well launched a lot of things that didn't and saw the difference between those approaches those products and you just got so many repetitions in right you just got these reps in yeah and one that relationship ended up like i ended up starting a company starting serval with that director of engineering counterpart so So we got to basically do a five-year trial run of what it was like to work together and kind of start something together.

37:04Jake Stauch:And two, I just got to see so much product that we built and shipped and saw what happened there. And then three, our customer was IT. This entire time, we are selling into IT teams. It's like security IT, right? It's actually more often just generic IT. So what happened in this space and what really helped Bracad as a tailwind is security cameras, accident control systems, a lot of the building kind of security infrastructure. As these became network devices that people wanted to access remotely and connect in their network, the ownership of these purchases and usage migrated from more of a facilities team to more of the IT team.

37:45Jake Stauch:Now, once you plug into the network, IT at least has a say and eventually becomes the owner.

37:50Turner Novak:And so before, like, there would just be like a VCR TV tape thing that the security...

37:56Jake Stauch:VCR initially, and then it became an NVR, like a DVR, you know, kind of like a TiVo for security cameras that was on site. But it's still an on-prem server that stores all the data, all the footage. It's all managed on this device. But, you know, eventually you say like, oh, it'd be cool to watch this footage from my home and connect it to the internet. And when facilities starts like plugging in devices into the network, into the switch, IT says, wait a minute, like, let me get involved here. Yeah. And, you know, oversimplification, but over time, IT takes on more and more of an ownership of this function.

38:30Jake Stauch:And so what it means for us is I was almost exclusively spending my time with IT, basically doing five years of customer discovery with IT, figuring out what do we want to build for you next? What are your pain points? What are your problems? problems. And of course, I hear nonstop about the help desk and all the manual tasks that they're stuck with, kind of like the worst parts of their job. And unfortunately, at Mercata, my job is kind of like steer them away from that and talk about like, yeah, what about the things that are drilled into the wall? Like talk to me about, you know, HVAC and speakers and like all these other potential product extensions that are more related to our overall product portfolio.

39:05Jake Stauch:But the lessons there really stuck with me of like, I understand what their pain points are, I understand what their job looks like. And I think the biggest thing that stood out was the automation surface area was practically zero. They weren't automating anything. And that was such a disconnect for me because my perception being in Silicon Valley, seeing all these amazing tools that all these companies were building, it seemed like there's all these amazing IT enterprise automation tools. And then, you know, that's juxtaposed with going on site with these customers and seeing IT up close and personal and nothing's automated.

39:40Jake Stauch:Like they're not automating anything. And so what is the gap there? What's causing that disconnect? That really kind of haunted me and my co-founder and eventually became the inspiration for what became Serval is, well, what happens if we like solve that automation gap? What happens if we make it very, very easy to build the automation and we take the friction away? You'll actually end up with much bigger automation service.

40:04Turner Novak:And I know there's a question that you asked to get really close to that problem and answer. Do you want me to say the question or do you know what the question is? Yeah, I know what the question is.

40:13Jake Stauch:It was the most important customer discovery question that we had when we were exploring ideas was, if you could hire someone to just sit next to you and do work all day long, what would you have them do? And when I started asking that question, it became very clear what people wanted, which is they want somebody to sit next to them. one, build a bunch of automations, try out different automation tools. Like these tools, they're very excited about them, but they don't, you know, if you're handling tickets all day, when are you going to carve out time to build these things? And so they want somebody to go and build automations for them and then take on all of these kind of repetitive manual tasks, the help desk tasks, all like the kind of the low value, high effort tasks that IT is often stuck with.

40:57Jake Stauch:And so it's like very interesting to hear those two things. like I want somebody to go build automations for me. I want somebody to take over the help desk. And we believe that those two problems are actually linked. That if you actually had somebody building automations for you that were really good, you'd also make the help desk problem go away too. And so once we understood that this is fundamentally what people want, then it becomes a question like, well, how do you deliver it? And that's what led to Serval.

41:22Turner Novak:And the existing kind of help desk platforms, like were they not picking up on this feedback or like was it like because it seems like like they weren't solving for it necessarily they

41:34Jake Stauch:weren't I think in a pre-ai world it was not a easy problem to solve at all and probably an impossible challenge to solve because they all offered workflow builders that could solve all of these problems the challenge was not that the tools didn't exist that you couldn't build workflows to automate all these things that has been around for a long time and I think if you're a product leader of these companies you might say well I don't know why they didn't build these automations. Like we gave them all the tools, they could have automated everything. But that was the problem is that the tools outpaced, the capability of the tools outpaced the time and energy that IT had at their disposal to go and implement those tools.

42:10Jake Stauch:And so what you needed to solve was not yet another automation tool, yet another workflow builder, but how do we short circuit the process of building those workflows? How do we not give you automation, automate the automation so that that whole process of building out those workflows happens automatically?

42:26Turner Novak:And this wouldn't have really been possible pre all the code gen tools.

42:31Jake Stauch:Exactly. Because our approach was, hey, the only way to make this work and make this work reliably is to take your natural language description of what you want to automate and turn that into automation. We think the best way to do that is actually by writing the underlying code to power that automation. In a world where that doesn't exist, very, very hard to make that work reliably. This is maybe interesting for people

42:50Turner Novak:who are thinking about startup ideas, not serval related. Like where else do you think this could be applicable? creating products for customers by creating code, like in a non, even adjacent category? Have you thought about that much? I haven't actually. I've been so heads down on Serval. I've not thought about the other things we can do. I mean, I think obviously... Maybe like adjacent categories for Serval then.

43:13Jake Stauch:Yeah, but we think about a lot. We start often with the IT and security teams, but then within a couple of weeks of using our product, usually they're branching this off into HR, people teams, finance teams, legal, operations staff, because the automations they're building are not limited IT. Of course, they actually expand beyond the company.

43:29Turner Novak:Yeah, because it's like identity products. It's like security, sort of, in some cases. I can definitely see the adjacencies in HR, customer, facing, touching things.

43:42Jake Stauch:Yeah, exactly. I mean, our mission here is build the AI platform for employee support, get people back to meaningful work. And so that means, yes, a lot of employee support is IT-related. Most of it is IT-related still.

43:54Turner Novak:Yep.

43:54Jake Stauch:but people still have a lot of questions for the people team and a lot of questions for these other departments. And I think that that part of the business is, that part of the category is growing very quickly as these employee support requests continue to mount and people are always going to need support at work. And we want to build a platform that makes it very easy to build the automations for those other teams, especially the non-technical teams that don't have the resources to go and build these workflows themselves.

44:18Turner Novak:She had this insight from Verkata. She started building it. It was just like off to the races. Everything clicked and worked. Customer signing up left and right. How did it go?

44:27Jake Stauch:Oh, how I wish that was the case. So we started building. And I think from the very early days, there's a couple things we knew were true. One is that the technology was not there yet. So when we tried to build kind of a proof of concept of this kind of natural language to code workflow builder, it fundamentally did not work. So what time was this? This is April, May, 2024. 4. So like GPT 4, you know, going into GPT 4.5, I think is coming out, you know, maybe around that time or maybe a little bit later. But that's kind of like this era. It's pre-GPT 4.0.

45:05Turner Novak:But this was like the summer of Cursor, right? Where like CodeGen's like first, like, I guess, working truly. It was starting to.

45:13Jake Stauch:It was starting to a lot, especially like the autocomplete and like, I see what you're doing here and I can like get you the next step. But the true autonomous of like, hey, I want to go do this thing. the reliability of just generating that on the fly was just not quite there. And so if you were really on the rails and you said something simple like reset Google workspace password, and here's the Google Docs, it would do a pretty good job. And that would work fairly reliably. So, you know, you had a set of cases where it would work reliably. And that's what gave us confidence. Like, okay, well, it works for this set of cases.

45:44Jake Stauch:Where it doesn't work is as soon as you start to get creative and kind of go off the rails, that's where it starts to break down. And so we were confident that we were just like one or two model iterations away from this really starting to click. And so that gave us confidence. We felt like, hey, this works better, honestly, than we thought it would. Not as good as it needs to in the future, but like we're not that far off. So we had confidence there. And especially once 4.0 came out, it felt like there are a lot of tools. Then obviously the cloud models started to be much better on the cogen side.

46:15Jake Stauch:But once that started to happen, we got a lot more confidence there. So one is we knew that would be hard. We decided to do that problem first. Our vision from the beginning was, no, we're not going to just build an AI layer. We're going to build a full ITSM platform, go after the legacy incumbents, build the full system of record. We felt that was very important from a product strategy, from a business strategy.

46:35Turner Novak:Why did you feel that? Because some of the consensus wisdom is like, build a small little wedge in product that works, then you expand from there. You were like, fundamental.

46:44Jake Stauch:I disagree with that in this area, at least for our business and our customer. We just felt like a lot of the low-hanging fruit problems are solved by a handful of point solutions. What you really need to do is build a better platform. And I think part of that just comes from looking at the market, looking at what people spend money on. People spend a lot of money on IT service management. And we want to go straight after those budgets. We don't want to convince somebody to create a new category, a new budget for us. We want to go after their existing spend directly. That was part one on the business strategy.

47:14Jake Stauch:On the product strategy, we just felt like you just cannot build the perfect product experience if you're tied to somebody else's platform. If step one to getting value out of Serval is setting up ServiceNow, setting up Jira service management in the way that we need it set up, that's just not the ideal product experience. We want to be able to own that end-to-end experience from day one. And so we knew the product vision was very, very big, very expansive. we decided to start with the hardest problem. We knew we could build a great taking system, asset management, all these other things. But the hardest problem was going to be, can you get this workflow builder, this AI code gen system to work reliably?

47:51Jake Stauch:And so we spent a lot of time on that. We convinced ourselves pretty early on that like, hey, it's pretty close and it's going to be there and it's doing really cool things. And then we started building out the rest of the platform. But because we're going after this category of, you know, legacy incumbents, IT service management, there's a couple of things that made it really hard in the early days. One is startups do not buy IT service management. Startups don't have IT teams. Yeah, it's like just the founders like, oh, you started? Like, just here you go. Here's your laptop. Let me know if you need to help revisioning stuff.

48:21Jake Stauch:Like, go for it. And so you can't sell to a 10-person company or a 30-person company or really even like a 100-person company. You need to sell to like corporations. Yes, the smallest company that would even have an IT function is going to be at least 100 employees, probably like 200, 300 employees. What's the smallest customer you've got? Around 200 employees. And that's really kind of like the early stage. And usually only those customers when there's a high growth trajectory where they know they're about to get much bigger. And so what that means is that the customers you're talking to either don't have this problem because they're too small or are mature enough where they need the product to be really good.

48:57Turner Novak:Yeah, they're not going to like test out because that's the thing. Like sometimes if you got other friends with an early stage company, like let's try each other's products. Sure. Like give them feedback, but you're probably in bed. There's none of that.

49:08Jake Stauch:Yeah, no IT or security leaders like, oh yeah, I'll throw this in front of my users. Like, what's the worst that could happen? Yeah, people just reset. They like lock the founders out of the company. In order for it to have a lot of value, it also needs to have a lot of access and you need to connect it to like critical business systems. And so it was very challenging. One, just because of the product service area. It just didn't do all the things. They're not going to replace their existing incumbent software with you when it's missing 80 % of what the incumbent software does.

49:36Turner Novak:So did you spend a long period of time just building all these different features that would like convert?

49:43Jake Stauch:Yeah, our vision was that this didn't really work until you actually had the workflow builder combined with the full ticketing platform, combined with, you know, access management, automating access requests, which is a big part of the help desk, and all these other capabilities and have like this full unified experience. And so from the beginning, we had this vision of this has to be this big product, or else there's just no reason for somebody to migrate off their existing tools. But that is really challenging because it takes a while to build that. And for the first six months or so, it's just me and my co-founder.

50:12Jake Stauch:You know, he's spending all this time building. We're talking to customers nonstop. But there's just no pull because what we're showing them doesn't come close to what it needs to do. So how long did it take to sign the first dollar of revenue? Over a year. Okay. Over a year of just building and building and building and not, you know, getting nice compliments of like, this looks really cool, keep us posted. But nothing that feels like a buying signal or getting close to a purchase. We had design partnerships, building alongside customers. But even the design partnerships, it always felt like we were just so far away from this being an actual tool that they would purchase and replace their...

50:49Jake Stauch:Because again, it's always a rip and replace. There's not really a greenfield opportunity here. If you're a decent-sized company, you have a solution in place and we're trying to displace it. So it was challenging.

51:01Turner Novak:Were there any signals of like, hey, we're in month 11. No one's paid us for this yet. Like, but we think next month we might get it. Like, how did you know that you could keep going?

51:12Jake Stauch:This is the hardest problem in startups, I feel like, is knowing what is a persistence problem. Like you're actually just a lot of hard work and a couple months away from unlocking something and where you're just deluding yourself. Which honestly, my first company, there's a lot of like self-delusion of like thinking that we were just one feature away, one product launch away. And if we just built the next thing that we'd unlock some big part of the market. And I think, you know, something I heard that I think is very true is, is, you know, good founders can often squeeze product, some degree of product market fit out of ideas that don't really have legs.

51:49Jake Stauch:And so you can very easily have this motivated reasoning that's like, oh, no, this is going to work. We just need to keep building and we just need to keep doing stuff. And that could be completely wrong. In this case, we were right that we just needed to keep building. But it was really hard to know that in the moment.

52:04Turner Novak:So could you dissect like a difference between your first and second company maybe? Maybe it's like pretty obvious now in retrospect.

52:11Jake Stauch:Yeah, I think in the first company, I was very optimistic. And so every signal I got that was positive, I think just like fueled me. And I just kind of like was seeking the positive, just gravitating towards the positive feedback. Like, wow, this customer is so excited. This mom who used to do with a kid said it changed their life. Like we need to keep going, keep going, keep going. And I think in the second company, very jaded, very skeptical, like the positive feedback basically had no impact on me. I didn't feel it at all. I was like, whatever, I don't believe you. And then the negative feedback and like really gravitate towards that of like, okay, this person doesn't think that this is a good idea.

52:50Jake Stauch:Let's dissect that, like understand that. And so just having an overall more skeptical view of the market and taking so much more positive feedback for me to feel like we're heading in the right direction.

52:59Turner Novak:Yeah. But wouldn't that, you know, you're on month 10 of no customers are actually like paying you and 10 months of just negative feedback. Wouldn't you say like, you know what, let's go to like this other thing. Let's go to a completely different area.

53:13Jake Stauch:Yeah. And I think it's like important that it's not the, it's not negative feedback. It's just like no buying feedback, right? It's like, this is really cool guys. Keep me posted. This is awesome. I love it. You know, keep me up to date, send me, add me to your newsletter. You know, he just got these things of this is, this is very far away. And it got, it got really tough because yeah, you just don't know if this is ever going to work out. And I remember going on a really long walk with my co-founder of, should we change course? Should we like maybe pivot to something where we could sell it faster?

53:45Jake Stauch:Like maybe it is just like this very thin AI layer that we sell to early stage companies that just like answers users' questions in Slack. And like that's something that we could build and there would probably be like early stage companies that buy it. We thought about that and we're like, well, there's not really a market for that. You know, that's not an exciting space to go after. You can't name me a$100 billion company that sells like a Slack bot and it feels like you'd get stuck in that category for a while and then you'd be competing against a lot of other companies that we wouldn't, you know, really have a great advantage over.

54:16Jake Stauch:It's like that didn't feel like a good idea. You know, do you go like large enterprise? You say like, hey, I'm going to shrink the product service area and maybe I'm going to find like a narrow approach that goes to the large enterprise. I just felt like, well, then you're not really going after the real category. Again, you're kind of like taking a short cut. It just felt like, hey, actually, I think we're right. I think you have to build the full product. You just have to keep building. And so we just kind of talked about it and we like looked at all the different alternatives and try to be really honest and real with ourselves around what the different options were and then double down and said, no, we are on the right path.

54:55Jake Stauch:When we get all the stuff we want into the product, people will start buying it and we will have a business. And sure enough, a few weeks later, we got our first customer and then second customer and third customer and then it just started to snowball. And it got to a really exciting place very quickly.

55:12Turner Novak:And so the snowballing happened. And at what time did it start to snowball? Because I think you mentioned April of 25. You were still in this like...

55:20Jake Stauch:April of 25, I did not know if it was going to work. And it very easily couldn't. And we're still considering like, should we do something different? Should we like make some kind of radical change to the business? This is nine months ago. Nine months ago.

55:31Turner Novak:Wow.

55:32Jake Stauch:May, we got our first customer. So that was a good signal, but it was very, very cheap. You know, crazy discounts. Like still not a great deal. What was the customer or the deal or the size? like you're allowed to say? Yeah, it was actually perplexity. Oh, nice. Okay. And they were the first one that actually signed. And they're on that cusp

55:52Turner Novak:of like pretty large, probably have, they're like a startup, but they have a lot of employees.

55:57Jake Stauch:Hundreds of employees and growing. Like at that point, hundreds of employees inflecting very, very quickly, about to triple. And so, you know, had a need for a product like ours. But, you know, they had an existing solution in place and we had to rip it out. And so that made it so that there's a lot the product had to do.

56:12Turner Novak:How do you rip that out? Did you have to help them with implementation and all that kind of stuff?

56:18Jake Stauch:Yeah. One, we went on site every single week to meet with them in person.

56:23Turner Novak:Which sounds like a big deal. But actually, some of the companies I've invested in that have had early success with big, tough, lumpy, hard-to-build products like this, the going on site for implementation is extremely important. It's kind of like the forward deployed engineer thing that's become like a meme at this point.

56:43Jake Stauch:We literally sit around the IT leader's laptop and we just iterate. And we get all the things that we're missing. And we deliver that to the team. And we just keep building and building and building. And then eventually we get there. And then we got our second and third customer in June. With these bigger contracts? They started getting bigger. The next contract was three times bigger than the last one. And the next one was twice as big as the one before that.

57:10Turner Novak:So, you know, it's like pretty quickly, you're like, like, oh, man, like, once finally buy it, it's like, oh, wow, that one's way bigger. Holy shit.

57:16Jake Stauch:Like, yes. And then we had one that came through that didn't even pilot us that actually bought us at list price without even a pilot. And that was, I think, one of the first really signals of, oh, no, this is going to work. Yeah, this is going to work.

57:28Turner Novak:That's awesome. And then we how did that feel? Like for somebody who's maybe in like the 11 months through this or the April of 2025, like internally, how does that feel as a founder when you finally get that?

57:39Jake Stauch:it's this massive relief, but then it's also like immediately coupled with the anxiety of like, oh no, we got, we have so much to do.

57:47Turner Novak:It's like they just bought this thing.

57:50Jake Stauch:You know, we have a lot to build to make sure they have a fantastic experience. Like we are certainly not out of the woods just because we have three customers. You know, we, you cannot like get too excited about that. We got a long, long way to go.

58:01Turner Novak:But there's probably that like extra motivation. You're like, I can keep doing this now because Because it's finally working.

58:06Jake Stauch:Yes. And then we ended up, because we got really great logos, we got five or six great customers and so many customers in pipeline. At that point, we had five or six customers, 20 or so in pilot. And that's when we started getting preempted on our Series A because people were starting to take notice. A lot of enthusiasm around the category, around the space.

58:29Turner Novak:So do you know how that happened? Were your investors talking to, were downstream investors that were preempting you talking to your existing investors? Or was it like customers were telling the investors?

58:40Jake Stauch:They were talking to customers. So they were doing research on the space. I think this is not a clever idea to go after ServiceNow, to go after this ITSM, right? Like a lot of people can come up with this idea of, oh, hey, there's this massive software company, like maybe we can build a better version. And so I think this is part of a lot of investors' thesis that there's going to be a better version of IT service management, a better price service management built. And so there are always investors interested in what we're doing. And they're kind of always on the background, kind of like seeing how they're going.

59:09Jake Stauch:If it works, maybe we'll talk. And once they started talking to our customers and hearing feedback, some of which was like feedback they never heard before from customers, just the level of enthusiasm for like an IT service management product was just off the charts.

59:24Turner Novak:Yeah, it's like a boring product you would think of like, why are you excited about this?

59:28Jake Stauch:And these people are obsessed with it. And said, basically, the worst thing that could happen in their life is this being taken away from them. And so with that enthusiasm, because the TAM is so large here, that was enough signal for a lot of investors because the TAM is insanely massive. You don't have to prove that there's a market here. You have to prove that you built something so special that you can actually make a dent in that market. And that's what we did. Ended up raising our Series A from the wonderful folks at Redpoint. They've spent a lot of time in the ITSM space. they got really excited about what we were doing and had a lot of options for our Series A but Redpoint was clearly the ones that had understood the space the best and felt like they had the most value to add.

1:00:09Jake Stauch:And then it just felt like off to the races. Like at the time we got our Series A term sheet I think we were eight people as a company and then very quickly started to grow started to hire the customers start to snowball we hire our first sales rep and you know I think if you zoom out obviously in the day-to-day everything feels chaotic and stressful and you, you know, you lose deals, you, you win deals, then it feels up. Now, but then if you zoom out, it looks like it was just like a crazy rocket ship.

1:00:36Turner Novak:Yeah, I'm sure somebody looks at sort of right now. Oh, it's like always been crushing it. Like, I'm sure things are great. Like, there's no problems. Like, it's all easy. You just look at like the chart that you probably have. But as we said for the past hour, it wasn't the easiest.

1:00:50Jake Stauch:Yeah, for sure. It's like you zoom out. It looks like this crazy up into the right trajectory. you zoom in and you see like the spikes and the ups and downs and all the things that feel like on a day-to-day basis that they're not going well but yeah if you zoom out it's been just an

1:01:02Turner Novak:incredible story and then you said the day you announced the series a you got a term shoot for the series b was that again just like people were like we want to give you money like that was that

1:01:10Jake Stauch:was how did that go so yeah we we delayed the announcement of series a a little bit so we ended up you know doing the series a in august but i feel like everyone kind of knew like all the investors you are for sure like everyone was like we got secrets i mean the the there's a lot of Everyone knows everything, it seems like. And so we raised a Series A, closed out in August, announced in October. The day we announced the Series A in October, though, I get a text from Sequoia saying, hey, can you come to our office? I said, no, I'm in Orlando. I'm in an IT conference, actually, in Orlando. Then they text back and say, where are you staying?

1:01:49Jake Stauch:And ended up flying out to Orlando from San Francisco. one partner from San Francisco, one partner from London, and meet me for dinner with the term sheet. And that's how the Series B happened. And the idea was they talked to all of our customers. Again, at this point, many, many more customers than five. They talked to all of our customers. They talked to everyone that I've ever worked with, basically, managers, peers, direct reports. They also talked to all of our competitors' customers. And they had this full picture of the market. And they just knew that we're going to win. and so why wait on the sidelines for us to grow as a company?

1:02:26Jake Stauch:Why not just come in as early as possible?

1:02:28Turner Novak:And then did you consider anyone else or you're just like, this is a really good offer? I initially said no at dinner,

1:02:37Jake Stauch:mostly just because we just fundraised and it felt like, hey, we just raised$50 million Series A. Oh, it was 50? It was$50 million Series A. At the time, I think maybe were like 15 people as a company. Like, I don't have a way to deploy additional capital. It doesn't make sense for us to bring in a Series B at this time.

1:02:58Turner Novak:Yeah.

1:02:59Jake Stauch:So then what did they do to convince you? One is I talked to a lot of references of people that have raised money from Sequoia. I thought about, you know, the impact it could have, not just the additional capital, but the support of a great new set of investors, great set of partners. And so, you know, as I considered, like, hey, what are the different options? What are the different things? Yes, we could postpone our Series B to where it makes more sense in six months. But there could be a lot of value in doing this now from a support perspective and from a signaling perspective and helping with hiring and customer acquisition and all these things.

1:03:37Jake Stauch:So I decided that it made a lot of sense.

1:03:40Turner Novak:Just this being this is about three months later, was it a good call? Did you feel you've gotten what all they brought to the table? Absolutely. Absolutely.

1:03:48Jake Stauch:Great decision. I don't regret it at all. support on the customer side, on the candidate side, recruiting side, strategy side, just across the board. And we felt that honestly from all of our investors. I've been very nervous about taking every single check that we took.

1:04:05Turner Novak:Really? But you just don't need it.

1:04:08Jake Stauch:It's a big decision. Like you know that these people are going to be on your cap table forever. These are people you're going to have to answer a phone call for for the rest of your life potentially. And so are these people that you really want to like basically get into a marriage with. And it's stressful. It's stressful to make that kind of commitment. But every single investor we brought on board, I felt so lucky to have them involved. And we made the right decision every single time, I think.

1:04:34Turner Novak:So when you think about good support from an investor, helping with customer introductions or with hiring, what is a good relationship there look like? Are they texting you a LinkedIn profile, like my cousin's looking for an internship? Can you interview him? Or what does the good relationship look like for you?

1:04:54Jake Stauch:Yeah, I think it changes a little bit based on stage. First round was one of our leads in our seed round alongside General Catalyst. First round is incredible at seed stage. I mean, there's just no one better. They really are so focused on that stage. They were probably really supportive through the journey of like, we don't know if it's going to work. Exactly. And this is what they do is they spend time with companies before they become successful companies, before anyone knows what these companies are. And they've seen it all and they've seen it all at that stage. And so it was so valuable to have first round Bill Trenchard over there as a partner.

1:05:30Jake Stauch:Constant meetings, constant one-on-ones, so much support, both like strategic and emotional support of like, hey, this is normal that this takes a while to figure out. But just actually very tactical. Like, here's how founder-led sales can be structured. You know, they actually hosted a retreat, training founders on founder-led sales and going through an entire four-day intensive course. What was your biggest takeaway from that retreat? I learned a lot about running a successful pilot because we had tried to start these pilots that ended up devolving into these endless, kind of this limbo feature requests and it never kind of ends and it turns into kind of like a design partnership with no kind of line of sight to signing a deal.

1:06:11Turner Novak:So is this just like, oh, we'll do another three months kind of thing? Like, how do you fall into that trap?

1:06:17Jake Stauch:You meet with them and they're like, hey, what about this? What about that? And then you just kind of keep meeting with them. And it's hard to have a purchasing conversation, especially early on, because the product legitimately is not mature enough, right? And so everything feels kind of like a promise. And so it's hard, especially selling against a legacy incumbent where it's already entrenched. So you're saying, okay, guys, well, I'll do all these feature requests, but would love for you to rip out your existing system and then put this in, even though it doesn't do all the things you want it to do.

1:06:46Turner Novak:Like that's just hard to... It's a hard conversation to have.

1:06:49Jake Stauch:Did it change your approach? Oh, yeah. Basically setting up from the beginning, here's the structure of the pilot. Here's how we're going to evaluate. Here are the criteria for whether or not we're going to move forward. Making that a structured conversation and then structuring the meetings of the pilot to make sure we're moving towards the evaluation and we're not just kind of like hanging out, meeting every week and hearing more about what the product could do better.

1:07:13Turner Novak:Okay.

1:07:13Jake Stauch:So that's a very tactical thing. First round made well over 100 customer intros. So just like, again, very tactically intro to the decision maker at ICP customers, very valuable recruiting. I mean, they put their resources behind us to help us recruit. They were able to source us several candidates.

1:07:29Turner Novak:This was during that year of no customers converting and you were still, they're introducing you to people and everyone's bouncing off. Like, were you able to like, keep the relationships and then people like those people you met in that first year, they now have started closing over the past couple months?

1:07:45Jake Stauch:Oh, yeah, for sure. I mean, it's funny. We just restarted a pilot with a customer that we got introduced to before we even incorporated Serval.

1:07:52Turner Novak:Okay.

1:07:53Jake Stauch:And, you know, just dragged on for a while, ended up like not going anywhere. And now they've come back and, you know, just kicked off a pilot with us. So we're really excited about going back to that other customers. And what's interesting is the early feedback of these customers was not negative, not like, oh, this doesn't work. It's like, this is awesome. We love where you're going with it. Basically, call me when you have a product. because again, we're not this like net new thing that can just sit on top of your stack and you can plug in and just get value out of. You have to pull out, especially at this time, now we've made this migration process much easier.

1:08:26Jake Stauch:You don't have to replace your system of record. But at the time it was like you had to pull out your full system of record and you had to like migrate over to Serval. And that's just a big, that's a big ask, especially where we were as a company.

1:08:39Turner Novak:You changed how you did sort of the replacement, the rip and replace. They assume they didn't have to, or they kind of automated it. So what exactly did you do? Yeah, so one of the challenges in this category,

1:08:49Jake Stauch:all AI companies face this, is are you going to be the system of action layer on top of the system of record, or are you going to be the system of record? There's advantages to both approaches. We decided from early on we wanted to do both. We wanted to actually be the AI layer on top and the full system of record. And in the early days, we kind of really pushed forward to like, hey, you should implement us as a full system of record. Now, what we found is, and we knew this would happen, then you're sitting around kind of waiting for them to be ready to replace your system of records. So instead we said, you know what, let's do both really well.

1:09:20Jake Stauch:And we can be the AI layer on top of your existing system of record. We can sit on top of a ServiceNow or a Jira Service Management. But the way we do that is very unique in that it's not just a simple layer. It actually becomes a mirror. So it's not a layer, but a mirror where we're mirroring the data in both systems. So all the tickets that flow through actually show up in both platforms. Why that ends up being important is the day, the moment you decide, hey, could we just use Serval? All the data is already there. There is no migration because you've already been floating everything through the system.

1:09:53Jake Stauch:And it also incentivizes people to think about it in that way because they start working on a Serval and they notice, hey, Serval has all my data here. It has all my configurations. It is a replica of my system of record. Why again are we using these two systems? Yeah. And so we stopped having the conversation with customers of like, hey, we're going to replace your system record. We come in and say, no, it's fine. We'll just be a layer on top. What we find is every single one of them, once they get implemented, start saying, oh, we should just use Serval for everything. And so that's been a really, really important.

1:10:23Jake Stauch:And we knew we were going to do that from early on. It's not like we had this complete realization. But once that was actually implemented in the product in a really seamless way, that really helped us to not have a tough conversation early on. but instead say, hey, you can implement this as your full system record. You can implement this as a layer. It doesn't really matter to us. We know where you're going to end up,

1:10:43Turner Novak:which is you're going to use the full platform. So did you build agents that automate the syncing of data? Yeah.

1:10:49Jake Stauch:So we have a really robust syncing system with health checks, like all the data synced between two systems, configurations on, is it a one-way sync, a two-way sync? When does the sync happen? What fields are synced? How do we interpolate things where we don't have a data match? Do we use AI to match field like really, really robust. We decided to invest and make that a core part of the platform.

1:11:09Turner Novak:What is the timeline? Is it like if I type something in Serval, half a second later it shows up? Absolutely. Okay.

1:11:16Jake Stauch:So I'm curious, what tool did you guys use to do that? It was like a certain software? No, we just built it internally.

1:11:21Turner Novak:Oh, you built it internally? We built it all internally. Yeah. Okay. Interesting. Yeah, I feel like because it's definitely a question that comes up a lot. Is this like build a system of record, layer on top? Yeah.

1:11:32Jake Stauch:How do you... We think the answer is both. And the way you do that is actually build it not as a layer, but as a mirror so that you can ease that transition. And a lot of this is just deciding to build really hard things. Because when you look at this problem, it's impossible. All these fields, all the mappings, how do you solve this? This is so messy. API rate limits. You run into so many challenges and a lot of this is just saying, you know what, it's really hard and that's why we should do it.

1:12:00Turner Novak:And I know there's a stat that we both kind of like thought was interesting that it's something like a Harvard study that said 90 % of AI projects fail or something I think. Yeah the MIT story story. Like do you know why? Why do you think that is? Because it's a massive number. You would think AI is a massive bubble and this whole thing should pop if no one's actually using it.

1:12:18Jake Stauch:Right? Yeah I mean I think like if you take that at face value and I think there are like some concerns on how to think about that research but I think if you assume that that's true what we find is the technology has advanced to the point where the problem is not the models are not good enough. The problem is not the software is not good enough. The problem is translating the capabilities of the AI of the software platform to match the business processes. Or reverse, you could change the business processes to match the capabilities and the way the AI and the software is structured. And so that mismatch between how businesses are run and what the software can do, that's where you see things like forward deployed engineering and professional services trying to bridge that gap today.

1:12:59Jake Stauch:That is the hardest problem to solve. in these AI implementations today is the actual implementation of, I run onboarding in this way. I've got a 72-page PDF on how onboarding works across the company. Serval has this amazing AI platform for automating workflows. How do we connect these? How do I get all the cool capabilities of the Serval platform and use that to automate all my onboarding? That's where a lot of the work happens, and that's where a lot of this can break down. And so I think what's going to be interesting over the next couple of years is you're going to see a lot more focus, especially from companies like ours, on how do we actually bridge that gap?

1:13:33Jake Stauch:How do we make it easier to translate the business requirements to the product capabilities without it being this huge implementation project that has to be owned entirely by a forward deployed engineering staff?

1:13:45Turner Novak:I think you might have said this, maybe somebody else said this to me before, but it was like you almost make the implementation part of the product. It's like, so what have you found that works the best? Are you still navigating it?

1:13:57Jake Stauch:we're building some really cool stuff that are basically going to allow you to just tell the system, here's what I want to do. Here's how we have things set up. And it can both map your business processes, but also suggest changes to your business processes that make the overall structure. Because a lot of this is meeting in the middle where you might have a certain flow that makes a lot of sense in a world before AI. But with AI tools, you could actually simplify this flow and it'll work a lot better. But a lot of large enterprises is also say, you know what? The business process is not going to change.

1:14:28Jake Stauch:We're going to do it this way and I need your tool to adapt to that. And I think you have to have a, if you're selling in a large enterprise, you have to have a tool that can adapt to where the customer is and not force them to change how they do things. Though a lot of times those changes can be very helpful in making the system overall more reliable.

1:14:46Turner Novak:But it's kind of one of those like, the bigger the ship is, the harder it is to steer it. It's like if it's just like 50 ,000 person company, it's like you got to...

1:14:55Jake Stauch:They're not going to change how they do things because a vendor came in and said, hey, it would be better if you did it this way. No, you have to come in and say, hey, we can do it exactly the way you want. And then we can talk later about how you can make some improvements.

1:15:06Turner Novak:Yeah. And then so you've raised, I forget the actually dollar amount. I probably should like recheck this morning. But you've raised like, it sounds like over$100 million. Over$125 million. $125 million. You probably have the majority of you haven't spent yet. Correct. But you're going to hire more people. So how do you think about hiring right now with the phase that you're at?

1:15:26Jake Stauch:I think what's really important is obviously we have incredible hiring goals. And we went from eight people in August to 40 today. And we've got crazy hiring goals for the rest of the year. And it's not going to slow down. But in the middle of all that, you have to keep the bar incredibly high. You actually have to increase talent density as you hire.

1:15:44Turner Novak:That sounds hard. It's like founders are probably like amazing. How do you hire people better than you? It's really hard.

1:15:50Jake Stauch:One is, you know, you have to have a vision that's really exciting. I mean, that's why we're going after this massive category. That's why we're not just happy to be an AI layer, a startup that sells some kind of narrow niche, but like we're actually going after one of the biggest software categories in the world. And we're going to be much bigger because we're going after the services layer. So it starts with ambition, starts with, you know, building a team that people want to join. It also starts with actually having the talent density to begin with. So the early hires end up being so important because then the next person you want to bring in, that's really, really talented, they need to see your team and feel like, oh, yeah, this is this is the group I want to be a part of.

1:16:25Jake Stauch:Great people want to work with people that are better than them. Great people don't want to show up and realize, oh, man, I'm going to be like maybe the best person here. And that's what we want to build this culture, though, is where every person that actually is raising the bar. And one of the ways we do that is we actually make sure when we're evaluating candidates that we think about it in that way of is this person actually better than the median person at the company today, whatever the function is, do they actually raise the bar in some meaningful way? Because what often happens in these companies as they scale, is you start hiring people that like, meet the bar, the people that are better maybe than 40 % of the people you've hired in that role.

1:17:05Jake Stauch:And that makes sense in the moment, because they hire, they do well in the interviews, and they actually do better or are better than 40%, almost half of the people in the entire company. And so how could you not hire this person? They're better than like the people doing the interview. But if you keep hiring at the 40th percentile over and over and over again, well, what happens?

1:17:25Turner Novak:It has to say downward.

1:17:26Jake Stauch:Yeah, it basically just like continues to collapse and the talent density collapses. And you see this happen over and over and over, especially as companies get very large, is that they cannot keep raising the bar. And so they hire people that are good enough, that are better than a lot of the people in place. Again, probably better than some of the interviewers. And yet they're not actually better than the median or the average. And so one of the questions we ask as part of the debrief on a candidate is who are they better than? Because if you can't tell me who they're actually going to be better than, and - Oh, this is an internal question.

1:17:57Turner Novak:It looks like you ask the candidate,

1:17:58Jake Stauch:who are you better than? Oh, yeah. That would be great, right? Like, make them challenge somebody for their job. You don't, we don't do that. We just, like, we do it as a forcing function, obviously, like, collapsing somebody onto, like, a single dimension of, like, good or bad. Like, that's not, you know, it's impossible to do. But I think it's important to think about it in this way of saying, hey, are they actually raising the bar in some way? And maybe it's because they're super high slope. So maybe they're less experienced rather than come in and be as productive as some of the folks on the team.

1:18:23Jake Stauch:But we believe that within a couple of years, they could be one of the best engineers here. Or they bring a new skillset that we just don't have on the team and they raise the bar in that way. So I think there's different ways to raise the bar, but I think they have to come in and make us better. And I think the other thing they have to do is, are we excited for their start date? This is the best gut check, is if they sign today and they've got their start date two weeks, three weeks from now, are we counting down the days until this person starts? Or is this just kind of, yeah, it's great, they'll start this day.

1:18:52Jake Stauch:All the best candidates, you're so excited for the day they start because you're going to feel that impact. And so it's really important to raise the bar on these candidates. It's kind of our foundational principle is that every candidate raises the bar.

1:19:05Turner Novak:Yeah, that's like a fun, really easy to remember, just like gut check on it. Like, are you excited for them to work for you? Like, I mean, so simple. but there's so many times you're like, eh, not really.

1:19:17Jake Stauch:Yeah, a lot of times you'll go through the debrief and everyone will pass them. They'll say like, yep, three, three out of four, three out of four, three out of four, we should hire them. But no one's excited. And then you say, you know, you say, are we excited for this person to join? Like, who are they better than at the company? And you'll find very quickly like, oh, actually, this is not a bar racer. This is somebody who's good. And, you know, hiring an elite team means saying no to a lot of great people. And that's the hardest part of the job is that these people come in and they're actually great.

1:19:44Jake Stauch:And there's nothing wrong with them. And they did very well, but they don't get a spot.

1:19:49Turner Novak:And one kind of interesting hire you made those, maybe at this point, it's not that contrarian, but you hired somebody who's one of the earliest employees to work on video production. Yes. So talk me through that.

1:20:00Jake Stauch:Yeah, it was really interesting. So one is we knew we were hiring this incredible growth team. I actually hired my COO as my wife, and I hired her and she was running growth at Rippling. And we knew we were going to have this incredible growth team at the company. But the growth team is only as good as the content you can equip them with, right? You can't put a bunch of stuff in front of people and expect it to convert if you're not really investing in content and storytelling. We also knew that because we're going after these large enterprises, we really needed to punch above our weight from a brand and content perspective.

1:20:34Turner Novak:Because if you look like a startup,

1:20:36Jake Stauch:if we look like a startup, no one's going to buy us. because people do not buy from startups in this category. The companies we're competing against are massive, massive companies. Like we have to punch above our weight and we have to equip our growth team with great content. And so for us, it's like, actually, we want to bring this at house and we want to have this be a core competency. And so what's funny is I reached out to the best video person I ever worked with, absolute legend. And I just asked like, hey, do you have anyone in your network? Because you're the best I worked with. You have to know people that are like looking to join an early stage startup.

1:21:09Jake Stauch:and he reached out and he said, you know what, I might know somebody. And even though I had no intention and no idea that we could actually get our top choice or the person that we're most excited about, I just wanted him to introduce me to somebody. And instead he came to the office and was so excited about what we're doing and decided to join us and one of the best hires we made.

1:21:30Turner Novak:Wow, that's awesome. And one other thing you said you focus on a lot is like the people that you hire, are they also able to make more hires for you, help you recruit. Exactly.

1:21:39Jake Stauch:Yeah. So raising the bar is one thing. But then we also think about this from obviously, team is the only durable advantage in this era. Like any product advantage, insights you have about the market, it's not going to last very long.

1:21:49Turner Novak:I could vibe code a decent version of service.

1:21:52Jake Stauch:There's so many amazing smart entrepreneurs out there. The funding environment is so rich. Funding is not a differentiator. Talent is the only true long-term differentiator because it compounds. And the people that use these tools, they just compound and compound and compound. And so we knew that talent was going to be really important. And so when you bring people in, yes, they have to raise the bar from their pure themselves as an IC or as a manager. But what we also think about is how did they impact future hiring? So is this person likely to make it easier or harder for us to recruit more people that raise the bar?

1:22:27Jake Stauch:And so they can do that a couple different ways. So some people are like, tactically, they come in and they act as recruiters. They come in and they have great networks and they bring people along and everyone wants to follow them. And that is a big part of what we think about when we bring people in is like, are they somebody that brings people with them, brings high caliber people with them? So that's like at the top level, someone who actually brings the people along. And then there's also like, okay, but maybe they're not going to bring a bunch of folks along. Maybe they're more junior, but do they make it more likely that when we have somebody visit, when we have somebody do an onsite, do we make it more do they make it more likely that person joins whether because they bring a level of energy enthusiasm kindness are they are they just so incredibly talented that people want to work with them because of their caliber so we we think about people through that lens of do they actually help us recruit either actually by being a recruiter physically or or just like because they're here we're more likely to get the next person that we're really excited about Yeah.

1:23:25Turner Novak:Interesting. Yeah. I feel like it's, it's kind of like one of those things, there's like different ways to like, maybe they're like a very high profile person where like everyone will see like the news article or the LinkedIn update and be curious, or it's literally just like, they could text five people that they worked with in the past and just bring them all over.

1:23:41Jake Stauch:Yeah. Or they're just so much fun and they bring like this lively energy office. You're like, Oh, I can't wait for this person to have lunch with my candidates because candidates are going to meet this person and they're going to decide to join. And the flip side is true. somebody could be very, very good, but we feel like, you know what? Like, I don't know if I want this person to have lunch with our candidates. And I don't know if after that lunch experience, the candidate's going to be more likely to join the company. And so we really think about that lens when we evaluate people.

1:24:05Turner Novak:Oh, yeah, it's almost like, you ever watch the Silicon Valley show? Yeah. No, Guilfoyle. Like, he's like, super talented. You ever like, candidate might be, and he was like, don't work here. Like, this place is terrible or something. Like, you don't want to scare people. Yeah, exactly.

1:24:18Jake Stauch:Well, this was a lot of fun. Thanks for doing it. Thank you so much. This was a blast.

1:24:23Turner Novak:And I hope you had a blast. A quick thanks again to Numeral and Flex for supporting this episode. Put your sales tax on autopilot at numeral.com and upgrade to Flex Elite to get$1 ,000 on your first card using code Turner with the waitlist link in the description. If you enjoyed this conversation, please like, comment, subscribe, and share with a friend who should use Serval to automate their help desk. Make sure to check out the back catalog of over 100 episodes with the founders of companies like Robinhood, Mercury, and Box. Tune in over the next few weeks for guests that include Chetan Bhutaganta at Benchmark, Mike and Nikhil at Footwork, and Scott Stevenson at Spellbook, the fastest growing AI company in Canada.

1:24:59Turner Novak:If you don't want to miss any of these, subscribe to my newsletter, The Split, linked in the description to get each episode, plus a transcript emailed directly to your inbox every week. Thanks again for listening. See you next time.