Founder Mode: Kashish Gupta, Founder and co-CEO of Hightouch

0:00Carolyn and I are here today with Kashish Gupta of High Touch, who went through YC in the summer of 2019. Welcome. Thanks for having me. It's really nice to meet you. I've never met you. Good to meet you as well. I've heard so much about you both. Well, thank you for coming on our special series today. We are here at the Y Combinator Founder Mode retreat. And so we're talking to founders a little bit about their experiences with Founder Mode. But first, we'd love to hear more about what your company does. HiTouch is a data and AI platform for marketers. So we help marketers do two things. We help them access their customer data and run any advertising or lifecycle marketing campaign using their customer data.

0:45And two is we help them deploy AI agents that can help them more intelligently run those marketing campaigns and build those campaigns from scratch. So we're now building agents that can help you write content that's highly personalized for your customers so that you can write a basketball campaign that's very different from your tennis campaign and then send those to people that are specifically interested in those two topics. Oh, wow. I feel like that happens to me on the daily. Very targeted advertising. You're probably getting a lot of that marketing from us. Probably. And from brands that use high touch.

1:16Yeah, yeah. Who are some of your big clients? Yeah, so we work with several large B2C brands primarily. Usually companies like PetSmart, Spotify, Men's Warehouse, these kinds of brands. Oh, wow. And we've always been enterprise focused. So in the early days, we kind of did discovery on smaller and bigger companies. Everyone said sell to smaller companies because it's easier. And we just decided not to because we found out that our product market fit based on the product that we were building was strictly better for enterprise. Wait, people told you to sell to small businesses? Yeah, including Y Combinator.

1:48Really? Yeah. Because the cycle was going to be shorter? So it was like, oh, get a few wins and then like graduate up to the big enterprises. Easier to get feedback, exactly. Easier to test and evolve. So then you're like, nope, we're going to go for the big guns right away. And it was a unique scenario. I would say the feedback is still probably great for most founders. But for us, our architecture was one that was perfectly suited for enterprise and didn't make that much sense for smaller businesses. And so you just went with your gut and said, no. That's what the customers were telling us. We basically only listen to customers no matter who tells us what.

2:18I love it. Maybe that's sort of founder mode first lesson. I think most founder mode founders do this. Like if the customer didn't say something, it's just not true until the customer says it. And even when I try to pitch my co-funders on something, they'll tell me, did the customer say that or is that your thoughts, Kashish? And if it's my idea, then it doesn't count until the customer says it. Wow, you guys are like intense about the customer centricness. Yeah, sometimes it's very harsh. How did you guys get started? Sure. So we originally were a travel business. That's what we did Y Combinator with in 2019.

2:50No kidding. Really? We were basically chat GPT for travel. You would just message us and we would use natural language processing at the time before GPT models existed to book your travel. COVID happened. We decided it didn't make any sense to travel. No one was traveling. Exactly, in the following year. And so then we were pivoting. We did a bunch of different business ideas. And every single time we asked our customers, do you want this product? They always said yes. Then we always asked them other questions like, well, what are your top priorities other than this? And then they would just suddenly relax and tell us all their important priorities that were not what we were building.

3:22When you say customers, I'm thinking these were people doing travel. Who are the customers you're referring to in this scenario? These were completely new folks. Okay, so you have an idea, you'd have customers, you'd run this by them, and then they would actually give you really good information. Exactly. If you ask them the right questions. Right. If you push them to tell you their honest truth about what is truly most important to them. So long story short, we eventually came to this idea that was helping companies use their data in sales and marketing. What we found is that there was actually a huge gap between I have data and I can now actually use it in production sales and marketing.

3:58And that in the enterprise, that gap was way larger because people were using data warehouses like Snowflake and Databricks as their database. And so we actually, two of my co-founders used to work at a different YC company called Segment. Really? Exactly. No way. Two of the Segment guys are your co-founders now? So they're engineers on the Segment team. Okay. Two of the Segment co-founders did eventually invest in Hightouch. But yeah, these are early engineers at Segment. And what we thought is that Segment actually solved all these data problems. When we went to Enterprise, we found that it did not.

4:30And so that is why we felt like our product market fit was specifically for Enterprise. Because we found out that the Segment paradigm, which was send me all your data, I'll organize it for you, and I'll help you run marketing with it, broke in Enterprise. in enterprise people wanted to bring their own database. And that was our core innovation. We decided we'll help you bring your own database and we'll make all your SaaS tools, all 100 of them reflect that database. This is a really new question, but you're a big business. You have all this data. Why is it so hard to connect your sales and marketing team with your big data where, like with all your data, why is that connection not just easy?

5:07I think there's two main reasons. One is you have so much data. you have to help people understand like what the right data is can they use it is it like um governed well like all the kind of like enterprise like uh red tape that goes around data usage and the second is when you want to actually get something done like i want to run an ad campaign there's no tooling that exists for that um so we just found this really surprising gap in the market that there was just no tool between the database and the marketing platforms and actually the marketing platforms didn't want there to be because they wanted to own the data and so we just said we're going to break that we're going to be the only SaaS tool that does not store any data and we still to this day do not store any data like we just have no database oh wow how interesting so how big are you now oh we're about 250 people okay um we are maybe like 2 ,000 or 3 ,000 customers approximately and we work with probably call like 25 of the fortune 500 nice just let's go back to the timeline really quickly you're you obviously had your COVID trough of sorrow and then you started talking to the customers.

6:10What was your big year? When did you figure, you discovered this gap? What was the year things really started humming? We've somewhat kind of redefined the company every two years. So I would say every two years, we have a huge surge of demand because we launch a new product that's extremely interesting. So we went from this data connections product to a UI that marketers love. That caused a lot lot more demand. Folks like PetSmart and Warner Music, they love this UI and they use it every single day. Then we launched an AI decisioning product that uses reinforcement learning to choose the best marketing on a per customer basis.

6:44That's probably why you're getting so many test messages because people are just sending all their texts to all their customers. We decide the best message for every customer. And so we can send you less messages, like one a week, but it's actually relevant. But they're much better messages, much more targeted. Yeah. So like almost every B2C brand is, how do I reduce the number of messages, reduce unsubscribes, and increase actual engagement. That's like our job now. So you guys look like a stair step. You're not like a smooth curve. You just keep iterating, changing, iterating, changing, and getting more and more successful.

7:13That's fascinating. So Carolyn and I are collecting a little data on founder mode, like what it means in practice besides just the definition of it. Can you tell us along your journey, have you ever had to go into founder mode or when you've used some of the principles? So I love this concept and I'm happy to kind of share my take on what it means. And I've actually kind of shared this now with our whole exec team and all of our sales leaders as well, that there will be times where they see me or my co-founders practicing founder mode and to expect it to happen, to like be engaged and excited by it rather than scared.

7:48Oh, wow. That's a nice warning. Yes. Just a warning. And I think this is like just a good lesson for a lot of founders. Like if you tell people that you're going to do something in advance, then when you do it, they're not surprised. They don't think you're acting out of character. They don't think you're mad at them. They're like, oh, he said he would do this, and now he is. So I know why this is happening. You're not breaking character. Yeah, exactly. So you ask for permission in advance, and it gives you so much more credit afterwards to actually practice that. So I was taught something a long time ago that it was really difficult for me to internalize.

8:17But it was like, what is the job of a CEO? And ultimately what I was taught is that the job of a CEO is to make a company successful. And it is, unfortunately, not to make everyone around them happy. That's true. That is true. And I struggled with this so much in the early days because I would try to listen to everyone around me, take their feedback, do the things that they thought should be done. Consensus building. Right. And in a relatively democratic way. Yeah. That is a terrible way to lead a company. I think I became a significantly better co-founder and co-CEO later on around really 2024, to be honest, very candidly, when I stopped negotiating.

8:57so people would say oh but like let's not do that let's do like a version of that but you as a founder have so much conviction in the thing that you should actually just take full kind of like go ahead on like let's actually do this the right way rather than some compromise type of way so my definition of founder mode is basically your job is to provide results or to make the company successful and the people that are there for the vision or the mission of the company will always prefer that versus you saying yes to them, making them happy, even providing them mentorship or career growth. Like they will always sacrifice some of those things for you making the decisions that make the company successful.

9:33Yeah. You know, it's funny. So, you know, sometimes we go into parent mode when we're on this podcast. Yes, we do. And this, what you're saying reminds me of this. There's a psychology that like children actually feel better when their parents are more strict because the boundaries actually make them feel safe. This is a little, it's not exactly comparable but that's what I'm in my head I'm thinking like maybe that translates to the workplace I have to admit what I was thinking is this idea of breaking character with my kids like I always tried it was bad if you like lost it and acted crazy because you're breaking character of mom you know yeah yeah and so we both went to our parenting mode during this it's good advice yeah it's good advice yeah and I think like a lot of people for example will hire executives that have significantly more experience than them.

10:19That person should be better than you at that domain. And they are actually. But you have perspective both from all the other parts of the company as well as from the market and from the customer. Is it hard to reconcile that though? This person might have more experience in X, but you want them to listen to you. So difficult. Yeah. Especially when you're like often the youngest person in the room. Right. Yes. But I think like embracing the fact that you have perspective on the market and the customer is what helps. because you eventually realize that as a CEO of a business, you're always going to have more context than everyone else.

10:54So if you're feeling something, there's probably a reason why. And you owe it to yourself to sit down and think and write until you eventually identify, why was I so strongly held to a certain way of doing things? Is it because I'm resistant to change or because there's actual customer context that enforces why this should be done this way? Do you do a lot of writing to help you think? Yeah. So that is, I guess, what I learned in the last couple of years. I write almost every hour of every day. So I'm not always journaling, but pretty much every thought I have, I write down. How much of it do you share?

11:22I try to share everything that is left that is still true by the end of the week. That is quite a process. Because everyone has volatility, right? You might lose conviction and gain conviction throughout a week. By the end of the week or even end of the day, if something is still there and you're still quite sure about it, that is when I start feeling uncomfortable if other people don't know. So another thing I was taught if there's anything that you know that you have not told other people in your company, especially your executives or like your leadership, then like you're basically not doing your job or you're lying because you're hiding information from them.

11:56And if you kind of figure something out or your intuition is kind of leading you somewhere, you owe it to them to share that information as soon as possible. And for you, that timeline is a week. Like you give yourself a week. Ideally. And if you're still thinking about it, it's time to disclose. Ideally. Okay. And you think people will be scared because they're getting information about this. Maybe it's negative stuff. No, they're actually quite happy because they sensed it too. If you hire good people, they almost always sense it too. And so then that's when they start speaking up and being like, oh, I'm feeling this as well.

12:28Let's solve it together. I have a leadership coach and his name is David Clements. He's taught me a lot of these things. One thing he's taught me is that the only person that can afford to be wrong in the company is ultimately the founder because they can't really get fired. It's not always true. Obviously, founders do get fired. But for all intents and purposes, most people are risk averse because they have the ability to get fired. The founder is the only person that can say, I'm going to do the thing that needs to be done and take all the risk. And so what that extrapolates to is that if you're right 100 % of the time, you didn't take enough risks.

13:05which means you didn't do the job of a founder. And a lot of founder mode definitions are like, do the thing only the founder can do that no one else can do. And so in this case, I'm saying that risk is basically the only thing the founder can do uniquely that other people will struggle to take. Interesting. Or they'll want permission from you. Or they'll want permission. They'll tone it down. They'll take half risk. Yes. Hedge. They'll hedge. They'll hedge. Exactly. So good examples of this is mid last year, no one really believed in us hitting our revenue plan still. And I basically said, hey, we're going to double the sales team headcount.

13:38And I think we're not only going to hit this year's headcount, like revenue plan, but also next year's and like double again. But the numbers were not there. What I was feeling is that the market was telling me there's more demand for this product than ever. And that it was going to show up in our pipeline, like NetNew, but not in our metrics historically. So it's all like forward metrics. How did you get that feeling? Is it from talking to your customers? Like how did you know? I started managing the sales team directly. So it was like maybe like four managers and like 20 reps. I started working directly.

14:09Did you have a sales manager before? We did. We had a sales leader. We were kind of in between that sales leader and a chief revenue officer that we were looking for. And part of learning how to hire a chief revenue officer was doing the job myself. Like reading the books, managing the staff, like learning the job. And then as a result, talking to all those customers and realizing actually in every single team, we had under forecasted the demand. And it was actually just limited by the fact that we didn't have enough people. So the risk was, we're going to spend a lot of money. We're going to hire a ton of people.

14:38And hiring is risky because firing is the worst. And you never want to go through the rift. And you don't want to go through the rift. It's so demoralizing. Yes. And I couldn't prove with data that I was right. Right. You had nothing to back it up except your gut. Yeah. And a lot of naysayers. Oh, yeah. Only naysayers. Well, actually, that's a good question. I was just going to say, like you said that sometimes when you have these gut feelings, other people will have sensed it and they'll be like, oh, thank God you said it. Because I was feeling it. In this case, was that not true? That is a great point.

15:07Candidly, there was a lot of naysayers at the top. On the ground level, there was a lot of people that strongly agreed. You talk to the reps, they're telling me I'm going to close 2 to 3x of quota. You talk to the managers, they say, yeah, I haven't told you this yet, Kashish, but I know I'm going to hit like 4 million more than you think I am. Wow. So you go to the very bottom and they have all this qualitative feedback that's not necessarily in the data where they feel very, very optimistic. Oh, interesting. Wow. That's a very good founder mode example. That's a great, very specific one. So the other one I have is, I think oftentimes, like coordinating amongst equals is the hardest.

15:42So a lot of founder mode folks are like, well, ultimately someone reports to me, I can tell them exactly what to do. Your co-founders, on the other hand, are more your equals. Right, yeah. And so making decisions between your co-founders is probably like the most stressful, but the most rewarding. Because if you're very aligned with your co-founders, then you can just move mountains. So for us, this was earlier this year, we were working on AI product. It was a reinforcement learning product that predominantly did not use LLMs. So you see all these other AI companies that are focused on using LLMs, and that's the main logical unit.

16:12For us, it was reinforcement learning, which we thought was the correct way for marketing because CMOs were really scared of LLMs, and they were really averse to content generation at the time. Scared of LLMs. All of H2 last year, that was the case. I would say most of H1 this year, CMOs said, content gen is not ready for me. Okay. And so we thought, let's use reinforcement learning to choose the best content. And we built this AI product around it. The market was pretty excited, but they were adopting slowly. And so at this point, let's say our company has four main products, and we have 50 engineers.

16:44So we're very understaffed for a very large surface area. What happened is I talked to my co-founders, and I said, hey, guys, what we're doing, we're going to double this year. We're probably going to double next year. but like I think there's a much bigger opportunity and it's kind of scary to hear but I don't think the AI opportunity that we're working on right now is the largest opportunity I think there's an even bigger one that no one has cracked we have to define our own way and like pave our own market but if we do that I think like we're going to build a significantly longer lasting business and the way I framed this was actually like given where we are now if us three stop doing our job we're still going to double this year.

17:26Wow. And so that should give you relief and excitement on going for the moon, on actually going for the largest possible opportunity. And this was, it's brand new information because usually we were so in the details that we didn't believe that we could actually hit our numbers without really strong involvement. But now the team is there and the demand is there. So that was a very refreshing feeling. But sharing that as the lever for what can we work on that would actually completely redefine marketing. If you were to build a marketing team right now, given the technologies we have today, how would you build that marketing team without any biases?

17:57We started asking every single one of our customers this and some of the best CMOs in the world. And they all said, yeah, we would not be doing any of the stuff that we're doing today. Like we're writing all these briefs. We're basically just like stabbing at the dark for what works and doing trial and error. We would be making way more data-informed decisions and let LLMs look through all the campaigns, all the data and make decisions with us. Oh, wow. So then we started basically inventing that. Like we started sitting with them saying, hey, I'll give you this product for free, but work with me and develop this with me.

18:25Yeah. And your co-founders were aligned with you or how much convincing did you have to do? It took us honestly like two to three months of convincing each other. Interesting. Because I didn't have like what to do. Yeah. None of us had what to do. It was just like we could do a lot more and there is a technical shift in the market right now that no one else is going to do because they don't have the access to marketers that we do. And so it was, I think if there was a clear proposal, then it'd be like, okay, let's make a yes-no decision. This was much more like a, let's do something. Let's figure out together what to do.

18:57And it took us probably three months. You have two co-founders? Yes. Okay. So three of us total. Yeah. Wow. Well, that was really interesting. I loved your examples. It's so interesting. Yeah, the specificity is great. Yes, we are going to have such good information based on these interviews. So thank you for coming on. Yeah, thank you for having me. Thank you very much. So nice to meet you too. Good to meet you too. Super excited for High Touch, by the way. It sounds like an amazing company. I look forward to watching your continued success. I appreciate that. Yeah. Thank you. Thank you. All right.

19:25Bye.