Contents
Elias Torres: In the past, I would be like, the minute I had something that kind of, like, loaded on your browser, like, I wanted to charge you, you know, like a dollar. I was like, “Yes, I got a dollar!” This time, I’m like, I don’t want your money. It’s like, I want to know that you’re obsessed, and that is so sticky. And I’m going to do everything at your company. There’s so many founders that they think that just because they built something, that they got it, right? People are delusional; people have $50 million in revenue, and they’re delusional that that product works. You know, this time around, I really want to do it right. I want to build something that people like throwing money at me and saying, like, “This is really—there’s nothing like it. This is my journey now.”
Pat Grady: We’re really excited to share today’s episode of Training Data with you. Today we have Elias Torres, someone we’ve known for more than a decade across three companies.
We first met Elias when he was busy rebuilding the core platform for HubSpot many, many years ago. After that, we got into business with him with Drift, which is his second startup. And then more recently, we got into business with Elias on Agency, His third startup. Agency is in the midst of redefining customer experience, and so today we’ll hear a bit about what that means, and also how to build a company in a world of AI. We hope you enjoy.
Elias, welcome to the show.
Elias Torres: Thank you. I’ve been waiting for this moment my whole life.
What’s going on in AI?
Pat Grady: [laughs] I know you have. I know you have. You know, we had this wonderful script all planned, and then over the last few minutes, we got into some real hot takes. Why don’t we just start with the hot takes? Tell us what’s going on in the world of AI.
Elias Torres: I think that everybody’s asking for AI. Everybody says they want it, and when you come and bring it to them, they just reject it. You know, it’s like the Messiah has arrived, and everybody’s like, “No, we don’t want it.” And I think it’s a super interesting time, right? Because we have the best technology mankind has ever created. It is so intelligent, it is so smart, it’s so capable, but yet people are demanding this level of perfection when they’re not even able to use the chat prompt to ask a basic question. And so I think that we are completely misunderstanding the technology and its capabilities.
Pat Grady: So it’s an expectation mismatch, not necessarily a technological flaw.
Elias Torres: Well, I think in some ways, we’re used to pre-AI technology, right? That it was able to look up a string from a database, and it was a perfect lookup and a perfect match. And so I think they’re used to that level of perfection. And so when you bring any possibility of a different answer or a different solution, I think people are struggling with that imperfection.
Pat Grady: So we’re used to narrow functionality, perfect accuracy. All of a sudden we have broad functionality, imperfect accuracy, and people are having a hard time with that transition.
Elias Torres: Yeah. I think I see a lot of customers being, like, half full, you know, half empty.
Pat Grady: Yeah.
Elias Torres: My approach to AI is like, if it’s doing 10 percent more than I wasn’t doing before, if it’s doing 20 percent, 30 percent, I’m extremely happy. Like, I don’t have to do that, it saves me time. But other people, if it’s not 100 percent perfect, I’d rather have none.
Pat Grady: Yeah.
Elias Torres: And I think that’s a very dangerous take for people to take.
Pat Grady: And actually the example that comes to mind is one that you shared with us before, which is around how you manage your own email.
Elias Torres: Correct.
Pat Grady: Do you care to share that example?
Elias Torres: Which one? The one that I—so let me see if I get this one right.
Pat Grady: [laughs]
Elias Torres: So Agency, right? Agency can, like, read all my email and create drafts and automatically, like, I can reply to everybody. So usually what I’m doing is when I’m demoing the product, I open my entire inbox to the customers. It says like it really—not to worry about it yet, I guess. But I’m like, “Oh, I just had this meeting with this customer and we had this thing, and I’m going to send this follow up.” And I just hit the send button, you know? And is this the example?
Pat Grady: Yeah, because we were talking about how, like, the email deluge is just untenable at this point. And, like, people spend hours and hours a day managing their email—or at least a lot of people do. And, like, the AI product that I would love to pay for is one that can just take care of my email. We were having this conversation and you’re like, “I don’t spend any time managing my email. I actually just let Agency do it for me.”
Elias Torres: Absolutely.
Pat Grady: Which is not the point of Agency, but it’s one of the things agency can do.
Elias Torres: Yeah. And I think that’s a great example. I think that narrows it, right? Is that we generate these emails for customers and follow ups. And the thing is that if you’re managing—if you’re trying to manage, you know, 500 pipelines and you’re trying to communicate to everybody, what’s best? That you deliver two perfect emails, or that you send something to all 500 prospects?
Pat Grady: Yeah.
Elias Torres: Right? Because they individually don’t know how much time you’re spending on it. But just say ‘ping’ and, like, send that email, right?
Pat Grady: Yeah.
Elias Torres: To follow up. And so what happens is when my customers, it’s like I’m sending these messages, and I kind of like almost don’t—I look at it, I might cringe sometimes, but I send it, because partly it’s this, I don’t know, the stage of my life, maybe because I’m old, I’m like, I already know that I’m never going to say anything perfect. So if it goes out, it goes out and, like, as long as, you know, it’s going to be fine. But the problem is I see customers, I watch them on recordings of using the product from a user experience perspective. And I’m like, “Well, this person just spent 20 minutes and they really didn’t edit the email. Sometimes they’re just changing the salutation or, like, they didn’t like how it was just too aggressive to say “Here’s my calendar link.” And they were like, “And let me know times.” And then they’re like 20 minutes later and the email gets sent.
And so I think that that’s fundamentally why businesses can’t scale today because there’s humans in the middle, you know, to add so much delay and obstacles and slowdowns in the pursuit of delivering a customer experience, you know?
Sonya Huang: So you’re saying people are scared to let AI take the wheel, and they should just let AI take the wheel?
Elias Torres: I think so. I think we need to choose what really matters, you know, like kind of one-way doors, two-way doors. We need to say, like, is this—like, we need to also have a little bit more leniency and forgiveness. Like, if an email goes out, you know, that didn’t say exactly the right thing or hallucinated, I think we all should be a little bit more forgiving and be like, it’s okay, don’t worry, and remove that fear from people. I think both sides, the sending and the receiving, need to be a little bit more chill.
Pat Grady: Yeah.
Sonya Huang: I’m going to use that excuse next time I say some crazy shit that ticks off Pat.
Pat Grady: [laughs]
Sonya Huang: “Sorry, it was the AI!”
Elias Torres: But isn’t that what we do normally?
Pat Grady: Yeah.
Elias Torres: We say crazy shit, and then it’s like the guy that stole the hat from the kid, you know, at the U.S. Open.
Pat Grady: Yes, exactly.
Elias Torres: First he says some crazy shit, then he says some other crazy shit. He could just throw an AI too. Might as well, you know? Although we might be sued by him right now.
Sonya Huang: [laughs]
Growing up in Nicaragua
Pat Grady: You didn’t specify which guy, so I think we’re good. Normally on Training Data, we don’t really get into personal stories, but I actually think your personal story is pretty exceptional and pretty unique. And so could you maybe just say a couple words about how your childhood shaped the sort of entrepreneur that you have become?
Elias Torres: Yeah, absolutely. I think that I am an engineer, just for the sake of it.
Pat Grady: [laughs]
Elias Torres: I’ve written code before. But let’s talk about the personal stuff, absolutely. I grew up in Nicaragua, in I would say what we call a communist era, right? So very little, third-world country. You know, I still have a shock. I go into people’s homes—not that I go without—like, they invite me, you know?
Pat Grady: We’re not breaking in.
Elias Torres: You’re not breaking in here. But then I go in and, like, I open the fridge and it’s just, like, full of food. Americans, it’s just, like, boxes and boxes and snacks and more. Every drawer you open. If you came to my house in Nicaragua, everything was empty. Like, the only things that would be in there are, like, a few pots and pans. Like, I literally remember this as a kid. We, like—there’s absolutely nothing to eat. There would be, like, you know, just the food that you were gonna make for that meal kind of thing.
Pat Grady: Yeah.
Elias Torres: Like, it’s like just in time. And so that’s just—it’s a lot of scarcity, right? And so you grew up with—you know, I remember telling my mother—we’d be like, I would ask for things, and one time my mom said something like, “I would give you anything I have, anything I could. If I’m not given a chance, because I can’t.” And so I learned to ask, like, “Mom, if you can buy me this gift, you know, if you can buy me this.” So it’s just like a completely different world than the world that we live in in a first world country, America, you know, greatest country in the world. You know, but then it’s like—and then how we’re living today, right? And a lot of people are like—at least the world that I’m living in today is just like the extreme opposite of that.
Pat Grady: Yeah. What was your first job?
Elias Torres: Pre IBM?
Pat Grady: I mean, your actual first job that you got paid any sort of money for, for doing any sort of work.
Elias Torres: I think there’s the competition. The one that sounds better is the one when I was, like, cleaning the offices with my mother. But we did both. I was working at McDonald’s and cleaning offices when we first came to this country that I got paid. I was 17 years old.
Pat Grady: And I remember you told me your mom had a laptop, and you became tech support and this is how you got introduced to technology.
Elias Torres: That was pre-United States. Well, I came, I spent two years with my father. I didn’t grow up with my dad. And he bought this, like, computer. I don’t know, it’s like, you know, people would bring him stuff that I don’t know where it came from. You know, it was stolen. And so he would buy stuff, and he would just bring it home. And so the thing that caught my attention—I have a half brother, and he just loved fixing cars. And then my dad brought this computer, and my half brother did not look at it. I don’t know if I was drawn by it, or drawn by the fact that my brother wasn’t using it.
Elias Torres: And I just started using WordPerfect and like Lotus 1-2-3 in the ’80s. I was, like, in sixth, seventh grade. I did junior high in LA, and I just loved typing on that thing and trying to get the printer to work. No internet, no communication, no user group, just me in the garage just trying to figure this thing out.
Pat Grady: Yeah.
Elias Torres: And then when I went back to Nicaragua, my mother had a laptop. I show up in Nicaragua in the ‘80s and my mom has a laptop. She’s a professor, she’s a PhD, a veterinarian at the university. And she has a laptop, and I’m just like, “Why do you have a laptop?” This is Nicaragua. And so I started helping her and being like her tech support at the university. Mostly I just broke the computer, and then I would take it to IT to get it fixed.
Chatbots at IBM in 1999
Pat Grady: [laughs] And then your first job kind of post-university was IBM, is that right?
Elias Torres: Absolutely, yeah.
Pat Grady: And we don’t need to talk about IBM necessarily, but tell me about the moment that you met David Cancel.
Elias Torres: Yeah, I think I worked at IBM with an amazing group of people. I’ll say that my first—1999, my first project at IBM, I was building a chatbot that you could look up people’s phone numbers. There was a blue pages, like, instead of yellow pages at IBM. And I learned so much, I built so much. It was an amazing thing, but I just got fed up. 400,000 people, you cannot make a huge impact in that company. It’s just too political. Imagine me in a 400,000-person organization.
And so I just kept trying to—I kept making connections in Boston, in the tech scene. It took me a long time. And then I finally met David. And first, I’d never seen another, another Hispanic Latino in tech, you know? I was like, okay. Like, I liked him. I felt like I trusted him more to join his startup, because a lot of people were asking me to join their startups and I did not know how to choose one. I chose him because I just felt comfortable. You know, I felt that he understood me and that I could trust him. And the first thing he did is like, he offered me to take over his prior job at some other company. And I was like, “What do you mean? Just be VP of engineering at your old company?” But in the end I really decided to join him in this company called Lookery. It was my first tech startup, because I needed to try something outside of IBM.
Pat Grady: Yeah. What was it like going from 400,000 people to 40 people or whatever?
Elias Torres: No, it was like 10.
Pat Grady: There you go.
24/7 on the first startup
Elias Torres: I was working. I had a desk, and I lived in Lowell, Massachusetts. I had a desk in my bedroom, so I would get up and sit down and I would just work 24/7. Like, it was like that stage of my life was like three babies in diapers working 24/7. Just it was so exhausting. Like, literally I was like the main engineer in the company and had to build everything.
So I went from building stuff that nobody cared and nobody used that IBM to, like, I was the sole person responsible. But it was the best. Not—I have so many best times, sorry. It was when I started using AWS.
Pat Grady: Ah!
Elias Torres: And I started using the cloud, and it was mind boggling from, like, ordering and buying blade servers and requesting stuff through IBM’s, you know, procurement systems to do anything to, like, pushing a button, S3 and EC2. And it was like I was just blown away that I could be this one person orchestrating and building everything without needing anybody.
Pat Grady: Yeah.
Elias Torres: So that was a huge unlock.
Pat Grady: And then you guys started Performable. So that was your first company that you founded—Agency is your third company that you founded. You guys started Performable, and after a few years joined HubSpot, which is where we intersected. And for people’s benefit—and I think Brian and Dharmesh would agree with this characterization. HubSpot in the early days had an amazing story and, like, an okay product. And then you and David joined with your team from Performable. And originally the mandate was to build out a particular piece of the product, but then you ended up with responsibility for the whole thing and rebuilt it from scratch. And sort of the second phase of HubSpot, thanks to you guys, was great story, great product. Can you say a couple words about what it was like joining HubSpot, and then sort of how over the time you were there, you managed not only to scale with the organization, but to kind of like reinvent it in some ways?
Elias Torres: To me, professionally, it was a big breakout moment. You know, you go from tinkering with computers and WordPerfect or, like, launching a few EC2 instances and building a few web apps to really having to support 5,000 customers.
I went from, like, 20 customers at Performable to 5,000 customers immediately. And that was a shocker to me because one, what I care more about is customer experience, right? My customers at Performable would text me and they would say, “This is broken,” and I would open my computer, edit the code and say “Reload.” When you have 5,000 customers, you can’t do that.
So I had to learn how to scale in every sense of the word, right? We had a huge urgency, we had major, major churn. The product did not work at all and the team did not function either, so we had to, like, rebuild the team, rebuild the product and rebuild the trust with the customers that this product was going to actually achieve what it was going to do. And I also had to learn how to scale myself as a leader. And the most important thing I would say that I learned there was, like, hiring at scale.
Hiring at scale
Pat Grady: I was going to ask you about that actually, because I believe you hired Andrew Bialecki before you started Klaviyo. I believe you hired Christopher O’Donnell before he went on to build HubSpot CRM and start a company of his own. I believe you had a handful of really exceptional hires, and it’s not obvious that a mid-stage marketing software company in Boston would be able to attract such great people. And so I’m curious, like, what were you looking for in people that you hired, and then maybe what did you do to help them sort of have such growth in their careers?
Elias Torres: I think so many people are exceptional, and it’s a combination of giving them a chance and also role modeling after them what becoming an outlier really means. And so I would say, like, am I as successful as I am because of who I was so early? Or is it because a lot of people also shaped me along the way to teach me what was possible, right? And made me want to go after and accomplish those same things, just like Brian and Dharmesh for example, right?
Pat Grady: Yeah.
Elias Torres:And so I think all these people—there’s so many people. There’s Whitney, there’s Jared, current EVP at HubSpot that is still there running the entire system.
Pat Grady: I forgot about Whitney. Yeah, good point.
Elias Torres: There’s a few more, right?
Pat Grady: It’s amazing.
Elias Torres: Not that I’m keeping track of them, but it just makes me really proud to have people that I’ve been able to influence their lives and their careers, right? But it was really—they were at the places where I was. I was in a garage just tinkering with WordPerfect. They were doing, you know, the crappiest jobs that you could possibly think of.
Pat Grady: Yeah.
Elias Torres: And so my thing is I give people a shot, right? And I can, you know, test their intelligence from the conversation, see if they can keep up, see if they have hunger, they have grit, and then just bring them along for the ride and then they get to choose the path that they take after, right?
Pat Grady: Yeah.
Elias Torres: And so I think that I don’t hire for credentials. I don’t hire for where you came from, what you said you did. Actually, like, if you have all that stuff, I kind of like, rule you out immediately.
Pat Grady: A little suspicious.
Elias Torres: It’s just sus. Totally sus.
The story of Drift
Pat Grady: [laughs] Let’s talk about Drift real quick. Just because—so startup number one, Performable, startup number two, Drift, which again, was you and David Cancel. And I know that your experience at Drift helped to shape the idea for Agency. So can you just say a word about what was Drift, and what aspects of Drift kind of gave you the insight for Agency which you’re building now?
Elias Torres: I mean, I think that the thing that we learned at HubSpot was time to value, right? It’s like, how long does it take for the customer to experience the value in the product that you’re building for them? And at HubSpot, it takes a long time. You have to build blogs, you have to build ranking in SEO and Google, and you have to get leads and you have to become a brand. So you’re coaching the customer from day one to, like, you know, we’re in here for a journey, and at a low price, which is an unbelievable achievement for HubSpot to be at the revenue that it is today, right? The scale.
But I would say that at Drift, we were kind of like—it was almost something I always kept thinking with David, and we were like, how can we get time to value? And so we were patient in the beginning. We spent about two years wandering through the desert trying to figure out, like, what should we work on?
Pat Grady: Yeah. I remember, it began as HR software.
Elias Torres: Oh, my God. Yeah, let’s not talk about that.
Pat Grady: [laughs]
Elias Torres: There’s a bad joke in there. So we were trying to do, like, Glassdoor. It was like a Secret app at that time. Remember Secret? People could say, like, secretly, like, anonymously, what’s going on at their company. Because we were obsessed with team dynamics and culture at HubSpot. But then we kept pivoting and pivoting. Like, we would pivot, like, every month. Every time Pat would stop by in Boston to see us, like, “So what are you guys working on? Oh, a new Dropbox.”
Pat Grady: [laughs]
Elias Torres: It’s like, “What are you doing now? New Pinterest. What about now? Survey Monkey.” It’s like literally every month I would just tell the team that was not a good idea, we’re gonna try another one. So one, we spent two years being super patient and finding something we want. And the thing that I realized is, like, you gotta go back to what you know, experience compounds and you gotta just, like, stick with it.
And so we went on a huge diversion, and then came back to, like, closer and closer and closer to the app, to service, to customer. And we were next door to HubSpot, so we were not going to do marketing and we were not going to—I was not going to build another CRM. And it was like, no. And so we started focusing from support, then we went in-app and then we went back to leads. And the idea was if you could deploy this, that can immediately start getting you more leads without any human effort. That was a scaling point, right? And automation.
So we had a chatbot that would be the receptionist, the welcome reception on your homepage. Instead of asking you to fill out a form, it could ask you questions, it could inform you, deliver some value, book a calendar meeting, route it to the right rep and send a notification to the cell phone of the rep. And just make connections faster and remove the friction. And that was fantastic, right? That worked. I think that that helped us take off. We did many things right, but the reality was this product was shallow, right? In that it wasn’t too deeply penetrated, because it was only solving one basic step in the customer journey. It only did, like, the first connection.
Pat Grady: Yeah.
Elias Torres: But the problem that arose then after is like, everybody would be like, “Well, I came back to the website. Why doesn’t it recognize me? Why doesn’t it pick up where it left off? I already had this conversation. I already explained this. How come when I’m inside the app, it doesn’t know, you know, what I said before, my support tickets and my whatever?” Right? And so there was this dream I had of like, how could we always know everything about the customer, and how could we always apply that information in every exchange that we have? We should know our customer, right? And so it was a pain that we didn’t have the technology to be able to deliver that.
Pat Grady: Yeah.
Elias Torres: And so I think that was one struggle. The other struggle, I would say, was that we built quickly, we built brand, we built product, we had amazing speed to market, but then we didn’t have the ability to scale. You know, here, we always think, we’ll just hire more bodies and just raise more money. Don’t worry about spending, it’ll resolve itself out. We can always scale it later. And I think that that’s fundamentally flawed. I don’t know if people still get that, to tell you the truth, in this age of AI. I think that is the whole point of AI is to prove that out. But other people are like, “Just hire and we’ll worry about it later.”
And I think that that was my biggest lesson at Drift, that I always liked talking to my customers. I always liked text me, call me. I just—I’m an extrovert, and I just thrive on that, on relationships. And when we got to the point when we started having thousands and thousands of customers at Drift, I just could no longer talk to them, right? I could no longer know them. And usually when a CSM calls you because it’s a churn of somebody that I might have emailed once, it commonly hasn’t saved this churn. It’s just too late.
Pat Grady: Yeah.
Elias Torres: You can’t do that. I mean, I might have a success rate of, like, 20 percent if I promise them the world and I’m going to be there for you. That’s shallow. That’s hypocritical, that’s not the truth, you know? And so I felt that pain intimately of what happens when you scale, and what happens when you have 800 people, 600? I can keep track, you know, and you spend more time managing the people, their promotions, their growth, their onboarding, their recruiting, their entertainment, the town halls. And I think that just consumed us, and we realized that that took our eyes from the ball of the customer and the product. And I think that that’s where we paid the price in not being able to build a legendary company as we dreamed to build from the beginning.
Pat Grady: And Drift was ultimately still worth more than a billion dollars. And so, you know, your second—first startup success, you know, join HubSpot. Second startup success of greater magnitude. And at that point, you know, you’re kind of like a walking example of the American dream, you know? Like, you came to this country with nothing, and through smarts and hustle and sheer force of will, you know, you built these amazing things, and put your life in a totally different position for you and your family. You could have ridden off into the sunset and just, like, called it a career. Like, why do it all over again?
Riding off into the sunset?
Elias Torres: Well, I did. I did ride into the sunset.
Pat Grady: [laughs]
Elias Torres: I did that for, like, seven months. I think that people travel the world, did all this stuff, but it’s extremely empty and boring, I would say. But I was kite surfing in Tatajuba, Jericoacoara in Brazil, you know, with some friends. Majestic place. This is the first time I’m actually disconnecting. Like, this is my first trip after I leave Drift, and I’m like, “Wow, I have no meetings, I have nothing to do.” And I’m just like, the whole morning we’re just staring in this, like, cabana, just looking at this ocean, empty beaches. It’s a very remote area in the north northeast of Brazil. And I’m like, “Wow, I need to learn how to meditate and how to just be one with nature.” And in the afternoon, we would go kite surfing.
And then ChatGPT launches, you know? And I’m just, like, showing everybody and explaining. I don’t even know how to explain it. Like, how does it know how to answer this? And so the first day that I’m off really mentally is the day ChatGPT launches, and I’m just like, this is the greatest moment in mankind. And I’m just like, “Fuck, I gotta go back in.” You know? It’s like I feel like I worked all my life, I always considered myself an imposter. Not anymore. You know, we achieved that.
But the thing is, like, all my life, I’m like, I didn’t go to this school, I didn’t build in the Valley. I’m in Boston. This company fails. You know, all this stuff. And, like, I didn’t have enough because of this. I didn’t have this network. I didn’t know investors, I didn’t know this, I didn’t know English. And now I’m like, I fucking know everything.
Pat Grady: [laughs]
Elias Torres: It’s like, I know everybody. I know I built the systems enough to prove to millions of users and this and that and revenue sales. And I’m just gonna sit here when all these people that don’t know anything are, like, building AI startups? Fuck no. I’m jumping back in, you know? I was like, this is the moment. And I will say that the cheesy, cringy answer to this is also, as a Latino, I feel an obligation, you know? It’s like, most people would die to be in the position that I am in right now. And to squander—going back to that day in my house in Nicaragua with no food, to squander resources and opportunity and just so, like, time earned, work earned, you know, to just sit around and just kite surf in Brazil, you know or, like, surf in Fiji, I just think it’s a waste. Like, while I’m on this Earth, I have to do something. And going back to being a role model, people want to see what someone that looks like you is capable of achieving. And I’m like, “I can’t sit this one out,” right?
And so that’s when I, like, called you and I’m like, “Can I come to Base Camp? Can I get, like, reconnected, fired up with this stuff?” I think I came to AI Ascent, and that’s when the moment it was like, “Let’s fucking go.”
Pat Grady: Yeah.
Elias Torres: You know?
Diving into AI with Agency
Pat Grady: Yeah. Early 2023, I remember you came to AI Ascent, and then you started talking with OpenAI.
Elias Torres: Yes.
Pat Grady: And one of the problems they were having was they had all these enterprises whose immediate thought was, can we deploy this thing in a customer facing way? Kind of like the Drift business in some ways. And so I remember you kind of jumped back in on that, and then evolved the idea into what Agency has become, which is very different. And can you just say a word—we kind of backed into this earlier talking about the email stuff, but can you just say a word, like, what is Agency? And, like, what problem does it solve for customers? Why is that problem important? Can you just say a few words about that?
Elias Torres: Yeah. The problem that everyone in the world has is that they struggle to deliver a great customer experience. And the only way that they can solve that problem today is not with technology, but is with humans. And so human-led deliver customer experience, it’s almost an impossible thing. And so what Agency is building is AI-led customer experience. How do we truly scale customer experience beyond our wildest imaginations without needing a human in every step of the way, right? So that’s what I’m really solving for. And it kind of like came through.
I just—I love life, right? And, you know, now that I’m older, because you can trace back all the steps. And so I gave you a whole bunch of them. But Brazil, ChatGPT, AI Ascent. You introduced me to OpenAI. OpenAI says we’re just like 200 people. We do not know how to talk to all these customers. We can’t tell them how to, like, prompt stuff. And would you help us? There was a jump. There’s a cohort of companies that were like, “Let’s build services in AI and let’s start there.” And so I kind of did that, built a consultancy and just started servicing all kinds of customers, like the NBA, Red Bull, crazy companies. One of them was Klaviyo.
You know, Andrew, I said, “What do you need help with?” And he’s like, “I need help delivering customer experience. You know, it’s like, how do I help my customers understand what the potential is of using Klaviyo? How do we give them advice?” Which is the job of a CSM, right? And so, like, how can a CSM know, be an expert, every CSM that you hire be an expert? The number one end-of-the-world expert in Klaviyo itself, or in e-commerce marketing.
So that’s where AI comes in. And when he first asked me to do this, I said, “No fucking way. I don’t know if I could do that. Imagine, like, my company would be bigger than yours.” He’s like, “Just do it.” So he just—roles reversed, right? And he’s like, “Go do it. Go do things.” And so we built a model that understood every customer and every one of their interactions, and understood what was working and what was not working and be able to classify the entire usage of every user in the company, and start being able to deliver tailored advice, right?
And then the whole thing started clicking for me where it was like, what if I can just deliver the QBR? What if I can just, like, create a video explaining that and saving time to the customer. And so then I was like, “This is great. Like, this is the moment where, like, this is what I want to solve.” And I wasn’t sure that was going to be it, and literally that day, like, Brian Halligan sends me a text, like, you know, he had been sending me all these messages, romancing me. And then that day he was like, “I have an idea for you.” You know, it’s like, “Let’s disrupt the world. You know, let’s disrupt this entire industry.” And I’m like, “What are you talking about?” “Like, it’s about the people. We can’t scale. You know, how do we solve this problem in customer experience? Let’s do it.” And then we called you, and that’s how Agency was born, you know? Things just accelerate.
Sonya Huang: It must have been a really cool full circle moment going from chatbots at IBM to now chat is working, and going from you’re only solving the transactional part of the conversation at Drift to now you manage the entire customer experience. It’s incredible. Full circle moment.
Elias Torres: Yeah. I think that a lot of people are struggling. They’re having an identity crisis with AI of, like, what should I do? Will I be replaced? And to me, I think what I’ve learned, what I see a lot of founders struggle with is—or people is like, what’s my purpose? Like, what am I going to do? And what am I going to do that’s going to last? So what am I going to do that is big?
And so to me, finding the problem of customer experience is so soothing and reassuring. It’s like the hardest thing. I’m not saying it’s easy, but I just can’t think of how this will ever be solved. It’s like, whatever customer experience we could—like, most customer experience in the world sucks. Like, I would say, like, the best I could think of maybe could be like a fancy hotel, you know, like, sometimes? But I don’t want to name my hotel that I stay here, but now if I ask them to send me some delivery or medicine or something, they’re like, “That’ll be $4, Mr. Torres.” Like, why am I paying thousands of dollars for this room and you charging me $4 for delivering me, like, my Tylenol? And then I got this food and it was like, I don’t want to come down. It’s like, “That’ll be $7,” you know?
Pat Grady: [laughs]
Elias Torres: And this is like the greatest experience you can get today, I think, in customer. Like, that’s where you get pampered.
Sonya Huang: Yeah. Do you have any customers on Agency today? And any favorite customer stories?
Elias Torres: Classic Sequoia, it’s like, “What’s the revenue? What’s the curve?”
Sonya Huang: [laughs]
Pat Grady: Let’s talk about ARR.
Elias Torres: Let’s talk about ARR.
Sonya Huang: We went through your story.
Elias Torres: What’s your growth rate?
Pat Grady: What’s your gross margin?
Elias Torres: Yeah. Because you guys—actually, we can talk about that. This is a shit show. I don’t know how we’re going to survive with this LLM cost. I think there’s an entire pyramid scheme here.
Pat Grady: Well, actually, say a word about that. Yeah.
Stick with the customers you have
Elias Torres: Yeah, I mean, I think—so we have over 50 customers using the product, right? I don’t give a shit about numbers and stuff like that. I’m building for them, I’m solving, I’m really delighted. I was trying to get more customers, and Brian said, “Stick with the customers you have. Make them, like, so wildly successful.” And I was like, “You’re right.”
Pat Grady: Yeah, I think that’s important is that there are more customers that you could go get, but you’re focused right now on just making these 50, like, deliriously happy with the product.
Elias Torres: That’s exactly where I am, right? And so back to the cost stuff. So we’ve been working with them, and I have a really—it’s hard going multiple times around because this time around, in the past, I would be like, the minute I had something that kind of like loaded on your browser, like, I wanted to charge you. You know, it was like a dollar. I was like, “Yes! I got a dollar.” This time I’m like, “I don’t want your money.” It’s like, I want to know that you’re obsessed, and that is so sticky. And I’m going to do everything at your company. And I don’t want to make my—there’s so many founders that they think that just because they built something that they got it, right? People are delusional. People have $50 million in revenue, and they’re delusional that that product works.
You know, this time around, I really want to do it right. I want to build something that people like throwing money at me and saying, like, “This is really—there’s nothing like it.” This is my journey now, right? So I want to build something real that is not going to, like, just—I think most of SaaS out there that we ever built, that I ever built, just created more work for the user. I want something that takes the work off, right? And so I’m being more patient, right? And maybe it hurts me, maybe it doesn’t. But I got great investors like Pat, and he’s not rushing me, so—sometimes.
Pat Grady: [laughs]
Elias Torres: But I would say that what’s really hard is I’m trying to understand. My number one goal is I want to create a company that is a billion in revenue with less than 100 employees, right? I was one of the first ones saying it out there, and people were like, “You’re crazy, you’re crazy.” And I really mean it, right? Most of my team is engineers, right? And we’re just building the product because where most of the money and more the headcount goes is in GTM and customer experience.
Pat Grady: Yup.
Elias Torres: And so I want to solve that. I want to get that right so we can build the companies of the future. There’s a lot of lack of creativity, and we’re in the most creative country in the world, but what I see out there in products is like everybody’s building the same chat, you know, media recorder, the note summarizer and the email drafter, right?
When they zig, we zag
Pat Grady: Well, I remember when you started Agency, one of the HubSpot, you know, principles or norms has always been when they zig, we zag, right?
Elias Torres: Mm-hmm.
Pat Grady: And I think when you started Agency, the zig was all these AI SDR companies, and your zag was “No, no. We’ll let them take the front end of the business, we’re going to deal with the back end of the business because that’s where the pain actually is and that’s where the value is built.” And so I think you sort of zagged when people were zigging. And I think over the last year or so that’s proven to be a good decision. But can you say a word about, like, what can AI do today? What can it not do today? And so in the product that you’ve built, where is AI or the product itself really nailing it? And where do you feel like there is maybe still a capability gap in terms of what can be done?
Elias Torres: Well, I think that if we’re optimists, AI is infinitely capable in the theoretical.
Pat Grady: In the fullness of time.
Elias Torres: In the fullness of time, right? But today, it’s actually not that smart. And so it’s like you have to write paragraphs and paragraphs to maybe get the right answer: 42. And so, you know, if you type the wrong word or if you try it again, it’s just a different answer. And so that’s the part that today’s human brains just can’t cope with it.
And so when you’re trying to deliver experience to the customer, you’re trying to figure out what is it that you’re exactly trying to do, right? Are you trying to just come up with a better word to reply to the customer, or are you trying to let the AI actually do and manage the customer experience? And so I think where we’re struggling is that if we cannot even trust the AI to draft your own email that you’re about to hit the button, how much worse is going to be for us to let the AI make decisions on 10,000 customers on a daily basis on its own?
Pat Grady: Mm-hmm.
Elias Torres: So we built the first part of Agency, which is what most people are trying to do today, which is this, you know, customer-360, foundational, let’s bring all that information into one place and be able to ask questions. But what most people are not realizing is that if you require a human to go type into that chat box, you’re dead on arrival. Everybody’s so confused, and even in the Valley of, like, building tools that are, like, just helping a human do something. I’m done with that. I don’t want to do that. It bores me to death to type stuff into ChatGPT. I’m a CEO now and I’m spoiled and I’m living my best life. I just want to tell people what to do one time and they do it 10,000 times. And so that’s kind of what I really want AI to do for me. It’s like, how can we instruct AI to do one task infinitely?
And most people are stuck. Like, don’t get me started on the word “agents,” right? Everybody, like, talks about agents and, like, okay, send me a summary after my meeting to my email. Who gives a shit? Like, I can always go ask that question, but it’s what do I do with it? So what I’m doing is I’m doing the very first principles in the companies that I’m working with, because people just keep asking me, “Oh, can you generate me a dashboard about the customers?” And then, so what?
Pat Grady: Yeah, what do you want to do with the dashboard?
Elias Torres: What do you want to do with the dashboard? And so, “Oh. Well, I want to click on this and then do this. Why can’t I do that?” And then what do you want me to do? You want me to go after the renewals? You want me to go tell the rep? And then what are you going to tell the rep? “Oh, I’m going to tell them to email the customer. Why can’t I just email the customer?” Right?
Deprogramming the entire business world
Elias Torres: And so that’s the journey I’m in, that I’m enjoying, but it’s really hard. I have to deprogram the entire business world.
Pat Grady: Yeah.
Elias Torres: Because they’re used to working and operating this way. And, you know, Brian had his birthday. I was at his house, I showed up with his glasses and then he was, like, in shock.
Pat Grady: [laughs]
Elias Torres: He’s never seen them before. And so then I was one of his old friends because Brian is old. I’m old. I can say I’m old. I can say anything I want now, I’m old, too. So one of his old retired VCs—it came to me like an oracle. And he was saying, “Elias, my advice to you is forget everything you’ve ever learned. Forget the pattern recognition, forget your experience, forget all that. That’s bullshit. Just gotta, like, try new things.” And he’s, like, telling me to let go and not, like, rely on the past, because sometimes, like, experienced founders, we get stuck in that way. And it was like this deprogramming, to just charge into the future.
And that’s my challenge of, like, how do I become a change agent to our customers? To really believe and stop worrying about the things that we were doing before and focus on the right thing that they can do, and they can have that one on one with their customer, with the top customer. But a lot of stuff that we’re doing is really unnecessary because we just didn’t have the technology. But it’s going to take a long time for AI to be prompted into success of, like, “Read this dashboard, make this concrete and do this.” Just even doing one of those workflows consistently every time, it’s going to take a lot of prompting. But there’s a lot of stuff that you can bring change internally. As a customer experience platform, we can bring things to resolve a lot of internal inefficiencies, but the most valuable thing is delivering that directly to the customer.
Pat Grady: All right, last question. Let’s end on a high note. What are you most optimistic for in our AI future?
Elias Torres: I think that what I’m most optimistic is I want people to be able to leverage, to use their agency more. You know, I think that we have worked so hard for all of our history, and I think we need to stop being so focused on, like, hard, hard, hard work, and being able to, like, do what we’re best at doing, which is taking initiative, making decisions, choosing a purpose, choosing a customer, choosing an audience, and go serve them, right? But be able to leverage AI to do the work around us and not be afraid of it, that it’s really taking away our agency, because it just can’t, you know?
Sonya Huang: Great company name. Humans have agency.
Pat Grady: Indeed. Awesome. Elias, thank you so much.
Elias Torres: Thank you for having me.
Sonya Huang: Thank you.
Mentioned in the episode
Mentioned in the episode:
- Lookery: David Cancel’s first startup that Elias joined after IBM; shut down in 2009
- Performable: Elias and David’s second startup, acquired by HubSpot in 2011
- Drift: Elias and David Cancel’s third startup, merged with Salesloft in 2024
- Klaviyo: B2C CRM company started by Andrew Bialecki after working with Elias at HubSpot
- Secret: Short-lived anonymous messaging app that inspired one of Drift’s early iterations
- Tatajuba: Kitesurfing destination in Jericoacoara, Brazil where Elias (briefly) considered retirement